================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------------
Date of Report (Date of earliest event reported): May 25, 2000
CARVER BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-21487 13-3904174
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
75 WEST 125TH STREET
NEW YORK, NEW YORK 10027-4512
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (212) 876-4747
NOT APPLICABLE
(Former name or former address, if changed since last report)
================================================================================
<PAGE>
ITEM 5. OTHER EVENTS.
On May 25, 2000, Carver Bancorp, Inc. (the "Company"), the holding
company for Carver Federal Savings Bank, a federally chartered stock savings
bank, issued a news release announcing its results for the three month period
ended March 31, 2000 and the twelve month period ended March 31, 2000 and that
it was restating its net income for the three-month and six-month periods ended
September 30, 1999 as well as for the nine-month period ended December 31, 1999.
The Company intends to file amendments to its quarterly reports on Form 10-Q for
the three-month periods on September 30, 1999 and December 31, 1999. A copy of
the news release containing such announcement is filed herewith as Exhibit 99.1
and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits. The following Exhibits are filed as part of this report:
Exhibit No. Description
- ----------- -----------
99.1 Press Release issued May 25, 2000
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CARVER BANCORP, INC.
By: /s/ Deborah C. Wright
-------------------------------------
Deborah C. Wright
President and Chief Executive Officer
Dated: May 26, 2000
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
99.1 Press Release issued May 25, 2000
[CARVER BANCORP, INC. LOGO]
FOR IMMEDIATE
RELEASE
Contact: Ruth Pachman/Sarah Zitter Milstein James Boyle
Kekst and Company Carver Bancorp, Inc.
(212) 521-4800 (212) 876-4747, ext. 174
CARVER BANCORP, INC. REPORTS FOURTH QUARTER
AND FISCAL YEAR 2000 RESULTS
--EXTRAORDINARY EXPENSES AND ACCOUNTING ADJUSTMENTS
LEAD TO LOSSIN FOURTH QUARTER
AND YEAR--
--COMPANY RESTATES NET INCOME FOR SECOND QUARTER OF FISCAL 2000--
NEW YORK, NEW YORK, May 25, 2000 - Carver Bancorp, Inc. (the "Company" or
"Carver") (AMEX: CNY), the holding company for Carver Federal Savings Bank (the
"Bank"), today announced its results for the three month period ended March 31,
2000 and the twelve month period ended March 31, 2000.
Carver reported a net loss of $2.7 million, or $1.23 per primary share for the
fourth quarter of fiscal year 2000, compared to net income of $765,000 or $0.35
per primary share for the fourth quarter of fiscal year 1999. For fiscal year
2000, the Company reported a net loss of $1.1 million, or $0.53 per primary
share, compared to a net loss of $4.5 million, or $2.02 per primary share for
fiscal year 1999.
The Company also reported that it is restating its net income for the
three-month and six-month periods ended September 30, 1999 as well as for the
nine-month period ended December 31, 1999. In each instance, the restated
earnings are attributable to an adjustment required to reverse an incorrect
accounting entry of $415,000 made during the second quarter of fiscal year 2000
which had the effect of increasing net income for the period. For the
three-month period ended September 30, 1999 the Company is restating its net
income from $675,000, or $0.30 per primary share to $260,000 or $0.12 per
primary share. For the six-month period ended September 30, 1999 the Company is
restating its net income from $1.5 million or $0.66 per primary share to $1.0
million, or $0.47 per primary share. For the nine-month period ended December
31, 1999 the Company is restating its income from $2.0 million or $0.90 per
primary share to $1.6 million, or $0.72 per primary share. The Company intends
to file amendments to its quarterly reports on Form 10-Q for the three-month
periods ended September 30, 1999 and December 31, 1999.
"While Carver's operations are significantly improved, two extraordinary events
negatively impacted our results for the fourth quarter and the year, resulting
in a loss for both periods," said Deborah C. Wright, Carver's president and
chief executive officer. "First, the proxy fight with BBC Capital Market was
costly. Second, to close the books on Carver's previous financial difficulties,
in December 1999 we appointed KPMG LLP as our new auditor and in January 2000 we
hired a new chief financial officer. After a thorough review of our financial
statements in conjunction with our year-end audit, we concluded that adjustments
to accounting records were required in several areas. In particular, we
determined that certain assets were no longer
<PAGE>
recoverable and should be expensed and that increases to expenses associated
with certain of the Company's benefit plans were required. These adjustments,
coupled with proxy fight expenses, offset solid gains in the Company's fourth
quarter net interest income."
