##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 1-13007
 CARVER BANCORP, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    13-3904174(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)75 West 125th Street, New York, New York
    
    10027(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (718) 230-2900
 Securities Registered Pursuant to Section 12(b) of the Act:
 Common Stock, par value $.01 per share
    
    NASDAQ Global Market(Title of Class)
    
    (Name of each Exchange on which registered)
 Securities registered pursuant to Section 12(g) of the Act:
 None
 o Yes þ No
 o Yes þ No
 þ Yes o No
 o o
 o
  o Large Accelerated Filer
    
    o Accelerated Filer
    
    o Non-accelerated Filer
    
    þ Smaller Reporting Company
 o Yes þ No




---



##### 



CARVER BANCORP, INC.
2009 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
 PagePART I
    
    
    2ITEM 1. BUSINESS
    
    
    2ITEM 1A. RISK FACTORS
    
    
    33ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    39ITEM 2. PROPERTIES
    
    
    40ITEM 3. LEGAL PROCEEDINGS
    
    
    42ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    42PART II
    
    
    42ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
    
    
    42ITEM 6. SELECTED FINANCIAL DATA
    
    
    45ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    46ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    64ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    65ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    100ITEM 9A. CONTROLS AND PROCEDURES
    
    
    100ITEM 9B. OTHER INFORMATION
    
    
    101PART III
    
    
    101ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE
    
    
    101ITEM 11. EXECUTIVE COMPENSATION
    
    
    101ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
    
    
    101ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS DIRECTOR INDEPENDENCE
    
    
    101ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    102PART IV
    
    
    102ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    102SIGNATURES
    
    
    103EXHIBIT INDEX
    
    
    104Exhibit 21.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 33.1




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
  
    
    the Companys success in implementing its new business initiatives, including expanding its product line, adding new
branches and ATM centers and successfully building its brand image;
 
    
    increases in competitive pressure among financial institutions or non-financial institutions;
 
    
    legislative or regulatory changes which may adversely affect the Companys business;
 
    
    technological changes which may be more difficult to implement or expensive than anticipated;
 
    
    changes in interest rates which may reduce net interest margin and net interest income;
 
    
    changes in deposit flows, loan demand, real estate values, borrowing facilities, capital markets and investment
opportunities which may adversely affect the business;
 
    
    changes in existing loan portfolio composition and credit quality, and changes in loan loss requirements;
 
    
    changes in accounting principles, policies or guidelines which may cause conditions to be perceived differently;
 
    
    litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, which may
delay the occurrence or non-occurrence of events longer than anticipated;
 
    
    the ability to originate and purchase loans with attractive terms and acceptable credit quality;
 
    
    the ability to attract and retain key members of management;
 
    
    the ability to realize cost efficiencies; and
 
    
    general economic conditions, either nationally or locally in some or all areas in which business is conducted, or
conditions in the real estate or securities markets or the banking industry which could affect liquidity in the capital
markets, the volume of loan origination, deposit flows, real estate values, the levels of non-interest income and the
amount of loan losses.
   1




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PART I
  
 ITEM 1. BUSINESS.
 OVERVIEW
       2




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GENERAL
 Carver Bancorp, Inc.
    3




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Carver Federal Savings Bank
   Available Information
   4




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##### Table of Contents



Lending Activities
 General
    Loan Portfolio Composition
  5




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##### Table of Contents



Non-residential Real Estate Lending
       6




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Multi-family Real Estate Lending.
   Construction Lending
   7




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##### Table of Contents



One-to-four Family Residential Lending
     8




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##### Table of Contents



Business Loans
 Consumer and other Loans
  Loan Processing
  9




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Loan Approval ,
 Loans-to-One-Borrower
 Loan Sales
 Loan Originations and Purchases
  10




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentLoans Originated:One-to-four family
    
    $
    10,861
    
    
    
    7.17
    %
    
    $
    39,060
    
    
    
    18.38
    %
    
    $
    32,381
    
    
    
    17.21
    %Multi-family
    
    
    21,019
    
    
    
    13.88
    %
    
    
    13,118
    
    
    
    6.17
    %
    
    
    8,657
    
    
    
    4.60
    %Non-residential
    
    
    57,785
    
    
    
    38.16
    %
    
    
    48,743
    
    
    
    22.94
    %
    
    
    31,108
    
    
    
    16.53
    %Construction
    
    
    38,471
    
    
    
    25.40
    %
    
    
    61,021
    
    
    
    28.72
    %
    
    
    56,834
    
    
    
    30.20
    %Business
    
    
    22,891
    
    
    
    15.12
    %
    
    
    18,982
    
    
    
    8.93
    %
    
    
    730
    
    
    
    0.39
    %Consumer and others (1)
    
    
    405
    
    
    
    0.27
    %
    
    
    1,804
    
    
    
    0.85
    %
    
    
    282
    
    
    
    0.15
    %Total loans originated
    
    
    151,432
    
    
    
    100.00
    %
    
    
    182,728
    
    
    
    86.00
    %
    
    
    129,992
    
    
    
    69.08
    %Loans purchased (2)
    
    
    
    
    
    
    
    %
    
    
    29,736
    
    
    
    14.00
    %
    
    
    58,191
    
    
    
    30.92
    %Total loans originated and purchased
    
    
    151,432
    
    
    
    100.00
    %
    
    
    212,464
    
    
    
    100.00
    %
    
    
    188,183
    
    
    
    100.00
    %Loans sold (3)
    
    
    (10,291
    )
    
    
    
    
    
    
    (17,716
    )
    
    
    
    
    
    
    (30,778
    )Net additions to loan portfolio
    
    $
    141,141
    
    
    
    
    
    
    $
    194,748
    
    
    
    
    
    
    $
    157,405
 (1)
    
    Comprised of personal and credit card loans.(2)
    
    Comprised of primarily construction and non-residential mortgage loans and business loans.(3)
    
    Comprised of primarily one-to-four family mortgage loans.    11




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Loan Maturity Schedule
 Loan Maturities<1 Yr.
    
    
    1-2 Yrs.
    
    
    2-3 Yrs.
    
    
    3-5 Yrs.
    
    
    5-10 Yrs.
    
    
    10-20 Yrs.
    
    
    20+ Yrs.
    
    
    TotalGross loans receivable:One-to-four family
    
    $
    10
    
    
    $
    253
    
    
    $
    109
    
    
    $
    362
    
    
    $
    2,105
    
    
    $
    4,111
    
    
    $
    77,716
    
    
    $
    84,666Multi-family
    
    
    1,063
    
    
    
    76
    
    
    
    8,115
    
    
    
    8,710
    
    
    
    23,517
    
    
    
    23,472
    
    
    
    15,368
    
    
    
    80,321Non-residential
    
    
    16,629
    
    
    
    11,804
    
    
    
    8,188
    
    
    
    38,361
    
    
    
    93,227
    
    
    
    95,004
    
    
    
    10,382
    
    
    
    273,595Construction
    
    
    140,369
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    949
    
    
    
    
    
    
    
    144,318Business
    
    
    18,946
    
    
    
    792
    
    
    
    8,643
    
    
    
    5,894
    
    
    
    17,433
    
    
    
    3,952
    
    
    
    1,862
    
    
    
    57,522Consumer
    
    
    98
    
    
    
    15
    
    
    
    55
    
    
    
    992
    
    
    
    441
    
    
    
    68
    
    
    
    5
    
    
    
    1,674Total
    
    $
    177,115
    
    
    $
    12,940
    
    
    $
    25,110
    
    
    $
    54,319
    
    
    $
    139,723
    
    
    $
    127,556
    
    
    $
    105,333
    
    
    $
    642,096
  Due After March 31, 2010Fixed
    
    
    Adjustable
    
    
    TotalGross loans receivable:One-to-four family
    
    $
    6,361
    
    
    $
    78,295
    
    
    $
    84,656Multi-family
    
    
    20,944
    
    
    
    58,258
    
    
    
    79,214Non-residential
    
    
    75,751
    
    
    
    181,215
    
    
    
    256,966Construction
    
    
    
    
    
    
    3,949
    
    
    
    3,949Business
    
    
    14,401
    
    
    
    23,490
    
    
    
    37,891Consumer
    
    
    1,576
    
    
    
    
    
    
    
    1,576Total
    
    $
    119,033
    
    
    $
    345,948
    
    
    $
    464,981
 Asset Quality
 General.
   12




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Non-performing Assets
   2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Loans accounted for on a non-accrual basis (1):Gross loans receivable:One-to-four family
    
    $
    4,396
    
    
    $
    567
    
    
    $
    173
    
    
    $
    1,098
    
    
    $
    149Multi-family
    
    
    3,569
    
    
    
    
    
    
    
    3,886
    
    
    
    763
    
    
    
    167Non-residential
    
    
    11,375
    
    
    
    522
    
    
    
    
    
    
    
    
    
    
    
    665Construction
    
    
    3,286
    
    
    
    
    
    
    
    
    
    
    
    865
    
    
    
    Business
    
    
    3,079
    
    
    
    1,708
    
    
    
    439
    
    
    
    
    
    
    
    Consumer
    
    
    22
    
    
    
    57
    
    
    
    12
    
    
    
    4
    
    
    
    17Total non-accrual loans
    
    
    25,727
    
    
    
    2,854
    
    
    
    4,510
    
    
    
    2,730
    
    
    
    998Accruing loans contractually past due > 90 days
    
    
    894
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total non-accrual & accruing loans
past due > 90 days
    
    
    26,621
    
    
    
    2,854
    
    
    
    4,510
    
    
    
    2,730
    
    
    
    998Other non-performing assets (2):Real estate owned
    
    
    465
    
    
    
    1,163
    
    
    
    28
    
    
    
    26
    
    
    
    Total other non-performing assets
    
    
    465
    
    
    
    1,163
    
    
    
    28
    
    
    
    26
    
    
    
    Total non-performing assets
    
    $
    27,086
    
    
    $
    4,017
    
    
    $
    4,538
    
    
    $
    2,756
    
    
    $
    998Non-performing loans to total loans
    
    
    4.15
    %
    
    
    0.43
    %
    
    
    0.74
    %
    
    
    0.55
    %
    
    
    0.23
    %Non-performing assets to total assets
    
    
    3.42
    %
    
    
    0.50
    %
    
    
    0.61
    %
    
    
    0.42
    %
    
    
    0.16
    %
 (1)
    
    Non-accrual status denotes any loan where the delinquency exceeds 90 days past due and loans,
in the opinion of management, the collection of additional interest is doubtful. Payments
received on a non-accrual loan are either applied to the outstanding principal balance or
recorded as interest income, depending on managements assessment of the ability to collect on
the loan.(2)
    
    Other non-performing assets generally represent property acquired by the Bank in settlement
of loans (i.e., through foreclosure, repossession or as an in-substance foreclosure). These
assets are recorded at the lower of their fair value or the cost to acquire.   13




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Asset Classification and Allowances for Losses
  14
    Table of Contents      15




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2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Balance at beginning of year
    
    $
    4,878
    
    
    $
    5,409
    
    
    $
    4,015
    
    
    $
    4,097
    
    
    $
    4,125Less Charge-offs:One-to-four family
    
    
    
    
    
    
    22
    
    
    
    19
    
    
    
    17
    
    
    
    8Business
    
    
    501
    
    
    
    709
    
    
    
    50
    
    
    
    
    
    
    
    Consumer and other
    
    
    83
    
    
    
    174
    
    
    
    51
    
    
    
    100
    
    
    
    65Total Charge-offs
    
    
    584
    
    
    
    905
    
    
    
    120
    
    
    
    117
    
    
    
    73Add Recoveries:One-to-four family
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    5
    
    
    
    Non-residential
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    Business
    
    
    10
    
    
    
    110
    
    
    
    
    
    
    
    
    
    
    
    Consumer and other
    
    
    43
    
    
    
    42
    
    
    
    43
    
    
    
    30
    
    
    
    45Total Recoveries
    
    
    53
    
    
    
    152
    
    
    
    47
    
    
    
    35
    
    
    
    45Net loans charged-off
    
    
    531
    
    
    
    753
    
    
    
    73
    
    
    
    82
    
    
    
    28CCB acquisition allowance
    
    
    
    
    
    
    
    
    
    
    1,191
    
    
    
    
    
    
    
    Provision for losses
    
    
    2,702
    
    
    
    222
    
    
    
    276
    
    
    
    
    
    
    
    Balance at end of year
    
    $
    7,049
    
    
    $
    4,878
    
    
    $
    5,409
    
    
    $
    4,015
    
    
    $
    4,097Ratios:Net charge-offs to average loans outstanding
    
    
    0.08
    %
    
    
    0.17
    %
    
    
    0.02
    %
    
    
    0.02
    %
    
    
    0.01
    %Allowance to total loans
    
    
    1.06
    %
    
    
    0.74
    %
    
    
    0.89
    %
    
    
    0.81
    %
    
    
    0.96
    %Allowance to non-performing loans (1)
    
    
    27.40
    %
    
    
    170.89
    %
    
    
    119.93
    %
    
    
    147.07
    %
    
    
    410.65
    %
 (1)
    
    Non-performing loans consist of non-accrual loans and accruing loans 90
days or more past due in settlement of loans.  2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofLoans
    
    
    
    
    
    
    Loans
    
    
    
    
    
    
    Loans
    
    
    
    
    
    
    Loans
    
    
    
    
    
    
    Loansto Total
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    to TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossAmount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    LoansAllowance for loan losses:One-to-four family
    
    $
    970
    
    
    
    13.8
    %
    
    $
    324
    
    
    
    6.6
    %
    
    $
    372
    
    
    
    6.9
    %
    
    $
    565
    
    
    
    14.1
    %
    
    $
    528
    
    
    
    12.9
    %Multi-family
    
    
    428
    
    
    
    6.1
    %
    
    
    315
    
    
    
    6.5
    %
    
    
    1,414
    
    
    
    26.1
    %
    
    
    1,084
    
    
    
    27.0
    %
    
    
    898
    
    
    
    21.9
    %Non-residential
    
    
    2,417
    
    
    
    34.2
    %
    
    
    1,215
    
    
    
    24.9
    %
    
    
    1,487
    
    
    
    27.5
    %
    
    
    960
    
    
    
    23.9
    %
    
    
    1,129
    
    
    
    27.6
    %Construction
    
    
    896
    
    
    
    12.7
    %
    
    
    1,448
    
    
    
    29.7
    %
    
    
    951
    
    
    
    17.6
    %
    
    
    303
    
    
    
    7.5
    %
    
    
    212
    
    
    
    5.2
    %Business
    
    
    2,268
    
    
    
    32.2
    %
    
    
    1,124
    
    
    
