On this page of StockholderLetter.com we present the latest annual shareholder letter from CARVER BANCORP INC — ticker symbol CARV. Reading current and past CARV letters to shareholders can bring important insights into the investment thesis.

 •  11/4/2024 Letter Continued (Full PDF)
 •  More "Banking & Savings" Category Stockholder Letters
 •  CARV Benford's Law Stock Score = 93

CARV Shareholder/Stockholder Letter Transcript:

2024
ANNUAL REPORT
NASDAQ: CARV

October 17, 2024
Dear Carver Shareholders:
For over 76 years, the mission of Carver Bancorp, Inc. (together with its subsidiaries,    Carver    or the    Bank   ) has
been to provide New Yorkers with access to capital and competitively priced banking solutions. As one of the nation   s
largest African- and Caribbean-American managed and publicly traded Minority Depository Institutions (   MDIs   ),
Carver proudly serves diverse communities of consumers and Minority and Women-owned Business Enterprises
(   MWBEs   ) across Greater New York City.
As the low-to-moderate income
(   LMI   ) neighborhoods in Carver   s
service footprint have expanded to
include multiple ethnicities, so has
Carver   s de   nition of community.
Historically predominant African- and
Caribbean-American neighborhoods
served by our branches in Harlem,
Brooklyn and Queens now include
growing centers of Hispanic, Asian,
and Hasidic patronage. Our
community is expanding and Carver   s
mission and ability to serve this
increasingly diverse cohort of
customers has never been more vital.
FISCAL YEAR 2024 PERFORMANCE
Carver reduced its net loss by 32% to $3.0 million for the    scal year-ended March 31, 2024 (   FY-2024   ), achieving a
breakeven in the second half of the year that revealed positive earnings momentum. Although net interest income
of $22.6 million was down by 1% from the prior year, non-interest income of $6.7 million (up 87%) drove the bottom
line.
Underlying Carver   s improved results were greater mission-aligned grant income opportunities, increased loan
diversi   cation and better pricing discipline in this    higher-for-longer    funding environment. Indeed, Carver
materially increased net income in the second half of the    scal year while non-interest expense remained relatively
unchanged.
Financial Highlights:
Interest Income - up 23%; portfolio diversi   cation from organic originations and participations in commercial
mortgages, consumer, specialty    nance and broadly syndicated loans are a result of Carver   s increased commercial
engagement with bank and    ntech partners.

Net Interest Margin - Despite the unprecedented run-up in funding costs and the lingering in   uence of the 2023
Banking Crisis, Carver achieved Net Interest Income of $22.6 million, on par with FY-2023 at $22.8 million. Since FY2020, Net Interest Income has risen by 41%. Q4-2024 Net Interest Margin of 3.31%, improved by 28 bps over the
prior quarter as increased origination volume and the net yield pick-up on newly booked loans began to o   set the
marginal rise in funding costs.
Capital Strength - Carver   s capital ratios continue to exceed the minimum Total Risk Based Capital (12%) and Tier 1
Leverage (9%) requirements of our primary regulator, the O   ce of the Comptroller of the Currency (the    OCC   ). The
Bank remains well capitalized based on its Total Risk-Based Capital Ratio of 12.98%, Tier 1 Leverage Ratio of 9.56%
and Tier 1 Risk-Based Capital Ratio of 12.00% as of March 31, 2024.
Assets - Driven by a 4.6% increase in assets to $757
million, Assets per Employee, an indicator of
e   ciency, rose by 1.9% in FY-2024.
Deposits - up 7.8%, funded by steady growth in retail
and institutional deposits; notably, the 5-year decline
in the brokered deposit component indicates a strong
relationship banking trend. Over 85% of the Bank   s
deposits were FDIC-insured as of the    scal-year end.
Loan Growth - Net loans grew by 4.1% to $617 million
in FY-2024, a period that began at the end of the 2023
Banking Crisis and experienced 2 Federal Reserve rate
hikes. Organic loan growth was driven by    nancing
local entrepreneurs and organizations, including
increased    oating rate Commercial & Industrial
(   C&I   ) and Consumer lending, which helped to
reduce portfolio interest rate sensitivity and increase
diversi   cation. C&I grew by 7.0% and comprised 9.7%
of the gross loan portfolio.
2

CAPITAL GROWTH AND INSTITUTIONAL PARTNERS
Carver   s mission-aligned institutional investors include JPMorgan Chase, Wells Fargo, Bank of America, American
Express and National Community Investment Fund. Our    nancial strength has been enhanced by over $40 million
of new and conveyed capital since 2020.
Carver is a partner in the innovative J.P. Morgan Asset Management (   JPM   ) Empowering Change Program
(   Empowering Change   ). The program quali   es Carver to o   er JPM   s Empower share class of money market funds
to corporate and institutional investors that seek to achieve social impact goals without sacri   cing their economic
objectives. The Empowering Change revenue stream bolsters the Bank   s earnings and enhances our ability to impact
underserved communities.
CARVER AT A GLANCE   
Carver   s journey underscores the systemic importance of mission-driven MDIs and Community Development
Financial Institutions (   CDFIs   ) to the well-being of underserved communities. The Bank has a proud history of
providing LMI communities throughout New York with a place to save for the future and access to credit products.

