James D. Goudge

statement of condition

Broadway Bank has continued to achieve strong growth in 2015 for deposits and loans. On March 31, deposits totaled $2.76 billion, up $67 million (+2.5%) from December and up $198 million (+7.7%) vs. March 2014. Loans ended the quarter at $1.43 billion, up $44 million (+3.2%) vs. December and up $193 million (+16%) vs. a year ago. Over the past year, we have had double-digit percentage growth in most loan categories (business, commercial real estate, construction and residential mortgage).

Our loan growth reflects improved demand driven by an improving local economy. The recent drop in oil prices could impact Texas negatively, but we have little direct exposure to the energy industry. In fact, credit quality continues to be strong for our portfolio. One of our biggest challenges, when it comes to loans, is the intense local competition for quality business, particularly as it impacts pricing (i.e., loan interest rates). Rate competition is good for borrowers, but we believe some of the pricing we are seeing offered by competitors does not provide an appropriate return relative to the credit risks taken. At Broadway Bank, we remain committed to being competitive while also preserving credit quality and the returns we achieve relative to risk. In the long run, doing so is in the best interest of the bank and of the customers we serve.

Sincerely,
James D. Goudge
Chairman and CEO

Source: 1Q15