Stockholders' Equity (Notes)

12 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

STOCKHOLDERS' EQUITY

Conversion and Stock Offering. On October 24, 1994, the Bank issued in an initial public offering 2,314,375 shares of common stock, par value $0.01 (the “Common Stock”), at a price of $10 per share resulting in net proceeds of $21.5 million.  As part of the initial public offering, the Bank established a liquidation account at the time of conversion, in an amount equal to the surplus and reserves of the Bank at September 30, 1994.  In the unlikely event of a complete liquidation of the Bank (and only in such event), eligible depositors who continue to maintain accounts shall be entitled to receive a distribution from the liquidation account.  The total amount of the liquidation account may be decreased if the balances of eligible deposits decreased as measured on the annual determination dates.  The Bank is not permitted to pay dividends to the Company on its capital stock if the effect thereof would cause its net worth to be reduced below either: (i) the amount required for the liquidation account, or (ii) the amount required for the Bank to comply with applicable minimum regulatory capital requirements.

Regulatory Capital. The operations and profitability of the Bank are significantly affected by legislation and the policies of the various regulatory agencies. The OCC has promulgated capital requirements for financial institutions consisting of minimum tangible and core capital ratios of 1.5% and 3%, respectively, of the institution's adjusted total assets and a minimum risk-based capital ratio of 8% of the institution's risk weighted assets.  Although the minimum core capital ratio is 3%, the Federal Deposit Insurance Corporation Improvement Act (“FDICIA”), as amended, stipulates that an institution with less than 4% core capital is deemed undercapitalized. In assessing an institution's capital adequacy, the OCC takes into consideration not only these numeric factors but also qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where necessary.  Carver Federal, as a matter of prudent management, targets as its goal the maintenance of capital ratios which exceed these minimum requirements and that are consistent with Carver Federal's risk profile.  The previously described Cease and Desist Order Carver Federal entered into with the OCC included a capital directive requiring the Bank to achieve and maintain minimum regulatory capital levels of a Tier 1 leverage ratio of 9% and a total risk-based capital ratio of 13% by April 30, 2011. At March 31, 2014, the Bank's capital level exceeded the regulatory requirements with a Tier 1 leverage ratio of 10.38%, total risk-based capital ratio of 20.12% and a Tier 1 risk-based capital ratio of 17.55%.

On June 29, 2011, the Company raised $55 million of capital. The $55 million resulted in a $51.4 million increase in liquidity net of the effect of various expenses associated with the capital raise. On June 30, 2011, the Company downstreamed $37 million to the Bank. During December 2011, the Company downstreamed another $7 million to the Bank. The remainder of the net capital raised is retained by the Company for future strategic purposes or to downstream into the Bank, if necessary. No assurances can be given that the amount of capital raised is sufficient to absorb the losses emanating from the Bank's loan portfolio. Should the losses be greater than expected, additional capital may be necessary in the future.

In addition, no assurances can be given that the Bank and the Company will continue to comply with all provisions of the Order. Failure to comply with these provisions could result in further regulatory actions to be taken by the regulators.

The table below presents the capital position of the Bank at March 31, 2014.

($ in thousands)	Tier 1 Leverage Ratio			Tier 1 Risk-Based Capital Ratio			Total Risk-Based Capital Ratio
GAAP Capital at March 31, 2014	$	61,907		$	61,907		$	61,907
Add:
General valuation allowances	—			—			4,781
Qualifying subordinated debt	—			—			5,000
Other	(27		)	(27		)	(27		)
Deduct:
Unrealized gains (losses) on securities available-for-sale, net	(4,768		)	(4,768		)	(4,768		)
Regulatory Capital	66,648			66,648			76,429
Minimum Capital requirement	57,771			49,382			49,382
Regulatory Capital Excess	$	8,877		$	17,266		$	27,047
Capital Ratios	10.38		%	17.55		%	20.12		%