Borrowed Money

12 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Borrowed Money

BORROWED MONEYFederal Home Loan Bank Advances. At March 31, 2023, the Bank had a $10.0 million overnight borrowing with a fixed rate of 4.99% and a $25.0 million advance with a fixed rate of 4.5% maturing in March 2025 outstanding from the FHLB-NY. As a member of the FHLB-NY, the Bank may have outstanding FHLB-NY borrowings in a combination of term advances and overnight funds of up to 30% of its total assets, or approximately $217.0 million at March 31, 2023. Borrowings are secured by the Bank's investment in FHLB-NY stock and by a blanket security agreement. This agreement requires the Bank to maintain as collateral certain qualifying assets (principally mortgage loans and securities) not otherwise pledged. At March 31, 2023, advances were all fixed-rate and secured by pledges of the Bank's investment in FHLB-NY capital stock totaling $2.3 million, and a blanket assignment of pledged qualifying mortgage loans of $53.5 million and mortgage-backed and investment securities with a market value of $2.5 million. The Bank has sufficient collateral at the FHLB-NY to be able to borrow $6.3 million from the FHLB-NY at March 31, 2023. The accrued interest payable on FHLB advances was $14 thousand and interest expense was $359 thousand for the year ended March 31, 2023.

Subordinated Debt Securities. On September 17, 2003, Carver Statutory Trust I issued 13,000 shares, liquidation amount $1,000 per share, of floating rate capital securities.  Gross proceeds from the sale of these trust preferred debt securities of $13 million, and proceeds from the sale of the trust's common securities of $0.4 million, were used to purchase approximately $13.4 million aggregate principal amount of the Company's floating rate junior subordinated debt securities due 2033.  The trust preferred debt securities are redeemable at par quarterly at the option of the Company beginning on or after September 17, 2008, and have a mandatory redemption date of September 17, 2033. Cash distributions on the trust preferred debt securities are cumulative and payable at a floating rate per annum resetting quarterly with a margin of 3.05% over the three-month LIBOR. During the second quarter of fiscal year 2017, the Company applied for and was granted regulatory approval to settle all outstanding debenture interest payments through September 2016. Such payments totaling $2.5 million were made in September 2016. Interest on the debentures had been deferred beginning with the December 2016 payment, per the terms of the agreement, which permit such deferral for up to twenty consecutive quarters, as the Company is prohibited from making payments without prior regulatory approval. During the fourth quarter of fiscal year 2021, the Company applied for and was granted regulatory approval to settle all outstanding debenture interest payments through June 2021. Full payment was made on June 16, 2021. The Company has since had discussions with the Federal Reserve Bank of Philadelphia regarding future quarterly payments. A streamlined process has been developed for the Company to request regulatory approval to make debenture interest payments. All quarterly interest payments subsequent to the June 2021 payment up to and including the March 2023 payment have been made.

The accrued interest payable on subordinated debt securities was $44 thousand and the interest expense was $814 thousand for the year ended March 31, 2023. The accrued interest payable on subordinated debt securities was $22 thousand and the interest expense was $462 thousand for the year ended March 31, 2022.

Paycheck Protection Program Liquidity Facility (PPPLF). The Federal Reserve established the PPPLF to support the PPP program by extending credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value. The interest rate on PPPLF advances is fixed at 0.35% and the maturity date is equal to the maturity date of the PPP loans pledged to secure the extension of credit. During the twelve months ended March 31, 2023, the Bank repaid its remaining $3 thousand outstanding advance under its PPPLF. Interest expense on PPPLF advances was zero and $27 thousand for the years ended March 31, 2023 and 2022, respectively.

Other Borrowings. During fiscal year 2022, the Company entered into two 5-year long-term unsecured low interest loans totaling $2.5 million provided by third parties. The $1.5 million and $1.0 million notes have a fixed interest rate of 1.0%, payable annually, and will mature in 2026. Based on the covenants of these notes, the proceeds will be used to finance eligible loans offered through the Bank's community investment initiatives loan program. The accrued interest payable and interest expense on these notes was $3 thousand and $25 thousand, respectively, for the year ended March 31, 2023. The accrued interest payable and interest expense was $19 thousand for the year ended March 31, 2022.

The following table presents expected maturities of the Company's long-term borrowings at March 31, 2023:

$ in thousands
Year ending March 31,
2024	$	—
2025	25,000
2026	—
2027	2,500
2028	—
Thereafter	13,403
Total	$	40,903

The following table sets forth certain information regarding Carver Federal's borrowings as of and for the years ended March 31:

$ in thousands	2023			2022
Amounts outstanding at the end of year:
FHLB advances	$	35,000		$	—
Subordinated debt securities	13,403			13,403
PPPLF	—			3
Other	2,500			2,500
Rate paid at year end:
FHLB advances	4.99		%	—		%
Subordinated debt securities	7.96		%	3.97		%
PPPLF	—		%	0.35		%
Other	1.00		%	1.00		%
Maximum amount of borrowing outstanding at any month end:
FHLB advances	$	40,000		$	2,000
Subordinated debt securities	13,403			13,403
PPPLF	3			23,705
Other	2,500			2,500
Approximate average amounts outstanding for year:
FHLB advances	$	11,776		$	22
Subordinated debt securities	13,403			13,403
PPPLF	—			7,647
Other	2,500			1,757
Approximate weighted average rate paid during year:
FHLB advances	3.04		%	0.09		%
Subordinated debt securities	6.07		%	3.45		%
PPPLF	0.14		%	0.35		%
Other	1.01		%	1.06		%