In this corner stands New York’s Carver Bancorp Inc., the holding company of Carver Federal Savings Bank, an institution that has served New York’s African American community for half a century and is struggling to improve its fortunes. Its challenger is Boston Bank of Commerce (BBOC), a bank with a scrappy management team seeking to continue its campaign of conquering and rebuilding financially weak black institutions.
For more than a year, the institutions have been locked in a no-holds-barred public brawl that has pit the nation’s largest black bank against a 15th-ranked contender, Harlem against black Beantown, a married couple against a community, classmate against classmate. The battle has sparked a boardroom power struggle, a series of lawsuits and the involvement of a black venture capital firm and a Wall Street powerhouse. At stake is the leadership of black banking.
Since most black businesses are privately owned, the battle for publicly held Carver Bancorp provides a unique look at African American businesspeople engaged in a proxy fight. It also tells the blow-by-blow story of the strategies many community banks must employ to grow in an era of mega-mergers and financial supermarkets. Carver and BBOC have laced on the gloves.
CHALLENGES OF THE CHAMP
At 51 years of age, Carver Federal is a neighborhood stalwart that has taken its share of blows. Soon after the troops came home from World War II, and black soldiers who had helped liberate Europe found they still had to fight Jim Crow, Carver was founded. Many vets, and two generations of their families, entrusted their money and futures to Carver. In return, the institution rewarded their loyalty. When the jazz joints and other Harlem businesses packed up and moved downtown, Carver stayed. Today, as in the past, major black dignitaries are involved with the bank. Former New York City Mayor David Dinkins and banking executive Pazel Jackson sit on the board. And Carver (No. 1 on the B.E. Banks list with $413 million in assets) needs its long-standing community support now more than ever.
This past January, Carver Bancorp CEO Deborah C. Wright made a huge announcement. A little more than six months into the job, she had succeeded in infusing $2.5 million of Wall Street financing into the bank. The funds represented a badly needed shot in the arm for Carver; federal regulators had already classified the bank as “troubled.”
But Wright knew what she was inheriting when she took the helm at Carver in June 1999. The situation was explained carefully to the pool of CEO applicants, from which Wright-despite her lack of banking knowledge-emerged as the strongest candidate, said Carver Chairman David R. Jones. She is an intelligent, Harvard-trained professional with a rÃ©sumÃ© full of economic development and urban planning experience. She was the president of the Upper Manhattan Empowerment Zone Development Corp. and a past commissioner of New York’s Department of Housing Preservation and Development. But with $5 million in losses in the third quarter of fiscal 1999 alone (Thomas Clark Jr., Carver Bancorp’s CEO, lost