Carver Bancorp (CARV) reported QQ1 2025 revenue of $9.912 million, a 15.94% yearâoverâyear increase but a material quarterâtoâquarter decline of 15.66%. The quarter produced a net loss of $2.212 million and basic earnings per share of â$0.43, with EBITDA of â$1.986 million and an operating margin of â22.3%. The negative bottom line reflects a combination of elevated nonâinterest expenses and a relatively heavy interest expense burden, which more than offset the gross profit of $5.949 million on revenue of $9.912 million. Cash flow from operations was negative at $(2.349) million, and free cash flow was $(2.503) million, underscoring cashâgeneration challenges in the quarter.
On the balance sheet, total assets stood at $746.51 million and total liabilities at $706.65 million, yielding stockholdersâ equity of $39.86 million. The bank maintains a large longâterm investment portfolio (~$622.85 million) alongside $93.29 million of cash and shortâterm investments, providing liquidity optionality but implying sensitivity to market movements in the investment book. The equity base remains relatively thin given the size of assets, with a debtâtoâcapitalization of ~0.59 and a debtâtoâequity ratio of ~1.46, and a priceâtoâbook ratio of approximately 0.19, signaling substantial valuation discount versus bank peers.
Management commentary in QQ1 2025 commentary notes a continued focus on balance sheet resilience, liquidity management, and expense discipline, while noting nearâterm profitability challenges as the bank strives to stabilize core revenue drivers in a competitive regional market. Investors should monitor revenue mix, cost containment, loan pricing dynamics, and the sensitivity of the vast investment portfolio to interest rate and market movements.
Operating Income: $(2.212) million; Margin â â22.32%; YoY not disclosed for this single quarter; QoQ deterioration appears pronounced given volume and expense base
Net Income: $(2.212) million; Net margin â â22.32%; YoY â â55.67%; QoQ â â20,209.09%
Financial Highlights
Key QQ1 2025 metrics and year/quarter trends:
- Revenue: $9.912 million; YoY +15.94%; QoQ â15.66%
- Gross Profit: $5.949 million; Gross margin â 60.02%; YoY â4.63%; QoQ â27.31%
- Operating Income: $(2.212) million; Margin â â22.32%; YoY not disclosed for this single quarter; QoQ deterioration appears pronounced given volume and expense base
- EBITDA: $(1.986) million; EBITDA margin â â20.04%
- Net Income: $(2.212) million; Net margin â â22.32%; YoY â â55.67%; QoQ â â20,209.09%
- EPS (Basic/Diluted): $(0.43) per share; YoY â â34.38%; QoQ â â20,576.19%
- Operating cash flow: $(2.349) million; Free cash flow: $(2.503) million
- Balance sheet highlights: Total assets $746.51 million; Total liabilities $706.65 million; Total stockholdersâ equity $39.86 million; Cash and cash equivalents $46.34 million; Shortâterm investments $46.95 million; Longâterm investments $622.85 million; Net debt $11.96 million; Retained earnings $(53.76) million; Accumulated OCI $(12.97) million; Book value per share implied by equity base is materially opaque given large investment holdings and the relatively modest equity base.
- Liquidity and capitalization: Debt to capitalization â 0.59; Debt to equity â 1.46; Price to book â 0.192; Indicates significant valuation discount versus peers, but with earnings headwinds and leverage concerns.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
9.91M
15.94%
-15.66%
Gross Profit
5.95M
-4.63%
-27.31%
Operating Income
-2.21M
-55.67%
-20 209.09%
Net Income
-2.21M
-55.67%
-20 209.09%
EPS
-0.43
-34.38%
-20 576.19%
Key Financial Ratios
grossProfitMargin
100%
netProfitMargin
-35.6%
returnOnAssets
-0.3%
returnOnEquity
-5.55%
debtEquityRatio
1.46
operatingCashFlowPerShare
$-0.46
freeCashFlowPerShare
$-0.49
priceToBookRatio
0.19
priceEarningsRatio
-0.87
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript availability is not included in the provided data. No management quotes from an earnings call are accessible in this dataset. If/when a transcript is provided, populate this section with management themes (strategy, operations, market conditions) and contextual quotes. In the absence of a transcript, the analysis centers on disclosed financials and the implied guidance from the quarterâs performance.
