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.
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.
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