Carver Bancorp(US:CARV)2020-02-12 20:32Financial Performance - The Bank reported a net loss of $1.4 million for the three months ended December 31, 2019, compared to a net loss of $1.3 million for the same period in the prior year[205]. - Net interest income decreased by $0.1 million, or 2.4%, to $4.0 million for the three months ended December 31, 2019, compared to $4.1 million for the same quarter last year[214]. - Net interest income decreased by $0.9 million, or 7.0%, to $12.0 million for the nine months ended December 31, 2019, compared to $12.9 million for the prior year period[214]. - Non-interest income decreased by $0.3 million, or 23.1%, to $1.0 million for the three months ended December 31, 2019, compared to $1.3 million for the same period last year[232]. - Non-interest expense decreased by $0.7 million, or 9.9%, to $6.4 million for the three months ended December 31, 2019, compared to $7.1 million for the prior year quarter[236]. - The Company achieved a decrease in non-interest expenses, which helped mitigate the losses reported for the nine months ended December 31, 2019[205]. Asset and Liability Management - Carver Bancorp, Inc. had approximately $569.1 million in assets as of December 31, 2019[141]. - As of December 31, 2019, the Bank's total assets were $569.1 million, reflecting a 1.0% increase from $563.7 million at March 31, 2019[191]. - Total liabilities increased by $2.7 million, or 0.5%, to $519.3 million at December 31, 2019, primarily due to the recognition of $20 million in operating lease liabilities[195]. - Deposits decreased by $15.9 million, or 3.3%, to $464.3 million at December 31, 2019, mainly due to reductions in brokered certificates of deposit accounts[196]. - The Bank's net borrowings increased by $4.2 million, or 19.6%, to $25.6 million at December 31, 2019, compared to $21.4 million at March 31, 2019[171]. Loan Portfolio and Credit Quality - The adequacy of the Bank's Allowance for Loan and Lease Losses (ALLL) is determined based on management's review of the loan portfolio and various economic factors[154]. - Carver Federal has a high concentration of loans secured by properties located in its market area, which poses risks related to economic conditions[137]. - The Bank maintains a specific reserve allowance for criticized and classified loans, with at-risk balances of $500,000 or more being individually reviewed for impairment[162]. - Nonaccrual loans totaled $7.2 million, or 1.3% of total assets, at December 31, 2019, down from $10.3 million, or 1.8% of total assets, at March 31, 2019[226]. - The allowance for loan losses (ALLL) was $4.6 million at December 31, 2019, representing a ratio of 1.09% to total loans[226]. - Loans classified as troubled debt restructuring (TDR) totaled $4.3 million at December 31, 2019, down from $5.4 million at March 31, 2019[229]. - As of December 31, 2019, non-performing assets totaled $7.3 million, representing 1.3% of total assets, a decrease from $10.7 million or 1.9% at March 31, 2019[230]. - The total non-performing loans to total loans ratio was 1.70% as of December 31, 2019, down from 1.78% in the previous quarter[230]. Capital and Regulatory Compliance - The Bank's capital adequacy is measured in accordance with the Basel III regulatory framework, requiring a minimum Common Equity Tier 1 (CET1) ratio of 7%[177]. - The Bank's Tier 1 leverage capital ratio was 11.25%, with a Common Equity Tier 1 capital ratio of 15.91% and a total risk-based capital ratio of 17.10% as of December 31, 2019[183]. - The Bank's liquidity is monitored using regulatory guidelines, and it was in compliance with its liquidity policy as of December 31, 2019[170]. - The Bank's commitment to improve its regulatory position contributed to lower regulatory assessment costs and operational efficiencies[236]. Market Position and Competition - The Bank's primary market area for deposits includes low- to moderate-income neighborhoods in Brooklyn, Manhattan, and Queens, facing significant competition from larger financial institutions[144]. - The Bank's competition for loans comes mainly from commercial banks, savings institutions, and mortgage banking companies, which have greater financial resources[144]. - The Bank's community involvement and targeted services help it compete effectively in its market despite challenges[145]. Interest Income and Expense - Total interest-earning assets were $547,755 thousand for the three months ended December 31, 2019, with an average yield of 4.01%[215]. - Total interest-bearing liabilities were $439,627 thousand for the three months ended December 31, 2019, with an average cost of 1.32%[215]. - Interest income decreased by $1.2 million, or 6.8%, to $16.4 million for the nine months ended December 31, 2019, compared to $17.6 million for the prior year period[219]. - Interest expense decreased by $0.4 million, or 8.5%, to $4.3 million for the nine months ended December 31, 2019, compared to $4.7 million for the prior year[220]. - The average interest rate spread improved to 2.67% for the nine months ended December 31, 2019, compared to 2.54% for the prior year[1]. Community Development and Initiatives - The Bank's community development initiatives are overseen by Carver Community Development Corporation, which coordinates financial literacy activities and applies for grants[146].