Carver Bancorp(US:CARV)2025-08-13 18:03PART I. FINANCIAL INFORMATION (UNAUDITED) Item 1. Financial Statements The unaudited statements show total assets of $713.6 million and a quarterly net loss of $1.2 million Consolidated Statements of Financial Condition Total assets decreased to $713.6 million, driven by lower deposits and loans, with equity falling to $28.5 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Total Assets | $713,624 | $729,991 | | Total cash and cash equivalents | $43,835 | $50,315 | | Total loans receivable, net | $598,937 | $607,347 | | Total Liabilities | $685,086 | $700,413 | | Total deposits | $645,531 | $661,837 | | Total Equity | $28,538 | $29,578 | Consolidated Statements of Operations The quarterly net loss improved to $1.2 million from $2.2 million year-over-year due to a credit loss recovery Quarterly Operating Results (in thousands, except per share data) | Metric | Q1 2025 (3 mos ended Jun 30) | Q1 2024 (3 mos ended Jun 30) | | :--- | :--- | :--- | | Net Interest Income | $5,641 | $5,504 | | (Recovery of) provision for credit losses | $(26) | $260 | | Total Non-interest Income | $1,268 | $705 | | Total Non-interest Expense | $8,112 | $8,161 | | Net Loss | $(1,177) | $(2,212) | | Loss per common share (Basic & Diluted) | $(0.22) | $(0.43) | Consolidated Statements of Comprehensive Loss Total comprehensive loss narrowed to $1.1 million from $2.5 million in the prior-year quarter Comprehensive Loss Summary (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss | $(1,177) | $(2,212) | | Other comprehensive income (loss) | $124 | $(263) | | Total comprehensive loss, net of tax | $(1,053) | $(2,475) | Consolidated Statement of Changes in Equity Total equity declined by $1.04 million to $28.5 million, primarily due to the quarterly net loss - Equity declined by $1.04 million during the quarter, moving from $29.58 million to $28.54 million17 Consolidated Statements of Cash Flows Cash and cash equivalents decreased by $6.5 million, mainly from a net decrease in deposits Cash Flow Summary (in thousands) | Activity | Three Months Ended June 30, 2025 | | :--- | :--- | | Net cash used in operating activities | $(230) | | Net cash provided by investing activities | $8,958 | | Net cash used in financing activities | $(15,208) | | Net decrease in cash and cash equivalents | $(6,480) | Notes to Consolidated Financial Statements Key disclosures cover the OCC Formal Agreement, capital requirements, and details on loan and investment portfolios - On May 14, 2025, the Bank entered into a Formal Agreement with the OCC, requiring approval for key changes and mandating a Tier 1 leverage ratio of 9% and a total risk-based capital ratio of 12%26 - The company deferred the interest payment due June 17, 2025, on its subordinated debt, with deferred interest totaling $300 thousand at quarter-end24 - Total loans receivable decreased to $605.3 million, with an allowance for credit losses (ACL) of $6.3 million, or 1.04% of total loans56162 - Nonaccrual loans totaled $24.5 million as of June 30, 2025, a slight decrease from the prior quarter61 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the improved quarterly net loss, decreased assets, and challenges from regulatory capital requirements Overview Carver Federal is a leading African-American operated bank with $713.6 million in assets serving New York City - Carver Federal is among the largest African-American operated banks in the United States, with assets of approximately $713.6 million as of June 30, 2025108 - The bank received its seventh consecutive "Outstanding" rating from the OCC in its most recent Community Reinvestment Act (CRA) examination108 Critical Accounting Estimates The Allowance for Credit Losses (ACL) is the most critical estimate, involving significant management judgment - The Allowance for Credit Losses (ACL) is considered the most critical accounting estimate, involving significant management judgment and susceptibility to economic changes115116 Liquidity and Capital Resources The bank's liquidity is adequate, but capital ratios failed to meet the OCC's minimum requirements - At June 30, 2025, the Bank's capital levels did not meet its Individual Minimum Capital Ratio (IMCR) requirements, with a Tier 1 leverage ratio of 8.82% and a total risk-based capital ratio of 11.58%131132 - The company has an undrawn $25.0 million revolving loan facility to support green energy financing initiatives126 - Total cash and cash equivalents decreased by $6.5 million during the quarter, primarily due to a $16.3 million net decrease in deposits130 Comparison of Financial Condition Total assets decreased by $16.4 million (2.2%) due to declines in cash, loans, and deposits - Total assets decreased by $16.4 million (2.2%) to $713.6 million at June 30, 2025141 - Gross portfolio loans decreased by $8.4 million (1.4%) as payoffs of $22.7 million exceeded new originations143 - Deposits decreased by $16.3 million (2.5%), primarily from reductions in certificates of deposit and business accounts145 Comparison of Operating Results The quarterly net loss improved to $1.2 million from $2.2 million year-over-year, driven by higher non-interest income Selected Operating Ratios | Ratio | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Return on average assets | (0.66)% | (1.18)% | | Return on average stockholders' equity | (15.80)% | (21.49)% | | Net interest margin | 3.22% | 3.01% | | Efficiency ratio | 117.41% | 131.44% | - Net interest income increased by $0.1 million (1.8%) to $5.6 million, primarily due to a decrease in interest expense156 - The company recorded a $26 thousand recovery of credit loss, compared to a $260 thousand provision in the prior year quarter162 - Non-interest income increased by $0.6 million (85.7%) to $1.3 million, driven by higher depository and loan fees170 Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company is a smaller reporting company - Disclosure about market risk is not required as the Company is a smaller reporting company172 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the quarter-end - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025174 - No material changes were made to the Company's internal control over financial reporting during the fiscal quarter175 PART II. OTHER INFORMATION Legal Proceedings The company is not involved in any material legal proceedings outside the ordinary course of business - The Company is not involved in any pending legal proceedings that management believes would be material to its financial condition or operations177 Risk Factors No material changes to risk factors were reported since the last annual report - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended March 31, 2025178 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities No unregistered sales, use of proceeds, or issuer purchases of equity securities occurred during the period - No such activities were reported for the period179 Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - No defaults were reported for the period180 Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable181 Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter182 Exhibits This section lists all exhibits filed with the quarterly report, including certifications and XBRL data