Carver Bancorp Inc. (CARV, Financial) filed Annual Report for the period ended 2010-03-31.
Carver Bancorp Inc. has a market cap of $17.3 million; its shares were traded at around $7 with a P/E ratio of 46.7 and P/S ratio of 0.4. CARV is in the portfolios of Third Avenue Management, Martin Whitman of Third Avenue Value Fund.
The Bank formalized its many community focused investments on August 18, 2005, by forming Carver Community Development Corporation (CCDC). CCDC oversees the Banks participation in local economic development and other community-based initiatives, including financial literacy activities. CCDC is now coordinating the Banks development of an innovative approach to reach the unbanked customer market in Carver Federals communities. Importantly, CCDC spearheads the Banks applications for grants and other resources to help fund these important community activities. In this connection, Carver Federal has successfully competed with large regional and global financial institutions in a number of competitions for government grants and other awards. In June 2006, Carver Federal was selected by the United States Department of Treasury (US Treasury) to receive an award of $59 million in New Markets Tax Credits, (NMTC). In May 2009, Carver Federal won another NMTC award in the amount of $65 million. The NMTC award is used to stimulate economic development in low- to moderate-income communities. The NMTC award enables the Bank to invest with community and development partners in economic development projects with attractive terms including, in some cases, below market interest rates, which may have the effect of attracting capital to underserved communities and facilitating revitalization of the community, pursuant to the goals of the NMTC program. The NMTC award provides a credit to Carver Federal against Federal income taxes when the Bank makes qualified investments. In addition to the tax credit awards previously recognized, the Company expects to receive additional NMTC tax benefits of approximately $7.8 million from the June 2006 award over approximately the next four years. The Companys ability to realize the benefit of the tax credits is dependent upon the Company generating sufficient taxable income. As of March 31, 2010, Carver Federal has transferred rights to investors to $31 million of new market tax credits from the May 2009 award and has entered into an agreement with an additional third party investor which is intended to result in future transactions to transfer another $24 million. See item 7 below and the footnotes to the financial statements for additional details on the NMTC activities.
The Trust was formed in 2003 for the purpose of issuing $13.0 million aggregate liquidation amount of floating rate Capital Securities due September 17, 2033 (Capital Securities) and $0.4 million of common securities (which are the only voting securities of Carver Statutory Trust I), which are 100% owned by Carver Bancorp, Inc., and using the proceeds to acquire Junior Subordinated Debentures issued by Carver Bancorp, Inc. Carver Bancorp, Inc. has fully and unconditionally guaranteed the Capital Securities along with all obligations of Carver Statutory Trust I under the trust agreement relating to the Capital Securities. The Trust is not consolidated with Carver Bancorp, Inc. for financial reporting purposes in accordance with the Financial Accounting Standards Boards Accounting Standards Codification (ASC) regarding the consolidation of variable interest entities (formerly FIN 46(R)).
On April 5, 2006, the Company entered into a definitive merger agreement to acquire Community Capital Bank (CCB), a Brooklyn-based community bank, in a cash transaction valued at $11.1 million, or $40.00 per CCB share. On September 29, 2006, the Bank acquired CCB, with approximately $165.4 million in assets and two branches. The Bank incurred an additional $0.9 million in transaction costs related to the acquisition. The acquisition of CCB and its award-winning small business lending platform has expanded the Companys ability to capitalize on substantial growth in the small business market. The Company continues to evaluate acquisition opportunities as part of its strategic objective for long-term growth.
On March 8, 1995, Carver Federal formed CFSB Realty Corp. as a wholly-owned subsidiary to hold real estate acquired through foreclosure pending eventual disposition. At March 31, 2010, this subsidiary had $0.8 million in total assets and a minimal net operating loss. During the fourth quarter of the fiscal year ended March 31, 2003, Carver Federal formed Carver Asset Corporation (CAC), a wholly-owned subsidiary which qualifies as a real estate investment trust (REIT) pursuant to the Internal Revenue Code of 1986, as amended. This subsidiary may, among other things, be utilized by Carver Federal to raise capital in the future. As of March 31, 2010, CAC owned mortgage loans carried at approximately $90.0 million and total assets of $126.5 million. On August 18, 2005, Carver Federal formed CCDC, a wholly-owned community development entity, to facilitate and develop innovative approaches to financial literacy, address the needs of the unbanked and participate in local economic development and other community-based activities. As part of its operations, CCDC monitors the portfolio of investments related to NMTC awards and makes application for additional awards.
Loan Portfolio Composition. Total loans receivable increased by $9.5 million, or 1.4%, to $672.7 million at March 31, 2010 compared to $663.2 million at March 31, 2009. Carver Federals total loans receivable as a percentage of total assets decreased to 83.5% at March 31, 2010 compared to 83.8% at March 31, 2009. Non-residential real estate loans, which includes commercial real estate, totaled $259.6 million, or 38.6% of total loans receivable; multi-family loans totaled $141.7 million, or 21.1% of total loans receivable; construction loans (net of committed but undisbursed funds), totaled $111.3 million, or 16.5% of total loans receivable; one-to-four family mortgage loans totaled $90.1 million, or 13.4% of total loans receivable; business loans totaled $68.5 million, or 10.2% of total loans receivable; and consumer loans (credit card loans, personal loans, and home improvement loans) totaled $1.4 million, or 0.2% of total loans receivable.