    23.0
    %
    
    
    951
    
    
    
    17.6
    %
    
    
    22
    
    
    
    0.5
    %
    
    
    10
    
    
    
    0.2
    %Consumer and other
    
    
    70
    
    
    
    1.0
    %
    
    
    94
    
    
    
    1.9
    %
    
    
    234
    
    
    
    4.3
    %
    
    
    420
    
    
    
    10.5
    %
    
    
    544
    
    
    
    13.3
    %Unallocated
    
    
    
    
    
    
    0.0
    %
    
    
    358
    
    
    
    7.3
    %
    
    
    
    
    
    
    0.0
    %
    
    
    661
    
    
    
    16.5
    %
    
    
    776
    
    
    
    18.9
    %Total Allowance
    
    $
    7,049
    
    
    
    100.0
    %
    
    $
    4,878
    
    
    
    100.0
    %
    
    $
    5,409
    
    
    
    100.0
    %
    
    $
    4,015
    
    
    
    100.0
    %
    
    $
    4,097
    
    
    
    100.0
    %
   16




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Investment Activities
 General.
 Accounting for Certain
Investments in Debt and Equity Securities,
 Mortgage-Backed Securities.
    17




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##### Table of Contents



Other Investment Securities.
 Other Earning Assets.
 Securities Impairment.
 Sources of Funds
 General.
 Deposits.
    18




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##### Table of Contents



Borrowed Money.
  REGULATION AND SUPERVISION
 General
   19




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Recent Government Actions
 de minimis
    20




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Federal Banking Regulation
 Activity Powers.
     21




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##### Table of Contents



Loans-to-One Borrower Limitations.
 Qualified Thrift Lender Test.
 Capital Requirements.
  22




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##### Table of Contents



Prompt Corrective Action Regulations.
  Limitation on Capital Distributions.
   (1)
    
    the Bank would be undercapitalized following the distribution;(2)
    
    the proposed capital distribution raises safety and soundness concerns; or(3)
    
    the capital distribution would violate a prohibition contained in any
statute, regulation or agreement.
 Liquidity.
  23




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##### Table of Contents



Branching.
 Community Reinvestment.
  (1)
    
    a lending test, to evaluate the institutions record of making loans in its
assessment areas;(2)
    
    an investment test, to evaluate the institutions record of investing in
community development projects, affordable housing and programs benefiting low or
moderate income individuals and businesses; and(3)
    
    a service test, to evaluate the institutions delivery of banking services
through its branches, ATM centers and other offices.
   Transactions with Related Parties.
    24




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##### Table of Contents



Assessment.
 Enforcement.
 Standards for Safety and Soundness.
 Insurance of Deposit Accounts
    25




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##### Table of Contents



26




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##### Table of Contents



Anti-Money Laundering and Customer Identification
   
    
    Performance of a risk assessment and establishment of a Board approved policy.
 
    
    Designation of a qualified BSA officer.
 
    
    Establishment of an effective training program.
 
    
    Establishment of anti-money laundering programs.
 
    
    Establishment of a program specifying procedures for obtaining identifying
information from customers seeking to open new accounts, including verifying the
identity of customers within a reasonable period of time.
 
    
    Establishment of enhanced due diligence policies, procedures and controls
designed to detect and report money laundering.
 
    
    Prohibition on correspondent accounts for foreign shell banks and compliance
with record keeping obligations with respect to correspondent accounts of foreign
banks.
   27




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Federal Home Loan Bank System
    Federal Reserve System
    28




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##### Table of Contents



Privacy Protection
   Holding Company Regulation.
   Restrictions Applicable to All Savings and Loan Holding Companies.
 (1)
    
    control (as defined under HOLA) of another savings institution
(or a holding company parent) without prior OTS approval;(2)
    
    through merger, consolidation, or purchase of assets, another
savings institution or a holding company thereof, or acquiring all or
substantially all of the assets of such institution (or a holding company),
without prior OTS approval; or(3)
    
    control of any depository institution not insured by the FDIC
(except through a merger with and into the holding companys savings
institution subsidiary that is approved by the OTS).
  29




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##### Table of Contents



(1)
    
    in the case of certain emergency acquisitions approved by the
FDIC;(2)
    
    if such holding company controls a savings institution
subsidiary that operated a home or branch office in such additional state as of
March 5, 1987; or(3)
    
    if the laws of the state in which the savings institution to be
acquired is located specifically authorize a savings institution chartered by
that state to be acquired by a savings institution chartered by the state where
the acquiring savings institution or savings and loan holding company is
located or by a holding company that controls such a state chartered
association.
  Federal Securities Laws
  Delaware Corporation Law
  FEDERAL AND STATE TAXATION
 Federal Taxation
 General.
 Bad Debt Reserves.
 Distributions.
  30




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##### Table of Contents



Dividends Received Deduction and Other Matters.
 State and Local Taxation
 State of New York.
   New York City.
 Delaware Taxation.
  31




---



##### Table of Contents



EXECUTIVE OFFICERS OF THE HOLDING COMPANY
  Deborah C. Wright
 Mark A. Ricca , cum laude
 James H. Bason
 James Carter ,
 Blondel A. Pinnock
  32




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##### Table of Contents



Margaret D. Roberts
 John Spencer
 Thomas Sperzel, CPA
 
 ITEM 1A. RISK FACTORS.
  Changes in interest rate environment may negatively affect Carvers net income, mortgage loan
originations and valuation of available-for-sale securities.
     33




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Carvers results of operations are affected by economic conditions in the New York metropolitan
area.
      34




---



##### Table of Contents



Strong competition within the Banks market areas could hurt expected profits and slow growth.
   The Banks increased emphasis on non-residential, construction real estate lending and small
business lending may increase exposure to lending risks.
    The Bank operates in a highly regulated industry, which limits the manner and scope of business
activities.
   35




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Efforts to comply with the Sarbanes-Oxley Act involve significant expenditures, and non-compliance
with the Sarbanes-Oxley Act may adversely affect the Bank.
   Changes in laws, government regulation and monetary policy may have a material effect on results of
operations.
   36




---



##### Table of Contents



pari passu
    37




---



##### Table of Contents



The Company is subject to certain risks with respect to liquidity.
     The Banks ability to pay dividends or lend funds to the Holding Company is subject to regulatory
limitations which may prevent the Holding Company from making future dividend payments or principal
and interest payments on its debt obligation.
    38




---



##### Table of Contents



Carver may not be able to utilize its income tax benefits.
  Carver faces system failure risks and security risks.
  The Bank may be required to record a charge to earnings if goodwill or other intangible assets
become impaired.
  The Companys business could suffer if it fails to retain skilled people.
  A natural disaster could harm Carvers business.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
   39




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ITEM 2. PROPERTIES.
   40




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##### Table of Contents



LeaseYear
    
    
    Owned or
    
    
    Expiration
    
    
    % SpaceBranches
    
    Address
    
    City/State
    
    Opened
    
    
    Leased
    
    
    Date
    
    
    UtilizedMain Branch
    
    75 West 125th Street
    
    New York, NY
    
    
    1996
    
    
    Owned
    
    
    n/a
    
    
    
    100
    %Bedford-Stuyvesant Branch
    
    1281 Fulton Street
    
    Brooklyn, NY
    
    
    1989
    
    
    Owned
    
    
    n/a
    
    
    
    70
    %Crown Heights Branch
    
    1009-1015 Nostrand Avenue
    
    Brooklyn, NY
    
    
    1975
    
    
    Owned
    
    
    n/a
    
    
    
    100
    %St Albans Branch
    
    115-02 Merrick Boulevard
    
    Jamaica, NY
    
    
    1996
    
    
    Leased
    
    
    02/2011
    
    
    
    75
    %Malcolm X Blvd. Branch
    
    142 Malcolm X Boulevard
    
    New York, NY
    
    
    2001
    
    
    Leased
    
    
    04/2011
    
    
    
    100
    %Jamaica Center Branch
    
    158-45 Archer Avenue
    
    Jamaica, New York
    
    
    2003
    
    
    Leased
    
    
    07/2018
    
    
    
    100
    %Atlantic Terminal Branch
    
    4 Hanson Place
    
    Brooklyn, NY
    
    
    2003
    
    
    Leased
    
    
    03/2013
    
    
    
    100
    %Bradhurst Branch
    
    300 West 145th Street
    
    New York, NY
    
    
    2004
    
    
    Leased
    
    
    12/2009
    
    
    
    100
    %Sunset Park Branch
    
    140 58th Street
    
    Brooklyn, NY
    
    
    2000
    
    
    Leased
    
    
    10/2010
    
    
    
    100
    %Inactive:Livingston Branch
    
    111 Livingston Street
    
    Brooklyn, NY
    
    
    1999
    
    
    Leased
    
    
    02/2014
    
    
    
    0
    %ATM CentersWest 125th Street
    
    503 West 125th Street
    
    New York, NY
    
    
    2003
    
    
    Leased
    
    
    03/2013
    
    
    
    100
    %West 137th Street
    
    3381 Broadway
    
    New York, NY
    
    
    2003
    
    
    Leased
    
    
    10/2013
    
    
    
    100
    %Atlantic Terminal Mall
    
    139 Flatbush Avenue
    
    Brooklyn, NY
    
    
    2004
    
    
    Leased
    
    
    07/2009
    
    
    
    100
    %5th Avenue
    
    1400 5th Avenue
    
    New York, NY
    
    
    2003
    
    
    Leased
    
    
    10/2013
    
    
    
    100
    %Fulton Street
    
    1950 Fulton Street
    
    Brooklyn, NY
    
    
    2005
    
    
    Leased
    
    
    01/2010
    
    
    
    100
    %Atlantic Avenue
    
    625 Atlantic Avenue
    
    Brooklyn, NY
    
    
    2003
    
    
    Leased
    
    
    10/2013
    
    
    
    100
    %Church & Nostrand
    
    2843-52 Church Avenue
    
    Brooklyn, NY
    
    
    2007
    
    
    Leased
    
    
    12/2012
    
    
    
    100
    %Myrtle Ave
    
    362 Myrtle Ave
    
    Brooklyn, NY
    
    
    2007
    
    
    Leased
    
    
    07/2017
    
    
    
    100
    %ATM
Machines *Bedford Avenue
    
    1650 Bedford Avenue
    
    Brooklyn, NY1150 Carroll Street
    
    1150 Carroll Street
    
    Brooklyn, NYAirTrain
    
    93-40 Sutphin Boulevard
    
    Jamaica, NYBrooklyn Army Terminal
    
    140 58th Street
    
    Brooklyn, NYAdministrative OfficeMetrotech Center
    
    12 Metrotech Center
    
    Brooklyn, NY
    
    
    2007
    
    
    Leased
    
    
    03/2017
    
    
    
    100
    %
 *
    
    Stand alone ATMs, not under real estate lease agreements.  41




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##### Table of Contents



ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
  High
    
    
    Low
    
    
    DividendFiscal Year 2009June 30, 2008
    
    $
    12.76
    
    
    $
    8.05
    
    
    $
    0.10September 30, 2008
    
    $
    9.18
    
    
    $
    6.49
    
    
    $
    0.10December 31, 2008
    
    $
    7.20
    
    
    $
    5.00
    
    
    $
    0.10March 31, 2009
    
    $
    5.98
    
    
    $
    1.65
    
    
    $
    0.10
 High
    
    
    Low
    
    
    DividendFiscal Year 2008June 30, 2007
    
    $
    17.06
    
    
    $
    15.70
    
    
    $
    0.10September 30, 2007
    
    $
    16.75
    
    
    $
    15.10
    
    
    $
    0.10December 31, 2007
    
    $
    16.85
    
    
    $
    12.70
    
    
    $
    0.10March 31, 2008
    
    $
    16.00
    
    
    $
    11.50
    
    
    $
    0.10
    42




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43




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Stock Performance Graph
  
 2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Carver Bancorp Inc.
    
    
    100.00
    
    
    
    137.33
    
    
    
    127.67
    
    
    
    127.50
    
    
    
    90.98
    
    
    
    28.60S&P Small Cap Thrift &
Mortgage Finance
    
    
    100.00
    
    
    
    157.59
    
    
    
    165.12
    
    
    
    136.43
    
    
    
    104.64
    
    
    
    50.44SIC Code 6030-6039(AMEX STOCKS)
    
    
    100.00
    
    
    
    158.59
    
    
    
    172.70
    
    
    
    165.55
    
    
    
    88.49
    
    
    
    66.15
 The stock price performance included in this graph is not necessarily indicative of future stock
performance.
   44




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##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA.
  2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Selected Financial Condition Data:Assets
    
    $
    791,428
    
    
    $
    796,182
    
    
    $
    739,530
    
    
    $
    661,396
    
    
    $
    626,377Loans held-for-sale
    
    
    21,105
    
    
    
    23,767
    
    
    
    23,226
    
    
    
    
    
    
    
    Total loans receivable, net
    
    
    634,010
    
    
    
    627,231
    
    
    
    579,866
    
    
    
    493,432
    
    
    
    421,987Securities
    
    
    74,730
    
    
    
    38,172
    
    
    
    67,117
    
    
    
    108,286
    
    
    
    149,335Cash and cash equivalents
    
    
    13,341
    
    
    
    27,368
    
    
    
    17,350
    
    
    
    22,904
    
    
    
    20,420Deposits
    
    
    603,416
    
    
    
    654,663
    
    
    
    615,122
    
    
    
    504,638
    
    
    
    455,870Borrowed funds
    
    
    115,017
    
    
    
    58,625
    
    
    
    61,093
    
    
    
    93,792
    
    
    
    115,299Stockholders equity
    
    
    64,338
    
    
    
    53,881
    
    
    
    51,142
    
    
    
    48,697
    
    
    
    45,801Number of deposit accounts
    
    
    44,480
    
    
    
    46,771
    
    
    
    46,034
    
    
    
    41,614
    
    
    
    40,199Number of branches
    
    
    9
    
    
    
    10
    
    
    
    10
    
    
    
    8
    
    
    
    8Operating Data:Interest income
    
    $
    42,000
    
    
    $
    48,132
    
    
    $
    41,740
    
    
    $
    32,385
    
    
    $
    28,546Interest expense
    
    
    16,506
    
    
    
    22,656
    
    
    
    19,234
    
    
    
    13,493
    
    
    
    9,758Net interest income before provision for loan losses
    
    
    25,494
    
    
    
    25,476
    
    
    
    22,506
    
    
    
    18,892
    
    
    
    18,788Provision for loan losses
    
    
    2,703
    
    
    
    222
    
    
    
    276
    
    
    
    
    
    
    
