Carver Bancorp Inc., owner of the largest African- and Caribbean American-run bank in the U.S., reduced the dividend rate it pays for a government bailout by shifting to a different federal-support program.
Carver exchanged $18.98 million of preferred stock held by the Troubled Asset Relief Program with the same amount of stock through the Community Development Capital Initiative, a program aimed at encouraging lending in lower-income areas, the New York-based company said today in a statement.
Payments to the U.S. Treasury Department will fall to 2 percent from 5 percent, saving $569,000 a year, the bank said. The move also extends the time period Carver can use the government program to eight years from five.
Carver Bancorp has been trying to recover from loan defaults and last reported an annual profit in fiscal 2008. Federal regulators told the bank in February 2009 to reduce its concentration in commercial lending and limited the amount of deposits that could come from outside brokers.
The Treasury introduced the community-development program in February to spur lending to small businesses in lower-income areas. The initiative allowed firms in urban and rural areas not served by traditional banks to apply for capital injections.
Carver Bancorp is the holding company for Carver Federal Savings Bank, which has nine New York City branches in Brooklyn, Queens and Manhattan, according to its Web site.
To contact the reporter on this story: Craig Trudell in New York at email@example.com