CARVER BANCORP INC Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) – Marketscreener.com

Forward-Looking Statements
•the ability of the Bank to comply with the Formal Agreement (“Agreement”) between the Bank and the Office of the Comptroller of the Currency, and the effect of the restrictions and requirements of the Formal Agreement on the Bank’s non-interest expenses and net income;
•the market price and trading volume of our shares of common stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses;
•changes in the level of trends of delinquencies and write-offs and in our allowance and provision for loan losses;
•changes in interest rates, which may reduce net interest margin and net interest income;
•adverse changes in the financial industry and the securities, credit, national and local real estate markets (including real estate values);
•changes in the level of government support of housing finance;
•changes to state rent control laws, which may impact the credit quality of multifamily housing loans;
•our ability to control costs and expenses;
•risks related to a high concentration of loans secured by property located in our market area;
•increases in competitive pressure among financial institutions or non-financial institutions;
•changes in consumer spending, borrowing and savings habits;
•technological changes that may be more difficult to implement or more costly than anticipated;
•changes in deposit flows, loan demand, real estate values, borrowing facilities, capital markets and investment opportunities, which may adversely affect our business;
•litigation or regulatory actions, whether currently existing or commencing in the future, which may restrict our operations or strategic business plan;
•the ability to originate and purchase loans with attractive terms and acceptable credit quality; and
•the ability to attract and retain key members of management, and to address staffing needs in response to product demand or to implement business initiatives.
Overview
(1) Carver Statutory Trust I debt investment includes deferred interest of $26 thousand.
Allowance for Loan and Lease Losses
General Reserve Allowance
An unallocated loan loss allowance is appropriate when it reflects an estimate of probable loss, determined in accordance with GAAP and is properly supported.
Stock Repurchase Program
Liquidity and Capital Resources
Mortgage Representation and Warranty Liabilities
The following table presents information on open requests from FNMA. The amounts presented are based on outstanding loan principal balances. $ in thousands
Representation and warranty repurchase reserve, June 30, 2022 (1)
(1) Reported in our consolidated statements of financial condition as a component of other liabilities. (2) Component of other non-interest expense.
Assets
Other assets increased $4.7 million, or 65.7%, to $11.9 million at June 30, 2022, compared to $7.2 million at March 31, 2022 primarily due to the purchase of a $5.0 million bank-owned life insurance policy during the first quarter.
Liabilities and Equity
Total liabilities decreased $39.9 million, or 5.9%, to $640.3 million at June 30, 2022, compared to $680.2 million at March 31, 2022, primarily due to decreases in total deposits and other liabilities, partially offset by an increase in advances from the FHLB-NY.
Asset/Liability Management
The economic environment is uncertain regarding future interest rate trends. Management monitors the Company’s cumulative gap position, which is the difference between the sensitivity to rate changes on the Company’s interest-earning
Off-Balance Sheet Arrangements and Contractual Obligations
Commitment to fund private equity investment 253 Total
Comparison of Operating Results for the Three Months Ended June 30, 2022 and
The following table reflects selected operating ratios for the three months ended June 30, 2022 and 2021 (unaudited):
Average stockholders’ equity, excluding AOCI, to average assets (7) (8)
Average interest-earning assets to average interest-bearing liabilities
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
Analysis of Net Interest Income
Yield/Cost
1.98 %
Interest Expense
Provision for Loan Losses and Asset Quality
At June 30, 2022, non-performing assets totaled $12.2 million, or 1.8% of total assets compared to $11.5 million, or 1.6% of total assets at March 31, 2022.
The following table sets forth information with respect to the Bank’s non-performing assets at the dates indicated:
Subprime Loans
Non-Interest Income
Non-Interest Expense
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