    Net interest income after provision for loan losses
    
    
    22,791
    
    
    
    25,254
    
    
    
    22,230
    
    
    
    18,892
    
    
    
    18,788Non-interest income
    
    
    5,175
    
    
    
    7,861
    
    
    
    2,869
    
    
    
    5,341
    
    
    
    4,075Non-interest expense
    
    
    37,832
    
    
    
    29,898
    
    
    
    24,100
    
    
    
    19,134
    
    
    
    18,696Income (loss) before income taxes
    
    
    (9,866
    )
    
    
    3,217
    
    
    
    999
    
    
    
    5,099
    
    
    
    4,167Income tax (benefit) expense
    
    
    (3,202
    )
    
    
    (892
    )
    
    
    (1,099
    )
    
    
    1,329
    
    
    
    1,518Minority intereset, net of taxes
    
    
    360
    
    
    
    146
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (7,024
    )
    
    $
    3,963
    
    
    $
    2,098
    
    
    $
    3,770
    
    
    $
    2,649Basic earnings (loss) per common share
    
    $
    (2.87
    )
    
    $
    1.59
    
    
    $
    0.84
    
    
    $
    1.50
    
    
    $
    1.06Diluted earnings (loss) per common share
    
    $
    (2.87
    )
    
    $
    1.55
    
    
    $
    0.81
    
    
    $
    1.45
    
    
    $
    1.03Cash dividends per common share
    
    $
    0.40
    
    
    $
    0.40
    
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.26Selected Statistical Data:Return on average assets (1)
    
    NM
    
    
    
    0.51
    %
    
    
    0.30
    %
    
    
    0.60
    %
    
    
    0.45
    %Return on average equity (2)
    
    NM
    
    
    
    7.18
    
    
    
    4.25
    
    
    
    7.93
    
    
    
    5.80Net interest margin (3)
    
    
    3.55
    %
    
    
    3.62
    
    
    
    3.44
    
    
    
    2.97
    
    
    
    3.41Average interest rate spread (4)
    
    
    3.34
    
    
    
    3.34
    
    
    
    3.16
    
    
    
    3.18
    
    
    
    3.26Efficiency ratio (5)
    
    
    102.59
    
    
    
    89.68
    
    
    
    94.98
    
    
    
    78.96
    
    
    
    81.77Operating expense to average assets (6)
    
    
    3.96
    
    
    
    3.89
    
    
    
    3.34
    
    
    
    3.04
    
    
    
    3.21Average equity to average assets
    
    
    6.85
    
    
    
    7.16
    
    
    
    7.05
    
    
    
    7.54
    
    
    
    7.84Dividend payout ratio (7)
    
    NM
    
    
    
    24.67
    
    
    
    34.04
    
    
    
    20.63
    
    
    
    24.64Asset Quality Ratios:Non-performing assets to total assets (8)
    
    
    3.31
    %
    
    
    0.50
    %
    
    
    0.61
    %
    
    
    0.42
    %
    
    
    0.16
    %Non-performing loans to total loans receivable (8)
    
    
    4.01
    
    
    
    0.43
    
    
    
    0.74
    
    
    
    0.55
    
    
    
    0.23Allowance for loan losses to total loans receivable
    
    
    1.06
    
    
    
    0.74
    
    
    
    0.89
    
    
    
    0.81
    
    
    
    0.96
 (1)
    
    Net income divided by average total assets.(2)
    
    Net income divided by average total equity.(3)
    
    Net interest income divided by average interest-earning assets.(4)
    
    The difference between the weighted average yield on interest-earning assets and the weighted
average cost of interest-bearing liabilities.(5)
    
    Non-interest expense divided by the sum of net interest income and non-interest income.(6)
    
    Non-interest expense less real estate owned expenses, divided by average total assets.(7)
    
    Dividends paid to common stockholders as a percentage of net income available to common
stockholders.(8)
    
    Non performing assets consist of non-accrual loans, loans accruing 90 days or more past due,
and property acquired in settlement of loans.(9)
    
    NM-Not meaningful  45




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##### Table of Contents



ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  Executive Summary
        46




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Acquisition of Community Capital Bank
   47




---



##### Table of Contents



New Markets Tax Credit Award
    Critical Accounting Policies
   Securities Impairment
   48




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##### Table of Contents



Allowance for Loan Losses
    
    
    Establishment of loan loss allowance amounts for all specifically
identified criticized and classified loans that have been designated as requiring
attention by managements internal loan review process, bank regulatory
examinations or Carver Federals external auditors.
    
    An average loss factor, giving effect to historical loss experience
over several years and other qualitative factors, is applied to all loans not
subject to specific review.
    
    Evaluation of any changes in risk profile brought about by business
combinations, customer knowledge, the results of ongoing credit quality monitoring
processes and the cyclical nature of economic and business conditions. An
important consideration in performing this evaluation is the concentration of real
estate related loans located in the New York City metropolitan area.
   
    
    Amount and trend of criticized loans;
    
    Actual losses;
    
    Peer comparisons with other financial institutions; and
    
    Economic data associated with the real estate market in the Companys lending market areas.
  49




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##### Table of Contents



Asset/Liability Management
   Stock Repurchase Program
  Discussion of Market RiskInterest Rate Sensitivity Analysis
    50




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##### Table of Contents



< 3 Mos.
    
    
    4-12 Mos.
    
    
    1-3 Yrs.
    
    
    3-5 Yrs.
    
    
    5-10 Yrs.
    
    
    10+ Yrs.
    
    
    TotalRate Sensitive Assets:Loans
    
    $
    170,769
    
    
    $
    74,181
    
    
    $
    125,161
    
    
    $
    145,263
    
    
    $
    57,635
    
    
    $
    85,089
    
    
    $
    658,098Mortgage Backed Securities
    
    
    4,713
    
    
    
    16,093
    
    
    
    35,229
    
    
    
    9,144
    
    
    
    6,688
    
    
    
    0
    
    
    
    71,867Federal Funds Sold
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Investment Securities
    
    
    260
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    260Total interest-earning assets
    
    
    175,742
    
    
    
    90,274
    
    
    
    160,389
    
    
    
    154,407
    
    
    
    64,323
    
    
    
    85,089
    
    
    
    730,225Rate Sensitive Liabilities:NOW accounts
    
    
    1,209
    
    
    
    2,822
    
    
    
    9,674
    
    
    
    9,674
    
    
    
    24,186
    
    
    
    806
    
    
    
    48,371Savings Accounts
    
    
    2,936
    
    
    
    6,851
    
    
    
    23,488
    
    
    
    23,488
    
    
    
    34,719
    
    
    
    25,957
    
    
    
    117,438Money market accounts
    
    
    1,080
    
    
    
    2,519
    
    
    
    8,638
    
    
    
    8,638
    
    
    
    21,595
    
    
    
    720
    
    
    
    43,190Certificate of Deposits
    
    
    82,992
    
    
    
    214,257
    
    
    
    24,386
    
    
    
    14,614
    
    
    
    17
    
    
    
    0
    
    
    
    336,266Borrowings
    
    
    44,063
    
    
    
    22,000
    
    
    
    38,114
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    104,178Total interest-bearing liabilities
    
    
    132,280
    
    
    
    248,449
    
    
    
    104,300
    
    
    
    56,414
    
    
    
    80,517
    
    
    
    27,483
    
    
    
    649,443Interest Sensitivity Gap
    
    $
    43,462
    
    
    $
    (158,175
    )
    
    $
    56,089
    
    
    $
    97,994
    
    
    $
    (16,193
    )
    
    $
    57,606
    
    
    $
    80,782Cumulative Interest Sensitivity Gap
    
    $
    43,462
    
    
    $
    (114,713
    )
    
    $
    (58,624
    )
    
    $
    39,370
    
    
    $
    23,176
    
    
    $
    80,782Ratio of Cumulative Gap to Total Rate
Sensitive assets
    
    
    5.95
    %
    
    
    -15.71
    %
    
    
    -8.03
    %
    
    
    5.39
    %
    
    
    3.17
    %
    
    
    11.06
    %
    51




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Net Portfolio Value (NPV) Analysis.
   Net Portfolio Value
    
    
    NPV as % of PV of AssetsChange in Rate
    
    $ Amount
    
    
    $ Change
    
    
    % Change
    
    
    NPV Ratio
    
    
    Change+300 bp
    
    
    78,444
    
    
    
    -27,089
    
    
    
    -26
    %
    
    
    9.66
    %
    
    -279 bp+200 bp
    
    
    87,601
    
    
    
    -17,931
    
    
    
    -17
    %
    
    
    10.63
    %
    
    -182 bp+100 bp
    
    
    97,080
    
    
    
    -8,452
    
    
    
    -8
    %
    
    
    11.61
    %
    
    -84 bp+50 bp
    
    
    101,485
    
    
    
    -4,048
    
    
    
    -4
    %
    
    
    12.05
    %
    
    -40 bp0 bp
    
    
    105,533
    
    
    
    
    
    
    
    
    
    
    
    12.45
    %
    
    
    -50 bp
    
    
    109,558
    
    
    
    4,026
    
    
    
    +4
    %
    
    
    12.84
    %
    
    +39 bp-100 bp
    
    
    112,389
    
    
    
    6,856
    
    
    
    +6
    %
    
    
    13.11
    %
    
    +66 bp
 March 31,2009Risk Measures: +200 BP Rate Shock:Pre-Shock NPV Ratio: NPV as % of PV of Assets
    
    
    12.45
    %Post-Shock NPV Ratio
    
    
    10.63
    %Sensitivity Measure: Decline in NPV Ratio
    
    -182 bp
   52




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##### Table of Contents



Average Balance, Interest and Average Yields and Rates
  2009
    
    
    2008
    
    
    2007Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    CostInterest Earning Assets:Loans
    
    $
    657,665
    
    
    $
    39,207
    
    
    
    5.96
    %
    
    $
    639,583
    
    
    $
    44,499
    
    
    
    6.96
    %
    
    $
    558,058
    
    
    $
    37,278
    
    
    
    6.68
    %Mortgage-backed securities
    
    
    50,003
    
    
    
    2,480
    
    
    
    4.96
    %
    
    
    39,079
    
    
    
    2,071
    
    
    
    5.30
    %
    
    
    64,682
    
    
    
    2,877
    
    
    
    4.45
    %Investment securities
    
    
    5,706
    
    
    
    239
    
    
    
    4.19
    %
    
    
    22,902
    
    
    
    1,434
    
    
    
    6.26
    %
    
    
    27,161
    
    
    
    1,325
    
    
    
    4.88
    %Fed funds sold
    
    
    3,990
    
    
    
    74
    
    
    
    1.85
    %
    
    
    3,007
    
    
    
    128
    
    
    
    4.26
    %
    
    
    5,145
    
    
    
    261
    
    
    
    5.07
    %Total interest earning assets
    
    
    717,364
    
    
    
    42,000
    
    
    
    5.85
    %
    
    
    704,571
    
    
    
    48,132
    
    
    
    6.83
    %
    
    
    655,046
    
    
    
    41,741
    
    
    
    6.37
    %Non-interest earning assets
    
    
    59,283
    
    
    
    
    
    
    
    
    
    
    
    63,440
    
    
    
    
    
    
    
    
    
    
    
    44,576Total assets
    
    $
    776,647
    
    
    
    
    
    
    
    
    
    
    $
    768,011
    
    
    
    
    
    
    
    
    
    
    $
    699,622Interest Bearing Liabilities:Deposits:NOW demand
    
    $
    26,340
    
    
    $
    61
    
    
    
    0.23
    %
    
    $
    24,660
    
    
    $
    138
    
    
    
    0.56
    %
    
    $
    25,313
    
    
    $
    98
    
    
    
    0.39
    %Savings and clubs
    
    
    120,659
    
    
    
    537
    
    
    
    0.45
    %
    
    
    131,627
    
    
    
    1,004
    
    
    
    0.76
    %
    
    
    136,785
    
    
    
    931
    
    
    
    0.68
    %Money market savings
    
    
    45,444
    
    
    
    903
    
    
    
    1.99
    %
    
    
    44,688
    
    
    
    1,193
    
    
    
    2.67
    %
    
    
    43,303
    
    
    
    1,133
    
    
    
    2.62
    %Certificates of deposit
    
    
    372,563
    
    
    
    11,357
    
    
    
    3.05
    %
    
    
    370,933
    
    
    
    16,489
    
    
    
    4.45
    %
    
    
    312,452
    
    
    
    13,036
    
    
    
    4.17
    %Mortgagors deposits
    
    
    2,738
    
    
    
    48
    
    
    
    1.75
    %
    
    
    2,687
    
    
    
    42
    
    
    
    1.56
    %
    
    
    2,154
    
    
    
    30
    
    
    
    1.39
    %Total deposits
    
    
    567,744
    
    
    
    12,906
    
    
    
    2.27
    %
    
    
    574,595
    
    
    
    18,866
    
    
    
    3.28
    %
    
    
    520,007
    
    
    
    15,228
    
    
    
    2.93
    %Borrowed money
    
    
    90,372
    
    
    
    3,600
    
    
    
    3.98
    %
    
    
    73,880
    
    
    
    3,790
    
    
    
    5.13
    %
    
    
    78,853
    
    
    
    4,007
    
    
    
    5.08
    %Total interest bearing
    
    
    658,116
    
    
    
    16,506
    
    
    
    2.51
    %
    
    
    648,475
    
    
    
    22,656
    
    
    
    3.49
    %
    
    
    598,860
    
    
    
    19,235
    
    
    
    3.21
    %Non-interest-bearing
Demand
    
    
    53,066
    
    
    
    
    
    
    
    
    
    
    
    51,713
    
    
    
    
    
    
    
    
    
    
    
    40,676Other liabilities
    
    
    12,302
    
    
    
    
    
    
    
    
    
    
    
    12,803
    
    
    
    
    
    
    
    
    
    
    
    10,739Total liabilities
    
    
    723,484
    
    
    
    
    
    
    
    
    
    
    
    712,991
    
    
    
    
    
    
    
    
    
    
    
    650,275Stockholders equity
    
    
    53,163
    
    
    
    
    
    
    
    
    
    
    
    55,020
    
    
    
    
    
    
    
    
    
    
    
    49,347Total liabilities and
stockholders equity
    
    $
    776,647
    
    
    
    
    
    
    
    
    
    
    $
    768,011
    
    
    
    
    
    
    
    
    
    
    $
    699,622Net interest income
    
    
    
    
    
    $
    25,494
    
    
    
    
    
    
    
    
    
    
    $
    25,476
    
    
    
    
    
    
    
    
    
    
    $
    22,506Average interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.16
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.55
    %
    