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â N/A
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Forward Guidance
No explicit forward guidance was reported for QQ1 2025 within the supplied data. Given the negative quarterly bottom line despite modest revenue growth, the nearâterm focus is likely to be on improving operating leverage, stabilizing core lending and deposit franchises, and managing the substantial investment book to mitigate market risk. Investors should monitor: (1) trajectory of net interest income and nonâinterest expense control, (2) stability of the investment portfolio and any impairment charges, (3) deposit trends and loan growth in the New York regional market, (4) capital adequacy and liquidity metrics, and (5) any additional disclosures on reserves and credit quality in upcoming quarters. Achievability of favorable profitability hinges on improved operating efficiency and a more favorable interest rate environment that supports net interest income without materially increasing credit losses.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CARV Focus
60.02%
0.00%
-5.55%
-86.60%
FFNW
1.45%
-5.98%
-0.67%
-44.07%
FNWB
1.00%
4.16%
0.25%
88.43%
FCAP
1.00%
25.20%
2.79%
8.06%
FNWD
1.40%
40.60%
6.12%
2.84%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
CARV presents a highârisk, highâuncertainty investment profile. The QQ1 2025 results show revenue growth but a meaningful bottomâline deterioration driven by elevated interest expense and operating costs, alongside a capital structure that is leveraged and supported by a large investment portfolio. The stock trades at a steep discount to book (â0.19x), which implies significant upside if profitability indicators begin to improve and the investment book is managed to reduce market sensitivity. The key to a more favorable investment thesis will be sustained improvements in operating leverage, stabilization or growth in core deposits, and a clearer path to earnings positive territory. Investors should monitor the evolution of NII, nonâinterest expense control, credit quality signals, and any additional guidance in subsequent quarters to assess the potential for earnings inflection against the backdrop of a dense balance sheet and modest equity capitalization.
Key Investment Factors
Growth Potential
Underscored by a modest revenue uptick in QQ1 2025 and potential operational improvements, but sustained profitability will depend on controlling nonâinterest expenses and enhancing spreads in a higherâquality loan book. Valuation suggests optional upside if the investment portfolio and NII stabilize, given a priceâtoâbook near 0.19 and a large, defensible deposit base.
Profitability Risk
Key risks include persistent negative earnings, elevated interest expense, concentration risk from a large longâterm investment book, thin equity base relative to asset size, and regulatory/compliance overhead for a small regional bank. Market volatility could impact OCI and the investment portfolio, amplifying earnings volatility.
Financial Position
Balanced liquidity with $93.29 million in cash and shortâterm investments against $706.65 million in liabilities, but a substantial longâterm investment portfolio (~$622.85 million) elevates market risk sensitivity. Equity base is modest at ~$39.86 million, resulting in a high leverage profile (debt to capitalization ~0.59) and a low price-to-book value (~0.19). These factors constrain financial flexibility but offer potential value if profitability improves and growth accelerates.
SWOT Analysis
Strengths
Strategic niche in the New York regional banking market with a diversified product set for consumers, small businesses, and nonprofit entities.
Substantial liquidity position with $93.3 million of cash and shortâterm investments providing resilience in stressed markets.
Defensible brand in its community banking footprint and a meaningful longâterm investment portfolio that could support earnings in a rising rate environment if managed prudently.
Weaknesses
Material quarterly loss in QQ1 2025 despite revenue growth, signaling limited operating leverage and earnings fragility.
Thin equity base relative to total assets (stockholdersâ equity ~$39.9 million on $746.5 million assets) and high leverage (debt to capital ~0.59).
Large exposure to a longâterm investment portfolio (~$623 million) that introduces markâtoâmarket risk and could impact earnings during rate or market shifts.
Negative retained earnings and negative net income raise questions about capital generation and future payout capacity.
Opportunities
Potential to strengthen core earnings through deposit growth, loan pricing optimization, and expense control.
Value-tilted valuation given P/B â 0.19 and the potential for earnings inflection if NII and fee-based income improve.
Ability to optimize the investment book and reduce volatility through hedging or rebalancing as market conditions evolve.
Threats
Rising interest rate volatility and credit risk in a regional bank portfolio could magnify losses or impair investment holdings.
Regulatory compliance costs and capital adequacy pressures in a smaller bank could constrain growth and payout flexibility.
Competition from larger regional banks and fintech entrants could pressure margins and deposit pricing.
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