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Carver Bancorp Inc. Reports Operating Results (10-Q)

February 16, 2010 | About:

Carver Bancorp Inc. (NASDAQ:CARV) filed Quarterly Report for the period ended 2009-12-31.

Carver Bancorp Inc. has a market cap of $19.06 million; its shares were traded at around $7.7 with a P/E ratio of 51.33 and P/S ratio of 0.4. The dividend yield of Carver Bancorp Inc. stocks is 5.19%. Carver Bancorp Inc. had an annual average earning growth of 11.3% over the past 10 years.CARV is in the portfolios of Third Avenue Management, Martin Whitman of Third Avenue Value Fund.

Highlight of Business Operations:

Recognition of the Banks $59.0 million NMTC award began in December 2006 when the Bank invested $29.5 million, one-half of its $59 million award. In December 2008, the Bank invested an additional $10.5 million and transferred rights to $19.2 million to an investor in a NMTC project. The Banks NMTC allocation was fully invested as of December 31, 2008. During the seven year period, assuming the Bank meets compliance requirements, the Bank will receive 39% of the $40.0 million invested award amount in tax benefits (5% over each of the first three years, and 6% over each of the next four years). The Company expects to receive the remaining NMTC tax benefits of approximately $8.4 million from its $40.0 million investment over the next five years. The Companys ability to utilize deferred tax assets generated by NMTC income tax benefits over the next five years, as well as other deferred tax assets, depends on its ability to meet the NMTC compliance requirements and its ability to generate sufficient taxable income from operations or from potential tax strategies to generate taxable income in the future.

Net cash used in investing activities was $11.4 million, primarily representing cash disbursed to fund loan originations of $96.4 million, offset partially by principal collections on loans of $78.6 million and proceeds from principal payments/maturities/sales/calls of securities of $35.2 million. Net cash provided by financing activities was $18.7 million and primarily resulted from increases in borrowings of $38.5 million, offset by a decrease in deposits of $18.4 million. Net cash used in operating activities during this period was $1.3 million, primarily representing net income, provision for loan losses and an increase in other assets.

At December 31, 2009, total assets increased $20.3 million, or 2.6%, to $811.7 million compared to $791.4 million at March 31, 2009. The increase in total assets is primarily a result of increases in loans receivable of $26.0 million and other assets of $7.3 million, offset by decreases in investment securities of $14.8 million and premises and equipment of $3.2 million. $4 million of the increase in other assets is prepayments of deposit insurance assessments required by the FDIC.

Loans receivable, including loans previously held for sale, increased $26.0 million, or 4%, to $688.2 million at December 31, 2009 compared to $662.2 million at March 31, 2009. The increase was primarily the result of increases in commercial mortgages of $27.8 million, multifamily loans of $10.8 million, and commercial business loans of $15.4 million, offset by decreases in construction loans of $18.2 million, and 1-4 family loans of $9.6 million (after adjusting for the reclassification from loans held for sale). The Bank continues to utilize prudent pricing and underwriting standards in originating new loans. This ongoing commitment demonstrates Carvers belief in the stability of its local communities during these difficult economic times and its commitment to making credit available to qualified homeowners and business owners.

Deposits decreased $18.4 million, or 3.0%, to $585.0 million at December 31, 2009 compared to $603.4 million at March 31, 2009. The branch consolidation resulted in the release of $32 million in Business Development District deposits and the Bank also declined to renew $25 million in higher cost institutional deposits. These reductions were partially offset by new deposits of $38.6 million of which $16.3 million were generated by deposit promotions.

Total stockholders equity increased $0.7 million, or 0.8%, to $65.0 million at December 31, 2009 compared to $64.3 million at March 31, 2009. The increase in total stockholders equity was primarily attributable to net income for the nine months ended December 31, 2009 totaling $2.3 million, partially offset by dividends paid of $1.4 million and a increase in accumulated other comprehensive loss of $0.2 million. The Banks capital levels exceed all regulatory requirements of a well-capitalized financial institution.

Read the The complete Report

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Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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