    
    
    
    
    
    
    
    
    
    3.62
    %
    
    
    
    
    
    
    
    
    
    
    3.44
    %Ratio of average interest -
earning assets to
interest -
bearing liabilities
    
    
    
    
    
    
    
    
    
    
    109.0
    %
    
    
    
    
    
    
    
    
    
    
    108.7
    %
    
    
    
    
    
    
    
    
    
    
    109.4
    %
  53




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##### Table of Contents



Rate/Volume Analysis
  2009 vs. 2008
    
    
    2008 vs. 2007Increase (Decrease) due to
    
    
    Increase (Decrease) due toVolume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalInterest Earning Assets:Loans
    
    $
    1,258
    
    
    $
    (6,380
    )
    
    $
    (5,122
    )
    
    $
    5,626
    
    
    $
    1,595
    
    
    $
    7,221Investment securities
    
    
    579
    
    
    
    (133
    )
    
    
    446
    
    
    
    (248
    )
    
    
    357
    
    
    
    109Mortgage-backed securities
    
    
    (1,077
    )
    
    
    (474
    )
    
    
    (1,551
    )
    
    
    (1,289
    )
    
    
    483
    
    
    
    (806
    )Fed funds sold, FHLB stock & other
    
    
    42
    
    
    
    (72
    )
    
    
    (31
    )
    
    
    (101
    )
    
    
    (32
    )
    
    
    (133
    )Total interest earning assets
    
    
    802
    
    
    
    (7,059
    )
    
    
    (6,257
    )
    
    
    3,988
    
    
    
    2,403
    
    
    
    6,391Interest Bearing Liabilities:DepositsNOW demand
    
    
    9
    
    
    
    (81
    )
    
    
    (72
    )
    
    
    (4
    )
    
    
    44
    
    
    
    40Savings and clubs
    
    
    (84
    )
    
    
    (412
    )
    
    
    (495
    )
    
    
    (39
    )
    
    
    112
    
    
    
    73Money market savings
    
    
    20
    
    
    
    (304
    )
    
    
    (284
    )
    
    
    37
    
    
    
    23
    
    
    
    60Certificates of deposit
    
    
    72
    
    
    
    (5,176
    )
    
    
    (5,103
    )
    
    
    2,580
    
    
    
    873
    
    
    
    3,453Mortgagors deposits
    
    
    1
    
    
    
    5
    
    
    
    6
    
    
    
    8
    
    
    
    4
    
    
    
    12Total deposits
    
    
    19
    
    
    
    (5,967
    )
    
    
    (5,948
    )
    
    
    2,582
    
    
    
    1,056
    
    
    
    3,638Borrowed money
    
    
    846
    
    
    
    (850
    )
    
    
    (4
    )
    
    
    (255
    )
    
    
    38
    
    
    
    (217
    )Total interest bearing liabilities
    
    
    865
    
    
    
    (6,817
    )
    
    
    (5,952
    )
    
    
    2,327
    
    
    
    1,094
    
    
    
    3,421Net change in interest income
    
    $
    (63
    )
    
    $
    (243
    )
    
    $
    (306
    )
    
    $
    1,661
    
    
    $
    1,309
    
    
    $
    2,970
  Comparison of Financial Condition at March 31, 2009 and 2008
 Assets
     54




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##### Table of Contents



Liabilities and Stockholders Equity
 Liabilities
     Stockholders Equity
   55




---



##### Table of Contents



Comparison of Operating Results for the Years Ended March 31, 2009 and 2008
 Net Income
  Interest Income
     Interest Expense
    56




---



##### Table of Contents



Net Interest Income Before Provision for Loan Losses
   Provision for Loan Losses and Asset Quality
   Non-Interest Income
   57




---



##### Table of Contents



Non-Interest Expense
  Income Tax Expense
  Comparison of Operating Results for the Years Ended March 31, 2008 and 2007
 Net Income
  Interest Income
     58




---



##### Table of Contents



Interest Expense
    Net Interest Income Before Provision for Loan Losses
    59




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##### Table of Contents



Provision for Loan Losses and Asset Quality
   Subprime Loans
  
    
    Low initial payments based on a fixed introductory rate that
expires after a short period and then adjusts to a variable index rate plus a
margin for the remaining term of the loan;
    
    Very high or no limits on how much the payment amount or the
interest rate may increase (payment or rate caps) on reset dates;
    
    Limited or no documentation of borrowers income;
    
    Product features likely to result in frequent refinancing to
maintain an affordable monthly payment; and/or
    
    Substantial prepayment penalties and/or prepayment penalties that
extend beyond the initial fixed interest rate period.
  60




---



##### Table of Contents




    
    Two or more 30-day delinquencies in the last 12 months, or one or
more 60-day delinquencies in the last 24 months;
    
    Judgment, foreclosure, repossession, or charge-off in the prior 24 months;
    
    Bankruptcy in the last 5 years;
    
    Relatively high default probability as evidenced by, for example,
a credit bureau risk score (FICO) of 660 or below (depending on the
product/collateral), or other bureau or proprietary scores with an equivalent
default probability likelihood; and/or
    
    Debt service-to-income ratio of 50% or greater, or otherwise
limited ability to cover family living expenses after deducting total monthly
debt-service requirements from monthly income.
  Non-Interest Income
  Non-Interest Expense
  Income Tax Expense
   61




---



##### Table of Contents



Liquidity and Capital Resources
         62




---



##### Table of Contents



Off-Balance Sheet Arrangements and Contractual Obligations
    Payments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 yearsLong term debt obligations:FHLB advances
    
    $
    71,614
    
    
    $
    63,500
    
    
    $
    8,000
    
    
    $
    114
    
    
    $
    Repo Borrowings
    
    
    30,000
    
    
    
    
    
    
    
    
    
    
    $
    30,000
    
    
    
    Guaranteed preferred beneficial interest in
junior subordinated debentures
    
    
    13,403
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,403Total long term debt obligations
    
    
    115,017
    
    
    
    63,500
    
    
    
    8,000
    
    
    
    30,114
    
    
    
    13,403Operating lease obligations:Lease obligations for rental properties
    
    
    7,355
    
    
    
    1,272
    
    
    
    2,360
    
    
    
    1,916
    
    
    
    1,807Total contractual obligations
    
    $
    122,372
    
    
    $
    64,772
    
    
    $
    10,360
    
    
    $
    32,030
    
    
    $
    15,210
 Variable Interest Entities
    63




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##### Table of Contents



Regulatory Capital Position
   Impact of Inflation and Changing Prices
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   64




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 Report of Independent Registered Public Accounting Firm
 
    
  65




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 March 31,
    
    
    March 31,2009
    
    
    2008ASSETSCash and cash equivalents:Cash and due from banks
    
    $
    8,251
    
    
    $
    15,920Money market investments
    
    
    5,090
    
    
    
    11,448Total cash and cash equivalents
    
    
    13,341
    
    
    
    27,368Securities:Available-for-sale, at fair value (including pledged as collateral of $59,928 and
$20,621 at March 31, 2009 and March 31, 2008, respectively)
    
    
    59,973
    
    
    
    20,865Held-to-maturity, at amortized cost (including pledged as collateral of $14,342 and
$16,643 at March 31, 2009 and March 31, 2008, respectively; fair value of $14,528 and
$17,167 at March 31, 2009 and March 31, 2008, respectively)
    
    
    14,808
    
    
    
    17,307Total securities
    
    
    74,781
    
    
    
    38,172Loans held-for-sale
    
    
    21,105
    
    
    
    23,767Loans receivable:Real estate mortgage loans
    
    
    581,987
    
    
    
    578,957Commercial business loans
    
    
    57,398
    
    
    
    51,424Consumer loans
    
    
    1,674
    
    
    
    1,728Allowance for loan losses
    
    
    (7,049
    )
    
    
    (4,878
    )Total loans receivable, net
    
    
    634,010
    
    
    
    627,231Office properties and equipment, net
    
    
    15,237
    
    
    
    15,780Federal Home Loan Bank of New York stock, at cost
    
    
    4,174
    
    
    
    1,625Bank owned life insurance
    
    
    9,481
    
    
    
    9,141Accrued interest receivable
    
    
    3,697
    
    
    
    4,063Goodwill
    
    
    
    
    
    
    7,055Core deposit intangibles, net
    
    
    380
    
    
    
    532Deferred tax asset, net
    
    
    10,214
    
    
    
    8,135Other assets
    
    
    5,008
    
    
    
    33,313Total assets
    
    $
    791,428
    
    
    $
    796,182LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits
    
    $
    603,416
    
    
    $
    654,663Advances from the FHLB-New York and other borrowed money
    
    
    115,017
    
    
    
    58,625Other liabilities
    
    
    8,657
    
    
    
    9,863Total liabilities
    
    
    727,090
    
    
    
    723,151Minority interest
    
    
    
    
    
    
    19,150Stockholders equity:Preferred stock (TARP) (par value $0.01 per share, 2,000,000 shares authorized; 18,980 shares,
with a liquidation preference of $1,000.00 per share, issued and outstanding as of March 31, 2009)
    
    
    18,980
    
    
    
    Common stock (par value $0.01 per share: 10,000,000 shares authorized; 2,524,691 shares issued;
2,475,037 and 2,481,706 shares outstanding at March 31, 2009 and 2008, respectively)
    
    
    25
    
    
    
    25Additional paid-in capital
    
    
    24,214
    
    
    
    24,113Retained earnings
    
    
    21,898
    
    
    
    29,988Unamortized awards of common stock under ESOPTreasury stock, at cost (49,654 and 42,985 shares at March 31, 2009 and 2008, respectively)
    
    
    (760
    )
    
    
    (670
    )Accumulated other comprehensive income (loss)
    
    
    (19
    )
    
    
    425Total stockholders equity
    
    
    64,338
    
    
    
    53,881Total liabilities and stockholders equity
    
    $
    791,428
    
    
    $
    796,182
  66




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CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended March 31,2009
    
    
    2008
    
    
    2007Interest Income:Loans
    
    $
    39,207
    
    
    $
    44,499
    
    
    $
    37,277Mortgage-backed securities
    
    
    2,480
    
    
    
    2,071
    
    
    
    2,877Investment securities
    
    
    239
    
    
    
    1,434
    
    
    
    1,325Money Market Investments
    
    
    74
    
    
    
    128
    
    
    
    261Total interest income
    
    
    42,000
    
    
    
    48,132
    
    
    
    41,740Interest expense:Deposits
    
    
    12,906
    
    
    
    18,866
    
    
    
    15,227Advances and other borrowed money
    
    
    3,600
    
    
    
    3,790
    
    
    
    4,007Total interest expense
    
    
    16,506
    
    
    
    22,656
    
    
    
    19,234Net interest income
    
    
    25,494
    
    
    
    25,476
    
    
    
    22,506Provision for loan losses
    
    
    2,703
    
    
    
    222
    
    
    
    276Net interest income after provision for loan losses
    
    
    22,791
    
    
    
    25,254
    
    
    
    22,230Non-interest income:Depository fees and charges
    
    
    2,810
    
    
    
    2,669
    
    
    
    2,476Loan fees and service charges
    
    
    1,258
    
    
    
    1,628
    
    
    
    1,238Gain (loss) on sale of securities
    
    
    
    
    
    
    431
    
    
    
    (624
    )Gain (loss) on loans
    
    
    (320
    )
    
    
    323
    
    
    
    (618
    )New Market Tax Credit Transfer Fee
    
    
    
    
    
    
    1,700
    
    
    
    Other
    
    
    1,427
    
    
    
    1,110
    
    
    
    397Total non-interest income
    
    
    5,175
    
    
    
    7,861
    
    
    
    2,869Non-interest expense:Employee compensation and benefits
    
    
    13,163
    
    
    
    13,323
    
    
    
    10,470Net occupancy expense
    
    
    4,350
    
    
    
    3,590
    
    
    
    2,667Equipment, net
    
    
    2,881
    
    
    
    2,451
    
    
    
    2,071Merger related expenses
    
    
    
    
    
    
    
    
    
    
    1,258Consulting Expense
    
    
    1,174
    
    
    
    2,733
    
    
    
    496Goodwill impairment
    
    
    7,055
    
    
    
    
    
    
    
    Other
    
    
    9,209
    
    
    
    7,801
    
    
    
    7,138Total non-interest expense
    
    
    37,832
    
    
    
    29,898
    
    
    
    24,100Income (loss) before income taxes and minority interest
    
    
    (9,866
    )
    
    
    3,217
    
    
    
    999Income tax benefit
    
    
    (3,202
    )
    
    
    (892
    )
    
    
    (1,099
    )Minority interest, net of taxes
    
    
    360
    
    
    
    146
    
    
    
    Net (loss) income
    
    $
    (7,024
    )
    
    $
    3,963
    
    
    $
    2,098Earnings (loss) per common share:Basic
    
    $
    (2.87
    )
    
    $
    1.59
    
    
    $
    0.84Diluted
    
    $
    (2.87
    )
    
    $
    1.55
    
    
    $
    0.81
  67




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS)
(In thousands)
 AccumulatedCommon
    
    
    on
    
    
    
    
    
    
    Other
    
    
    TotalTARP
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Stock
    
    
    Stock
    
    
    
    
    
    
    Comprehensive
    
    
    Stock-Preferred
    
    
    Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Acquired
    
    
    Acquired
    
    
    Retained
    
    
    Income
    
    
    HoldersStock
    
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    By ESOP
    
    

By MRP
    
    
    Earnings
    
    
    (Loss)
    
    
    EquityBalanceMarch 31, 2006
    
    
    
    
    
    
    25
    
    
    
    23,935
    
    
    
    (303
    )
    
    
    (10
    )
    
    
    (12
    )
    
    
    25,736
    
    
    
    (674
    )
    
    
    48,697Adjustment to initially implement
SFAS 158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    281
    
    
    
    281Balance post implementation of
SFAS 158
    
    
    
    
    
    
    25
    
    
    
    23,935
    
    
    
    (303
    )
    
    
    (10
    )
    
    
    (12
    )
    
    
    25,736
    
    
    
    (393
    )
    
    
    48,978Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,098
    
    
    
    
    
    
    
    2,098Minimum pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    79Change in net unrealized loss on
available-for-sale securities, net
of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    765
    
    
    
    765Comprehensive income, net of
taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,098
    
    
    
    844
    
    
    
    2,942Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (883
    )
    
    
    
    
    
    
    (883
    )Treasury stock activity
    
    
    
    
    
    
    
    
    
    
    61
    
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    12BalanceMarch 31, 2007
    
    
    
    
    
    
    25
    
    
    
    23,996
    
    
    
