Carver Bancorp in New York, one of the nation’s biggest black-run banks, is facing a hostile takeover.
Dream Chasers Capital Group, which owns a 5.5% stake in the $712 million-asset Carver, said in a press release that it had offered to boost its stake to 35%. The investor offered $3 a share, a 39% premium to Carver’s closing price on Tuesday.
Dream Chasers, a New York-based minority-run investment fund, said it has been in active talks with the bank for months “about acquiring a significant interest.”
The investor said it hopes to take control of the bank and replace its management and board with minority executives with a combined 40 years of banking experience. It would also recapitalize Carver and introduce a platform of services to attract new depositors.
“Poor execution and mismanagement, have left the bank on shaky financial footing, losing deposits, overconcentrated in commercial real estate and unable to serve any of its constituents’ well-shareholders, depositors, or the community,” the investor said in the release.
Carver carefully reviewed the proposal in accordance with its fiduciary responsibility, a representative said in a statement sent to S&P Global Market Intelligence.
“Given the implied valuation, pro forma dilution, and the significant reputational and regulatory risks involved in [the] proposal, the Carver board determined that rejecting it was in the best interests of shareholders, the company, and the communities the Bank serves,” the statement said.
Carver’s return on average assets was -0.5% in the second quarter, lagging the median 0.3% for all black minority depository institutions and 1% for all banks, S&P Global found. Its efficiency ratio was 113.2%.