|Public (NASDAQ: BYFC)|
The Broadway Federal Bank is a community bank founded in 1946 and based in Los Angeles. As of 2011, it owned and operated three traditional branches and one loan production office.
In 1946, Broadway Federal Savings and Loan Association was founded by a group of civic minded people to provide bank services to minorities in the greater Los Angeles area, who were not being serviced by any of the existing financial institutions.
The bank received its charter on November 26, 1946 with an initial investment of $150,000. It opened for business in a three-room office on 4329 South Broadway on January 11, 1947.
Real estate broker and investor H. A. Howard served as the first president of the company until September 1949, when Dr. H. Claude Hudson, investor, community activist and dentist took over leadership. The savings and loan grew rapidly under Chairman of the Board Hudson’s supervision. In 1954, Broadway Federal acquired a larger building at Broadway and 45th Street, which was redesigned by renowned architect Paul Williams, who was also a founding board member.
Broadway Federal grew to become the second largest black-owned bank in the United States. In 1966, its branch expansion began with a location in the Mid-Town area of Los Angeles. This branch was also designed by Paul Williams.
In 1972, Dr. Hudson retired from active management of Broadway Federal and his son, Elbert T. Hudson, an attorney, community activist and long-time board member was selected as board chairman and CEO. Elbert T. Hudson served as CEO until March 1992, when his son, Paul C. Hudson, also an attorney and community activist took over.
Shortly after Paul C. Hudson’s appointment as CEO, a fire destroyed Broadway Federal’s main branch during the civil unrest that occurred in the wake of Rodney King beating trial verdict. Despite this setback, management reaffirmed its commitment to the community.
In December 1995, Broadway began its conversion from a mutual savings and loan to a stock savings bank. The IPO raised close to $9 million. Broadway Financial Corporation is the parent holding company of what is now known as Broadway Federal Bank. Broadway Financial is publicly traded on the NASDAQ over the counter market as (symbol: BYFC).
In March 2010, based on information obtained during a regulatory examination, the Holding Company (Broadway Financial Corporation) and the Bank (Broadway Federal Bank) were determined to be “in troubled condition” and agreed to the issuance of Cease and Desist Order ("C&D") to them by the Office of Thrift Supervision (OTS) effective September 9, 2010. The C&D imposed limitations on the Company and the Bank.
According to the bank's annual report for 2011 with the Security and Exchange Commission, regulators have prohibited Broadway Federal from making additional loans to churches. About one-quarter of outstanding loans have been to church properties, which has been problematic for the bank. As of June 30, 2012, Broadway Federal had seven repossessed churches on its books.