    (277
    )
    
    
    (4
    )
    
    
    
    
    
    
    26,951
    
    
    
    451
    
    
    
    51,142Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,963
    
    
    
    
    
    
    
    3,963Minimum pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    195
    
    
    
    195Change in net unrealized loss on
available-for-sale securities, net
of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (221
    )
    
    
    (221
    )Comprehensive income, net of
taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,963
    
    
    
    (26
    )
    
    
    3,937Adjustment to initially implement
SFAS 156
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    49Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (975
    )
    
    
    
    
    
    
    (975
    )Treasury stock activity
    
    
    
    
    
    
    
    
    
    
    117
    
    
    
    (393
    )
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (272
    )BalanceMarch 31, 2008
    
    
    
    
    
    
    25
    
    
    
    24,113
    
    
    
    (670
    )
    
    
    
    
    
    
    
    
    
    
    29,988
    
    
    
    425
    
    
    
    53,881Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,024
    )
    
    
    
    
    
    
    (7,024
    )Minimum pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (492
    )
    
    
    (492
    )Change in net unrealized loss on
available-for-sale securities, net
of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    48Comprehensive income (loss),
net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,024
    )
    
    
    (444
    )
    
    
    (7,468
    )Common Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (990
    )
    
    
    
    
    
    
    (990
    )Issuance of TARP preferred
stock
    
    
    18,980
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,980Preferred Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )Treasury stock activity
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    (90
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )Stock based compensation
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Balance March 31, 2009
    
    
    18,980
    
    
    
    25
    
    
    
    24,214
    
    
    
    (760
    )
    
    
    
    
    
    
    
    
    
    
    21,898
    
    
    
    (19
    )
    
    
    64,338
  68




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 2009
    
    
    2008
    
    
    2007Cash flows from operating activites:Net (loss) income
    
    $
    (7,024
    )
    
    $
    3,963
    
    
    $
    2,098Adjustments to reconcile net (loss) income to net cash
from operating activities:Provision for loan losses
    
    
    2,703
    
    
    
    222
    
    
    
    276Provision for REO losses
    
    
    178
    
    
    
    
    
    
    
    Goodwill impairment charge
    
    
    7,055
    
    
    
    
    
    
    
    Stock based compensation expense
    
    
    68
    
    
    
    272
    
    
    
    426Depreciation and amortization expense
    
    
    1,932
    
    
    
    1,709
    
    
    
    1,581Amortization of premiums and discounts
    
    
    286
    
    
    
    (250
    )
    
    
    (1,145
    )Impairment charge on securities
    
    
    52
    
    
    
    
    
    
    
    (Gain) Loss from sale of securities
    
    
    
    
    
    
    (431
    )
    
    
    624Gain on sale of loans
    
    
    (45
    )
    
    
    (323
    )
    
    
    (192
    )Writedown on loans held-for-sale
    
    
    197
    
    
    
    
    
    
    
    702Loss on sale of real estate owned
    
    
    22
    
    
    
    
    
    
    
    108Originations of loans held-for-sale
    
    
    (9,097
    )
    
    
    (20,172
    )
    
    
    (24,708
    )Proceeds from sale of loans held-for-sale
    
    
    9,993
    
    
    
    19,953
    
    
    
    14,422Changes in assets and liabilities:Decrease (increase) in accrued interest receivable
    
    
    366
    
    
    
    272
    
    
    
    (1,365
    )Decrease (increase) in other assets
    
    
    6,388
    
    
    
    (10,530
    )
    
    
    (2,240
    )Decrease in other liabilities
    
    
    (1,319
    )
    
    
    (2,305
    )
    
    
    (4,267
    )Net cash provided by (used in) operating activities
    
    
    11,755
    
    
    
    (7,620
    )
    
    
    (13,680
    )Cash flows from investing activites:Purchases of securities:Available-for-sale
    
    
    (46,588
    )
    
    
    (15,265
    )
    
    
    Proceeds from principal payments, maturities and calls of securities:Available-for-sale
    
    
    7,674
    
    
    
    7,358
    
    
    
    26,539Held-to-maturity
    
    
    2,452
    
    
    
    1,803
    
    
    
    7,185Proceeds from sales of available-for-sale securities
    
    
    
    
    
    
    36,116
    
    
    
    57,942Originations of loans held-for-investment
    
    
    (151,432
    )
    
    
    (162,556
    )
    
    
    (105,284
    )Loans purchased from third parties
    
    
    
    
    
    
    (29,736
    )
    
    
    (58,191
    )Principal collections on loans
    
    
    142,151
    
    
    
    145,458
    
    
    
    146,410Proceeds from sales of loan originations held-for-investment
    
    
    
    
    
    
    
    
    
    
    16,548Purchases (redemptions) of FHLB-NY stock
    
    
    (2,549
    )
    
    
    1,614
    
    
    
    1,388Additions to premises and equipment
    
    
    (1,389
    )
    
    
    (2,862
    )
    
    
    (1,869
    )Proceeds from sale of real estate owned
    
    
    998
    
    
    
    
    
    
    
    404Payments for acquisition, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (2,425
    )Net cash (used in) provided by investing activities
    
    
    (48,683
    )
    
    
    (18,070
    )
    
    
    88,647Cash flows from financing activites:Net (decrease) increase in deposits
    
    
    (51,247
    )
    
    
    39,541
    
    
    
    (33,657
    )Net proceeds (repayment) of FHLB advances and other borrowings
    
    
    56,392
    
    
    
    (2,527
    )
    
    
    (45,660
    )Capital contribution from TARP
    
    
    18,980
    
    
    
    
    
    
    
    Common stock repurchased
    
    
    (159
    )
    
    
    (331
    )
    
    
    (321
    )Dividends paid
    
    
    (1,065
    )
    
    
    (975
    )
    
    
    (883
    )Net cash provided by (used in) financing activities
    
    
    22,901
    
    
    
    35,708
    
    
    
    (80,521
    )Net (decrease) increase in cash and cash equivalents
    
    
    (14,027
    )
    
    
    10,018
    
    
    
    (5,554
    )Cash and cash equivalents at beginning of period
    
    
    27,368
    
    
    
    17,350
    
    
    
    22,904Cash and cash equivalents at end of period
    
    $
    13,341
    
    
    $
    27,368
    
    
    $
    17,350Supplemental information:Noncash Transfers-Change in unrealized loss on valuation of available-for-sale investments,
    
    $
    79
    
    
    $
    221
    
    
    $
    765Cash paid for-Interest
    
    $
    16,107
    
    
    $
    21,973
    
    
    $
    19,510Income taxes
    
    $
    297
    
    
    $
    922
    
    
    $
    652
   69




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1. ORGANIZATION
 Nature of operations
   Consolidation of Variable Interest
Entities, an interpretation of ARB No. 51
  NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of consolidated financial statement presentation
    70




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Cash and cash equivalents
  Securities
    Loans Held-for-Sale
  Loans Receivable
   71




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##### Table of Contents



Allowance for Loan Losses
    
    
    Establishment of loan loss allowance amounts, which may be based on an
estimated loss factor or specific loan level analysis, for all specifically
identified criticized and classified loans that have been designated as requiring
attention by managements internal loan review process, bank regulatory
examinations or Carver Federals external auditors.
    
    An average loss factor, giving effect to historical loss experience
over several years and other qualitative factors, is applied to all loans not
subject to specific review.
    
    Evaluation of any changes in risk profile brought about by business
combinations, customer knowledge, the results of ongoing credit quality monitoring
processes and the cyclical nature of economic and business conditions. An
important consideration in performing this evaluation is the concentration of real
estate related loans located in the New York City metropolitan area.
  72




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##### Table of Contents




    
    Amount and trend of criticized loans;
    
    Actual losses;
    
    Peer comparisons with other financial institutions; and
    
    Economic data associated with the real estate market in the Companys lending market areas.
 Accounting by Creditors for
Impairment of a Loan
 Segment Reporting
 Disclosures about
Segments of an Enterprise and Related Information
 Concentration of Risk
  Office Properties and Equipment
  Buildings and improvements
    
    10 to 25 yearsFurnishings and equipment
    
    3 to 5 yearsLeasehold improvements
    
    Lesser of useful life or remaining term of lease
  Federal Home Loan Bank Stock
   73




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##### Table of Contents



Bank Owned Life Insurance
  Mortgage Servicing Rights
 Accounting for Servicing of
Financial Assets  an amendment of FASB Statement No. 140
 Real Estate Owned
  Identifiable Intangible Assets
 Goodwill and Other
Intangible Assets
  Income Taxes
    74




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Earnings (Loss) per Common Share
  Treasury Stock
  Pension Plans
  and Other Post-retirement Plans- an amendment of SFAS Statement Nos. 87, 88, 106
and 132(R)
 Reclassifications
  Impact of Recent Accounting Standards and Interpretations
   75




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76




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NOTE 3. IMPAIRMENT AND GOODWILL
    77




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NOTE 4. SECURITIES
  Amortized
    
    
    Gross Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair-ValueAvailable-for-Sale:Mortgage-backed securities:Government National Mortgage
Association
    
    $
    39,252
    
    
    $
    26
    
    
    $
    (486
    )
    
    $
    38,792Federal Home Loan Mortgage Corporation
    
    
    5,847
    
    
    
    185
    
    
    
    (2
    )
    
    
    6,030Federal National Mortgage Association
    
    
    13,872
    
    
    
    493
    
    
    
    (8
    )
    
    
    14,357Other
    
    
    571
    
    
    
    
    
    
    
    (37
    )
    
    
    534Total mortgage-backed securities
    
    
    59,542
    
    
    
    704
    
    
    
    (533
    )
    
    
    59,713U.S. Government Agency Securities
    
    
    254
    
    
    
    6
    
    
    
    
    
    
    
    260Total available-for-sale
    
    
    59,796
    
    
    
    710
    
    
    
    (533
    )
    
    
    59,973
 Amortized
    
    
    Gross Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair-ValueHeld-to-Maturity:Mortgage-backed securities:Government National Mortgage
Association
    
    
    488
    
    
    
    27
    
    
    
    
    
    
    
    515Federal Home Loan Mortgage Corporation
    
    
    10,292
    
    
    
    17
    
    
    
    (153
    )
    
    
    10,156Federal National Mortgage Association
    
    
    3,870
    
    
    
    80
    
    
    
    (248
    )
    
    
    3,702Total mortgage-backed securities
    
    
    14,650
    
    
    
    124
    
    
    
    (401
    )
    
    
    14,373Other
    
    
    158
    
    
    
    
    
    
    
    (3
    )
    
    
    155Total held-to-maturity
    
    
    14,808
    
    
    
    124
    
    
    
    (404
    )
    
    
    14,528Total securities
    
    $
    74,604
    
    
    $
    834
    
    
    $
    (937
    )
    
    $
    74,501
  78




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Amortized
    
    
    Gross Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair-ValueAvailable-for-Sale:Mortgage-backed securities:Government National Mortgage
Association
    
    $
    8,303
    
    
    $
    
    
    
    $
    (123
    )
    
    $
    8,180Federal Home Loan Mortgage Corporation
    
    
    4,077
    
    
    
    19
    
    
    
    
    
    
    
    4,096Federal National Mortgage Association
    
    
    6,748
    
    
    
    107
    
    
    
    
    
    
    
    6,855Other
    
    
    205
    
    
    
    4
    
    
    
    
    
    
    
    209Total mortgage-backed securities
    
    
    19,333
    
    
    
    130
    
    
    
    (123
    )
    
    
    19,340U.S. Government Agency Securities
    
    
    1,473
    
    
    
    52
    
    
    
    
    
    
    
    1,525Total available-for-sale
    
    
    20,806
    
    
    
    182
    
    
    
    (123
    )
    
    
    20,865
 Amortized
    
    
    Gross Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair-ValueHeld-to-Maturity:Mortgage-backed securities:Government National Mortgage
Association
    
    
    573
    
    
    
    34
    
    
    
    
    
    
    
    607Federal Home Loan Mortgage Corporation
    
    
    12,343
    
    
    
    11
    
    
    
    (230
    )
    
    
    12,124Federal National Mortgage Association
    
    
    4,216
    
    
    
    78
    
    
    
    (32
    )
    
    
    4,262Total mortgage-backed securities
    
    
    17,132
    
    
    
    123
    
    
    
    (262
    )
    
    
    16,993Other
    
    
    175
    
    
    
    
    
    
    
    (1
    )
    
    
    174Total held-to-maturity
    
    
    17,307
    
    
    
    123
    
    
    
    (263
    )
    
    
    17,167Total securities
    
    $
    38,113
    
    
    $
    305
    
    
    $
    (386
    )
    
    $
    38,032
  2009
    
    
    2008
    
    
    2007Available-for-Sale:Proceeds
    
    $
    1,265
    
    
    $
    22,428
    
    
    $
    14,422Gross gains
    
    
    
    
    
    
    431
    
    
    
    22Gross losses
    
    
    
    
    
    
    
    
    
    
    646
    79




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Amortized
    
    
    
    
    
    
    WeightedCost
    
    
    Fair Value
    
    
    Avg RateAvailable-for-Sale:Less than one year
    
    $
    
    
    
    $
    
    
    
    
    
    %One through five years
    
    
    119
    
    
    
    123
    
    
    
    5.24
    %Five through ten years
    
    
    1,678
    
    
    
    1,713
    
    
    
    4.89
    %After ten years
    
    
    57,999
    
    
    
    58,137
    
    
    
    4.04
    %$
    59,796
    
    
    $
    59,973
    
    
    
    4.07
    %Held-to-maturity:One through five years
    
    $
    
    
    
    $
    
    
    
    
    
    %Five through ten years
    
    
    495
    
    
    
    492
    
    
    
    3.53
    %After ten years
    
    
    14,313
    
    
    
    14,036
    
    
    
    5.54
    %$
    14,808
    
    
    $
    14,528
    
    
    
    5.47
    %
  Less than 12 months
    
    
    12 months or longer
    
    
    TotalUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    ValueAvailable-for-Sale:Mortgage-backed securities
    
    $
    (441
    )
    
    $
    30,008
    
    
    $
    (92
    )
    
    $
    2,938
    
    
    $
    (533
    )
    
    $
    32,946Total available-for-sale
    
    
    (441
    )
    
    
    30,008
    
    
    
    (92
    )
    
    
    2,938
    
    
    
    (533
    )
    
    
    32,946Held-to-Maturity:Mortgage-backed securities
    
    
    (246
    )
    
    
    2,119
    
    
    
    (155
    )
    
    
    8,682
    
    
    $
    (401
    )
    
    
    10,801Other
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    155
    
    
    
    (3
    )
    
