NEW
YORK, Nov. 3, 2023 /PRNewswire/
-- Carver Bancorp, Inc. (Nasdaq: CARV) ("Carver"), the
holding company for Carver Federal Savings Bank (the "Bank") today
released a letter to shareholders from its Interim CEO Craig C. MacKay that provides an update on the
Bank's strategic progress and impact on the communities it
serves.
Below is a copy of the letter:
November 1, 2023
Dear Carver Shareholders:
In the four short weeks since assuming the role of Interim
President & CEO of Carver Bancorp, Inc. and our wholly-owned
subsidiary, Carver Federal Savings Bank ("Carver" or the "Bank"), I
have been inspired by the passion of our people, the unwavering
support of our shareholders, and our impact on the
communities that we serve.
In January 2023, the Bank emerged
from a formal agreement with its primary regulator, concluding a
period of enhanced oversight, foundation-building, capital-raising,
technology upgrades, and portfolio rationalization. Carver is now a
better capitalized and more capable bank with solid liquidity and
Tier 1 Capital (12.4%), Leverage (10.1%) and Total Risk Based
Capital (13.4%) ratios in excess of "well capitalized" levels.
The Bank continues to grow in scale, market reach and in the
diversification of its suite of retail and commercial offerings,
while remaining committed to our mission to address the wealth
gap by "…providing local residents with a place to save,
grow businesses and build wealth, block by block, generation to
generation." With over $720
million in assets as of June 30,
2023, the Bank has grown organically by 28% since 2019,
which was achieved through increased productivity and the use of
advanced technology (assets per employee up 33%).
This year Carver is celebrating 75 years of providing
urban communities and Minority and Women-Owned Business Enterprises
("MWBEs") with access to capital and competitively priced banking
solutions. We lead the way in community-driven finance across the
Greater New York City region. From
micro-loans to large commercial facilities, to our performance in
deploying $50 million of Payroll
Protection Program loans (preserving over 5,000 jobs),
Carver is recognized as a leading Community Development Financial
Institution ("CDFI") in our market. The Bank has received
"Outstanding" Community Reinvestment Act ("CRA") ratings
since 2004, and in our latest evaluation, the Office of the
Comptroller of the Currency determined that 90% of Carver's
loans were made within our assessment area.
Carver has recently broadened its commercial presence,
participating in the financing of national credits and projects
such as Krispy Kreme Donuts and the new Atlanta Hawks Training
Facility, which provide additional loan portfolio diversification.
By leveraging our fintech partnerships, the Bank has:
- Expanded its consumer credit
solutions, deployed robust
mobile banking services to underbanked urban
centers, and extended its deposit-taking footprint
to encompass 9 states, with additional expansion
on the horizon
- Supported over 16,000 small business loans nationwide, through
a liquidity funding partnership with a minority-owned
fintech company
Carver's management team and Board of Directors are also
shareholders. While Carver's stock may experience sector- driven
volatility or speculation, we firmly believe that our prospects,
transparency, and ability to deliver against objectives will
ultimately be reflected in Carver's valuation. We are executing
upon a strategy to (i) fuel greater organic growth, (ii) deepen our
collaboration with our strategic and fintech partners, (iii)
leverage our new technology to achieve greater scale and operating
efficiencies, (iv) continue supporting a culture of disciplined
risk management, and (v) position the Bank to grow into
sustainable core profitability.
I am encouraged by the following results:
- Asset Growth – strong
organic loan growth (8.7%
4-Year CAGR thru FY-2023) and a 95% Loan-to-Deposit ratio, vs. 74% for our peer group,
indicating a more profitable asset mix.
-
Portfolio Diversification – commercial and industrial loans ("C&I") now comprise over 28% of the portfolio;
notwithstanding portfolio growth and diversification, over 80% of our lending still supports businesses,
investors, non-profit organizations, and individuals in our urban
communities.
- Deposit Growth – Carver's
deposit growth (5.8%
4-Year CAGR thru FY-2023) has been driven by "sticky"
institutional deposits, reducing our reliance
on external leverage and expensive brokered
deposits.
- Fintech Partnerships – through
our fintech partnerships, Carver has expanded
its ability to grow loans and
deposits, and enhance its commercial and retail offerings, including cash management and credit cards.
-
Charge-offs – The Bank has achieved
significant asset growth
while maintaining a strong underwriting and portfolio management discipline. Annual net charge-offs of 0.09%, among
the lowest in our peer group.
- Net Interest
Margin – Carver's YTD FY-2024
net interest margin,
at 3.14%, is comparable to our peer group and
has been sustained by the support
of our core relationship deposit accounts.
-
Rising Efficiency – loan assets per employee, a general indicator
of efficiency, has increased for four consecutive years at a 7.4% CAGR. Carver is completing more loans by volume and reducing cycle time with
the advent of new technologies and best practices.
- Capital-Raising – since 2019, Carver has taken in over
$40 million of net capital additions,
primarily driven by direct institutional investor placements and
at-the-market common stock offerings.
-
Investment in Technology – The Bank has invested over $3 million
since 2019 to upgrade our technology,
power a more robust mobile
banking platform, and enhance
operating efficiency.
Carver's path to sustainable core profitability hinges on
well-learned lessons in portfolio diversification, capital
adequacy, and risk and liquidity management, which will enable:
-
Continued growth of C&I lending fueled by our (i) new SBA initiative, (ii) healthcare finance partnership, (iii) progress in Green Energy
and contractor financing, and (iv) measured
exposure to broadly syndicated loans
- Ongoing expansion of our digital deposit footprint and mobile
banking capabilities
- Growth in consumer lending via our
fintech partnerships
- Strategic partnerships to expand product/service offerings
(e.g., wealth management, estate planning)
- Continued focus on leveraging technology, operating efficiency,
and fixed cost management
On behalf of our management team and Board of Directors, thank
you for holding us accountable on this journey to create enduring
value for our shareholders, and for enabling Carver to have "a
significant or major effect" on the communities that we
serve…impact.
Sincerely,
Craig C. MacKay
Interim President & CEO
Carver Bancorp, Inc.
About Carver Bancorp, Inc.
Carver Bancorp, Inc.
(NASDAQ: CARV) is the holding company for Carver Federal Savings
Bank, a federally chartered stock savings bank. Headquartered in
Harlem, NY, Carver was founded in 1948 to serve African-American
and Caribbean-American communities in New
York whose residents, businesses, and institutions had
limited access to mainstream financial services. The U.S. Treasury
Department has designated Carver as a Community Development
Financial Institution ("CDFI") because of its community-focused
banking services and dedication to its local community's economic
viability and revitalization. Carver is one of the largest African-
and Caribbean-American managed banks in the United States. The Bank recently expanded
its online presence to include consumer checking and savings
accounts across nine states, from Massachusetts to Virginia, and Washington, DC. For further information,
please visit the Company's website at www.carverbank.com. Be
sure to connect with Carver on Facebook, LinkedIn, and
Twitter.
Certain statements in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act. These statements are based on management's current
expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from those
included in these statements due to a variety of factors, risks,
and uncertainties. More information about these factors, risks, and
uncertainties is contained in our filings with the Securities and
Exchange Commission.
Media:
Michael Herley for Carver
203.308.1409
mediainquiries@carverbank.com
Investors:
ir@carverbank.com
SOURCE Carver Bancorp, Inc.
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SOURCE Carver Bancorp, Inc.