Carver   s seven full-service branches are in or adjacent to LMI neighborhoods and provide lending,
depository and other banking services to tens of thousands of New Yorkers, and hundreds of houses of
worship, non-pro   ts, multifamily dwellings and small businesses.

Carver   s customers have 24/7 access to 84,000 ATMs nationwide surcharge free, and a full range of online
and mobile banking services; online account opening is also available in nine states and Washington DC.

Carver   s Small Business Microloan Program plays a pivotal role in driving economic empowerment in our
communities. Our microloan program, bolstered by algorithm-based software, supports the capital needs
of minority entrepreneurs and looks beyond traditional credit scores. We empower small business
entrepreneurs by providing up to $50,000 of vital fulcrum capital.

Carver facilitates public/private business development through partnerships with state agencies and
corporate partners to provide contractor    nancing programs to MWBEs (e.g., the New York State    Bridge to
Success    Loan Program).

Carver sponsors    nancial education, wealth-building skills and small business empowerment programs
(e.g., seminars and 1:1 coaching to over 16,000 consumers and aspiring entrepreneurs).

Carver contributes to local investment utilizing Federal and State grants to support non-pro   t organizations,
provide workforce development and home ownership programs.

Carver embraces diversity and inclusion as a major growth catalyst for the Bank and our community. Over
52% of our 110 associates are female and 88% are people of color.
Over the last decade, the Bank has consistently received "Outstanding" CRA ratings from the OCC. The latest
assessment in March 2022 concluded the Bank   s average loan to deposit ratio is more than reasonable at 85.03%,
with an impressive 90% (in year 2021) of Carver   s small business loans made within our assessment area.
3

COMMUNITY IMPACT
Expanding Financial Services and Community Reinvestment
During FY-2024, Carver introduced several new products and services designed to deepen customer relationships,
diversify income for the Bank, and manage our overall cost of funds in an elevated interest rate environment,
including (i) engaging    ntech partners to drive e   ciency, scale, and favorable feedback/reviews from customers, (ii)
expanding access to capital for small businesses to stabilize operations and drive growth through our Small Business
Microloan Program and Contractor Financing Program, and (iii) developing our    nancial education and literacy
programs to create wealth,    nancial inclusion, and economic empowerment.
Promoting Men's Health and Community Wellness
Carver once again sponsored The Blue Jacket Fashion Show's prostate cancer
screening initiative, proudly hosted at our Main Branch in Harlem. In collaboration
with ZERO Prostate Cancer, a leading national non-pro   t with the mission to advance
research to end prostate cancer, the event featured the Mount Sinai Robert F. Smith
Mobile Prostate Cancer Screening Initiative, a community-based wellness e   ort
committed to enabling early detection of prostate cancer for at-risk men of color. This
initiative and partnership with Mount Sinai Hospital and The Blue Jacket Fashion Show
enabled Carver to e   ectively raise prostate health education and cancer awareness in
our community.
Supporting Climate Initiatives for Women-owned Businesses
In partnership with The Greater Harlem Chamber of Commerce, Carver held its 2nd Annual Minority Women-owned
Business Pitch Competition during the Harlem Week festivities. This competition was developed to address the
disproportionately negative impact of climate change on communities of color. The competition invited women
entrepreneurs with businesses in the Greater New York Area to submit written business plans detailing their
initiatives to enhance energy e   ciency at their respective companies. From a competitive    eld of over 90 applicants,
four deserving minority women business owners were awarded $10,000 each. The Bank plans to partner with
additional chambers of commerce to further drive sustainability and business development in urban communities
within the    ve boroughs of New York City.
Supporting Non-Pro   t Organizations
Carver provided over $200,000 in grants and sponsorships to community-based organizations for education, health,
   nancial literacy, arts, social services, and business development.
Grant awardee Danielle Douglas, Executive Director of The Council for Black Business
Enterprises stated,    Without the crucial support of Carver Bank, many of our key initiatives
aimed at empowering Black-owned businesses would have remained out of reach.   
Grant awardee Monique Hector, Executive Director at Harlem Business Alliance, stated,    As a
dedicated partner in our community, Carver Bank has been instrumental in helping us provide
critical resources and education to small business owners. Through their support, we   ve been
able to o   er business education workshops and assist more businesses in achieving MWBE
certi   cation, further empowering local entrepreneurs.   
4



 11/4/2024 Letter Continued (Full PDF)