NEW YORK, Aug. 7, 2012 (GLOBE NEWSWIRE) -- Carver Bancorp, Inc. (the "Company") (Nasdaq:CARV), the holding company for Carver Federal Savings Bank ("Carver" or the "Bank"), today announced financial results for its first fiscal quarter of 2013 ended June 30, 2012 ("Fiscal 2013").
The Company reported a net loss of $0.4 million or a loss per share of $0.10 for the first quarter of Fiscal 2013, compared to a net loss of $6.1 million or a loss per share of $37.65, for the prior year period.
Deborah C. Wright, Carver Bancorp Chairman and CEO said, "As we begin the new fiscal year, our energies are focused on two core priorities: returning our loan performance metrics to industry standards and substantially increasing our revenue. This quarter we continued to make significant progress towards improving our loan performance, as non-performing assets declined 16.9% from the prior quarter, and 46.3% decline from our peak of June 2011. As a result, the provision for loan losses declined substantially. We do, however, expect to be at this task for the balance of the fiscal year, which may lead to uneven results over the next several quarters."
Ms. Wright continued: "Having reduced operating costs over the course of the last twelve months, we are now focused on growing revenue by hiring more lenders and increasing our outreach to new and existing customers through initiatives such as Carver Community Cash. Over the coming months, we will pilot the delivery of check cashing and other products via automated machines installed in our ATM Centers and at a new supermarket branch. We are pleased with our progress in introducing Carver and, in some instances banking, to a broader spectrum of customers in the communities in which we operate."
Income Statement Highlights
First Quarter Results
The Company reported a net loss for the three months ended March 31, 2012 of $0.4 million compared to a net loss of $6.1 million for the prior year period. The primary drivers of the reduction in the loss versus the prior year period were reductions in the provision for loan losses and all categories of non-interest expense, which were partially offset by lower net interest margin and non-interest income.
Net Interest Income
Interest income decreased $1.1 million, or 15.0%, to $6.2 million in the first quarter, compared to the prior year quarter, with the decrease primarily attributed to a $150 million, or 26%, decrease in average loans. The average yield on mortgage-backed securities fell 94 basis points to 2.05% from 2.99% during the quarter, as higher yielding securities experienced early payoffs and were replaced with lower yielding securities. Although the average yield on loans increased 57 basis points to 5.19% from 4.62%, the drop in average loans decreased total interest income on loans. The reduction in real estate loans is expected to continue over the next several quarters until troubled debt restructures are complete and the Company rebuilds its loan production capacity.
Interest expense decreased $0.6 million, or 32.5%, to $1.3 million for the first quarter, compared to $1.9 million for the prior year quarter as lower cost deposits replaced borrowings. The average yield on interest bearing liabilities decreased 43 basis points to 1.04% for the quarter ended March 31, 2012.
Provision for Loan Losses
The Company recorded a $0.2 million provision for loan losses for the first quarter compared to $5.2 million for the prior year quarter. For the three months ended June 30, 2012, net charge-offs of $1.4 million were recognized compared to $4.6 million in the prior year period. The charge-offs in both quarters were primarily related to loans moved to held for sale ("HFS"). The charge-offs were partially offset by a reduction in the allowance for loan losses due a decline in total loans, non-performing loans and a reduction in our total loss experience.
Non-interest Income
Non-interest income decreased $0.2 million, or 13.9%, to $0.9 million for the first quarter, compared to $1.1 million for the prior year quarter, following adjustments on HFS loans and a valuation adjustment of $0.3 million on a real estate owned ("REO") property.
Non-interest Expense
Non-interest expense decreased $0.7 million to $6.6 million compared to $7.3 million in the prior year quarter. Non-interest expense was lower in all categories with the largest decreases comprised of $0.3 million in compensation expenses and $0.2 million in lower expenses on fixed assets and occupancy charges.
Income Taxes
The income tax expense was $0.2 million for the first quarter compared to a $0.1 million benefit for the prior year period.
Financial Condition Highlights
At June 30, 2012, total assets increased $3.7 million, or 0.6%, to $645.0 million, compared to $641.2 million at March 31, 2012. Cash and cash equivalents increased $19.3 million, investment securities increased $5.0 million and loans HFS increased $0.5 million. These increases were partially offset by decreases in the loan portfolio of $23.0 million, the allowance for loan losses of $1.2 million, and premises and equipment of $0.3 million.
