Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Our shares of common stock are traded on the NASDAQ Capital Market under the symbol “CARV". At March 31, 2021, there were 3,333,268 shares of common stock outstanding, held by approximately 546 stockholders of record.
As previously disclosed in a Current Report on Form 8-K filed with the SEC on October 29, 2010, the Company’s Board of Directors announced that Carver suspended payment of the quarterly cash dividend on its common stock.
Under OCC regulations, the Bank will not be permitted to pay dividends to the Company on its capital stock if its regulatory capital would be reduced below applicable regulatory capital requirements or if its stockholders' equity would be reduced below the amount required to be maintained for the liquidation account, which was established in connection with the Bank's conversion to stock form. The OCC capital distribution regulations applicable to savings institutions (such as the Bank) that meet their regulatory capital requirements permit, after not less than 30 days prior notice to and non-objection by the FRB, capital distributions during a calendar year that do not exceed the Bank's net income for that year plus its retained net income for the prior two years. For information concerning the Bank's liquidation account, see Note 12 of the Notes to the Consolidated Financial Statements. In addition, the Company is subject to restrictions under the Agreement that affect their ability to pay dividends. See Item 1 - Overview - Enforcement Actions.
On August 6, 2002, the Company announced a stock repurchase program to repurchase up to 15,442 shares of its outstanding common stock. As of March 31, 2021, 11,744 shares of its common stock have been repurchased in open market transactions at an average price of $235.80 per share (as adjusted for 1-for-15 reverse stock split that occurred on October 27, 2011). The Company reissued shares as restricted stock in accordance with their management recognition plan. No shares were repurchased pursuant to the stock repurchase program during fiscal 2021. As a result of the Company's participation in the TARP CDCI, the Treasury's prior approval was required to make further repurchases. The Treasury converted its preferred stock into common stock, which the Treasury continued to hold. On August 6, 2020, the Company repurchased all 2,321,286 shares of its common stock held by the Treasury for an aggregate purchase price of $2.5 million. The purchase price was funded by a third party grant. As of this date, the Company is not bound by the TARP CDCI restrictions as the Treasury is no longer a common stockholder of the Company.
Carver has the following equity compensation plans:
(1) The 2006 Stock Incentive Plan became effective in September 2006 and provides for discretionary option grants, stock appreciation rights and restricted stock to those employees and directors so selected by the Compensation Committee.
(2) The Carver Bancorp, Inc. 2014 Equity Incentive Plan became effective in September 2014 and provides for discretionary option grants, stock appreciation rights and restricted stock to those officers and directors selected by the Company’s Compensation Committee.
Additional information regarding Carver's equity compensation plans is incorporated by reference from the section entitled "Securities Authorized for Issuance Under Equity Compensation Plans" in the Proxy Statement (as defined below in Item 10).
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
There were no unregistered securities to report which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
ITEM 6. SELECTED FINANCIAL DATA.
