Business
Largest U.S. Black-Owned Bank Reports Loss of $39.5 million for FY 2011
“We are also focusing on revenues with the launch of “Carver Community Cash”, our new product line to meet the daily transactional needs of residents of our community who do not have a bank relationship. In the communities Carver serves, as many as 25% of residents obtain their financial services at check cashers, rather than banks. With our product line and community credibility, we hope to provide a welcoming place for this customer base to bank with us, and allow us to introduce them to all the financial industry has to offer, including savings and other products that allow them to prepare for a brighter future. We believe this product line will be a core plank in expanding our relevance to consumers and the institutions they count on, many of whom are Carver’s customers as well.”
“We understand that to substantially boost revenue we need to get back to lending. As we do, later this year, our focus will be on increasing loans to non-profits and small businesses in our community. While we are cognizant of the fact that the economy continues to present significant risks and unemployment remains high in the communities in we serve, we embrace the significant work ahead and are upbeat about our future,” Ms. Wright concluded.
As announced on July 1, 2011, Carver raised $55 million of equity via a private placement of mandatorily convertible non-voting participating preferred stock with seven institutional investors, including: The Goldman Sachs Group, Inc,. Morgan Stanley, Citigroup Inc., The Prudential Insurance Company of America, American Express Company, First Republic Bank and National Community Investment Fund. Additionally the U.S. Department of the Treasury has agreed to exchange the $18.98 million of the Company’s Series B Preferred Stock that it acquired in connection with the Company’s participation in the Trouble Asset Relief Program’s Community Development Capital Initiative for common stock, subject to shareholder approval. For additional information regarding the capital raise please see the Form 8-K filed with the Securities and Exchange Commission on June 29, 2011.
Income Statement Highlights
Fourth Quarter Results
The Company reported a net loss for the quarter ended March 31, 2011 of $5.5 million compared to a net loss of $2.2 million for the prior year quarter. The net loss is primarily the result of $6.8 million in provision for loan losses which is $2.2 million more than the provision set aside in the prior year quarter.