Cash and cash equivalents increased $19.3 million, to $111.0 million at June 30, 2012, compared to $91.7 million at March 31, 2012. This increase primarily resulted from proceeds of loan payoffs and sales.
Total securities increased $5.0 million, or 5.2%, to $101.2 million at June 30, 2012, compared to $96.2 million at March 31, 2012. This change reflects an increase of $5.7 million in available-for-sale securities and a $0.7 million decrease in held-to-maturity securities as the Company diversified its investment portfolio.
Total loans receivable decreased $23.0 million, or 5.6%, to $389.9 million at June 30, 2012, compared to $412.9 million at March 31, 2012; $16.2 million of principal repayments and loan payoffs across all loan classifications contributed to the majority of the decrease, with the largest declines in Commercial Real Estate and Construction loans. An additional $7.5 million in loans were transferred from held for investment to HFS. Principal charge offs for the fiscal year totaled $1.4 million. Decreases were partially offset by loan originations and advances of $1.5 million.
HFS loans increased $0.5 million. The Company continued to take aggressive steps to increase troubled loan resolution. During the period, the portfolio experienced a net increase of $6.4 million (net of charge offs), which was offset by $5.7 million of sales and paydowns and $0.2 million transferred to REO.
Total liabilities increased $5.4 million, or 0.9%, to $590.0 million at June 30, 2012, compared to $584.6 million at March 31, 2012 as short-term borrowings increased $23.0 million, partially offset by reductions in deposits of $18.5 million.
Deposits decreased $18.5 million, or 3.5%, to $514.1 million at June 30, 2012, compared to $532.6 million at March 31, 2012. Reductions in certificates of deposit and non-interest bearing checking account balances accounted for the majority of the decrease.
Advances from the Federal Home Loan Bank of New York (FHLB-NY) and other borrowed money increased $23.0 million, or 52.9%, to $66.4 million at June 30, 2012, compared to $43.4 million at March 31, 2012 as the Company increased short-term borrowings during the quarter.
Total equity decreased $1.6 million, or 2.9%, to $55.0 million at June 30, 2012, compared to $56.6 million at March 31, 2012, reflecting the quarter's net loss.
Asset Quality
At June 30, 2012, non-performing assets totaled $71.8 million, or 11.1% of total assets, compared to $86.4 million or 13.5% of total assets at March 31, 2012 and $133.5 million or 19.7% of total assets at June 30, 2011. Non-performing assets at June 30, 2012 were comprised of $19.8 million of loans 90 days or more past due and non-accruing, $19.1 million of loans classified as a troubled debt restructuring, $0.7 million of loans that are either performing or less than 90 days past due and have been deemed to be impaired, $2.0 million of REO, and $30.2 million of loans classified as HFS.
The allowance for loan losses was $18.6 million at June 30, 2012, which represents a ratio of the allowance for loan losses to non-performing loans ($39.6 million) of 47.0% compared to 36.3% at March 31, 2012. The ratio of the allowance for loan losses to total loans was 4.8% at June 30, 2012, unchanged from March 31, 2012.
About Carver Bancorp, Inc.
Carver Bancorp, Inc. is the holding company for Carver Federal Savings Bank, a federally chartered stock savings bank, founded in 1948 to serve African-American communities whose residents, businesses and institutions had limited access to mainstream financial services. Carver, the largest African- and Caribbean-American run bank in the United States, operates nine full-service branches in the New York City boroughs of Brooklyn, Manhattan and Queens. For further information, please visit the Company's website at www.carverbank.com.
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors, risks and uncertainties. More information about these factors, risks and uncertainties is contained in our filings with the Securities and Exchange Commission.
