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Carver Bancorp, Inc. Reports Third Quarter Fiscal Year 2016 Results
NEW YORK, Feb. 10, 2016 (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 quarter ended December 31, 2015, the third quarter of its fiscal year 2016. The Company reported net income of $437 thousand, or basic and diluted earnings per share of $0.12, for the quarter, compared to net income of $111 thousand, or basic and diluted earnings per share of $0.03, for the quarter ended December 31, 2014. For the nine months ended December 31, 2015, the Company reported net income of $451 thousand, or basic and diluted earnings per share of $0.12, compared to net income of $491 thousand, or basic and diluted earnings per share of $0.13, for the comparative prior year period. Michael T. Pugh, the Company's President and Chief Executive Officer, said: “During the quarter our lending results continued to show positive momentum, with our loan portfolio increasing by $39 million, or 7% over the prior quarter. Our banking team's engagement with potential and existing customers is also yielding results in the growth of core deposits, which represent a low-cost source of funding for our loan portfolio. During the quarter, our core deposits increased 5% to $361 million, outpacing our overall 2% increase in deposits. At the close of the quarter, our capital ratios remained strong with a Tier 1 capital ratio of 10.15%. "As an organization, Carver continues to invest the time and resources in our people to create an ecosystem of success that better equips our bankers and the local small business entrepreneurs that operate in our communities with the tools they need to succeed. This past December, Carver co-facilitated a workshop on capital access for the local small business community. Our lending team also continues to build relationships with the Minority and Women Business Enterprises ("MWBEs") that are quickly becoming a key engine of economic growth in our communities. In the months ahead, we plan to formally rollout a new loan program for borrowers who need access to capital of up to $15,000. Mr. Pugh concluded, "We are pleased with the direction of our banking franchise and the operational improvements that are underway. As we look ahead, we believe Carver remains well-positioned for continued improvement and positive growth." Statement of Operations Highlights Third Quarter and Nine Months Results The Company reported net income of $437 thousand for the three months ended December 31, 2015, compared to net income of $111 thousand for the prior year quarter. For the nine months ended December 31, 2015, the Company reported net income of $451 thousand, compared to net income of $491 thousand for the prior year period. In both periods, the change in our results was driven by higher net interest income and non-interest income, partially offset by provisions for loan losses in the current periods compared to recoveries of loan losses in the prior year periods. Our provision for loan losses increased in both periods primarily as a result of the increase in our loan portfolio. Net Interest Income Net interest income increased $1.6 million, or 37.3%, to $5.8 million for the quarter, compared to $4.3 million for the prior year quarter. Net interest income increased $3.0 million, or 22.1%, to $16.6 million for the nine months ended December 31, 2015, compared to $13.6 million for the prior year period. Increases in each period were driven primarily by loan portfolio growth. Interest income increased $1.7 million, or 33.1%, to $7.0 million for the quarter, compared to $5.3 million for the prior year quarter, driven by a $169.4 million, or 40.9%, increase in the Bank's average loan balances. For the nine months ended December 31, 2015, interest income increased $3.3 million, or 20.1%, to $19.9 million compared to $16.6 million for the prior year period, driven by a $131.1 million, or 32.6%, increase in the Bank's average loan balances. Interest expense increased $158 thousand, or 15.6%, to $1.2 million for the quarter, compared to $1.0 million for the prior year quarter. For the nine months ended December 31, 2015, interest expense increased $326 thousand, or 10.9%, to $3.3 million, compared to $3.0 million for the prior year period. The increase in each period was primarily due to the Bank's deposit growth. The cost of deposits remained flat at 0.63% for the quarter and 0.62% year to date. Provision for Loan Losses To reflect the robust growth in the Bank's loan portfolio, the Company recorded a $728 thousand provision for loan losses for the third quarter, compared to a $1.2 million recovery of loan losses for the prior year quarter. Net chargeoffs of $100 thousand were recognized for the third quarter, compared to net recoveries of $434 thousand for the prior year quarter. For the nine months ended December 31, 2015, the Company recorded a $1.5 million provision for loan losses, compared to a $2.6 million recovery of loan losses for the prior year period, due primarily to the robust loan growth during the period. Net chargeoffs of $793 thousand were recognized for the nine months ended December 31, 2015, compared to net recoveries of $1.3 million in the prior year period. Non-interest Income Non-interest income increased $1.3 million, or 94.7%, to $2.7 million for the three months ended December 31, 2015, compared to $1.4 million for the prior year quarter. For the nine months ended December 31, 2015, non-interest income increased $893 thousand, or 21.4%, to $5.1 million compared to $4.2 million for the prior year period. The increase was primarily attributed to a gain recognized on the sale and leaseback of one of the Bank's branch locations conducted as part of Carver's ongoing site rationalization efforts. The increase was also attributable to gains on sales of loans and real estate owned during the quarter. Non-interest income in the prior year included a $323 thousand grant from the Community Development Financial Institutions Fund of the U.S. Treasury Department. Non-interest Expense Non-interest expense increased $558 thousand, or 8.2%, to $7.3 million for the quarter, compared to $6.8 million for the prior year quarter due to higher other non-interest expense, including the acceleration of expenses due to the