"From the time I took office on June 1st, I was determined to put Carver's
financial issues behind us and instill a new standard of fiscal discipline," Ms.
Wright said. "In light of the longstanding nature of these issues, I knew that
this goal would not be achieved overnight. Nevertheless, we have taken dramatic
steps to turn Carver around, including an intensive financial, operational and
personnel housecleaning. Although these accounting adjustments hurt our bottom
line in the short term, they were necessary to ensure that Carver moves forward
from the most solid financial position possible."
Ms. Wright added, "We have made considerable progress on the operational front,
as we move aggressively to implement our business strategy of rebuilding our
platform to address the growing financial services needs of African- and
Caribbean-Americans. In the past ten months we have raised $2.5 million in
strategic equity capital to fund new growth, hired new senior executives with
strong retail banking, lending and technology experience, and divested our
Roosevelt, Long Island branch--a first step in rationalizing our cost structure
and re-positioning our branch network. Most recently we launched Carver 2001, a
comprehensive review of Carver's operational practices, intended to increase
productivity, reduce costs, and introduce best practices. It will also include
the investigation of new technologies for our customers and employees.
"While we are clearly unsatisfied with the results for fiscal year 2000, we
believe that we have established a more solid foundation upon which to build
customer satisfaction and shareholder value. While there is still a lot of work
to be done, we are confident in our prospects for the future," Ms. Wright
concluded.
RESULTS OF OPERATIONS FOR THE FOURTH QUARTER OF FISCAL YEAR 2000
Comparing the fourth quarter of fiscal year 2000 to the comparable prior year
period, the decrease in net income was primarily due to increases in
non-interest expenses and the provision for possible loan losses, offset in part
by an increase in net interest income and non-interest income.
Interest income decreased by $194,000 or 2.8% to $6.8 million for the
three-month period ended March 31, 2000, compared to $7.0 million for the same
period last year. The decrease in interest income is primarily attributable to
decreases of $286,000 and $231,000 in interest earned on loans receivable and
mortgage-backed securities, respectively, offset by increases of $252,000 in
interest earned on investment securities, and $70,000 in other interest earning
assets. These variances are attributable to a shift in assets from higher
yielding loans and mortgage-backed securities to investment securities.
Interest expense decreased by $406,000 or 10.8% to $3.4 million for the
three-month period ended March 31, 2000, compared to $3.8 million for the
comparable prior year period. The decrease in interest expense is primarily
attributable to a decrease of $354,000 in interest expense on borrowed money,
resulting from a decrease in the average cost and the average balance of
borrowed money.
<PAGE>
Net interest income before the provision for possible loan losses increased by
$212,000 or 6.6% to $3.4 million for the three-month period ended March 31, 2000
compared to $3.2 million for the same period last year. Net interest income
after the provision for possible loan losses remained at $2.9 million, virtually
unchanged from the prior year period.
The Company provided $494,000 for possible loan losses for the three-month
period ended March 31, 2000 compared to $219,000 in the same period last year.
The provision for possible loan losses for the fourth quarter of fiscal year
2000 represents the amount required to bring the allowance for possible loan
losses to the level required by the Company's policy. During the fourth quarter
of fiscal year 2000 the Bank charged off approximately $ 846,000 of loans. At
March 31, 2000, non-performing loans totaled $2.1 million, or 0.78% of total
loans compared to $4.5 million or 1.64% of total loans at March 31, 1999. At
March 31, 2000, the Bank's allowance for possible loan losses was $2.9 million
compared to $4.0 million at March 31, 1999, resulting in a ratio of the
allowance to non-performing loans of 138.0% at March 31, 2000 compared to 89.3%
at March 31, 1999 and a ratio of the allowance for possible loan losses to total
loans of 1.07% and 1.46%, respectively.