| CARVER BANCORP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||
| June 30, | March 31, | |
| $ In thousands, except per share data | 2012 | 2012 |
| ASSETS | ||
| Cash and cash equivalents: | ||
| Cash and due from banks | $ 104,193 | $ 89,872 |
| Money market investments | 6,810 | 1,825 |
| Total cash and cash equivalents | 111,003 | 91,697 |
| Restricted cash | 6,415 | 6,415 |
| Investment securities: | ||
| Available-for-sale, at fair value | 90,833 | 85,106 |
| Held-to-maturity, at amortized cost (fair value of $11,091 and $11,774 at June 30, 2012 and March 31, 2012, respectively) | 10,401 | 11,081 |
| Total investments | 101,234 | 96,187 |
| Loans held-for-sale ("HFS") | 30,163 | 29,626 |
| Loans receivable: | ||
| Real estate mortgage loans | 348,361 | 367,611 |
| Commercial business loans | 41,120 | 43,989 |
| Consumer loans | 419 | 1,258 |
| Loans, net | 389,900 | 412,858 |
| Allowance for loan losses | (18,607) | (19,821) |
| Total loans receivable, net | 371,293 | 393,037 |
| Premises and equipment, net | 9,306 | 9,573 |
| Federal Home Loan Bank of New York ("FHLB-NY") stock, at cost | 3,054 | 2,168 |
| Accrued interest receivable | 2,180 | 2,256 |
| Other assets | 10,310 | 10,271 |
| Total assets | 644,958 | 641,230 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| LIABILITIES: | ||
| Deposits: | ||
| Savings | 100,774 | 101,079 |
| Non-Interest Bearing Checking | 62,125 | 67,202 |
| NOW | 25,146 | 28,325 |
| Money Market | 109,516 | 109,404 |
| Certificates of Deposit | 216,507 | 226,587 |
| Total Deposits | 514,068 | 532,597 |
| Advances from the FHLB-New York and other borrowed money | 66,421 | 43,429 |
| Other liabilities | 9,494 | 8,585 |
| Total liabilities | 589,983 | 584,611 |
| Stockholders' equity: | ||
| Preferred stock, (par value $0.01, per share), 45,118 Series D shares, with a liquidation preference of $1,000 per share, issued and outstanding | 45,118 | 45,118 |
| * Common stock (par value $0.01 per share: 10,000,000 shares authorized; 3,697,264 issued; 3,695,320 and 3,695,174 shares outstanding at June 30, 2012 and March 31, 2012, respectively) | 61 | 61 |
| Additional paid-in capital | 54,549 | 54,068 |
| Accumulated deficit | (45,461) | (45,091) |
| Non-controlling interest | 1,356 | 2,751 |
| Treasury stock, at cost (1,944 shares at June 30, 2012 and 2,090 at March 31, 2012, respectively) | (417) | (447) |
| Accumulated other comprehensive (loss) income | (231) | 159 |
| Total stockholders equity | 54,975 | 56,619 |
| Total liabilities and stockholders equity | 644,958 | 641,230 |
| (*) Common stock shares reflect 1 for 15 reverse stock split which was effective on October 27, 2011 | ||
| CARVER BANCORP, IN AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF OPERATION | ||
| Three Months Ended | ||
| June 30, | ||
| $ In thousands except per share data | 2012 | 2011 |
| Interest Income: | ||
| Loans | $ 5,587 | $ 6,702 |
| Mortgage-backed securities | 294 | 397 |
| Investment securities | 200 | 110 |
| Money market investments | 69 | 25 |
| Total interest income | 6,150 | 7,234 |
| Interest expense: | ||
| Deposits | 976 | 1,006 |
| Advances and other borrowed money | 344 | 950 |
| Total interest expense | 1,320 | 1,956 |
| Net interest income | 4,830 | 5,278 |
| Provision for loan losses | 224 | 5,170 |
| Net interest income after provision for loan losses | 4,606 | 108 |
| Non-interest income: | ||
| Depository fees and charges | 796 | 721 |
| Loan fees and service charges | 200 | 278 |
| Gain on sales of loans, net | 36 | 1 |
| Loss on real estate owned | (288) | -- |
| Lower of Cost or market adjustment on loans held for sale | -- | (100) |
| Other | 196 | 192 |
| Total non-interest income | 940 | 1,092 |
| Non-interest expense: | ||