    
    155Total held-to-maturity
    
    
    (246
    )
    
    
    2,119
    
    
    
    (158
    )
    
    
    8,837
    
    
    
    (404
    )
    
    
    10,956Total securities
    
    $
    (687
    )
    
    $
    32,127
    
    
    $
    (250
    )
    
    $
    11,775
    
    
    $
    (937
    )
    
    $
    43,902
  Less than 12 months
    
    
    12 months or longer
    
    
    TotalUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    ValueAvailable-for-Sale:Mortgage-backed securities
    
    $
    (33
    )
    
    $
    3,857
    
    
    $
    (90
    )
    
    $
    4,033
    
    
    $
    (123
    )
    
    $
    7,890Total available-for-sale
    
    
    (33
    )
    
    
    3,857
    
    
    
    (90
    )
    
    
    4,033
    
    
    
    (123
    )
    
    
    7,890Held-to-Maturity:Mortgage-backed securities
    
    
    (7
    )
    
    
    451
    
    
    
    (255
    )
    
    
    13,800
    
    
    
    (262
    )
    
    
    14,251U.S. Government Agency
Securities
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    174
    
    
    
    (1
    )
    
    
    174Total held-to-maturity
    
    
    (7
    )
    
    
    451
    
    
    
    (256
    )
    
    
    13,974
    
    
    
    (263
    )
    
    
    14,425Total securities
    
    $
    (40
    )
    
    $
    4,308
    
    
    $
    (346
    )
    
    $
    18,007
    
    
    $
    (386
    )
    
    $
    22,315
  80




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##### Table of Contents



NOTE 5. LOANS RECEIVABLE, NET
  2009
    
    
    2008Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentGross loans receivable:One- to four-family
    
    $
    84,666
    
    
    
    13.19
    %
    
    $
    103,419
    
    
    
    16.35
    %Multifamily
    
    
    80,321
    
    
    
    12.51
    %
    
    
    78,657
    
    
    
    12.43
    %Non-residential
    
    
    273,595
    
    
    
    42.60
    %
    
    
    238,508
    
    
    
    37.70
    %Construction
    
    
    144,318
    
    
    
    22.48
    %
    
    
    158,877
    
    
    
    25.11
    %Business
    
    
    57,522
    
    
    
    8.96
    %
    
    
    51,424
    
    
    
    8.13
    %Consumer and other (1)
    
    
    1,674
    
    
    
    0.26
    %
    
    
    1,728
    
    
    
    0.27
    %Total loans receivable
    
    
    642,096
    
    
    
    100.00
    %
    
    
    632,613
    
    
    
    100.00
    %Add:Premium on loans
    
    
    546
    
    
    
    
    
    
    
    725Less:Deferred fees and loan discounts
    
    
    (1,583
    )
    
    
    
    
    
    
    (1,229
    )Allowance for loan losses
    
    
    (7,049
    )
    
    
    
    
    
    
    (4,878
    )Total loans receivable, net
    
    $
    634,010
    
    
    
    
    
    
    $
    627,231
 (1)
    
    Includes personal, credit card, and home improvement.    81




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Balance at beginning of the year
    
    $
    4,878
    
    
    $
    5,409
    
    
    $
    4,015Provision charged to operations
    
    
    2,702
    
    
    
    222
    
    
    
    276Recoveries of amounts previously charged-off
    
    
    53
    
    
    
    153
    
    
    
    47Charge-offs of loans
    
    
    (584
    )
    
    
    (906
    )
    
    
    (120
    )Acquisition of CCB
    
    
    
    
    
    
    
    
    
    
    1,191Balance at end of the year
    
    $
    7,049
    
    
    $
    4,878
    
    
    $
    5,409
         82




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##### Table of Contents



NOTE 6. OFFICE PROPERTIES AND EQUIPMENT, NET
  2009
    
    
    2008Land
    
    $
    415
    
    
    $
    415Building and improvements
    
    
    10,149
    
    
    
    9,874Leasehold improvements
    
    
    8,221
    
    
    
    6,041Furniture and equipment
    
    
    11,014
    
    
    
    12,07929,799
    
    
    
    28,409Less accumulated depreciation and amortization
    
    
    (14,562
    )
    
    
    (12,629
    )Office properties and equipment, net
    
    $
    15,237
    
    
    $
    15,780
  NOTE 7. ACCRUED INTEREST RECEIVABLE
  2009
    
    
    2008Loans receivable
    
    $
    3,326
    
    
    $
    3,751Mortgage-backed securities
    
    
    356
    
    
    
    273Investments and other interest bearing assets
    
    
    15
    
    
    
    39Total accrued interest receivable
    
    $
    3,697
    
    
    $
    4,063
 NOTE 8. DEPOSITS
  2009
    
    
    2008Percent
    
    
    Weighted
    
    
    
    
    
    
    Percent
    
    
    Weightedof Total
    
    
    Average
    
    
    
    
    
    
    of Total
    
    
    AverageAmount
    
    
    Deposits
    
    
    Rate
    
    
    Amount
    
    
    Deposits
    
    
    RateNon-interest-bearing demand
    
    $
    56,505
    
    
    
    9.36
    %
    
    
    0.00
    %
    
    $
    51,736
    
    
    
    7.90
    %
    
    
    0.00
    %NOW accounts
    
    
    48,371
    
    
    
    8.02
    %
    
    
    0.15
    %
    
    
    28,168
    
    
    
    4.30
    %
    
    
    0.20
    %Savings and club
    
    
    117,438
    
    
    
    19.46
    %
    
    
    0.22
    %
    
    
    125,819
    
    
    
    19.22
    %
    
    
    0.53
    %Money market savings account
    
    
    43,190
    
    
    
    7.16
    %
    
    
    1.35
    %
    
    
    45,514
    
    
    
    6.95
    %
    
    
    2.94
    %Certificates of deposit
    
    
    335,348
    
    
    
    55.58
    %
    
    
    2.25
    %
    
    
    400,587
    
    
    
    61.20
    %
    
    
    4.10
    %Other
    
    
    2,564
    
    
    
    0.42
    %
    
    
    1.86
    %
    
    
    2,839
    
    
    
    0.43
    %
    
    
    1.51
    %Total
    
    $
    603,416
    
    
    
    100.00
    %
    
    
    1.41
    %
    
    $
    654,663
    
    
    
    100.00
    %
    
    
    2.83
    %
  83




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##### Table of Contents



Period to MaturityTotal
    
    
    PercentRate
    
    < 1 Yr.
    
    
    1-2 Yrs.
    
    
    2-3 Yrs.
    
    
    3+ Yrs.
    
    
    2009
    
    
    of Total0%  0.99%
    
    $
    13,904
    
    
    $
    79
    
    
    $
    204
    
    
    $
    6
    
    
    $
    14,192
    
    
    
    4.23
    %1%  1.99%
    
    $
    140,098
    
    
    $
    459
    
    
    $
    0
    
    
    $
    0
    
    
    $
    140,557
    
    
    
    41.91
    %2%  3.99%
    
    $
    132,497
    
    
    $
    14,948
    
    
    $
    2,096
    
    
    $
    6,416
    
    
    $
    155,957
    
    
    
    46.51
    %4% and over
    
    $
    9,555
    
    
    $
    4,063
    
    
    $
    6,324
    
    
    $
    4,700
    
    
    $
    24,642
    
    
    
    7.35
    %Total
    
    $
    296,054
    
    
    $
    19,549
    
    
    $
    8,624
    
    
    $
    11,122
    
    
    $
    335,348
    
    
    
    100.00
    %
   2009
    
    
    2008
    
    
    2007NOW demand
    
    $
    61
    
    
    $
    138
    
    
    $
    97Savings and clubs
    
    
    537
    
    
    
    1,004
    
    
    
    931Money market savings
    
    
    903
    
    
    
    1,193
    
    
    
    1,133Certificates of deposit
    
    
    11,379
    
    
    
    16,522
    
    
    
    13,080Mortgagors deposits
    
    
    48
    
    
    
    42
    
    
    
    3012,928
    
    
    
    18,899
    
    
    
    15,271Penalty for early withdrawal of
certificates of deposit
    
    
    (22
    )
    
    
    (33
    )
    
    
    (44
    )Total interest expense
    
    $
    12,906
    
    
    $
    18,866
    
    
    $
    15,227
 NOTE 9. BORROWED MONEY
 Federal Home Loan Bank Advances and Repurchase agreements.
 2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedMaturing Year Ended March 31,
    
    Average Rate
    
    
    Amount
    
    
    Average Rate
    
    
    Amount2009
    
    
    
    %
    
    $
    
    
    
    
    3.77
    %
    
    $
    15,1072010
    
    
    2.11
    %
    
    
    63,500
    
    
    
    
    %
    
    
    2011
    
    
    3.84
    %
    
    
    8,000
    
    
    
    
    %
    
    
    2013
    
    
    4.64
    %
    
    
    30,114
    
    
    
    4.63
    %
    
    
    30,1432.99
    %
    
    $
    101,614
    
    
    
    4.34
    %
    
    $
    45,250
   84




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##### Table of Contents



Repurchase agreements.
 Subordinated Debt Securities.
  2009
    
    
    2008
    
    
    2007Amounts outstanding at the end of year:FHLB advances
    
    $
    71,614
    
    
    $
    15,250
    
    
    $
    47,775Guaranteed preferred beneficial interest in junior
subordinated debentures
    
    $
    13,403
    
    
    $
    13,375
    
    
    $
    13,318Rate paid at year end:FHLB advances
    
    
    2.30
    %
    
    
    3.77
    %
    
    
    4.32
    %Guaranteed preferred beneficial interest in junior
subordinated debentures
    
    
    4.92
    %
    
    
    5.85
    %
    
    
    8.40
    %Maximum amount of borrowing outstanding at any month end:FHLB advances
    
    $
    71,614
    
    
    $
    60,874
    
    
    $
    93,975Guaranteed preferred beneficial interest in junior
subordinated debentures
    
    $
    13,403
    
    
    $
    13,375
    
    
    $
    13,318Approximate average amounts outstanding for year:FHLB advances
    
    $
    46,975
    
    
    $
    36,724
    
    
    $
    65,567Guaranteed preferred beneficial interest in junior
subordinated debentures
    
    $
    13,395
    
    
    $
    13,344
    
    
    $
    13,286Approximate weighted average rate paid during year:FHLB advances
    
    
    1.96
    %
    
    
    5.18
    %
    
    
    4.36
    %Guaranteed preferred beneficial interest in junior
subordinated debentures
    
    
    5.63
    %
    
    
    7.76
    %
    
    
    8.33
    %
 NOTE 10. INCOME TAXES
  2009
    
    
    2008
    
    
    2007Federal income tax expense (benefit):Current
    
    $
    
    
    
    $
    70
    
    
    $
    1,628Deferred
    
    
    (3,025
    )
    
    
    (1,107
    )
    
    
    (3,018
    )(3,025
    )
    
    
    (1,037
    )
    
    
    (1,390
    )State and local income tax expense
(benefit):Current
    
    
    176
    
    
    
    169
    
    
    
    296Deferred
    
    
    (353
    )
    
    
    (24
    )
    
    
    (5
    )(177
    )
    
    
    145
    
    
    
    291Total income tax benefit
    
    $
    (3,202
    )
    
    $
    (892
    )
    
    $
    (1,099
    )
  85




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentStatutory Federal income tax expense
(benefit)
    
    $
    (3,477
    )
    
    
    34.0
    %
    
    $
    1,094
    
    
    
    34.0
    %
    
    $
    339
    
    
    
    34.0
    %State and local income taxes, net of
Federal tax benefit
    
    
    116.00
    
    
    
    (1.1
    )%
    
    
    86
    
    
    
    2.7
    %
    
    
    187
    
    
    
    11.6
    %New markets tax credit
    
    
    (2,000
    )
    
    
    19.6
    %
    
    
    (2,000
    )
    
    
    (61.6
    )%
    
    
    (1,475
    )
    
    
    (83.8
    )%General business credit
    
    
    (31
    )
    
    
    0.3
    %
    
    
    (41
    )
    
    
    (1.3
    )%
    
    
    (69
    )
    
    
    (3.9
    )%Goodwill amortization
    
    
    2,399
    
    
    
    (23.5
    )%
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %Other
    
    
    (209
    )
    
    
    2.0
    %
    
    
    (31
    )
    
    
    (1.0
    )%
    
    
    (81
    )
    
    
    (4.6
    )%Total income tax benefit
    
    $
    (3,202
    )
    
    
    31.3
    %
    
    $
    (892
    )
    
    
    (27.2
    )%
    
    $
    (1,099
    )
    
    
    (46.7
    )%
   2009
    
    
    2008Deferred Tax Assets:Allowance for loan losses
    
    $
    2,397
    
    
    $
    1,427Deferred loan fees
    
    
    168
    
    
    
    461Compensation and benefits
    
    
    31
    
    
    
    102Non-accrual loan interest
    
    
    911
    
    
    
    579Capital loss carryforward
    
    
    591
    
    
    
    591Deferred rent
    
    
    
    
    
    
    111Purchase accounting adjustment
    
    
    119
    
    
    
    159Net operating loss carry forward
    
    
    756
    
    
    
    2,072New markets tax credit
    
    
    5,413
    
    
    
    3,227Depreciation
    
    
    204
    
    
    
    330Minimum pension liability
    
    
    132
    
    
    
    Other
    
    
    315
    
    
    
    28Total Deferred Tax Assets
    
    
    11,037
    
    
    
    9,087Deferred Tax Liabilities:Income from affiliate
    
    
    700
    
    
    
    690Minimum pension liability
    
    
    
    
    
    
    170Unrealized gain on available-for-sale securities
    
    
    123
    
    
    
    92Total Deferred Tax Liabilities
    
    
    823
    
    
    
    952Net Deferred Tax Assets
    
    $
    10,214
    
    
    $
    8,135
   86




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##### Table of Contents



NOTE 11. EARNINGS (LOSS) PER COMMON SHARE
  2009
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    (7,024
    )
    
    $
    3,952
    
    
    $
    2,098Preferred stock dividends
    
    
    (76
    )
    
    
    
    
    
    $
    Net income (loss) available to common stockholders
    
    $
    (7,100
    )
    
    $
    3,952
    
    
    $
    2,098Weighted average common shares outstanding  basic
    
    
    2,472
    
    
    
    2,492
    
    
    
    2,511Effect of dilutive options
    
    
    
    
    
    
    50
    
    
    
    57Effect of dilutive MRP shares
    
    
    
    
    
    
    19
    
    
    
    18Weighted average common shares outstanding 
diluted
    
    
    2,472
    
    
    
