Activist group boosts its offer to buy New York-based Carver
A New York-based minority investment firm has sweetened its offer for Carver Bancorp.
Dream Chasers Capital announced Monday in a press release that it would pay $3.25 for each share of the $743 million-asset Carver's stock. Headquartered in New York's Harlem neighborhood, Carver is the holding company for the 75-year-old Carver Federal Savings Bank, one of the nation's most prominent Black banks. Carver reported 4.9 million shares outstanding as of Nov. 10, which would value Dream Chaser's offer at close to $16 million.
Dream Chasers made its original $3-per-share offer in August.
Carver shares were trading for $1.92 midday Wednesday. In a press release Monday, Dream Chasers labeled Carver's relatively low stock price "an indictment of management."
"Over the past few years, under current management, the bank has been losing money, losing deposits, over concentrated in commercial real estate and has a stock price down over 80% for many shareholders," Dream Chasers stated in the press release.
President and CEO Michael Pugh stepped down on Sept. 30 after an eight-year tenure leading Carver. The company tapped veteran investment banker Craig MacKay to serve as president and CEO on an interim basis.
In a letter to shareholders Nov. 1, McKay noted Carver's progress growing loans and deposits in 2023, while keeping charge-offs at de minimis levels. MacKay outlined plans to boost originations of commercial-and-industrial and Small Business Administration loans, improve mobile banking technology and seek strategic partnerships to expand wealth management product offerings.
Despite MacKay's positive slant, Carver has struggled on some fronts in 2023. While loans and deposits have indeed grown, the company continues to lose money, including posting a $1.6 million loss for the three months ending Sept. 30. Carver's fiscal year begins April 1. For the 12 months ending March 31, it reported a loss of $4.1 million.
According to Dream Chasers, the shareholder letter failed to chart a path that would return Carver to profitability and to address what it characterized as an over concentration in commercial real estate loans. Carver's most recent quarterly report, filed Nov. 14 with the Securities and Exchange Commission, listed commercial real estate loans totaling $171 million at Sept. 30, or 28% of Carver's $606 million-asset loan portfolio. That concentration was down from 30% on March 31.
"Management has not delivered for its fan base, namely: shareholders, depositors and the communities of color it serves," Dream Chasers stated.
Dream Chasers is led by Greg Lewis, a longtime financial advisor who serves as CEO of StockKings Capital, a New York-based registered broker-dealer. In its most recent disclosure report, filed Dec. 22 with the SEC, Dream Chasers reported controlling 233,000 shares of Carver.