Non-interest income increased $209,000 or 23.5% to $1.1 million for the
three-month period ended March 31, 2000 compared to $888,000 for the same period
last year. The increase in non-interest income is primarily attributable to an
increase of $686,000 in other non-interest income, which offset a decrease of
$477,000 in loan fees and service charges. The increase in other non-interest
income is primarily due to non-recurring income of $728,000 resulting from the
sale of the Alhambra Building by the Company's subsidiary, Alhambra Realty.
Non-interest expense increased by $3.6 million or 115.1% to $6.6 million for the
three-month period ended March 31, 2000 compared to $3.1 million for the
comparable prior year period. The increase in non-interest expense is primarily
attributable to increases in salaries and employee benefits and other
non-interest expenses. The increase in salaries and employees benefits is the
result of one-time increases of approximately $593,000 associated with certain
of the Bank's benefit plans. The increase in other non-interest expenses is
primarily attributable to approximately $870,000 of costs associated with the
Company's proxy battle with BBC Capital Market, Inc. as well as approximately
$1.8 million of accounting records adjustments required to expense assets no
longer deemed recoverable by the Company.
RESULTS OF OPERATIONS FOR FISCAL YEAR 2000
Comparing fiscal year 2000 to fiscal year 1999, the decrease in the net loss was
primarily due to decreases in non-interest expenses and the provision for
possible loan losses, as well as a decrease in interest expense, offset in part
by decreases in interest income.
Interest income decreased by $1.1 million or 3.9% to $27.4 million for fiscal
year 2000, compared to $28.5 million for fiscal year 1999. The decrease in
interest income is primarily attributable to decreases of $1.1 million and $1.8
million in interest earned on loans receivable and mortgage-backed securities,
respectively, offset in part by an increase of $1.8 million in interest earned
on investment securities. This reflects the shift in funds from loans and
mortgage-backed securities to investment securities that existed throughout much
of the year.
Interest expense decreased by $806,000 or 5.4% to $14.0 million for the
twelve-month period ended March 31, 2000, compared to $14.8 million for the
prior year. The decrease in interest expense is primarily attributable to a
decrease of $997,000 in interest expense on borrowed
<PAGE>
money, resulting from a decrease in the average cost and the average balance of
borrowed money.
Net interest income before the provision for possible loan losses decreased by
$301,000 or 2.2% to $13.4 million for the twelve-month period ended March 31,
2000 compared to $13.7 million for the same period last year. Net interest
income after the provision for possible loan losses increased by $2.7 million,
or 27.3% to $12.3 million compared to $9.6 million for the prior year. The
increase in net interest income after the provision for possible loan losses
reflects a $2.9 million decrease in the provision for possible loan losses for
fiscal year 2000.
The Company provided $1.1 million for possible loan losses for fiscal year 2000
compared to $4.0 million for the fiscal year 1999. The provision for possible
loan losses for fiscal year 2000 represents the amount required to bring the
allowance for possible loan losses to the level required by the Company's
policy. During fiscal year 2000 the Bank charged off approximately $2.6 million
of loans. At March 31, 2000, non-performing loans totaled $2.1 million, or 0.78%
of total loans compared to $4.5 million or 1.64% of total loans at March 31,
1999. At March 31, 2000, the Bank's allowance for possible loan losses was $2.9
million compared to $4.0 million at March 31, 1999, resulting in a ratio of the
allowance to non-performing loans of 138.0% at March 31, 2000 compared to 89.3%
at March 31, 1999 and a ratio of the allowance for possible loan losses to total
loans of 1.07% and 1.46%, respectively.
Non-interest income increased $157,000 or 6.6% to $2.5 million for fiscal year
2000 compared to $2.4 million for fiscal year 1999. The increase in non-interest
income is primarily attributable to an increase of $482,000 in other
non-interest income, which offset a decrease of $320,000 in loan fees and
service charges. The increase in other non-interest income is primarily due to
non-recurring income of $728,000 resulting from the sale of the Alhambra
Building by the Company's subsidiary, Alhambra Realty.
Non-interest expense decreased by $2.1 million or 11.9% to $15.8 million for
fiscal year 2000 compared to $18.0 million for the prior fiscal year. The
decrease in non-interest expense is primarily attributable to a decrease of $2.5
million in other non-interest expenses offset by an increase of $475,000 in
salaries and employee benefits. The increase in salaries and employees benefits
is the result of increased expenses associated with certain of the Bank's
benefit plans. The decrease in other non-interest expenses is primarily
attributable to reductions in consultant fees and reconciliation adjustments.
