Donald Felix, who
Felix, 50, served as chief of staff for Citigroup Chairman Richard Parsons from 2009 into 2010, during the bank's painful recovery from
The $749 million-asset, New York-based Carver is far from the brink of failure. Capital ratios remain in excess of regulatory minimums, even after a string of annual losses. Felix pointed to several other positive signs, including a linked-quarter spike in net interest income, which rose 9% to $6 million for the three months ended Sept. 30.
"We've got some good wind in the sails, now it's about how do we continue moving forward with a more robust strategic plan," Felix said. "For us, the opportunity is how do we do more and do better."
Still, Carver's struggles have prompted renewed attention from activists. Dream Chasers Capital Group, led by veteran securities executive Greg Lewis, sought last year to
"This is a good opportunity," Felix said. "It's meaningful for the future. With so few Black-operated banks remaining, Carver … is too important not to succeed."
Felix' most recent job prior to joining Carver was a two-year stint at the Providence, Rhode Island-based Citizens Financial Group, where he served as head of national banking, in charge of the $220 billion-asset company's digital national bank, Citizens Access. His 25-year banking career includes three years at Chase as chief of staff for
Felix said his experience working at three of the biggest financial institutions in the country "has led to my being where I am today." He is convinced that his background will prove invaluable leading Carver, which he acknowledged needs a turnaround. "So much of my experience absolutely lines up with what's needed at this particular moment, this inflection point for the bank, raising capital, returning to profitability and growing the business," Felix said.
Past as prologue
Carver was founded in 1948 in Harlem by a group of 14 African- and Caribbean-American activists and entrepreneurs, including Joseph Davis, a real estate agent and property appraiser, and M. Moran Weston, a social worker who was later ordained an Episcopal priest and served as the longtime rector of St. Phillip's Church in Harlem. Davis became Carver's first CEO.
Created with a mission to serve communities that traditional banks largely ignored, Carver evolved into a fixture in New York and one of the nation's largest Black-operated banks. After 75 years, its brand equity remains strong, Felix said. "The excitement, the passion, the commitment by our employees, by our board and by our customers to the mission Carver serves is extremely high," he said. "I can't tell you the number of reach-outs I've received from people who are attracted to this bank. I fall into the same category."
Despite his big-bank background, Felix said he never hesitated seeking the Carver job following
While Felix went to work at Citi immediately after graduating Howard University, it was his older sister, Gemma, who sparked his interest in banking. Gemma got a job as a teller at Chase in the late 1980s. "I watched her progress," Felix said. "They needed new help at a major branch at 14th Street and 7th Avenue. It was a big deal. They asked her to go there and help grow that branch. She continued to progress to the point where she became assistant branch manager at the flagship branch at 270 Park Avenue."
Gemma's success "made banking interesting to me," he said. "Everyone knew her. I could go to any of her branches. Her customers knew her and she knew them by name. That's where a lot of the inspiration came from."
Work cut out
While Carver's legacy resonates with many, its financial performance since going public in 1994 has been uneven, creating frustration for investors. An earlier string of annual losses in the mid-to-late 1990s led to a hostile takeover attempt by Kevin Cohee, CEO of the $614 million-asset OneUnited Bank. Carver beat back the bid and, under the leadership of CEO Deborah Wright, was able to turn things around. The bank enjoyed a six-year run of strong profitability in the early and mid-2000s.
Carver's fortunes deteriorated as a result of the Great Recession of 2007 to 2009. A major jump in nonperforming construction and commercial real estate loans resulted in more than $30 million of losses in 2010. Losses continued into 2011 and led to a $55 million recapitalization. Carver has never fully regained its footing. In May 2016, Carver entered into a
In a letter to shareholders Monday, Dream Chasers' Lewis blasted the board's performance, writing "it does the community and Carver no good to back a Board that has overseen operating losses, share price declines, and poor performance for such a long period of time."
"No bank or investment fund would tolerate such prolonged poor performance in their own organizations, and we shouldn't accept it from Carver," Lewis wrote.
Getting started
Felix parachuted into the middle of the situation, starting work just six weeks before Carver's annual meeting, scheduled for Dec. 12. At the moment, Felix is completing an assessment of the business and is clear on his top priorities. "First and foremost, we've got to grow the bank, drive new deposits, focus on incremental loans, acquire new customers, particularly the next generation of customers," Felix said.
Raising capital to upgrade technology, strengthen risk management and attract talent is "also on the docket," Felix said.
Carver disclosed plans to increase its Small Business Administration lending last year, under interim CEO Craig MacKay. Felix likes the initiative and plans to expand it. "It is definitely something I want to grow," Felix said. "If you think about the community impact, helping businesses start, helping them stay in business, helping them grow, the jobs created as a result, that is certainly squarely in our target."
Institutional Shareholder Services, widely considered the leading proxy advisory firm, endorsed Carver in its contest with Dream Chasers. It did so largely on the strength of Felix's appointment, which it termed "a step in the right direction" in a Nov. 29 press release. Felix "appears to have relevant experience and an understanding of the issues facing the bank, and despite his short tenure, he has developed what appears to be a logical go-forward plan," ISS stated.
