##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K/A
 Amendment No. 1
 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, 2008
 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 o
 o o
 o
  o Large Accelerated Filer
    
    o Accelerated Filer
    
    o Non-accelerated Filer
    
    þ Smaller Reporting Company
 o Yes þ No




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TABLE OF CONTENTS  PART IIITEM 6. SELECTED FINANCIAL DATACONSOLIDATED STATEMENTS OF FINANCIAL CONDITIONCONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CASH FLOWSITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL      CONDITION AND RESULTS OF OPERATIONSITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATACONSOLIDATED STATEMENTS OF FINANCIAL CONDITIONCONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED STATEMENTS OF FINANCIAL CONDITIONCONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOMECONSOLIDATED STATEMENTS OF CASH FLOWSITEM 9A. DISCLOSURE CONTROLS AND PROCEDURESPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULESSIGNATURESEXHIBIT INDEXExhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents    
 PART II
 
 ITEM 6. SELECTED FINANCIAL DATA.
  2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Restated)
    
    
    (Restated)Selected Financial Condition Data:Assets
    
    $
    796,182
    
    
    $
    739,530
    
    
    $
    661,396
    
    
    $
    626,377
    
    
    $
    538,830Loans held-for-sale
    
    
    23,767
    
    
    
    23,226
    
    
    
    
    
    
    
    
    
    
    
    Total loans receivable, net
    
    
    627,231
    
    
    
    579,866
    
    
    
    493,432
    
    
    
    421,987
    
    
    
    351,900Securities
    
    
    38,172
    
    
    
    67,117
    
    
    
    108,286
    
    
    
    149,335
    
    
    
    139,877Cash and cash equivalents
    
    
    27,368
    
    
    
    17,350
    
    
    
    22,904
    
    
    
    20,420
    
    
    
    22,774Deposits
    
    
    654,663
    
    
    
    615,122
    
    
    
    504,638
    
    
    
    455,870
    
    
    
    375,519Borrowed funds
    
    
    58,625
    
    
    
    61,093
    
    
    
    93,792
    
    
    
    115,299
    
    
    
    104,282Stockholders equity
    
    
    53,881
    
    
    
    51,142
    
    
    
    48,697
    
    
    
    45,801
    
    
    
    44,645Number of deposit accounts
    
    
    46,771
    
    
    
    46,034
    
    
    
    41,614
    
    
    
    40,199
    
    
    
    38,578Number of branches
    
    
    10
    
    
    
    10
    
    
    
    8
    
    
    
    8
    
    
    
    6Operating Data:Interest income
    
    $
    48,132
    
    
    $
    41,740
    
    
    $
    32,385
    
    
    $
    28,546
    
    
    $
    26,234Interest expense
    
    
    22,656
    
    
    
    19,234
    
    
    
    13,493
    
    
    
    9,758
    
    
    
    8,700Net interest income before provision for loan losses
    
    
    25,476
    
    
    
    22,506
    
    
    
    18,892
    
    
    
    18,788
    
    
    
    17,534Provision for loan losses
    
    
    222
    
    
    
    276
    
    
    
    
    
    
    
    
    
    
    
    Net interest income after provision for loan losses
    
    
    25,254
    
    
    
    22,230
    
    
    
    18,892
    
    
    
    18,788
    
    
    
    17,534Non-interest income
    
    
    7,861
    
    
    
    2,869
    
    
    
    5,341
    
    
    
    4,075
    
    
    
    5,278Non-interest expense
    
    
    29,898
    
    
    
    24,100
    
    
    
    19,134
    
    
    
    18,696
    
    
    
    15,480Income before income taxes
    
    
    3,217
    
    
    
    999
    
    
    
    5,099
    
    
    
    4,167
    
    
    
    7,332Income tax (benefit) expense
    
    
    (892
    )
    
    
    (1,099
    )
    
    
    1,329
    
    
    
    1,518
    
    
    
