He arrived with much fanfare and may have well been one of the most recognizable figures in Harlem USA. But despite, or perhaps because of, the many lending initiatives put in place in his four-year run as president and CEO of Carver Federal Savings Bank, Thomas Clark found himself ousted following a reported multimillion-dollar loss in third-quarter earnings.
Carver, (No.1 on the be banks list with $415.8 million in assets) announced it expects to incur a pre-tax loss in the range of approximately $5 to $7 million for the third quarter ending December 1998. On an after-tax basis the loss is expected to fall within the range of approximately $3 to $5 million or $1.35 to $2.25 per share, based on 2,225,000 average shares outstanding.
According to Carver Chairman David R. Jones, the losses are largely attributed to charge-offs related to the bank’s consumer loan portfolio and problems connected to its conversion of data processing systems from an outside provider to an in-house system.
As to Clark’s termination, Jones said the financial setback mandated the change. “When we announced a significant third-quarter loss following a number of quarters of only modest returns it was unacceptable,” he says. “For the future viability of the bank it was time to go in a different direction and seek different leadership. We’re publicly traded and if we don’t provide an organization that has an acceptable rate of return we won’t be around very long.”
Reached by telephone, Clark says he was disappointed by his termination, but not bitter. “I want people to support Carver. I didn’t give four years of my life for nothing. I gave it four years seven days of the week and I feel I did as much as I could. Obviously the board and I have differences on the future direction of Carver but it’s important that the bank be supported because it’s a fine institution,” he says. “Carver is a public company and has the right to change direction. Just as I have the right to want things resolved so I can go on with my life.”
So what went wrong? After years of playing it safe, Jones says the bank simply may have tried to do too much too quickly. “We were all excited about providing a new range of products for our customers, especially in the area of consumer lending. But we didn’t build the infrastructure to the point where we could do that. And that was the main source of our recent loss.”
In 1997, the bank announced it had agreed to purchase approximately $100 million of performing one- to four-family adjustable-rate mortgages. And last year the bank teamed with the New York Business Development Corp. and the New York State Common Retirement Fund to increase loans to minority- and women-owned businesses.
“When I arrived, we faced a rocky road in the consumer lending area. I felt we had a strategy to deal with it; The board felt differently,” says Clark. “I want Carver to thrive and grow. I know that we