Impact Investment Profile

Investor

National Community Investment Fund

Investee

Carver Bancorp, Inc.

National Community Investment Fund is a nonprofit equity fund investing in community development financial institutions. Carver Bancorp, Inc. is the holding company of Carver Federal Savings Bank, which provides financially underserved populations in the United States with access to responsible financial services. National Community Investment Fund's USD 1 million equity investment closed a capital raise that will contribute to the bank's recapitalization and support its continued growth and stability.

Investor Targeted Impact

Increase economic opportunity in disadvantaged communities

Investor

Name National Community Investment Fund
Investor description National Community Investment Fund (NCIF) is a nonprofit private equity fund that invests capital in, and facilitates knowledge transfer to, banks, thrifts, and credit unions that provide responsibly priced financial services to underserved U.S. communities. NCIF is focused on building the asset class and strength of the community development financial institution (CDFI) banking sector.

Investee

Name Carver Bancorp, Inc.
Sector Financial Services
Geography North America - United States
Investee business model Carver Bancorp, Inc. is the holding company of Carver Federal Savings Bank (here the term Carver is used interchangeably for the two entities). It was founded in 1948 to serve African-American communities whose residents, businesses, and institutions had limited access to mainstream financial services. Carver provides loans to the housing and small business sectors, check cashing, remittances and other non-credit financial services, and financial counseling. It serves consumers, businesses, and nonprofit organizations, including faith-based institutions.
Motivations for investment Carver is an attractive investment for NCIF due to its mission and long history of serving underserved communities. The bank has significant relationships with local community and faith-based organizations, city and state government programs, and nonprofit support. Carver's network enhances its impact while contributing to its future success. It is the largest African-American operated CDFI bank in the U.S. with a mission to expand wealth-enhancing opportunities in the multi-ethnic communities it serves. As of December 2010, 77 percent of its home lending and 67 percent of its branches were located in low- and moderate-income areas. Through NCIF, Carver has identified an investor that will help it endure the unprecedented impact of the U.S. financial crisis that began in 2008, continue its work in underserved markets, and grow. NCIF's investment has the potential to offer significant returns to it and other investors through Carver's organic growth in lending opportunities, new lines of business, and acquisitions.

Investment

Instrument Equity
Investment size USD 1 million
Source of deal NCIF was an existing investor in Carver when the bank began this capital raise. Carver secured a total of USD 55 million from seven institutional investors, including NCIF. NCIF invested to reinforce the bank's social and economic development commitment and to help close the capital raise. NCIF was Carver's only existing investor participating in this investment round, affirming its commitment to support institutions through socially responsible investments and its belief in Carver's impact.
Stage of company at time of investment Mature
Purpose of investment The funds from the capital raise are being used to recapitalize the bank and to provide growth capital for expanding its financial services in New York City's inner city communities.
Investment impact objectives NCIF's targeted impact for the investment is twofold. First, the investment was made at a time when Carver was under stress due to the broader economic recession of 2008. Second, NCIF's investment in Carver supports one of the pillars of the CDFI banking industry and signals to other investors and stakeholders that CDFI banks are vital to traditionally financially-underserved populations and should be supported in difficult economic times. NCIF believes that its investment will allow Carver to grow and further expand its work in the communities it serves.
Social and environmental metrics tracked on investment NCIF performs an annual impact analysis on all of its investees, based on the social performance metrics it pioneered for community development banks in 2007. These metrics focus on lending activity of depository institutions in low- to moderate-income communities as well as their physical presence in these communities.NCIF also collects data through a community impact survey that is sent to investee institutions. It contains questions on the size and demographics of institutions' employees, the types of credit, financial, and non-financial services they provide, and the demographic makeup of their customers. As part of the survey, NCIF also tracks metrics that are aligned with IRIS (IRIS alignment noted in parentheses), including:Number of Loans Originated or PurchasedLocation of Organization's Operating Facilities (IRIS aligned - OD1777)Mission Statement (IRIS aligned - OI4324) Total Employees (IRIS aligned - OI3160)Minority Employees (IRIS aligned - OI8147)Female Employees (IRIS aligned - OI6213)Number of Board Members (IRIS aligned - OI1075)Racial/ Ethnic Minority Board Members (IRIS aligned - OI6696)Female Board Members (IRIS aligned - OI8118)Product/Service Information - Other Financial Services Offered (IRIS aligned - PD5098)Product/Service Information - Non-Financial Services Offered (IRIS aligned - PD9681)Jobs Maintained (in Financed Enterprises) (IRIS aligned - PI5691)Jobs Created (in Financed Enterprises) (IRIS aligned - PI3687)Technical Assistance - Individuals (IRIS aligned - PI5352)Technical Assistance - Group-Based (IRIS aligned - PI7997)Technical Assistance - Organizations (IRIS aligned - PI6065)

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