    2,493Minority interest, net of taxes
    
    
    146
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    3,963
    
    
    $
    2,098
    
    
    $
    3,770
    
    
    $
    2,649
    
    
    $
    4,839Basic earnings per common share
    
    $
    1.59
    
    
    $
    0.84
    
    
    $
    1.50
    
    
    $
    1.06
    
    
    $
    2.03Diluted earnings per common share
    
    $
    1.55
    
    
    $
    0.81
    
    
    $
    1.45
    
    
    $
    1.03
    
    
    $
    1.87Cash dividends per common share
    
    $
    0.40
    
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.26
    
    
    $
    0.20Selected Statistical Data:Return on average assets (1)
    
    
    0.52
    %
    
    
    0.30
    %
    
    
    0.60
    %
    
    
    0.45
    %
    
    
    0.93
    %Return on average equity (2)
    
    
    7.23
    
    
    
    4.25
    
    
    
    7.93
    
    
    
    5.80
    
    
    
    11.40Net interest margin (3)
    
    
    3.62
    
    
    
    3.44
    
    
    
    2.97
    
    
    
    3.41
    
    
    
    3.56Average interest rate spread (4)
    
    
    3.34
    
    
    
    3.16
    
    
    
    3.18
    
    
    
    3.26
    
    
    
    3.40Efficiency ratio (5)
    
    
    90.31
    
    
    
    94.98
    
    
    
    78.96
    
    
    
    81.77
    
    
    
    67.86Operating expense to average assets (6)
    
    
    3.92
    
    
    
    3.34
    
    
    
    3.04
    
    
    
    3.21
    
    
    
    2.97Average equity to average assets
    
    
    7.16
    
    
    
    7.05
    
    
    
    7.54
    
    
    
    7.84
    
    
    
    8.13Dividend payout ratio (7)
    
    
    24.50
    
    
    
    34.04
    
    
    
    20.63
    
    
    
    24.64
    
    
    
    9.86Asset Quality Ratios:Non-performing assets to total assets (8)
    
    
    0.50
    %
    
    
    0.61
    %
    
    
    0.42
    %
    
    
    0.16
    %
    
    
    0.39
    %Non-performing loans to total loans receivable (8)
    
    
    0.43
    
    
    
    0.74
    
    
    
    0.55
    
    
    
    0.23
    
    
    
    0.60Allowance for loan losses to total loans receivable
    
    
    0.74
    
    
    
    0.89
    
    
    
    0.81
    
    
    
    0.96
    
    
    
    1.16
 (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.  2




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##### Table of Contents



RESTATEMENT
     Immaterial
Corrections
     3




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2007(As Previously
    
    
    
    
    
    
    
    
    
    
    (As PreviouslyReported)(1)
    
    
    Adjustment
    
    
    (As Restated)
    
    
    Reported)(1)
    
    
    Adjustment
    
    
    (As Restated)ASSETSCash and cash equivalents:Cash and due from banks
    
    $
    15,920
    
    
    $
    
    
    
    $
    15,920
    
    
    $
    14,619
    
    
    $
    
    
    
    
    14,619Federal funds sold
    
    
    10,500
    
    
    
    
    
    
    
    10,500
    
    
    
    1,300
    
    
    
    
    
    
    
    1,300Interest earning deposits
    
    
    948
    
    
    
    
    
    
    
    948
    
    
    
    1,431
    
    
    
    
    
    
    
    1,431Total cash and cash equivalents
    
    
    27,368
    
    
    
    
    
    
    
    27,368
    
    
    
    17,350
    
    
    
    
    
    
    
    17,350Securities:Available-for-sale, at fair value
    
    
    20,865
    
    
    
    
    
    
    
    20,865
    
    
    
    47,980
    
    
    
    
    
    
    
    47,980Held-to-maturity, at amortized cost
    
    
    17,307
    
    
    
    
    
    
    
    17,307
    
    
    
    19,137
    
    
    
    
    
    
    
    19,137Total securities
    
    
    38,172
    
    
    
    
    
    
    
    38,172
    
    
    
    67,117
    
    
    
    
    
    
    
    67,117Loans held-for-sale
    
    
    23,767
    
    
    
    
    
    
    
    23,767
    
    
    
    23,226
    
    
    
    
    
    
    
    23,226Loans receivable:Real estate mortgage loans
    
    
    578,957
    
    
    