    2,561
    
    
    
    2,586
 NOTE 12. STOCKHOLDERS EQUITY
 Conversion and Stock Offering.
  87




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##### Table of Contents



Regulatory Capital
  GAAP
    
    
    Tangible
    
    
    Leverage
    
    
    Risk-BasedCapital
    
    
    Equity
    
    
    Capital
    
    
    CapitalStockholders Equity at March 31, 2009(1)
    
    $
    77,634
    
    
    $
    77,634
    
    
    $
    77,634
    
    
    $
    77,634Add:General valuation allowances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,049Other
    
    
    
    
    
    
    218
    
    
    
    218
    
    
    
    218Deduct:Unrealized gains on securities
available-for-sale, net
    
    
    
    
    
    
    200
    
    
    
    200
    
    
    
    200Goodwill and qualifying intangible assets, net
    
    
    
    
    
    
    380
    
    
    
    380
    
    
    
    380Regulatory Capital
    
    
    
    
    
    
    77,272
    
    
    
    77,272
    
    
    
    84,321Minimum Capital requirement
    
    
    
    
    
    
    12,179
    
    
    
    32,478
    
    
    
    52,777Regulatory Capital Excess
    
    
    
    
    
    $
    65,093
    
    
    $
    44,794
    
    
    $
    31,544
 (1)
    
    Carver Federal only. Comprehensive Income (Loss).
 NOTE 13. EMPLOYEE BENEFIT AND STOCK COMPENSATION PLANS
 Pension Plan
  88




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##### Table of Contents



2009
    
    
    2008Change in benefit obligation:Benefit obligation at the beginning of year
    
    $
    2,399
    
    
    $
    2,887Adjustment for Measurement Date Change
    
    
    37
    
    
    
    Interest cost
    
    
    150
    
    
    
    163Actuarial gain
    
    
    (193
    )
    
    
    (308
    )Benefits paid
    
    
    (226
    )
    
    
    (170
    )Settlements
    
    
    (48
    )
    
    
    (173
    )Benefit obligation at end of year
    
    $
    2,119
    
    
    $
    2,399Change in fair value of plan assets:Fair value of plan assets at beginning of year
    
    $
    2,766
    
    
    $
    2,877Actual return on plan assets
    
    
    (741
    )
    
    
    232Benefits paid
    
    
    (226
    )
    
    
    (170
    )Settlements
    
    
    (48
    )
    
    
    (173
    )Fair value of plan assets at end of year
    
    $
    1,751
    
    
    $
    2,766Funded status
    
    $
    (368
    )
    
    $
    367Unrecognized loss
    
    
    
    
    
    
    Accrued pension cost
    
    $
    (368
    )
    
    $
    367
  2009
    
    
    2008
    
    
    2007Interest cost
    
    $
    150
    
    
    $
    163
    
    
    $
    159Expected return on plan assets
    
    
    (214
    )
    
    
    (221
    )
    
    
    (220
    )Net periodic pension benefit
    
    $
    (64
    )
    
    $
    (58
    )
    
    $
    (61
    )
  2009
    
    
    2008
    
    
    2007Annual salary increase (1)
    
    
    
    
    
    
    
    
    
    
    Expected long-term return on assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Discount rate used in measurement of benefit
obligations
    
    
    7.38
    %
    
    
    6.50
    %
    
    
    5.88
    %
 (1)
    
    The annual salary increase rate is not applicable as the plan is frozen and no new benefits
accrue.  89




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Directors Retirement Plan.
 Savings Incentive Plan.
   BOLI.
  Management Recognition Plan .
 Employee Stock Ownership Plan.
   90




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##### Table of Contents



Stock Option Plans.
   2009
    
    
    2008
    
    
    2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding, beginning
of year
    
    
    237,182
    
    
    $
    13.24
    
    
    
    240,087
    
    
    $
    13.24
    
    
    
    238,061
    
    
    $
    12.90Granted
    
    
    
    
    
    
    
    
    
    
    15,978
    
    
    
    16.93
    
    
    
    21,019
    
    
    
    16.50Exercised
    
    
    
    
    
    
    
    
    
    
    (3,475
    )
    
    
    11.58
    
    
    
    (11,776
    )
    
    
    9.57Forfeited
    
    
    (16,251
    )
    
    
    17.02
    
    
    
    (15,408
    )
    
    
    17.72
    
    
    
    (7,217
    )
    
    
    17.44Outstanding, end of year
    
    
    220,931
    
    
    $
    12.86
    
    
    
    237,182
    
    
    $
    13.22
    
    
    
    240,087
    
    
    $
    13.24Exercisable, at year end
    
    
    212,685
    
    
    
    
    
    
    
    198,088
    
    
    
    
    
    
    
    192,110
  91




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##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageRange of
    
    
    
    
    
    Remaining
    
    
    Exercise
    
    
    
    
    
    
    ExerciseExercise Prices
    
    Shares
    
    
    Life
    
    
    Price
    
    
    Shares
    
    
    Price$8.00  $8.99
    
    
    60,000
    
    
    1 years
    
    $
    8.17
    
    
    
    60,000
    
    
    $
    8.179.00  9.99
    
    
    32,000
    
    
    2 years
    
    
    9.93
    
    
    
    32,000
    
    
    
    9.9310.00  10.99
    
    
    2,000
    
    
    1 years
    
    
    10.38
    
    
    
    2,000
    
    
    
    10.3812.00  12.99
    
    
    37,400
    
    
    3 years
    
    
    12.10
    
    
    
    37,400
    
    
    
    12.1016.00  16.99
    
    
    50,803
    
    
    6 years
    
    
    16.59
    
    
    
    42,558
    
    
    
    16.5917.00  17.99
    
    
    18,000
    
    
    6 years
    
    
    17.20
    
    
    
    18,000
    
    
    
    17.1819.00  19.99
    
    
    19,618
    
    
    5 years
    
    
    19.64
    
    
    
    19,618
    
    
    
    19.6620.00  20.99
    
    
    729
    
    
    6 years
    
    
    20.00
    
    
    
    729
    
    
    
    20.0021.00  21.99
    
    
    381
    
    
    5 years
    
    
    21.76
    
    
    
    381
    
    
    
    21.76Total
    
    
    220,931
    
    
    
    
    
    
    
    
    
    
    
    212,686
   2009
    
    
    2008
    
    
    2007Risk-free interest rate
    
    
    N/A
    
    
    
    4.3
    %
    
    
    4.5
    %Volatility
    
    
    N/A
    
    
    
    31.2
    %
    
    
    19.0
    %Annual dividends
    
    
    N/A
    
    
    $
    0.29
    
    
    $
    0.32Expected life of option grants
    
    
    N/A
    
    
    7 yrs
    
    
    7 yrs
  Performance Compensation Plan.
 NOTE 14. COMMITMENTS AND CONTINGENCIES
 Credit Related Commitments.
    92




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2009
    
    
    2008Commitments to originate mortgage loans
    
    $
    38,056
    
    
    $
    81,754Commitments to originate commercial and consumer
loans
    
    
    4,616
    
    
    
    4,236Lines of credit
    
    
    16,028
    
    
    
    24,518Letters of credit
    
    
    4,164
    
    
    
    4,518Total
    
    $
    62,864
    
    
    $
    115,026
    Lease Commitments.
 MinimumYear Ending March 31,
    
    Rental2010
    
    $
    1,5502011
    
    
    1,5462012
    
    
    1,3522013
    
    
    1,1872014
    
    
    1,020Thereafter
    
    
    2,058$
    8,713
  Legal Proceedings
  93




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##### Table of Contents



NOTE 15. FAIR VALUE MEASUREMENTS
 Fair Value Measurements
      Fair Value Measurements at March 31, 2009, UsingQuoted Prices in Active
    
    
    Significant Other
    
    
    SignificantMarkets for Identical
    
    
    Observable Inputs
    
    
    Unobservable
    
    
    Total Fair(in thousands)
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)
    
    
    ValueMortgage servicing rights
    
    $
    
    
    
    $
    
    
    
    $
    452
    
    
    $
    452Securities available for
sale
    
    $
    
    
    
    $
    59,928
    
    
    $
    45
    
    
    $
    59,973
       94




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##### Table of Contents



Mortgage
    
    
    SecuritiesServicing
    
    
    Available for(in thousands)
    
    Rights
    
    
    SaleBeginning balance, April 1, 2008
    
    $
    605
    
    
    $
    45Additions
    
    
    80
    
    
    
    Total unrealized loss
    
    
    (233
    )
    
    
    Ending balance, March 31, 2009
    
    $
    452
    
    
    $
    45
 NOTE 16. FAIR VALUE OF FINANCIAL INSTRUMENTS
 Disclosures about Fair Value of Financial Instruments
 Cash and cash equivalents and accrued interest receivable
  Securities
  Loans receivable and loan held-for-sale
   95




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##### Table of Contents



Mortgage servicing rights
  Deposits
  Borrowings
  Commitments
   2009
    
    
    2008Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueFinancial Assets:Cash and cash equivalents
    
    $
    13,341
    
    
    $
    13,341
    
    
    $
    27,368
    
    
    $
    27,368Investment securities available-for-sale
    
    
    260
    
    
    
    260
    
    
    
    1,525
    
    
    
    1,525Mortgage backed securities available-for-sale
    
    
    59,713
    
    
    
    59,713
    
    
    
    19,340
    
    
    
    19,340Mortgage backed securities held-to-maturity
    
    
    14,808
    
    
    
    14,528
    
    
    
    17,307
    
    
    
    17,167Loans receivable
    
    
    634,010
    
    
    
    649,219
    
    
    
    627,231
    
    
    
    644,702Loans held-for-sale
    
    
    21,105
    
    
    
    22,467
    
    
    
    23,767
    
    
    
    24,084Accrued interest receivable
    
    
    3,697
    
    
    
    3,697
    
    
    
    4,063
    
    
    
    4,063Mortgage servicing rights
    
    
    452
    
    
    
    452
    
    
    
    605
    
    
    
    605Financial Liabilities:Deposits
    
    $
    603,416
    
    
    $
    610,455
    
    
    $
    654,663
    
    
    $
    660,813Advances from FHLB of New York
    
    
    71,614
    
    
    
    71,592
    
    
    
    15,249
    
    
    
    15,191Other borrowed money
    
    
    43,403
    
    
    
    46,179
    
    
    
    43,375
    
    
    
    44,984
 Limitations
    96




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##### Table of Contents



NOTE 17. VARIABLE INTEREST EARNINGS
     97




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##### Table of Contents



NOTE 18. QUARTERLY FINANCIAL DATA (UNAUDITED)
  June 30
    
    
    September 30
    
    

December
31
    (1)
    
    March 31Fiscal 2009Interest income
    
    $
    11,119
    
    
    $
    10,543
    
    
    $
    10,421
    
    
    $
    9,917Interest expense
    
    
    (4,861
    )
    
    
    (4,342
    )
    
    
    (4,007
    )
    
    
    (3,296
    )Net interest income
    
    
    6,258
    
    
    
    6,201
    
    
    
    6,414
    
    
    
    6,621Provision for loan losses
    
    
    (169
    )
    
    
    (170
    )
    
    
    (431
    )
    
    
    (1,933
    )Non-interest income
    
    
    1,748
    
    
    
    1,571
    
    
    
    1,195
    
    
    
    661Non-interest expense
    
    
    (7,366
    )
    
    
    (7,305
    )
    
    
    (7,733
    )
    
    
    (8,373
    )Goodwill Impairment
    
    
    
    
    
    
    
    
    
    
    (7,055
    )
    
    
    Income tax benefit
    
    
    322
    
    
    
    422
    
    
    
    550
    
    
    
    1,908Minority interest, net of taxes
    
    
    (138
    )
    
    
    (98
    )
    
    
    (124
    )
    
    
    Net income (loss)
    
    $
    655
    
    
    $
    621
    
    
    $
    (7,184
    )
    
    $
    (1,116
    )Earnings (loss) per common
shareBasic
    
    $
    0.28
    
    
    $
    0.25
    
    
    $
    (2.63
    )
    
    $
    (0.48
    )Diluted
    
    $
    0.27
    
    
    $
    0.25
    
    
    $
    (2.63
    )
    
    $
    (0.48
    )Fiscal 2008Interest income
    
    $
    11,968
    
    
    $
    12,088
    
    
    $
    12,309
    
    
    $
    11,767Interest expense
    
    
    (5,315
    )
    
    
    (5,625
    )
    
    
    (5,992
    )
    
    
    (5,724
    )Net interest income
    
    
    6,653
    
    
    
    6,463
    
    
    
    6,317
    
    
    
    6,043Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    (222
    )
    
    
    Non-interest income
    
    
    1,137
    
    
    
    1,453
    
    
    
    3,178
    
    
    
    2,093Non-interest expense
    
    
    (6,504
    )
    
    
    (7,196
    )
    
    
    (7,963
    )
    
    
    (8,207
    )Income tax benefit (expense)
    
    
    (143
    )
    
    
    44
    
    
    
    268
    
    
    
    712Minority interest, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146
    )Net income
    
    $
    1,143
    
    
    $
    764
    
    
    $
    1,578
    
    
    $
    495Earnings per common shareBasic
    
    $
    0.46
    
    
    $
    0.31
    
    
    $
    0.63
    
    
    $
    0.20Diluted
    
    $
    0.44
    
    
    $
    0.30
    
    
    $
    0.62
    
    
    $
    0.20
 (1)
    
    Net income as originally
reported on Form 10Q for the quarter ended December 31, 2008 was
adjusted by $0.7 million as a result of goodwill adjustment. NOTE 19. CARVER BANCORP, INC.   PARENT COMPANY ONLY
 CONDENSED STATEMENTS OF FINANCIAL CONDITION (in thousands):
 As of March 31,2009
    
    
    2008AssetsCash on deposit with subsidiaries
    
    $
    1,090
    
    
    $
    384Investment in subsidiaries
    
    
    77,930
    
    
    
    68,916Other assets
    
    
    644
    
    
    
    32Total Assets
    
    $
    79,664
    
    
    $
    69,332Liabilities and Stockholders EquityBorrowings
    
    $
    13,403
    
    
    $
    13,376Accounts payable to subsidiaries
    
    
    1,877
    
    
    
    1,945Other liabilities
    
    
    107
    
    
    
    113Total liabilities
    
    $
    15,387
    
    
    $
    15,434Stockholders equity
    
    
    64,281
    
    
    
    53,898Total Liabilities and Stockholders Equity
    
    $
    79,668
    
    
    $
    69,332
  98




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##### Table of Contents



CONDENSED STATEMENTS OF INCOME (in thousands):
 Years Ended March 31,2009
    
    
    2008
    
    
    2007IncomeEquity in net income (loss) from
    
    $
    (8,527
    )
    
