Broadway Federal Bank will soon close its Wilshire Boulevard and Leimert Park branches as part of “a broad recapitalization plan,” according to a statement released by its parent company, Broadway Financial Corp.
“The recapitalization will strengthen the bank’s capital base and lower fixed cost, which in turn will position the company for future growth and improved profitability,” said Paul C. Hudson, chairman and CEO.
The two branches, which are the least busy of its five retail offices, are set to end operation on Nov. 7.
Offices in Inglewood, Midtown and Exposition Park will remain open, as will its headquarters on Wilshire. Like most banks, all Broadway Federal’s deposits are insured by the FDIC up to at least $250,000.
The oldest Black-owned thrift institution west of the Mississippi and “the leading community-oriented savings bank in Southern California,” Broadway Federal was founded in 1946.
According to published reports, the bank must raise $5 million in new capital to replenish its depleted resources after logging heavy losses of $6.5 million in 2009. However, Hudson said he is attempting to double that required amount.
The company turned a profit in 2010, but losses resurged somewhat this year. Most of its losses are attributed to church and commercial loans.