Carver Bancorp in New York has agreed to exchange common stock so it can cancel trust preferred securities.
The company said in a press release that it will issue 524,826 shares of common stock to institutional holders in exchange for trust preferred securities with more than $1 million in interest obligations. The move is designed to strengthen the bank’s capital position and remove legacy debt.
“This exchange is a key part of our efforts to strengthen the Bank’s capital position, which is at the core of our turnaround strategy,” CEO Donald Felix said. “Removing such a significant debt overhang immediately increases our flexibility to take steps toward growth and profitability.”