Carver in N.Y. to Restate 2015 Results, Loss Expected
Carver Bancorp in New York will likely report a loss for its 2015 fiscal year after restating its results.
The $754 million-asset company disclosed in a regulatory filing Friday that the error is tied to the accrual of expenses related to invoices paid to its core system service provider. After consulting with Carver's accountant, the board's finance and audit committee determined that some expenses recorded in fiscal 2016 should have been recognized during the prior year, the filing said.
Carver, which also plans to restate several quarters of results, said the changes should result in a net loss for fiscal 2015, which ended on March 31.
The company disclosed in May that it had signed a formal agreement with the Office of the Comptroller of the Currency that included mandates tied to the Bank Secrecy Act and commercial real estate. The OCC found "unsafe and unsound banking practices" at Carver tied to BSA compliance and issues with strategic and capital planning, board and management oversight and concentration risk management, according to a copy of the order.
Carver disclosed in its earlier filing that it must revise and "adopt a comprehensive written program of internal control policies and procedures" tied to the BSA, while ensuring "adequate staffing" tied to its BSA program. The company must also conduct an independent review of customer account and transaction activity to "determine whether the bank timely identified and reported suspicious activity."
The company is also required to prepare a written plan to address its concentrations in commercial real estate loans. Also, Carver must form a compliance committee and prepare periodic reports detailing its progress complying with the formal agreement.