    
    
    
    
    578,957
    
    
    
    533,667
    
    
    
    
    
    
    
    533,667Commercial business loans
    
    
    51,424
    
    
    
    
    
    
    
    51,424
    
    
    
    50,541
    
    
    
    
    
    
    
    50,541Consumer loans
    
    
    1,728
    
    
    
    
    
    
    
    1,728
    
    
    
    1,067
    
    
    
    
    
    
    
    1,067Allowance for loan losses
    
    
    (4,878
    )
    
    
    
    
    
    
    (4,878
    )
    
    
    (5,409
    )
    
    
    
    
    
    
    (5,409
    )Total loans receivable, net
    
    
    627,231
    
    
    
    
    
    
    
    627,231
    
    
    
    579,866
    
    
    
    
    
    
    
    579,866Office properties and equipment, net
    
    
    15,780
    
    
    
    
    
    
    
    15,780
    
    
    
    14,626
    
    
    
    
    
    
    
    14,626Federal Home Loan Bank of New York stock, at cost
    
    
    1,625
    
    
    
    
    
    
    
    1,625
    
    
    
    3,239
    
    
    
    
    
    
    
    3,239Bank owned life insurance
    
    
    9,141
    
    
    
    
    
    
    
    9,141
    
    
    
    8,795
    
    
    
    
    
    
    
    8,795Accrued interest receivable
    
    
    4,063
    
    
    
    
    
    
    
    4,063
    
    
    
    4,335
    
    
    
    
    
    
    
    4,335Goodwill
    
    
    7,055
    
    
    
    
    
    
    
    7,055
    
    
    
    6,401
    
    
    
    
    
    
    
    6,401Core deposit intangibles, net
    
    
    532
    
    
    
    
    
    
    
    532
    
    
    
    684
    
    
    
    
    
    
    
    684Other assets
    
    
    41,870
    
    
    
    (422
    )
    
    
    41,448
    
    
    
    14,313
    
    
    
    (422
    )
    
    
    13,891Total assets
    
    $
    796,604
    
    
    $
    (422
    )
    
    $
    796,182
    
    
    $
    739,952
    
    
    $
    (422
    )
    
    $
    739,530LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits
    
    $
    654,663
    
    
    $
    
    
    
    $
    654,663
    
    
    $
    615,122
    
    
    $
    
    
    
    
    615,122Advances from the FHLB-NY and other borrowed
money
    
    
    58,625
    
    
    
    
    
    
    
    58,625
    
    
    
    61,093
    
    
    
    
    
    
    
    61,093Other liabilities
    
    
    9,800
    
    
    
    63
    
    
    
    9,863
    
    
    
    12,110
    
    
    
    63
    
    
    
    12,173Total liabilities
    
    
    723,088
    
    
    
    63
    
    
    
    723,151
    
    
    
    688,325
    
    
    
    63
    
    
    
    688,388Minority interest
    
    
    19,150
    
    
    
    
    
    
    
    19,150
    
    
    
    
    
    
    
    
    
    
    
    Stockholders equity:Common stock
    
    
    25
    
    
    
    
    
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    25Additional paid-in capital
    
    
    24,113
    
    
    
    
    
    
    
    24,113
    
    
    
    23,996
    
    
    
    
    
    
    
    23,996Retained earnings
    
    
    30,473
    
    
    
    (485
    )
    
    
    29,988
    
    
    
    27,436
    
    
    
    (485
    )
    
    
    26,951Unamortized awards of common stock under ESOP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Treasury stock, at cost
    
    
    (670
    )
    
    
    
    
    
    
    (670
    )
    
    
    (277
    )
    
    
    
    
    
    
    (277
    )Accumulated other comprehensive income
    
    
    425
    
    
    
    
    
    
    
    425
    
    
    
    451
    
    
    
    
    
    
    
    451Total stockholders equity
    
    
    54,366
    
    
    
    (485
    )
    
    
    53,881
    
    
    
    51,627
    
    
    
    (485
    )
    
    
    51,142Total liabilities and stockholders equity
    
    $
    796,604
    
    
    $
    (422
    )
    