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Carver Bancorp Inc. has a market cap of $17.3 million; its shares were traded at around $7 with a P/E ratio of 46.7 and P/S ratio of 0.4. CARV is in the portfolios of Third Avenue Management, Martin Whitman of Third Avenue Value Fund.
Highlight of Business Operations:
As of June 28, 2010, there were 2,474,719 shares of common stock of the Registrant outstanding. The aggregate market value of the Registrants common stock held by non-affiliates, as of September 30, 2009 (based on the closing sales price of $6.15 per share of the registrants common stock on September 30, 2009) was approximately $15,219,522The Bank formalized its many community focused investments on August 18, 2005, by forming Carver Community Development Corporation (CCDC). CCDC oversees the Banks participation in local economic development and other community-based initiatives, including financial literacy activities. CCDC is now coordinating the Banks development of an innovative approach to reach the unbanked customer market in Carver Federals communities. Importantly, CCDC spearheads the Banks applications for grants and other resources to help fund these important community activities. In this connection, Carver Federal has successfully competed with large regional and global financial institutions in a number of competitions for government grants and other awards. In June 2006, Carver Federal was selected by the United States Department of Treasury (US Treasury) to receive an award of $59 million in New Markets Tax Credits, (NMTC). In May 2009, Carver Federal won another NMTC award in the amount of $65 million. The NMTC award is used to stimulate economic development in low- to moderate-income communities. The NMTC award enables the Bank to invest with community and development partners in economic development projects with attractive terms including, in some cases, below market interest rates, which may have the effect of attracting capital to underserved communities and facilitating revitalization of the community, pursuant to the goals of the NMTC program. The NMTC award provides a credit to Carver Federal against Federal income taxes when the Bank makes qualified investments. In addition to the tax credit awards previously recognized, the Company expects to receive additional NMTC tax benefits of approximately $7.8 million from the June 2006 award over approximately the next four years. The Companys ability to realize the benefit of the tax credits is dependent upon the Company generating sufficient taxable income. As of March 31, 2010, Carver Federal has transferred rights to investors to $31 million of new market tax credits from the May 2009 award and has entered into an agreement with an additional third party investor which is intended to result in future transactions to transfer another $24 million. See item 7 below and the footnotes to the financial statements for additional details on the NMTC activities.
The Trust was formed in 2003 for the purpose of issuing $13.0 million aggregate liquidation amount of floating rate Capital Securities due September 17, 2033 (Capital Securities) and $0.4 million of common securities (which are the only voting securities of Carver Statutory Trust I), which are 100% owned by Carver Bancorp, Inc., and using the proceeds to acquire Junior Subordinated Debentures issued by Carver Bancorp, Inc. Carver Bancorp, Inc. has fully and unconditionally guaranteed the Capital Securities along with all obligations of Carver Statutory Trust I under the trust agreement relating to the Capital Securities. The Trust is not consolidated with Carver Bancorp, Inc. for financial reporting purposes in accordance with the Financial Accounting Standards Boards Accounting Standards Codification (ASC) regarding the consolidation of variable interest entities (formerly FIN 46(R)).
On April 5, 2006, the Company entered into a definitive merger agreement to acquire Community Capital Bank (CCB), a Brooklyn-based community bank, in a cash transaction valued at $11.1 million, or $40.00 per CCB share. On September 29, 2006, the Bank acquired CCB, with approximately $165.4 million in assets and two branches. The Bank incurred an additional $0.9 million in transaction costs related to the acquisition. The acquisition of CCB and its award-winning small business lending platform has expanded the Companys ability to capitalize on substantial growth in the small business market. The Company continues to evaluate acquisition opportunities as part of its strategic objective for long-term growth.
On March 8, 1995, Carver Federal formed CFSB Realty Corp. as a wholly-owned subsidiary to hold real estate acquired through foreclosure pending eventual disposition. At March 31, 2010, this subsidiary had $0.8 million in total assets and a minimal net operating loss. During the fourth quarter of the fiscal year ended March 31, 2003, Carver Federal formed Carver Asset Corporation (CAC), a wholly-owned subsidiary which qualifies as a real estate investment trust (REIT) pursuant to the Internal Revenue Code of 1986, as amended. This subsidiary may, among other things, be utilized by Carver Federal to raise capital in the future. As of March 31, 2010, CAC owned mortgage loans carried at approximately $90.0 million and total assets of $126.5 million. On August 18, 2005, Carver Federal formed CCDC, a wholly-owned community development entity, to facilitate and develop innovative approaches to financial literacy, address the needs of the unbanked and participate in local economic development and other community-based activities. As part of its operations, CCDC monitors the portfolio of investments related to NMTC awards and makes application for additional awards.
Loan Portfolio Composition. Total loans receivable increased by $9.5 million, or 1.4%, to $672.7 million at March 31, 2010 compared to $663.2 million at March 31, 2009. Carver Federals total loans receivable as a percentage of total assets decreased to 83.5% at March 31, 2010 compared to 83.8% at March 31, 2009. Non-residential real estate loans, which includes commercial real estate, totaled $259.6 million, or 38.6% of total loans receivable; multi-family loans totaled $141.7 million, or 21.1% of total loans receivable; construction loans (net of committed but undisbursed funds), totaled $111.3 million, or 16.5% of total loans receivable; one-to-four family mortgage loans totaled $90.1 million, or 13.4% of total loans receivable; business loans totaled $68.5 million, or 10.2% of total loans receivable; and consumer loans (credit card loans, personal loans, and home improvement loans) totaled $1.4 million, or 0.2% of total loans receivable.
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