Carver Federal Savings, the nation’s largest bank founded and run by African Americans, has avoided collapse by raising $55 million in new capital, Crain’s reported. The bank had recently moved into large commercial real estate lending, veering away from its tested strategy of lending to one- to four-family homes — the move backfired. Earlier this year, faltering under a load of delinquent real estate loans, the bank was ordered by regulators to raise additional cash.
The new investors include Goldman Sachs and Morgan Stanley, which have agreed to invest $15 million each, while Citigroup and Prudential Financial have agreed to put in $10 million, according to an announcement from Carver’s parent company, Carver Bancorp.
“I haven’t had a day this good in some time,” said Deborah Wright, the bank’s CEO.
Earlier this year, 12.3 percent of the bank’s loan portfolio was more than 90 days delinquent. The industry average is 4.9 percent, according to Federal Deposit Insurance data. [Crain’s]