CARVER FEDERAL SAVINGS BANK
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STRATEGIC RATIONALE FOR ACQUISITION OF
INDEPENDENCE FEDERAL
SAVINGS BANK
BY CARVER BANCORP, INC
MONDAY, MARCH 15, 2004
CARVER FEDERAL SAVINGS BANK
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Statements contained in this presentation that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject
to risks and uncertainties, which could cause actual results to differ
materially from those currently anticipated due to a number of factors.
Words such as "expect", "feel", "believe", "will", "may", "anticipate",
"plan", "estimate", "intend", "should", and similar expressions are intended
to identify forward-looking statements. These statements include, but are
not limited to, financial projections and estimates and their underlying
assumptions; statements regarding plans, objectives and expectations with
respect to future operations, products and services; and statements
regarding future performance. These statements are subject to certain risks
and uncertainties, many of which are difficult to predict and generally
beyond the control of Carver and Independence. The following factors, among
others, could cause actual results to differ materially from the anticipated
results or other expectations expressed in the forward-looking statements;
(1) the businesses of Carver and Independence may not be combined
successfully, or the combination may take longer to accomplish than
expected; (2) the growth opportunities and cost savings from the merger may
not be fully realized or may take longer to realize than expected; (3)
operating costs and business disruption following the merger, including
adverse effects on relationships with employees, may be greater than
expected; (4) governmental approvals of the merger may not be obtained, or
adverse regulatory conditions may be imposed in connection with governmental
approvals of the merger; (5) the stockholders of Independence may fail to
approve the merger; (6) competitive factors which could affect net interest
income and non-interest income, general economic conditions which could
affect the volume of loan originations, deposit flows and real estate values
of either or both entities; (7) the levels of non-interest income and the
amount of loan losses as well as other factors discussed in the documents
filed by Carver and Independence with the Securities and Exchange Commission
(SEC) and the Office of Thrift Supervision (OTS), respectively, from time to
time. Neither Carver nor Independence undertakes any obligation to update
these forward-looking statements to reflect events or circumstances that
occur after the date on which such statements were made.
This document may be deemed to be a solicitation material in respect of the
proposed merger of Carver and Independence. In connection with the proposed
transaction, Independence will be filing proxy statements and other
materials with the OTS. STOCKHOLDERS OF INDEPENDENCE ARE ENCOURAGED TO READ
THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE OTS
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
The final proxy statement will be mailed to stockholders of Independence.
Investors and security holders will be able to obtain the documents free of
charge from Independence Federal Savings Bank, 1229 Connecticut Avenue,
N.W., Washington, D.C. 20036, Attention: Investor Relations.
Independence and its directors and executive officers and other members of
management and employees may be deemed to participate in the solicitation of
proxies in respect of the proposed transactions. Information regarding
Independence's directors and executive officers is available in
Independence's proxy statement for its annual meeting of stockholders for
the fiscal year ended December 31, 2002, dated April 3, 2003. Additional
information regarding the interests of such potential participants will be
included in the proxy statement and other relevant documents filed with the
OTS when they become available.
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CARVER FEDERAL SAVINGS BANK
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TABLE OF CONTENTS
1. TRANSACTION OVERVIEW
2. STRATEGIC RATIONALE FOR TRANSACTION
3. FINANCIAL SUMMARY OF COMBINED COMPANY
4. ABOUT INDEPENDENCE
5. ABOUT CARVER
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CARVER FEDERAL SAVINGS BANK
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TRANSACTION OVERVIEW
o Consideration: 100% cash
o Transaction Value: Carver will pay $21.00 for each Independence share
$32.6 million aggregate transaction value
151% of December 31, 2003 book value*
90.6% of March 12, 2004 market value
o Structure: Independence will be merged into Carver Federal Savings Bank
o Expected Closing: By the end of calendar 2004
*Based on OTS Thrift Financial Report for December 31, 2003
CARVER FEDERAL SAVINGS BANK
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STRATEGIC RATIONALE FOR TRANSACTION
o DYNAMIC CONSUMER MARKET: experience, visibility and additional
resources to serve 3.1 million African-American consumers in two of
the most visible markets in the country
o EFFICIENCIES: specific and significant opportunities for cost
reductions that will allow for earnings accretion in the first full
year of combined operations
o ENHANCED SCALE & OPPORTUNITY:
o combination will create the first African-American operated bank
to reach $750 million in assets
o increased scale will afford more efficient delivery of products
and services to Carver and Independence customers
o WHO BENEFITS: the combination will benefit shareholders, customers,
employees and the communities we serve
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FINANCIAL SUMMARY OF COMBINED COMPANY*
o Total Assets: $750 million
o Total Loans: $480 million
o Total Deposits: $550 million
o EPS: Accretive in the first full year
o Regulatory Capital: Retain "well-capitalized" status
o Employees: Approximately 190
o Branches: 11 banking offices and 2 free-standing 24/7 ATM Centers
o Marketplace: 3.1 million African-Americans in NYC and greater Washington, DC
* Balance sheet values are approximations based on Independence's OTS Thrift
Financial Report for December 31, 2003 and Carver's 10-Q filing for
quarter ended December 31, 2003
CARVER FEDERAL SAVINGS BANK
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ABOUT INDEPENDENCE
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CARVER FEDERAL SAVINGS BANK
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ABOUT INDEPENDENCE
o Formed: 1968
o Headquarters: Washington D.C.
o Total Assets: $212 million at December 31, 2003(1)
o Banking Offices: 5
o Employees: 65
o LTM EPS: ($0.83)
o Marketplace: (2)
o 1.1 million African-Americans in Washington, DC metropolitan area
o Median household income in the DC area is approx. 50%
greater than that of the nation as a whole
o DC's population growth rate for the next five years is 60% greater than the
national average
(1) Based on OTS Thrift Financial Report for December 31, 2003
(2) Source: Claritas
CARVER FEDERAL SAVINGS BANK
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ABOUT CARVER
o Formed: 1948
o Headquarters: Harlem, New York City
o Total Assets: $530 million at December 31, 2003
o Banking Offices: 6 branches
2 free-standing 24/7 ATM Centers
o Employees: Approximately 125
o LTM EPS: $1.87
o Marketplace: 2 million African-Americans in NYC
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