Carver Bancorp(CARV) - 2026 Q2 - Quarterly Report

Financial Performance - The company reported a net loss of $2.4 million for the three months ended September 30, 2025, compared to a net loss of $2.1 million for the same period in the prior year[160]. - Net interest income decreased by $0.9 million, or 15.0%, to $5.1 million for the three months ended September 30, 2025[166]. - The efficiency ratio increased to 138.33% for the three months ended September 30, 2025, compared to 125.11% for the same period in the prior year[161]. - Non-interest income increased by $0.6 million, or 100.0%, to $1.2 million for the three months ended September 30, 2025, compared to the prior year quarter[181]. - Non-interest expense rose by $0.6 million, or 7.3%, to $8.8 million for the three months ended September 30, 2025, compared to the prior year quarter[182]. Asset and Liability Management - Carver Federal Savings Bank had approximately $697.9 million in assets as of September 30, 2025[116]. - Total assets decreased by $32.1 million, or 4.4%, to $697.9 million at September 30, 2025, from $730.0 million at March 31, 2025[149]. - Total liabilities decreased by $29.4 million, or 4.2%, to $671.0 million at September 30, 2025, primarily due to a decrease in total deposits[153]. - Total equity decreased by $2.7 million, or 9.1%, to $26.9 million at September 30, 2025, due to a net loss of $3.6 million[156]. Loan Portfolio and Credit Quality - The Bank's net loan portfolio decreased by $20.5 million during the same period[149]. - Gross portfolio loans decreased by $20.8 million, or 3.4%, to $592.9 million as of September 30, 2025, compared to $613.7 million at March 31, 2025[152]. - Nonaccrual loans totaled $26.7 million, or 3.82% of total assets, at September 30, 2025, compared to $24.6 million, or 3.37% of total assets at March 31, 2025[175]. - The allowance for credit losses (ACL) was $6.1 million at September 30, 2025, representing a ratio of ACL to total loans of 1.03%[175]. - The allowance for credit losses on off-balance sheet credit exposures was $14 thousand as of September 30, 2025[159]. - The allowance to total loans ratio was 1.03% as of September 30, 2025, consistent with the previous quarter[178]. - The total non-performing loans to total loans ratio was 4.50%, up from 4.04% at March 31, 2025[178]. Capital and Regulatory Compliance - The Tier 1 leverage ratio was 8.70% at September 30, 2025, below the 9% Individual Minimum Capital Requirement (IMCR)[140]. - The total risk-based capital ratio was 11.44% at September 30, 2025, below the 12% IMCR requirement[140]. - The Company has a representation and warranty repurchase reserve of $80,000 as of September 30, 2025[147]. Market Conditions and Competition - The Company faces significant competition for deposits and mortgage lending in its market areas, with many competitors having greater financial resources[119]. - The Bank's primary lending market includes Kings, New York, Bronx, and Queens Counties, as well as lower Westchester County[119]. Stock and Shareholder Actions - As of September 30, 2025, the Company repurchased 11,744 shares of its common stock at an average price of $235.80 per share[129]. - The Company has a stock repurchase program in place, initially announced on August 6, 2002, to repurchase up to 15,442 shares[129]. Interest Income and Expense - Interest income decreased by $1.2 million for the three and six months ended September 30, 2025, compared to the prior year periods, with a $0.9 million decrease in loan interest income due to a 4.2% decrease in average loan balances[170]. - Interest expense decreased by $0.4 million, or 10.5%, to $3.4 million for the three months ended September 30, 2025, compared to $3.8 million for the prior year quarter[171]. - The average interest rate spread for the six months ended September 30, 2025, was 2.65%, compared to 2.63% for the prior year period[169]. Deposits and Funding Sources - Total deposits decreased by $36.2 million, contributing to the decline in cash and cash equivalents[150]. - Deposits decreased by $36.2 million, or 5.5%, to $625.6 million at September 30, 2025, with a significant drop in certificates of deposit[154]. - The Bank's primary sources of funds are deposits, borrowed funds, and principal and interest payments on loans and securities[130]. - Advances from the FHLB-NY and other borrowed money increased by $7.3 million, or 36.1%, to $27.5 million at September 30, 2025[155].