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The following selected consolidated financial and other data is as of and for the years ended March 31 and is derived in part from, and should be read in conjunction with the Company's Consolidated Financial Statements and related notes:
$ in thousands 2021
2020
2019
2018
2017
Selected Financial Condition Data:
Assets $ 676,748 $ 578,770 $ 563,713 $ 693,910 $ 687,861
Loans held-for-sale — — — — 944
Total loans receivable, net 478,409 423,786 424,182 472,627 540,492
Investment securities 94,314 75,980 90,982 72,784 72,446
Cash and cash equivalents 75,591 47,540 31,228 134,558 58,686
Deposits 556,559 488,815 480,196 586,883 579,176
Advances from the FHLB-NY and other borrowed money 37,222 13,573 21,403 38,403 49,403
Equity 52,301 48,894 47,136 51,971 47,398
Number of deposit accounts 33,400 30,496 31,447 31,972 34,582
Number of branches 7 7 8 9 9
Operating Data:
Interest income 20,307 21,627 23,230 24,359 26,126
Interest expense 4,420 5,631 6,141 5,280 4,918
Net interest income before provision for (recovery of) loan losses 15,887 15,996 17,089 19,079 21,208
Provision for (recovery of) for loan losses (100) 19 (270) 135 29
Net interest income after provision for (recovery of) loan losses 15,987 15,977 17,359 18,944 21,179
Non-interest income 6,198 3,739 4,649 14,359 4,618
Non-interest expense 26,081 25,139 27,944 27,982 28,531
(Loss) income before income tax (benefit) expense (3,896) (5,423) (5,936) 5,321 (2,734)
Income tax (benefit) expense — — — (33) 119
Net (loss) income attributable to Carver Bancorp, Inc. (3,896) (5,423) (5,936) 5,354 (2,853)
Basic (loss) earnings per common share (1.14) (1.47) (1.60) 0.58 (0.77)
Diluted (loss) earnings per common share (1.14) (1.47) (1.60) 0.58 (0.77)
Selected Statistical Data:
Return on average assets (1)
(0.58) % (0.95) % (0.96) % 0.81 % (0.41) %
Return on average stockholders' equity (2) (10)
(8.24) % (10.51) % (12.93) % 11.17 % (5.88) %
Return on average stockholders' equity, excluding AOCI (2) (10)
(8.25) % (10.52) % (12.31) % 10.77 % (5.78) %
Net interest margin (3)
2.49 % 2.95 % 2.80 % 2.94 % 3.11 %
Average interest rate spread (4)
2.30 % 2.69 % 2.57 % 2.78 % 2.97 %
Efficiency ratio (5)
118.09 % 127.38 % 128.55 % 83.68 % 110.47 %
Operating expense to average assets (6)
3.91 % 4.39 % 4.51 % 4.23 % 4.09 %
Average stockholders' equity to average assets (7) (10)
7.09 % 9.00 % 7.41 % 7.24 % 6.96 %
Average stockholders' equity, excluding AOCI, to average assets (7) (10)
7.08 % 9.00 % 7.79 % 7.51 % 7.07 %
Dividend payout ratio (8)
— — — — —
Asset Quality Ratios:
Non-performing assets to total assets (9)
1.07 % 1.19 % 1.90 % 1.13 % 1.50 %
Non-performing loans to total loans receivable (9)
1.49 % 1.58 % 2.40 % 1.39 % 1.54 %
Allowance for loan losses to total loans receivable 1.06 % 1.15 % 1.08 % 1.07 % 0.93 %
(1) Net income (loss) divided by average total assets.
(2) Net income (loss) divided by average total stockholders' equity.
(3) Net interest income divided by average interest-earning assets.
(4) Combined weighted average interest rate earned less combined weighted average interest rate cost.
(5) Operating expense divided by sum of net interest income and non-interest income.
(6) Non-interest expense divided by average total assets.
(7) Average stockholders' equity divided by average assets for the period ended.
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(8) Dividends paid to common stockholders as a percentage of net income available to common stockholders.
(9) Non-performing assets consist of nonaccrual loans, loans held-for-sale and real estate owned.
(10) See Non-GAAP Financial Measures disclosure below for comparable GAAP measures.
Non-GAAP Financial Measures
In addition to evaluating the Company'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 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.
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) attributable to Carver 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. These fluctuations have been excluded due to the unpredictable nature of this item and is not necessarily indicative of current operating or future performance.
$ in thousands 2021
2020
2019
2018
2017
Average Stockholders' Equity
Average Stockholders' Equity $ 47,306 $ 51,609 $ 45,920 $ 47,943 $ 48,533
Average AOCI 57 43 (2,315) (1,779) (802)
Average Stockholders' Equity, excluding AOCI $ 47,249 $ 51,566 $ 48,235 $ 49,722 $ 49,335
Return on Average Stockholders' Equity (8.24) % (10.51) % (12.93) % 11.17 % (5.88) %
Return on Average Stockholders' Equity, excluding AOCI (8.25) % (10.52) % (12.31) % 10.77 % (5.78) %
Average Stockholders' Equity to Average Assets 7.09 % 9.00 % 7.41 % 7.24 % 6.96 %
Average Stockholders' Equity, excluding AOCI, to Average Assets 7.08 % 9.00 % 7.79 % 7.51 % 7.07 %