    $
    796,182
    
    
    $
    739,952
    
    
    $
    (422
    )
    
    $
    739,530
 (1)
    
    Includes adjustments for
immaterial corrections to reclassify $685,000 from commercial
business loans to goodwill as of 3/31/07 and to reflect additional
audit expenses of $28,000
($17,000 after tax) in fiscal
2008 net income.  4




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF INCOME
  Years Ended March 31,2007
    
    
    2007
    
    
    2007(As PreviouslyReported)
    
    
    Adjustment
    
    
    (As Restated)Interest Income:Loans
    
    $
    37,277
    
    
    $
    
    
    
    $
    37,277Mortgage-backed securities
    
    
    2,877
    
    
    
    
    
    
    
    2,877Investment securities
    
    
    1,325
    
    
    
    
    
    
    
    1,325Federal funds sold
    
    
    261
    
    
    
    
    
    
    
    261Total interest income
    
    
    41,740
    
    
    
    
    
    
    
    41,740Interest expense:Deposits
    
    
    15,227
    
    
    
    
    
    
    
    15,227Advances and other borrowed money
    
    
    4,007
    
    
    
    
    
    
    
    4,007Total interest expense
    
    
    19,234
    
    
    
    
    
    
    
    19,234Net interest income
    
    
    22,506
    
    
    
    
    
    
    
    22,506Provision for loan losses
    
    
    276
    
    
    
    
    
    
    
    276Net interest income after provision for loan losses
    
    
    22,230
    
    
    
    
    
    
    
    22,230Non-interest income:Depository fees and charges
    
    
    2,476
    
    
    
    
    
    
    
    2,476Loan fees and service charges
    
    
    1,238
    
    
    
    
    
    
    
    1,238Write-down of loans held for sale
    
    
    (702
    )
    
    
    
    
    
    
    (702
    )Gain (loss) on sale of securities
    
    
    (624
    )
    
    
    
    
    
    
    (624
    )Gain on sale of loans
    
    
    192
    
    
    
    
    
    
    
    192Loss on sale of real estate owned
    
    
    (108
    )
    
    
    
    
    
    
    (108
    )Other
    
    
    397
    
    
    
    
    
    
    
    397Total non-interest income
    
    
    2,869
    
    
    
    
    
    
    
    2,869Non-interest expense:Employee compensation and benefits
    
    
    10,470
    
    
    
    
    
    
    
    10,470Net occupancy expense
    
    
    2,667
    
    
    
    
    
    
    
    2,667Equipment, net
    
    
    2,071
    
    
    
    
    
    
    
    2,071Merger related expenses
    
    
    1,258
    
    
    
    
    
    
    
    1,258Consulting Expense
    
    
    496
    
    
    
    
    
    
    
    496Other
    
    
    6,377
    
    
    
    761
    
    
    
    7,138Total non-interest expense
    
    
    23,339
    
    
    
    761
    
    
    
    24,100Income before income taxes and minority interes
    
    
    1,760
    
    
    
    (761
    )
    
    
    999Income tax (benefit) expense
    
    
    (823
    )
    
    
    (276
    )
    
    
    (1,099
    )Minority interest, net of taxes
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    2,583
    
    
    $
    (485
    )
    
    $
    2,098Earnings per common share:Basic
    
    $
    1.03
    
    
    $
    (0.19
    )
    
    $
    0.84Diluted
    
    $
    1.00
    
    
    $
    (0.19
    )
    
    $
    0.81
  5




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In thousands)
 (As Previously Reported)
 Common
    
    
    CommonAdditional
    
    
    
    
    
    
    Stock
    
    
    Stock
    
    
    
    
    
    
    Accumulated Other
    
    
    Total Stock-Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Acquired
    
    
    Acquired
    
    
    Retained
    
    
    Comprehensive
    
    
    HoldersStock
    
    
    Capital
    
    
    Stock
    
    
    By ESOP
    
    
    By MRP
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalanceMarch 31, 2005
    
    $
    25
    
    
    $
    23,937
    
    
    $
    (420
    )
    
    $
    (126
    )
    
    $
    (128
    )
    