| Employee compensation and benefits | 2,720 | 3,045 |
| Net occupancy expense | 858 | 932 |
| Equipment, net | 482 | 543 |
| Consulting fees | 66 | 90 |
| Federal deposit insurance premiums | 343 | 454 |
| Other | 2,164 | 2,230 |
| Total non-interest expense | 6,633 | 7,294 |
| Loss before income taxes | (1,087) | (6,094) |
| Income tax expense (benefit) | 159 | (109) |
| Net loss before attribution of noncontrolling interests | (1,246) | (5,985) |
| Non Controlling interest, net of taxes | (885) | 146 |
| Net loss | (361) | (6,131) |
| Loss per common share: | ||
| Basic (*) | $ (0.10) | $ (37.65) |
| (*) Common stock shares for all periods presented reflects a 1 for 15 reverse stock split which was effective on October 27, 2011 | ||
| CARVER BANCORP, INC. AND SUBSIDIARIES | |||||
| Non Performing Asset Table | |||||
| $ In thousands | June 2012 | March 2012 | December 2011 | September 2011 | June 2011 |
| Loans accounted for on a non-accrual basis (1): | |||||
| Gross loans receivable: | |||||
| One-to-four family | $ 7,363 | $ 6,988 | $ 12,863 | $ 14,335 | $ 16,421 |
| Multi-family | 1,790 | 2,923 | 2,619 | 9,106 | 9,307 |
| Commercial real estate | 16,487 | 24,467 | 26,313 | 16,088 | 25,893 |
| Construction | 4,658 | 11,325 | 17,651 | 31,526 | 54,425 |
| Business | 9,337 | 8,862 | 9,825 | 7,831 | 9,159 |
| Consumer | -- | 23 | 4 | 36 | 22 |
| Total non-performing loans | $ 39,635 | $ 54,588 | $ 69,275 | $ 78,922 | $ 115,227 |
| Other non-performing assets (2): | |||||
| Real estate owned | $ 1,961 | $ 2,183 | $ 2,183 | $ 275 | $ 237 |
| Loans held for sale | 30,163 | 29,626 | 22,490 | 39,369 | 18,068 |
| Total other non-performing assets | 32,124 | 31,809 | 24,673 | 39,644 | 18,305 |
| Total non-performing assets (3): | $ 71,759 | $ 86,397 | $ 93,948 | $ 118,566 | $ 133,532 |
| Non-performing loans to total loans | 10.17 % | 13.22 % | 15.12 % | 16.14 % | 21.18 % |
| Non-performing assets to total assets | 11.13 % | 13.47 % | 14.01 % | 17.49 % | 19.68 % |
| (1) Non-accrual status denotes any loan where the delinquency exceeds 90 days past due and in the opinion of management the collection of additional interest and/or principal is doubtful. Payments received on a non-accrual loan are either applied to the outstanding principal balance or recorded as interest income, depending on assessment of the ability to collect on the loan. | |||||
| (2) Other non-performing assets generally represent loans that the Bank is in the process of selling and has designated held for sale or property acquired by the Bank in settlement of loans less costs to sell (i.e., through foreclosure, repossession or as an in-substance foreclosure). These assets are recorded at the lower of their cost or fair value. | |||||
| (3) Troubled debt restructured loans performing in accordance with their modified terms for less than six months and those not performing in accordance with their modified terms are considered non-accrual and are included in the non-accrual category in the table above. At June 30, 2012 there were $5.2 million TDR loans that have performed in accordance with their modified terms for a period of at least six months. These loans are generally considered performing loans and are not presented in the table above. | |||||
| CARVER BANCORP, INC. AND SUBSIDIARIES | ||||||
| CONSOLIDATED AVERAGE BALANCES | ||||||
| For the Three Months Ended March 31, | ||||||
| 2012 | 2011 | |||||
| $ in thousands | Average | Average | Average | Average | ||
| Balance | Interest | Yield/Cost | Balance | Interest | Yield/Cost | |
| Interest Earning Assets: | ||||||
| Loans (1) | 430,367 | 5,587 | 5.19 % | 580,145 | 6,702 | 4.62 % |
| Mortgage-backed securities | 57,254 | 294 | 2.05 % | 53,164 | 397 | 2.99 % |