BALANCE SHEET SUMMARY AS OF MARCH 31, 2000
At March 31, 2000, total assets increased $3.6 million or 0.9% to $420.1 million
compared to $416.5 million at March 31, 1999. This increase is primarily
attributable to an increase of $25 million in investment securities held to
maturity, offset in part by decreases of $5.0 million in securities available
for sale, $12.4 million in mortgage-backed securities held to maturity, $374,000
in loans receivable, net, and $4.2 million in other assets.
At March 31, 2000 total liabilities increased $2.2 million or 0.6 % to $387.5
million compared to $385.3 million at March 31, 1999. This increase is primarily
attributable to an increase of $4.9 million or 1.8% in deposits offset in part
by a decrease of $3.5 million in borrowed funds. The increase in deposits
reflects increases of $4.5 million in NOW accounts, $1.6 million in regular
savings accounts and $475,000 in certificates of deposit, offset in part by
decreases of $1.5 million in MMA accounts and $92,000 in Club accounts.
<PAGE>
At March 31, 2000, total stockholders' equity increased $1.5 million or 4.7% to
$32.6 million compared to $31.2 million at March 31, 1999. The increase in
stockholders' equity primarily reflects an increase of $2.4 million representing
the net proceeds from the issuance of convertible preferred securities during
the fourth quarter of fiscal year 2000, offset in part by a decrease in retained
earnings resulting from the net loss incurred for fiscal year 2000.
Carver Bancorp, Inc. is the holding company for Carver Federal Savings Bank, a
federally chartered stock savings bank. Carver Federal Savings Bank, which is
the largest independent African- and Caribbean-American run financial
institution in the U.S., operates six full service branches in the New York City
boroughs of Brooklyn, Queens and Manhattan.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS CONSISTING OF ESTIMATES
WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF
THE COMPANY AND THE BANK THAT ARE SUBJECT TO VARIOUS FACTORS WHICH COULD CAUSE
THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE ESTIMATES. THESE FACTORS
INCLUDE, WITHOUT LIMITATION, THE COMPANY'S SUCCESS IN IMPLEMENTING ITS
INITIATIVES, CHANGES IN GENERAL, ECONOMIC AND MARKET, LEGISLATIVE AND REGULATORY
CONDITIONS AND THE DEVELOPMENT OF AN ADVERSE INTEREST RATE ENVIRONMENT THAT
ADVERSELY EFFECTS THE INTEREST RATE SPREAD OR OTHER INCOME ANTICIPATED FROM THE
COMPANY'S OPERATIONS AND INVESTMENTS. THE COMPANY AND THE BANK ASSUME NO
OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT THE ACTUAL
RESULTS, CHANGES IN ASSUMPTIONS OR CHANGES IN OTHER FACTORS AFFECTING SUCH
FORWARD-LOOKING STATEMENTS.
