Carver Bancorp in New York is back on track after a lengthy struggle after the financial crisis.

With its balance sheet in order, Carver — the nation's biggest black-run bank — faces a new challenge: Making sure it stays relevant.

Michael Pugh, who took over from Deborah Wright as chief executive in January, believes he's up for the task.

Pugh has led an effort to upgrade Carver's mobile app and online banking platform in an effort to woo younger customers. The average age of a Carver customer is around 55, Pugh said. The company has also trimmed costs, amid broader declines in both interest revenue and fees.

"Down the line, the bank will be well-positioned" for long-term growth, Pugh said.

Pugh still has his work cut out for him; Carver lost $165,000 in the third quarter, though the company said the red ink was tied to a higher loan-loss provision that reflected loan growth.

"We've taken steps throughout the year to focus on a few critical things, with expense management being a very important item for us," Pugh said.

The company remains committed to providing services to underbanked customers in Harlem and New York's outer boroughs. The Carver Community Cash program, which provides check-cashing and money-transfer services, processed 90,000 transactions this year, while turning 12% of its unbanked users into customers.

Carver is planning to launch a small-dollar loan program for entrepreneurs. The program, which the company is piloting, will provide business with loans ranging from $2,500 to $10,000.

Pugh — who joined Carver in 2012 from Capital One Financial — discussed those programs, as well as his first year as CEO, in a wide-ranging interview at $737 million-asset company's Harlem offices. Here is an edited transcript.

What has surprised you since taking over as CEO? What changes have you made?

MICHAEL PUGH: There haven't been a lot of surprises, in part because I spent two years working very closely with Debbie Wright, our [former] CEO and chairman, who remains nonexecutive chair. As I've thought about making my mark, I'd say it's a continuation of a few critical things — namely to help improve asset quality. Focusing very closely on expense management is a critical area for us. The last thing, I would say, is thinking about ways to have a broader reach and attraction to the millennial customer set.

Let's talk about Carver's pilot program for small-dollar business loans.

We're very excited about this program. It's nearly ready to be launched. It requires quite a bit of in-house work to build it in a way that demonstrates that the product is unassailable. We expect to have it ready in the next two to three months, available full scale.

So it's currently available to a small number of clients?

We're continuing our testing and learning. It's important to really get it right. New York state has always had some sensitivity about small-dollar loans, and rightfully so. With that in mind, we've really taken very measured steps to make sure that it is done in a way that's responsible for the community and benefits the customer.

Let's talk about branching. Carver lost an in-store branch with the closing of the Pathmark supermarket in East Harlem.

I believe fundamentally that branches are important. They represent a critical piece of connecting with the community. There are some other places in the community where we'd like to certainly explore a bit more. But it would be hard to say at this point if [a new branch] would be in a supermarket, or a standalone.

Harlem is gentrifying. How has the neighborhood's development affected your customer base?

A lot of economic development that has taken place in the neighborhoods we serve. It's always a very delicate and sensitive topic, because there's an ongoing need to ensure that customers have affordable housing. On the lending side, part of our core mission is to support affordable housing and responsible lending to borrowers.

I think we're also seeing the benefit of some new movers that are coming into the area and have a real attraction to a financial institution like Carver.

The number of black-owned banks has declined in recent years. What are your thoughts on the future of minority-owned banks?

It's a really tough question to answer because, frankly, the micro-industry has shrunk. If you do a comparison and you look at banking as a whole, the number of banks that exist today is considerably less compared to where we were before the recession.

Carver is very strong, and we plan on being around to serve the community for years to come. I'm very hopeful for the industry as a whole. There's certainly a need, particularly in low- to moderate-income communities, for banks like Carver that have a real mission and focus on economic development.

What else should the industry know about you?

I would call myself a classically trained banker. It is the only career I've ever had as an adult. I started my career as a part-time teller. I've had a tremendous opportunity to work in different business channels, from operations, to mortgage, commercial, small business and retail.

All of that has culminated to me being here in this very special place.

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