Carver Bancorp(CARV) - 2022 Q2 - Quarterly Report

Financial Performance - The Company reported net income of $1.1 million for the three months ended September 30, 2021, compared to a net loss of $0.8 million for the same quarter last year [206]. - The Company reported a net loss of $1.7 million for the six months ended September 30, 2021, compared to a net loss of $1.6 million for the prior year period [206]. - Net interest income increased by $1.3 million, or 33.3%, to $5.2 million for the three months ended September 30, 2021, compared to $3.9 million for the same quarter last year [213]. - Non-interest income increased by $1.2 million, or 60.0%, to $3.2 million for the three months ended September 30, 2021, compared to $2.0 million for the prior year quarter [238]. - Non-interest expense rose by $0.3 million, or 4.5%, to $7.0 million for the three months ended September 30, 2021, compared to $6.7 million for the prior year quarter [239]. - The efficiency ratio improved to 84.53% for the three months ended September 30, 2021, compared to 113.85% for the same period last year [207]. Asset and Liability Management - Carver Bancorp, Inc. had approximately $706.9 million in assets as of September 30, 2021 [137]. - Total assets increased by $30.2 million, or 4.5%, to $706.9 million at September 30, 2021, compared to $676.7 million at March 31, 2021 [193]. - Total liabilities increased by $26.3 million, or 4.2%, to $650.7 million at September 30, 2021, compared to $624.4 million at March 31, 2021 [197]. - Total equity increased by $3.9 million, or 7.5%, to $56.2 million at September 30, 2021, primarily due to $4.0 million raised from the issuance of preferred stock [200]. - The Bank's liquidity is monitored using guidelines approved by its Board of Directors, with primary sources of funds being deposits and borrowed funds [173]. Loan Portfolio and Credit Quality - The Bank originated approximately 203 loans totaling $34.7 million under the PPP in the first round and 217 loans totaling $22.4 million in the second round [147][148]. - The Bank's Allowance for Loan and Lease Losses (ALLL) is determined based on management's evaluation of the loan portfolio, including delinquency and non-performing loan data [150]. - The allowance for loan losses (ALLL) was maintained at $341 thousand, representing 6.2% of the total ALLL as of September 30, 2021 [224]. - The allowance for loan losses (ALLL) increased to $5.5 million as of September 30, 2021, from $5.14 million at March 31, 2021, representing a ratio of 1.06% to total loans [227]. - Non-performing assets totaled $6.8 million, or 1.0% of total assets, as of September 30, 2021, down from $7.2 million, or 1.1% at March 31, 2021 [235]. - Nonaccrual loans amounted to $6.7 million, or 1.0% of total assets, as of September 30, 2021, compared to $7.2 million, or 1.1% at March 31, 2021 [230]. - The ratio of allowance to non-performing loans improved to 82.04% as of September 30, 2021, from 71.48% at March 31, 2021 [227]. Capital and Regulatory Compliance - The Bank's Tier 1 leverage capital ratio was 9.99% at September 30, 2021, exceeding the individual minimum capital requirement of 9% [186]. - The Common Equity Tier 1 capital ratio was 13.44% at September 30, 2021, significantly above the minimum capital requirement of 7% [182]. - The Company is closely monitoring asset quality, liquidity, and capital positions due to the ongoing impact of COVID-19 on its operations [146]. - Legislative or regulatory changes could adversely affect the Company's business, including new capital regulations and increased compliance costs [134]. Community Engagement and Development - Carver Federal received a New Markets Tax Credit award of $59 million in June 2006, followed by $65 million in May 2009 and $25 million in August 2011, aimed at stimulating economic development in low- to moderate-income communities [144]. - The Bank's primary market area includes low- to moderate-income neighborhoods in Brooklyn, Manhattan, and Queens, facing significant competition from larger financial institutions [141]. - Carver Federal has a fifth consecutive "Outstanding" rating from the OCC following its CRA examination in January 2019, indicating strong community responsiveness [137]. - The Bank's community development initiatives are overseen by the Carver Community Development Corporation, which coordinates financial literacy and economic development projects [143].