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Treasury pares down stake in Broadway Financial

The Treasury Department sold 4,702,860 voting shares of Broadway Financial Corp., ending its time as the company's largest stockholder.

The shares represent 21.97% of the company's total voting shares, and 46.35% of the Treasury's stake in the company. These sales, at $1.59 per share, reduced the Treasury's ownership to 29.35% from 47.40% of Broadway Financial's voting shares, and to 19.94% from 34.89% of the company's total shares.

Nearly half of the shares were purchased by Broadway Financial, which bought 2,374,716. Broadway Federal Bank F.S.B.'s employee stock ownership plan purchased 1,493,679 and San Francisco-based First Republic Bank bought 834,465.

Also, Broadway Financial sold 737,861 nonvoting common shares to First republic at $1.59 per share for an aggregate price of about $1.2 million. Overall, First Republic made a $2.5 million minority investment in the company's voting and nonvoting common shares, Broadway Financial said in a press release. Broadway Financial's proceeds from the sale of nonvoting shares were used to finance a portion of the shares it repurchased from the Treasury.

Concurrent with the repurchase from the Treasury, three shareholders exercised rights negotiated in the company's 2013 recapitalization to either exchange or sell a portion of their shares to maintain ownership below certain levels. Under this, 284,675 of the nonvoting shares were issued to CJA Private Equity Financial Restructuring Master Fund I LP, and 62,340 were issued to the National Community Investment Fund; in addition, the company repurchased a total of 139,119 voting shares from Los Angeles-based Bank of Hope and the National Community Investment Fund at $1.59 per share.

Overall, for a total price just under $4 million, Broadway Financial repurchased 2,513,835 voting shares from the U.S. Treasury Department, Bank of Hope and the National Community Investment Fund.