Harlem bank avoids collapse through Wall Street investment

TRD New York /
Jun.June 30, 2011 09:38 AM

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]

Related Articles

Nightingale’s Eli Schwartz and 111 Wall Street (Credit: Google Maps)

Nightingale partnership closes on $175M purchase of 111 Wall

2041 Adam Clayton Powell Junior Blvd in Harlem (Credit: Google Maps)

Rent-stabilized portfolio in Harlem trades for $118M

Extell Development chairman Gary Barnett with 555 Tenth Avenue and 524 East 14th Street (Credit: Barnett by Anuja Shakya, 555ten and StreetEasy)

Extell scores $700M refi for three Manhattan buildings

Softbank CEO Masayoshi Son and Goldman Sachs CEO David Solomon (Credit: Getty Images)

Goldman Sachs will lead Phase II of SoftBank’s WeWork rescue plan

1412 Broadway (Credit: Google Maps)

Isaac Chetrit lands $210M refi for Garment District office building

55 Hudson Yards, Facebook CEO Mark Zuckerberg (Credit: Google Maps and Getty Images)

Here’s how much Facebook is paying at Hudson Yards

From left: The Blau and Berg Company's Karine Blanc, TD and Partners' Nana Duncan and Lemor Development Group's Kenneth Morrison (Credit: Blauberg, TD+Partners and Lemor)

Black developers say partnerships aren’t always equal

Jho Low and the Time Warner Center at 25 Columbus Circle (Credit: Getty Images)

Financier at center of 1MDB fraud case agrees to give up hundreds of millions of dollars