The West Coast’s Last Black-Owned Bank Narrowly Avoids Hostile Takeover

What is the West Coast known for? Some might say Hollywood. Others would tell you about the coffee. The West Coast is also considered the hub for technology. Unfortunately, the same couldn’t be said for Black-owned banking. The West Coast states (California, Oregon, Washington, and Alaska) are the home of only Black-owned banks.

The first, OneUnited Bank, was originally founded in Boston, Massachusetts, and as the largest Black-owned bank in the country has branches in Boston, Los Angeles, and Miami. The second, Broadway Federal Bank, is the only Black-owned bank based out of the West Coast with two branches located in Los Angeles and one in Inglewood. As the business strives to stay Black-owned, it has experienced a few problems within the last few months.

Broadway Financial Bank ($BYFC) was publicly traded in 1995, and the majority Black-owned bank has $500 million in assets. The bank has continued to grow and thrive, but their stock prices have not. And it is in part due to the attempted hostile takeover by the CEO of The Capital Corps

In February 2020, Capital Corps CEO Steven Sugarman acquired 1.8 million shares of $BYFC. At 9.66%, this made him the largest shareholder in the company, but the Board of Directors had a safeguard in place. By giving additional voting rights to existing shareholders, they planned to prevent individuals from acquiring over 10% of the company that could lead to a takeover. Since then, Sugarman has taken a few steps of action.

Through his company Commerce Home Mortgage, he has urged Broadway Financial Bank to sell in which the President & CEO responded in a letter where he essentially tells him, “no, but we’ll talk about it later.” Later, in April 2020, The Capital Corps sent an offer to acquire Broadway Financial Corporation – an offer which they declined. As recently as June 9, Sugarman and the Commerce Home Mortgage nominated one of their own, a chairman of Capital Corps, to the Broadway Financial Bank Board of Directors. The nomination turned out to be invalid when they determined that the Sugarman-led group wasn’t a shareholder at the time of the meeting.

Broadway Financial Bank CEO Wayne-Kent A. Bradshaw (PC: Broadway Financial Bank)

While it seems that Sugarman has gone through a host of methods to gain control of Broadway Financial Bank, many believe that he has also suppressed the stock price in hopes of buying the company outright. As of June 19, it seems that the days of Steven Sugarman and The Capital Corps are over. They dissolved their share stake in the company. Now, in the aftermath, Broadway Financial Bank pushes for growth.

The bank has a history of helping Black consumers. When founded in 1946, the bank was an establishment for minorities who were unable to receive help or service from other financial institutions – or when their service came in the form of high-interest rates. With their values listed as equality of service, excellence in service, and community service, the bank focuses on serving low-to-moderate income communities.

This bank is a necessary presence in Southern California as it is the only Black-owned bank headquartered out of the West Coast. In comparison, the East Coast is teeming with options for Black banking. A quick search on the Official Black Wall Street app can help you find the closest one. But for those on the other side of the country, they must have an option and form of representation.

It is clear to me that the CEO and Board of Directors at Broadway Financial Bank are steadfast and resilient. They have no plans of giving up their bank, and we can help. For those looking to diversify your portfolio, consider adding $BYFC.

Jouviane Alexandre

Jouviane Alexandre is a professional writer based in New Jersey. Following her undergraduate education at Penn State University where she earned a bachelor’s degree in biology, she shifted her focus to her passion for content development. She has since worked for a number of Black-owned brands as a content strategist, content manager, and freelance writer.

Comments

  • Temi SAYS:

    07/03/2020 at 3:29 pmEdit

    I agree with Mimi because here in San Jose, Ca you can go all day without seeing a black person working at a business. It is not because they have not applied, but because people hire their ‘own’! If Sugarman was interested in ‘black empowerment’ he would have chosen a black person. People who ride in on our backs after we have put ourselves in front of the guns disgust me! If you remember, we as blacks were the ‘minority’. Now, ‘minority’ is a ‘collective’, as well as ‘people of colour’. The concepts have muddled the distinction of blackness, which results in ‘others’ benefitting from our pain.

    Reply
  • Lorraine SAYS:

    07/03/2020 at 2:37 pmEdit

    Michael, or Felix, could you elaborate more on the topic? I was ready to open 2 bank accounts with Broadway, and One United, when I read that to really help you need to invest, not just put money in an account. I was excited to come across this article and hopefully get more insight on the investment part and felt a bit disappointed when it just ended with adding to your portfolio. Many have never invested and it would’ve been a good opportunity to teach a little about that.
    Further disappointment when I saw the inky 2 comments left were not happy ones. Definitely would agree that 7mil is not the story of the minority community, and a bit discouraging at the least.

    Any further personal insight you’d be willing to share is much appreciated…. off to do more research.

    Thanks,

    Reply
  • michael ouellette SAYS:

    06/25/2020 at 5:53 pmEdit

    I am a shareholder-who was made aware of the hostile takeover on Junteenth.
    I bought 2000 shares-perhaps not a lot for some-
    -but for me-a big deal-
    At 4$ a share- I am down substantially-3000$-
    I was surprised-and not pleased that after the meeting which took place
    yesterday Wed. 06/24—
    No press release or any type of positive news was communicated
    -at least not visible to the Stock twits community-
    -believe me had there been news-it would have been shared among this stock community.
    Shareholders would be very grateful-for such news-and positive reinforcement as to
    -why we should hold our shares and invest in Broadway Financial

    Reply
  • Felix SAYS:

    06/25/2020 at 5:04 pmEdit

    You missed the part where the black CEO told a radio station that his average borrower had assets of $7 million. Is that catering to an under-served minority community?

    It’s also important to note that Sugarman is an advocate for minority empowerment. The “one of his own” that he nominated to the board is a Mexican-American former Los Angeles mayor. He was nominated for the purpose of guiding the bank toward more direct service to the minority community.

    Reply
    • Mimi SAYS:

      07/03/2020 at 2:55 pmEdit

      The man that Sugarman hired to the board was a Mexican American..but they are only interested in helping their own people, NOT black people! They have no care for us but our dollars. So I would be careful of investing or supporting with them.

      Reply

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