    $
    5,089
    
    
    $
    2,790Other income
    
    
    23
    
    
    
    34
    
    
    
    34Total income (loss)
    
    
    (8,504
    )
    
    
    5,123
    
    
    
    2,824ExpensesInterest Expense on Borrowings
    
    
    784
    
    
    
    1,185
    
    
    
    1,196Salaries and employee benefits
    
    
    152
    
    
    
    157
    
    
    
    180Shareholder expense
    
    
    764
    
    
    
    664
    
    
    
    439Other
    
    
    22
    
    
    
    35
    
    
    
    10Total expense
    
    
    1,722
    
    
    
    2,041
    
    
    
    1,825Income (loss) before income taxes
    
    
    (10,226
    )
    
    
    3,082
    
    
    
    999Income tax benefit
    
    
    (3,202
    )
    
    
    (881
    )
    
    
    (1,099
    )Net Income (loss)
    
    $
    (7,024
    )
    
    $
    3,963
    
    
    $
    2,098
 CONDENSED STATEMENTS OF CASH FLOW (in thousands):
 Years Ended March 31,2009
    
    
    2008
    
    
    2007Cash Flows From Operating ActivitiesNet income (loss)
    
    $
    (7,024
    )
    
    $
    3,963
    
    
    $
    2,098Adjustments to reconcile net income to net cash
from operating activities:(Equity) loss in net income of Subsidiaries
    
    
    8,608
    
    
    
    (5,224
    )
    
    
    (2,790
    )Income taxes from the Bank
    
    
    (3,202
    )
    
    
    (892
    )
    
    
    (1,099
    )Increase in A/R from Sub
    
    
    (621
    )
    
    
    
    
    
    
    Decrease
(increase) in other assets
    
    
    16
    
    
    
    (16
    )
    
    
    Increase
(decrease) in accounts payable to
subsidiaries
    
    
    (68
    )
    
    
    1,654
    
    
    
    225Decrease in other liabilities
    
    
    (6
    )
    
    
    (62
    )
    
    
    (83
    )Other, net
    
    
    
    
    
    
    168
    
    
    
    (13
    )Net cash used in operating activities
    
    
    (2,297
    )
    
    
    (409
    )
    
    
    (1,662
    )Cash Flows From Investing ActivitiesDividends Received from Bank
    
    
    3,200
    
    
    
    1,700
    
    
    
    3,201Receipt of TARP
    
    
    18,980
    
    
    
    
    
    
    
    Net cash provided by investing activities
    
    
    22,180
    
    
    
    1,700
    
    
    
    3,201Cash Flows From Financing ActivitiesIncrease in borrowings
    
    
    27
    
    
    
    
    
    
    
    Purchase of treasury stock, net
    
    
    (159
    )
    
    
    (331
    )
    
    
    (321
    )Dividends paid
    
    
    (1,065
    )
    
    
    (975
    )
    
    
    (878
    )Push Down of TARP funds
    
    
    (17,980
    )
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (19,177
    )
    
    
    (1,306
    )
    
    
    (1,199
    )Net increase (decrease) in cash
    
    
    706
    
    
    
    (15
    )
    
    
    340Cash and cash equivalents  beginning
    
    
    384
    
    
    
    399
    
    
    
    59Cash and cash equivalents  ending
    
    $
    1,090
    
    
    $
    384
    
    
    $
    399
  99




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
  
 ITEM 9A. DISCLOSURE CONTROLS AND PROCEDURES.
 (a) Evaluation of Disclosure Controls and Procedures
   (b) Managements Report on Internal Control Over Financial Reporting
      100




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##### Table of Contents



(c) Changes in Internal Control over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION.
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE.
  Audit Committee Financial Expert
  
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS DIRECTOR INDEPENDENCE.
   101




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
  
 PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
  A.
    
    The following consolidated financial statements are included in Item 8 of this annual
report:
 1.
    
    Report of Independent Registered Public Accounting Firm
 2.
    
    Consolidated Statement of Financial Condition as of March 31, 2009 and 2008
 3.
    
    Consolidated Statements of Operations for the years ended as of March 31, 2009,
2008 and 2007
 4.
    
    Consolidated Statements of Changes in Stockholders Equity and Comprehensive
Income (Loss) for the years ended March 31, 2009, 2008 and 2007
 5.
    
    Consolidated Statements of Cash Flows for the years ended March 31, 2009, 2008
and 2007
 6.
    
    Notes to Consolidated Financial Statements.
 B.
    
    Financial Statement Schedules. All financial statement schedules have been omitted, as
the required information is either inapplicable or included under Item 8, Financial
Statement and Supplementary Data.
  A.
    
    See Index of Exhibits on page E-1.
  102




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##### Table of Contents



CARVER BANCORP, INC.July 2, 2009
    
    By:
    
    /s/ Deborah C. Wright

Deborah C. WrightChairman and Chief Executive Officer
  /s/ Deborah C. Wright

Deborah C. Wright
    
    
    
    Chairman and Chief Executive Officer
(Principal Executive Officer)/s/ Thomas Sperzel

Thomas Sperzel
    
    
    
    Senior Vice President and Controller
(Principal Accounting Officer)/s/ Carol Baldwin Moody

Carol Baldwin Moody
    
    
    
    Director/s/ Dr. Samuel J. Daniel

Samuel J. Daniel
    
    
    
    Director/s/ David L. Hinds

David L. Hinds
    
    
    
    Director/s/ Robert Holland, Jr.

Robert Holland, Jr.
    
    
    
    Lead Director/s/ Pazel Jackson

Pazel G. Jackson, Jr.
    
    
    
    Director/s/ Edward B. Ruggiero

Edward B. Ruggiero
    
    
    
    Director/s/ Robert R. Tarter

Robert R. Tarter
    
    
    
    Director
  103




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.2
    
    
    Agreement and Plan of Merger dated as of April 5, 2006 by and between Carver Bancorp, Inc., Carver Federal
Savings Bank and Community Capital Bank (3)3.1
    
    
    Certificate of Incorporation of Carver Bancorp, Inc. (1)3.2
    
    
    Second Amended and Restated Bylaws of Carver Bancorp, Inc. (10)4.1
    
    
    Stock Certificate of Carver Bancorp, Inc. (1)4.2
    
    
    Federal Stock Charter of Carver Federal Savings Bank (1)4.3
    
    
    Bylaws of Carver Federal Savings Bank (1)4.4
    
    
    Amendments to Bylaws of Carver Federal Savings Bank (2)4.5
    
    
    Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (4)4.6
    
    
    Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock (4)10.1
    
    
    Carver Bancorp, Inc. 1995 Stock Option Plan, effective as of September 12, 1995 (1) (*)10.2
    
    
    Carver Federal Savings Bank Retirement Income Plan, as amended and restated effective as of January 1, 1997 and
as further amended through January 1, 2001 (9) (*)10.3
    
    
    Carver Federal Savings Bank 401(k) Savings Plan in RSI Retirement Trust, as amended and restated effective as
of January 1, 1997 and including provisions effective through January 1, 2002 (9) (*)10.4
    
    
    Carver Bancorp, Inc. Employee Stock Ownership Plan, effective as of January 1, 1994, incorporating Amendment
No. 1, incorporating Second Amendment, incorporating Amendment No. 2, incorporating Amendment No. 2A,
incorporating Amendment No. 3 and incorporating Amendment No. 4 (9) (*)10.5
    
    
    Carver Federal Savings Bank Deferred Compensation Plan, effective as of August 10, 1993 (1) (*)10.6
    
    
    Carver Federal Savings Bank Retirement Plan for Non-employee Directors, effective as of October 24, 1994 (1) (*)10.7
    
    
    Carver Bancorp, Inc. Management Recognition Plan, effective as of September 12, 1995 (1) (*)10.8
    
    
    Carver Bancorp, Inc. Incentive Compensation Plan, effective as of September 12, 1995 (1) (*)10.9
    
    
    Employment Agreement by and between Carver Federal Savings Bank and Deborah C. Wright, entered into as of June
1, 1999 (11) (*)10.10
    
    
    Employment Agreement by and between Carver Bancorp, Inc. and Deborah C. Wright, entered into as of June 1, 1999
(11) (*)
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ExhibitNumber
    
    Description10.11
    
    
    Securities Purchase Agreement by and among Carver Bancorp, Inc., Morgan Stanley & Co.
Incorporated and Provender Opportunities Fund L.P. (5)10.12
    
    
    Registration Rights Agreement by and among Carver Bancorp, Inc., Morgan Stanley & Co.
Incorporated and Provender Opportunities Fund L.P. (5)10.13
    
    
    Settlement Agreement and Mutual Release by and among BBC Capital Market, Inc., The Boston Bank
of Commerce, Kevin Cohee and Teri Williams; Carver Bancorp, Inc., Deborah C. Wright, David N.
Dinkins, Linda H. Dunham, Robert J. Franz, Pazel G. Jackson, Jr., Herman Johnson and David R.
Jones; Morgan Stanley & Co., Incorporated; and Provender Opportunities Fund, L.P. and Frederick
O. Terrell (5)10.14
    
    
    Amendment to the Carver Bancorp, Inc. 1995 Stock Option Plan (6) (*)10.15
    
    
    Amended and Restated Employment Agreement by and between Carver Federal Savings Bank and Deborah
C. Wright, entered into as of June 1, 1999 (7) (*)10.16
    
    
    Amended and Restated Employment Agreement by and between Carver Bancorp, Inc. and Deborah C.
Wright, entered into as of June 1, 1999 (7) (*)10.17
    
    
    Form of Letter Employment Agreement between Executive Officers and Carver Bancorp, Inc. (7) (*)10.18
    
    
    Carver Bancorp, Inc. Compensation Plan for Non-Employee Directors (9) (*)10.19
    
    
    Amendment Number One to Carver Federal Savings Bank Retirement Income Plan, as amended and
restated effective as of January 1, 1997 and as further amended through January 1, 2001 (9)10.20
    
    
    First Amendment to the Restatement of the Carver Federal Savings Bank 401(k) Savings Plan (9) (*)10.21
    
    
    Second Amendment to the Restatement of the Carver Federal Savings Bank 401(k) Savings Plan for
EGTRRA (9) (*)10.22
    
    
    Guarantee Agreement by and between Carver Bancorp, Inc. and U.S. Bank National Association,
dated as of September 17, 2003 (8)10.23
    
    
    Amended and Restated Declaration of Trust by and among, U.S. Bank National Association, as
Institutional Trustee, Carver Bancorp, Inc., as Sponsor, and Linda Dunn, William Gray and
Deborah Wright, as Administrators, dated as of September 17, 2003 (8)10.24
    
    
    Indenture, dated as of September 17, 2003, between Carver Bancorp, Inc., as Issuer, and U.S.
Bank National Association, as Trustee (8)10.25
    
    
    Second Amendment to the Carver Bancorp, Inc. Management Recognition Plan, effective as of
September 23, 2003 (11) (*)10.26
    
    
    Amended Share Voting Stipulation and Undertaking made by Carver Bancorp, Inc. in favor of the
OTS, made as of April 22, 2004 (11)10.27
    
    
    Trust Agreement between Carver Bancorp, Inc. and American Stock & Transfer Trust Company, dated
May 3, 2004 (11)
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##### Table of Contents



ExhibitNumber
    
    Description10.28
    
    
    First Amendment to the Carver Bancorp, Inc. Retirement Income Plan, effective as of March 28, 2005 (12) (*)10.29
    
    
    Sixth Amendment to the Carver Bancorp, Inc. Employee Stock Ownership Plan, effective as of March 28, 2005
(12) (*)10.30
    
    
    Carver Bancorp, Inc. 2006 Stock Incentive Plan, effective as of September 12, 2006 (14) (*)10.31
    
    

Performance
Compensation Plan of Carver Bancorp, Inc. effective as of
December 14, 2006 (15) (*)10.32
    
    
    Amendment to the Carver Bancorp, In. Stock Incentive Plan (16) (*)10.33
    
    
    Amendment to the Carver Bancorp, Inc. Performance Compensation Plan (16) (*)10.34
    
    
    First Amendment to the Employment Agreement Entered into as of June 1, 1999 Between Carver Bancorp, Inc.
and Deborah C. Wright (16) (*)10.35
    
    
    First Amendment to the Employment Agreement Entered into as of June 1, 1999 Between Carver Federal Savings
Bank and Deborah C. Wright (16) (*)14
    
    
    Code of ethics (13)21.1
    
    
    Subsidiaries of the Registrant31.1
    
    
    Certifications of Chief Executive Officer31.2
    
    
    Certifications of Chief Financial Officer32.1
    
    
    Written Statement of Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, 18 U.S.C. Section 135032.2
    
    
    Written Statement of Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, 18 U.S.C. Section 135033.1
    
    
    Consent of Independent Registered Public Accounting Firm
 (*)
    
    Management Contract or Compensatory Plan.(1)
    
    Incorporated herein by reference to Registration Statement No. 333-5559 on Form S-4 of the
Registrant filed with the Securities and Exchange Commission on June 7, 1996.(2)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 1998.(3)
    
    Incorporated herein by reference to the Exhibits to the Registrants Report on Form 8-K,
dated April 6, 2006.(4)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 1999.(5)
    
    Incorporated herein by reference to the Exhibits to the Registrants Report on Form 8-K,
dated January 14, 2000.(6)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 2000.(7)
    
    Incorporated herein by reference to the Registrants Proxy Statement dated January 25, 2001.  106




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##### Table of Contents



(8)
    
    Incorporated herein by reference to the Exhibits to the Registrants Quarterly Report on Form 10-Q
for the three months ended September 30, 2003.(9)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 2003.(10)
    
    Incorporated herein by reference to the Exhibits to the Registrants Report on Form 8-K,
dated December 19, 2008.(11)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 2001.(12)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 2005.(13)
    
    Incorporated herein by reference to the Exhibits to the Registrants Annual Report on Form
10-K for the fiscal year ended March 31, 2006.(14)
    
    Incorporated herein by reference to the Exhibits to the Registrants Definitive Proxy
Statement on Form 14A filed with the Securities and Exchange Commission on July 31, 2006.(15)
    
    Incorporated herein by reference to the Registrants Report on Form 8-K filed with the
Securities and Exchange Commission on December 19, 2006.(16)
    
    Incorporated herein by reference to the Exhibits to the Registrants Quarterly Report on Form
10-Q for the quarter ended December 31, 2008, filed with the Securities and Exchange
Commission on February 17, 2009.  107