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| C.E.O.'s Message |
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Dear Shareholders,
“Where have all of the relationships gone?” It seems that in these times of fast cars, fast food and fast talk, our hectic lives leave little room for meaningful relationships. From the married school teacher who puts in 60 hours/week followed by soccer practice, dinner with the family, and the children’s’ homework to the single mom working two jobs six days/week while raising three children, we all have precious few hours for us or for building relationships. Ask yourself, “How many close friends do I have outside my spouse or family?
Unfortunately, we are facing a similar epidemic within our institutions, where the trend is toward internet transactions, voice mail interfaces, text messaging, self service and formula driven solutions.
As a consequence, 12 months ago we began a process of re-establishing meaningful relationships with our customers. Like many banks, we had become dependent on wholesale relationships, which are often financial interactions without substance. We rarely got to know our customer in the Jimmy Stewart sense of “It’s a Wonderful Life”. |
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Realizing that our customer relationships were the substance of our franchise value, and that enhancing those relationships would support growth and enhance profitability, we have been building a sales force of relationship managers to re-introduce
to some and introduce to others the benefits of community banking with Broadway Federal Bank (Broadway or Bank).
Re-establishing our relationship with the customer was a process that involved:
• Identifying individuals with strong sales skills and motivated to venture outside the branch to capture new customers;
• Implementation of new products that met the changing needs of our customers; and
• Specialization in niche markets where Broadway could distinguish itself based on its knowledge of an industry sector,
network of contacts within the sector, specialized products designed for the sector and individualized underwriting to
address the unique circumstances of each customer.
In 2006, we accomplished the following:
• Increased our number of sales/relationship managers and conducted sales training. We implemented sales incentives
and began a formal process of sales referrals and weekly sales meetings that included both the loan origination and retail
banking sales staff.
• Broadway began accepting the Matricula Consular card for purposes of opening new accounts for recent immigrants;
implemented an online platform for opening new accounts via the internet; offered “free checking” accounts; and introduced
the Certificate of Deposit Account Registry Service that enables our customers to receive FDIC deposit insurance for
accounts with deposits in excess of $100,000.
• Developed new markets for loan origination in sports finance, commercial and industrial loans and loans to charter schools,
and re-established our presence in faith-based lending. Retail banking initiated cross sales to our loan customers and
expanded to the new markets of entertainment, public sector institutions and large institutions and companies.
I am happy to report that the Bank is beginning to see the fruits of our labors. Existing customers are doing more business with us resulting in multiple banking relationships, past customers are returning to the Bank, and new clients are responding to the customer friendly environment, sector specialization, and Broadway’s responsiveness to their individual requirements.
In 2007, we intend to continue to build meaningful relationships with customers within identified sectors and market niches. Our success is expected to increase profitability by improving our net interest margin and accelerating asset growth, which will ultimately enhance shareholder value.
Sincerely,
Paul C. Hudson
Chairman, CEO |
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