| Investment securities (2) | 36,022 | 110 | 1.23 % | 23,060 | 58 | 1.01 % |
| Restricted Cash Deposit | 6,415 | -- | 0.03 % | 2,049 | -- | 0.03 % |
| Equity Securities | 2,566 | 23 | 3.58 % | 3,294 | 48 | 5.79 % |
| Other investments and federal funds sold | 93,761 | 135 | 0.58 % | 29,913 | 28 | 0.37 % |
| Total interest-earning assets | 626,385 | 6,150 | 3.93 % | 691,625 | 7,233 | 4.18 % |
| Non-interest-earning assets | 6,282 | 5,105 | ||||
| Total assets | 632,667 | 696,730 | ||||
| Interest Bearing Liabilities: | ||||||
| Deposits: | ||||||
| Now demand | 26,607 | 11 | 0.16 % | 27,081 | 11 | 0.16 % |
| Savings and clubs | 101,305 | 67 | 0.26 % | 107,389 | 70 | 0.26 % |
| Money market | 109,330 | 203 | 0.75 % | 67,648 | 169 | 1.00 % |
| Certificates of deposit | 220,255 | 684 | 1.25 % | 214,510 | 744 | 1.39 % |
| Mortgagors deposits | 2,460 | 11 | 1.73 % | 2,863 | 12 | 1.69 % |
| Total deposits | 459,957 | 976 | 0.84 % | 419,491 | 1,006 | 0.96 % |
| Borrowed money | 43,930 | 344 | 3.11 % | 112,514 | 950 | 3.38 % |
| Total interest-bearing liabilities | 503,887 | 1,320 | 1.04 % | 532,005 | 1,956 | 2.22 % |
| Non-interest-bearing liabilities: | ||||||
| Demand | 65,198 | 128,292 | ||||
| Other liabilities | 6,834 | 7,293 | ||||
| Total liabilities | 575,919 | 667,590 | ||||
| Stockholders' equity | 56,748 | 29,140 | ||||
| Total liabilities & stockholders' equity | 632,667 | 696,730 | ||||
| Net interest income | 4,830 | 5,277 | ||||
| Average interest rate spread | 2.89 % | 2.71 % | ||||
| Net interest margin | 3.08 % | 3.05 % | ||||
| (1) Includes non-accrual loans | ||||||
| (2) Includes FHLB-NY stock | ||||||
| CARVER BANCORP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED SELECTED KEY RATIOS | ||
| Three Months Ended | ||
| June 30, | ||
| Selected Statistical Data: | 2012 | 2011 |
| Return on average assets (1) | (0.23)% | (3.52)% |
| Return on average equity (2) | (2.54)% | (84.16)% |
| Net interest margin (3) | 3.08 % | 3.05 % |
| Interest rate spread (4) | 2.89 % | 2.71 % |
| Efficiency ratio (5) | 114.96 % | 114.50 % |
| Operating expenses to average assets (6) | 4.19 % | 4.19 % |
| Average equity to average assets (7) | 8.97 % | 4.18 % |
|
Average interest-earning assets to average interest-bearing liabilities |
1.24 | 1.24 |
| Net loss per share (*) | $ (0.10) | $ (37.65) |
| Average shares outstanding (*) | 3,695,540 | 165,721 |
| June 30, | ||
| 2012 | 2011 | |
| Capital Ratios: | ||
| Tier 1 leverage ratio (8) | 9.72 % | 10.34 % |
| Tier I risk-based capital ratio (8) | 15.13 % | 13.98 % |
| Total risk-based capital ratio (8) | 17.63 % | 16.26 % |
| Asset Quality Ratios: | ||
| Non performing assets to total assets (9) | 11.13 % | 17.02 % |
| Non performing loans to total loans receivable (9) | 10.17 % | 21.18 % |
| Allowance for loan losses to total loans receivable | 4.77 % | 4.37 % |
| Allowance for loan losses to non-performing loans | 46.95 % | 20.62 % |
| (1) Net loss, annualized, divided by average total assets. | ||
| (2) Net loss, annualized, divided by average total equity. | ||
| (3) Net interest income, annualized, divided by average interest-earning assets. | ||
| (4) Combined weighted average interest rate earned less combined weighted average interest rate cost. | ||
| (5) Operating expenses divided by sum of net interest income plus non-interest income. | ||
| (6) Non-interest expenses, annualized, divided by average total assets. | ||
| (7) Average equity divided by average assets for the period ended. | ||
| (8) These ratios reflect consolidated bank only. | ||
| (9) Non performing assets consist of non-accrual loans, and real estate owned | ||
| (*) Common stock shares for all periods presented reflects a 1 for 15 reverse stock split which was effective on October 27, 2011 | ||