closing of a branch during the quarter. For the nine months ended December 31, 2015, non-interest expense decreased $497 thousand or 2.5%, to $19.6 million, compared to $20.1 million for the prior year period. The Bank had lower expenses associated with delinquent loans and loan workout, as well as a decrease in regulatory assessment charges compared to the prior year period. Income Taxes Income tax expense was $67 thousand for the three months ended December 31, 2015, compared to $62 thousand for the prior year quarter. For the nine months ended December 31, 2015, income tax expense was $160 thousand, compared to $135 thousand in the prior year period. Financial Condition Highlights At December 31, 2015, total assets were $754.1 million, reflecting an increase of $77.7 million, or 11.5%, from total assets of $676.4 million at March 31, 2015. This change was primarily driven by an increase of $117.7 million in the loan portfolio net of the allowance for loan losses, partially offset by a decrease of $29.2 million in the investment portfolio. Total investment securities decreased $29.2 million, or 25.8%, to $83.9 million at December 31, 2015, compared to $113.1 million at March 31, 2015, as cash generated from calls and sales of securities was redeployed into higher yielding loans. Loans, net increased $118.4 million, or 24.5%, to $601.6 million at December 31, 2015, compared to $483.2 million at March 31, 2015, following growth in mortgage and business loans from loan purchases and originations. Loans held-for-sale ("HFS") decreased $172 thousand, or 6.7%, to $2.4 million at December 31, 2015, following the transfer of one loan into Real Estate Owned. Total liabilities increased $77.7 million, or 12.5%, to $699.1 million at December 31, 2015, compared to $621.4 million at March 31, 2015, following growth in deposits. Deposits increased $69.9 million, or 13.2%, to $597.6 million at December 31, 2015, compared to $527.8 million at March 31, 2015, due primarily to increases in certificates of deposits, money market and non-interest bearing checking accounts. Advances from the Federal Home Loan Bank of New York and other borrowed money increased $5.0 million, or 6.0%, to $88.4 million at December 31, 2015, compared to $83.4 million at March 31, 2015. The Bank increased its borrowings to fund loan growth during the quarter. Total equity increased $86 thousand, or 0.2%, to $55.1 million at December 31, 2015, compared to $55.0 million at March 31, 2015. The increase was primarily driven by net income for the nine month period, offset by a $365 thousand increase in unrealized losses on investments. Asset Quality At December 31, 2015, non-performing assets totaled $13.5 million, or 1.8% of total assets, compared to $15.3 million, or 2.3% of total assets, at March 31, 2015, and $15.1 million, or 2.3% of total assets, at December 31, 2014. Non-performing assets at December 31, 2015, consisted of $5.1 million of loans classified as impaired, $3.4 million of loans 90 days or more past due and nonaccruing, $1.6 million of loans classified as troubled debt restructurings, $1.0 million of other real estate owned, and $2.4 million of loans classified as HFS. At December 31, 2015, the allowance for loan losses was $5.2 million, representing a ratio of the allowance for loan losses to non-performing loans of 51.0% compared to a ratio of 53.3% at March 31, 2015. Non-performing loans have increased 20.9% during the nine month period, primarily due to one commercial real estate loan that is experiencing delays in securing approval to allow tenancy. Nonetheless, the ratio of the allowance for loan losses to total loans was 0.86% at December 31, 2015, compared to 0.93% at March 31, 2015. About Carver Bancorp, Inc. Carver Bancorp, Inc. is the holding company for Carver Federal Savings Bank, a federally chartered stock savings bank. Carver was founded in 1948 to serve African-American communities whose residents, businesses, and institutions had limited access to mainstream financial services. In light of its mission to promote economic development and revitalize underserved communities, Carver has been designated by the U.S. Department of the Treasury as a community development financial institution. Carver is among the largest African- and Caribbean-American managed banks in the United States, with 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.
Non-GAAP Financial Measures In addition to evaluating Carver Bancorp's results of operations in accordance with U.S. generally accepted accounting principles (“GAAP”), management routinely supplements their evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency ratio, return on average stockholders' equity excluding average accumulated other comprehensive income (loss) ("AOCI"), and average stockholders' equity excluding AOCI to average assets. Management believes these non-GAAP financial measures provide information that is useful to investors in understanding the Company's underlying operating performance and trends, and facilitates comparisons with the performance of other banks and thrifts. Further, the efficiency ratio is used by management in its assessment of financial performance, including non-interest expense control. Return on equity measures how efficiently we generate profits from the resources provided by our net assets. Return on average stockholders' equity is calculated by dividing annualized net income (loss) by average stockholders' equity, excluding AOCI. Management believes that this performance measure explains the results of the Company's ongoing businesses in a manner that allows for a better understanding of the underlying trends in the Company's current businesses. For purposes of the Company's presentation, AOCI includes the changes in the market or fair value of its investment portfolio and former pension plan. These fluctuations have been excluded due to the unpredictable nature of this item and are not necessarily indicative of current operating or future performance.
Contacts: Michael Herley/Ruth Pachman Kekst (212) 521-4897/4891 michael.herley@kekst.com ruth.pachman@kekst.com David L. Toner Carver Bancorp, Inc. First Senior Vice President and Chief Financial Officer (718) 676-8936 david.toner@carverbank.com  |
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