Carver Bancorp Reports $13.7 Million Net Loss for Fiscal Year Ending March 31, 2025

Carver Bancorp, Inc. reported a net loss of $13.7 million for the fiscal year ending March 31, 2025, a significant increase from the $3.0 million loss recorded in the previous year. This decline in financial performance was primarily attributed to rising interest expenses, increased non-interest expenses, and a higher provision for credit losses, which outweighed a slight increase in interest income. Total assets decreased by 3.5% to $730.0 million, driven by reductions in cash and cash equivalents, investment securities, and the loan portfolio.

The company's total loans receivable fell by $9.2 million, or 1.5%, to $613.7 million, with notable decreases in one-to-four family loans and multifamily loans. The allowance for credit losses increased to $6.3 million, representing 1.03% of total loans, reflecting management's adjustments based on qualitative factors and an increase in individually analyzed loan reserves. Non-performing loans rose to $24.6 million, or 4.01% of total loans, compared to 1.89% in the prior year, indicating a deterioration in asset quality.

In terms of strategic developments, Carver entered into a formal agreement with the Office of the Comptroller of the Currency (OCC) on May 14, 2025, which mandates the establishment of a Compliance Committee and the preparation of a three-year strategic plan aimed at improving earnings performance. The agreement is part of the bank's ongoing efforts to enhance its operational framework and address regulatory requirements. Additionally, the bank has focused on expanding its community development initiatives, including a recent partnership to support green energy projects.

Operationally, Carver Federal Savings Bank, the company's primary subsidiary, maintained a workforce of 109 employees, with a significant emphasis on diversity, as 86% of employees identified as minorities. The bank's deposit base grew by $14.8 million, or 2.3%, to $661.8 million, primarily due to increases in money market and certificate of deposit accounts. However, the bank faced challenges in maintaining non-interest-bearing deposits, which decreased by 12.3% during the fiscal year.

Looking ahead, Carver Bancorp's management is focused on navigating the current economic landscape, characterized by high interest rates and inflationary pressures. The company is actively monitoring its liquidity, asset quality, and capital positions while implementing strategies to mitigate risks associated with the ongoing regulatory environment. The outlook remains cautious, with management acknowledging the potential for continued volatility in the banking sector and its impact on future performance.