# # #
<PAGE>
<TABLE>
<CAPTION>
CARVER BANCORP, INC
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Twelve-Months
March 31, March 31,
2000 1999 2000 1999
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Interest Income:
Loans $ 4,793,094 $5,079,067 $19,442,840 $20,576,506
Mortgage-backed securities 863,412 1,094,006 3,640,555 5,430,638
Investment securities 927,434 675,476 3,593,178 1,800,738
Other interest earning assets 177,937 107,563 689,929 665,544
----------- ---------- ----------- -----------
Total interest income 6,761,877 6,956,112 27,366,502 28,473,426
----------- ---------- ----------- -----------
Interest expense:
Deposits 2,119,667 2,171,501 8,612,026 8,421,226
Advances and other borrowed money 1,246,110 1,600,069 5,396,833 6,393,457
----------- ---------- ----------- -----------
Total interest expense 3,365,777 3,771,570 14,008,859 14,814,683
----------- ---------- ----------- -----------
Net interest income 3,396,100 3,184,542 13,357,643 13,658,743
Provision for loan losses 494,300 219,427 1,099,300 4,029,996
----------- ---------- ----------- -----------
Net interest income after
provision for loan losses 2,901,800 2,965,115 12,258,343 9,628,747
----------- ---------- ----------- -----------
Non interest income:
Loan fees and service charges 77,459 554,350 353,215 673,541
Gain or (loss) on sale of securities - (993) - 3,948
Other income 1,020,107 334,428 2,186,206 1,704,667
----------- ---------- ----------- -----------
Total non-interest income 1,097,566 887,785 2,539,421 2,382,156
----------- ---------- ----------- -----------
Non-interest expense:
Salaries and employee benefits 1,971,456 1,265,123 5,722,355 5,247,525
Net occupancy expenses 429,681 610,450 1,463,052 1,490,592
Equipment 510,008 346,359 1,350,710 1,409,429
Others 3,730,314 865,508 7,287,053 9,815,474
----------- ---------- ----------- -----------
Total non-interest expenses 6,641,459 3,087,440 15,823,170 17,963,020
----------- ---------- ----------- -----------
Income (loss) before income taxes (2,642,093) 765,460 (1,025,406) (5,952,117)
Income taxes - - -
Income taxes (benefit) 87,030 - 110,030 (1,499,367)
----------- ---------- ----------- -----------
Net income (loss) (2,729,123) 765,460 (1,135,436) (4,452,750)
=========== ========== =========== ===========
Net income (loss)available to common
stock shareholders:
Primary $(2,773,276) $ 765,460 $(1,179,589) $(4,452,750)
=========== ========== =========== ===========
Net Income (loss) per common share:
Primary $ (1.23) $ 0.35 $ (0.53) $ (20.2)
=========== ========== =========== ===========
Weighted average number of common share
outstanding
Primary 2,247,662 2,213,596 2,238,846 2,206,133
=========== ========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CARVER BANCORP, INC
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
As of As of
March 31, March 31,
ASSETS 2000 1999
------------- ------------
<S> <C> <C>
Cash and due from banks $ 10,902,497 $ 11,120,748
Other interest earning assets 11,300,000 10,200,000
------------- ------------
Total cash and cash equivalents 22,202,497 21,320,748
------------- ------------
Investment securities held to maturity 24,995,850 -
Securities available for sale 24,952,220 29,918,137
Mortgage-backed securities held to maturity, net
(estimated fair values of $51,939,162 and $65,693,568
at March 31, 2000 and March 31, 1999) 54,229,230 66,584,447
Loans receivable 273,083,331 274,541,950
Less allowance for loan loss (2,935,314) (4,020,099)
------------- ------------
Loans receivable, net 270,148,017 270,521,851
------------- ------------
Real estate owned, net 922,308 184,599
Property & equipment, net 11,175,334 11,884,983
Federal Home Loan Bank of New York stock, at cost 5,754,600 5,754,600
Accrued interest receivable 2,653,266 2,860,693
Excess of cost over net assets acquired, net 816,780 1,029,853
Other assets 2,268,430 6,422,933
------------- ------------
Total assets $ 420,118,532 $416,482,844
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 281,941,338 $276,999,074
Securities sold under agreement to repurchase 31,337,000 35,337,000
Advances from Federal Home Loan Bank of New York 66,688,456 65,708,466
Other borrowed money 553,201 992,619
Advance payments for taxes - -
Other liabilities 6,957,680 6,270,419
------------- ------------
Total liabilities 387,477,675 385,307,578
------------- ------------
Stockholders' Equity:
Preferred stock, $001 par value per share;
1,000,000 shares authorized; 1000 shares issued and outstanding 1,000 --
Common stock, $001 par value per share, 5,000,000 shares
authorized; 2,314,275 shares issued and outstanding 23,144 23,144
Additional paid-in capital 23,789,111 21,423,574
Retained Earnings-substantially restricted 9,479,552 10,721,168
Common stock acquired by Employee Stock Ownership Plan (651,950) (992,620)
Unrealized (loss) net, on securities available for sale -- --
------------- ------------
Total stockholders' equity 32,640,857 31,175,266
------------- ------------
Total liabilities and stockholders' equity $ 420,118,532 $416,482,844
============= ============
</TABLE>
See Notes to Consolidated Financial Statements
