one of the bank’s largest shareholders. When the board fired then-CEO Thomas Clark Jr. due to mounting losses, Cohee stepped forward, proposing that Carver purchase BBOC and that he and his wife run the operation. Carver’s board suspected that if the couple acquired enough Carver shares they would initiate a takeover, and chose Wright instead. That’s when the real battle began.
That August, as two board seats came up for election, BBOC nominated Cohee and Williams to the board.
With BBOC’s high percentage of voting shares it was likely they would win the seats. Carver called off the shareholders’ meeting, prompting Cohee to file a lawsuit to force one. Next, Wright announced that Morgan Stanley and venture capital firm Provender Capital Group would invest $2.5 million in exchange for convertible preferred voting stock, giving them an 8.25% equity stake. BBOC countered with a second lawsuit and claimed that Wright sold stock to her allies knowing they would vote for incumbent board members David Dinkins and David Jones.
A very public fight ensued, with Wright challenging Cohee’s understanding of conducting business in Harlem and Cohee criticizing Wright’s lack of banking experience. Eventually, Cohee and Williams settled for board seats, and by 2002 had sold their shares.
Once the dust settled, Carver’s first order of business focused on updating products, streamlining operations, and increasing assets. “When Deborah Wright came the company had really stagnated,” says Cohen Bros. & Co. analyst Joseph Gladue. “Their product offerings were out-of-date and there were a few unprofitable branches in their network.” To stop the bleeding, Carver closed three locations, which held $45 million in deposits and wrote-off $8.3 million in poorly underwritten consumer loans. The balance sheet was strong enough to withstand the write-off, but Wright didn’t want to reduce the assets by that much.
That’s when she reached out to some of the iconic names in New York City business, including Henry Kravis, a founder of private equity firm Kohlberg Kravis Roberts & Co.; former Metropolitan Transportation Authority Chairman Virgil Conway; and the late Robert Tisch, former vice chairman of Loews Corp. and co-owner of the New York Giants, who helped to raise the $45 million in deposits Wright needed to keep from shrinking the assets.
In addition, Carver quickly understood that it had to focus on its loyal customers. Even as she worked to make changes, Wright got an earful. “Customers were comfortable giving us the bad news,” she says. They were seeking investments, more access to the banks via ATMs, and competitive rates on CDs and savings accounts.
She worked to fix the system by putting a new team in place that could help Carver meet its customers’ needs and grow. Margaret Peterson, the chief human resources officer, who was initially on loan from Deutsche Bank during the turnaround at Carver but was asked to stay on, says Carver needed to streamline. “What we found here was that the branches operated pretty much independently in terms of accountability and standards.” As a result, Peterson hired an information technology director