Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 3, 2023

CARVER BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

001-13007

13-3904174

(State or Other Jurisdiction

of Incorporation)

(Commission File No.)

(I.R.S. Employer

Identification No.)

75 West 125th Street, New York, NY	10027-4512
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 360-8820

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

CARV

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 7.01. Regulation FD Disclosure.

On November 3, 2023, Carver Bancorp, Inc. (the “Company”) issued a letter to its shareholders. A copy of the letter is attached as Exhibit 99.1 hereto and incorporated by reference.

The information contained in this Item 7.01 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description

99.1		Letter to Shareholders, dated November 1, 2023

104		Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)

Forward Looking Statements

The Company may from time to time make written or oral “forward-looking statements,” including statements contained in the shareholder letter and in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained in this disclosure, are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. The Company and its operations are subject to numerous risks and uncertainties that include: changes in interest rates, which may reduce net interest margin and net interest income; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the ability of the Company to obtain approval from the Federal Reserve Bank of Philadelphia (the "Federal Reserve Bank") to distribute interest payments owed to the holders of the Company's subordinated debt securities; the limitations imposed on the Company which require, among other things, written approval of the Federal Reserve Bank prior to the declaration or payment of dividends, any increase in debt by the Company, or the redemption of Company common stock, and the effect on operations resulting from such limitations; the impact of the recent bank closings of First Republic Bank, Silicon Valley Bank and Signature Bank and the risks related to continued disruption in the banking industry and financial markets; the market price and trading volume of our shares of common stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses; changes in the level of trends of delinquencies and write-offs and in our allowance and provision for credit losses; the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for credit losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits, or prohibit us from paying dividends, which could adversely affect our dividends and earnings; national and/or local changes in economic conditions, which could occur from numerous causes, including political changes, domestic and international policy changes, unrest, war and weather, inflation or deflation conditions in the real estate, securities markets or the banking industry, which could affect liquidity in the capital markets, the volume of loan originations, deposit flows, real estate values, the levels of non-interest income and the amount of credit losses; adverse changes in the financial industry and the securities, credit, national and local real estate markets (including real estate values); changes in our existing loan portfolio composition (including reduction in commercial real estate loan concentration) and credit quality or changes in credit loss requirements; legislative or regulatory changes that may adversely affect the Company’s business, including but not limited to new capital regulations, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements, regulatory fees and compliance costs, and the resources we have available to address such changes; changes in the level of government support of housing finance; changes to state rent control laws, which may impact the credit quality of multifamily housing loans; our ability to control costs and expenses; the continuing impact of the COVID-19 pandemic on our business and results of operations; the impairment of our investment securities; risks related to a high concentration of loans to borrowers secured by property located in our market area; increases in competitive pressure among financial institutions or non-financial institutions; unexpected outflows of uninsured deposits could require us to sell investment securities at a loss; changes in consumer spending, borrowing and savings habits; technological changes that may be more difficult to implement or more costly than anticipated; changes in deposit flows, loan demand, real estate values, borrowing facilities, capital markets and investment opportunities, which may adversely affect our business; changes in accounting standards, policies and practices, as may be adopted or established by the regulatory agencies or the Financial Accounting Standards Board could negatively impact the Company's financial results; litigation or regulatory actions, whether currently existing or commencing in the future, which may restrict our operations or strategic business plan; the ability to originate and purchase loans with attractive terms and acceptable credit quality; and the ability to attract and retain key members of management, and to address staffing needs in response to product demand or to implement business initiatives. You should carefully review the risk factors described in the Form 10-K for the fiscal year ended March 31, 2023 and other documents the Company files from time to time with the Securities and Exchange Commission. The words “would be,” “could be,” “should be,” “probability,” “risk,” “target,” “objective,” “may,” “will,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and similar expressions or variations on such expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

		CARVER BANCORP, INC.
DATE: November 3, 2023	By:	/s/ Isaac Torres
		Isaac Torres
		Senior Vice President, General Counsel and Corporate Secretary

Exhibit 99.1

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.

im·pact ˈim-ˌpakt - … the force of impression of one thing on another; a significant or major effect

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 FEDERAL SAVINGS BANK

Carver was founded by a consortium of faith and business leaders in Harlem in 1948 to address the banking needs of the predominantly African American and Caribbean communities whose residents, businesses, and institutions had limited access to mainstream financial services and business capital. Carver remains headquartered in Harlem today, with a branch and 24/7 ATM network that serves the traditionally low-to-moderate-income neighborhoods of the five boroughs of New York City and surrounding areas. As the neighborhoods that we serve have evolved, so has Carver, which today proudly serves as a vehicle of wealth accumulation, finance, and commerce for communities with increasingly diverse income, ethnicity, and socio-economic profiles.

Cover	Nov. 03, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 03, 2023
Entity File Number	001-13007
Entity Registrant Name	CARVER BANCORP, INC.
Entity Central Index Key	0001016178
Entity Tax Identification Number	13-3904174
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	75 West 125th Street
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10027-4512
City Area Code	212
Local Phone Number	360-8820
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	CARV
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false