    $
    22,748
    
    
    $
    (235
    )
    
    $
    45,801Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    
    
    
    
    3,770Loss on pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (281
    )
    
    
    (281
    )Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )
    
    
    (158
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    (439
    )
    
    
    3,331Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (782
    )
    
    
    
    
    
    
    (782
    )Treasury stock activity
    
    
    
    
    
    
    (2
    )
    
    
    117
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Balance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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,583
    
    
    
    
    
    
    
    2,583Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    79Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    765
    
    
    
    765Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,583
    
    
    
    844
    
    
    
    3,427Dividends 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
    )
    
    
    
    
    
    
    27,436
    
    
    
    451
    
    
    
    51,627Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,980
    
    
    
    
    
    
    
    3,980Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    195
    
    
    
    195Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (221
    )
    
    
    (221
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,980
    
    
    
    (26
    )
    
    
    3,954Adjustment 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
    )
    
    $
    
    
    
    $
    
    
    
    $
    30,490
    
    
    $
    425
    
    
    $
    54,383
   6




---



##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In thousands)
 (As Restated)
 Common
    
    
    CommonAdditional
    
    
    
    
    
    
    Stock
    
    
    Stock
    
    
    
    
    
    
    Accumulated Other
    
    
    Total Stock-Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Acquired
    
    
    Acquired
    
    
    Retained
    
    
    Comprehensive
    
    
    HoldersStock
    
    
    Capital
    
    
    Stock
    
    
    By ESOP
    
    
    By MRP
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalanceMarch 31, 2005
    
    $
    25
    
    
    $
    23,937
    
    
    $
    (420
    )
    
    $
    (126
    )
    
    $
    (128
    )
    
    $
    22,748
    
    
    $
    (235
    )
    
    $
    45,801Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    
    
    
    
    3,770Loss on pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (281
    )
    
    
    (281
    )Change in net unrealized loss on
available-
for-sale securities, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )
    
    
    (158
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    (439
    )
    
    
    3,331Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (782
    )
    
    
    
    
    
    
    (782
    )Treasury stock activity
    
    
    
    
    
    
    (2
    )
    
    
    117
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Balance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 (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
(as restated)
    
    
    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
    )Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceMarch 31, 2008
(as restated)
    
    $
    25
    
    
    $
    24,113
    
    
    $
    (670
    )
    
    $
    
    
    
    $
    
    
    
    $
    29,988
    
    
    $
    425
    
    
    $
    53,881
   7




---



##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Years Ended March 31,2007
    
    
    2007
    
    
    2007(As PreviouslyReported)
    
    
    Adjustment
    
    
    (As Restated)Cash flows from operating activites:Net income
    
    $
    2,583
    
    
    $
    (485
    )
    
    $
    2,098Adjustments to reconcile net income to net cash from operating activities:Provision for loan losses
    
    
    276
    
    
    
    
    
    
    
    276Stock based compensation expense
    
    
    426
    
    
    
    
    
    
    
    426Depreciation and amortization expense
    
    
    1,581
    
    
    
    
    
    
    
    1,581Amortization of premiums and discounts
    
    
    (1,145
    )
    
    
    
    
    
    
    (1,145
    )Impairment charge on securities
    
    
    
    
    
    
    
    
    
    
    (Gain) Loss from sale of securities
    
    
    624
    
    
    
    
    
    
    
    624Gain on sale of loans
    
    
    (192
    )
    
    
    
    
    
    
    (192
    )Writedown on loans held-for-sale
    
    
    702
    
    
    
    
    
    
    
    702Loss on sale of real estate owned
    
    
    108
    
    
    
    
    
    
    
    108Originations of loans held-for-sale
    
    
    (24,708
    )
    
    
    
    
    
    
    (24,708
    )Proceeds from sale of loans held-for-sale
    
    
    14,422
    
    
    
    
    
    
    
    14,422Changes in assets and liabilities:Decrease (increase) in accrued interest receivable
    
    
    (1,365
    )
    
    
    
    
    
    
    (1,365
    )Increase in other assets
    
    
    (2,662
    )
    
    
    422
    
    
    
    (2,240
    )(Decrease) increase in other liabilities
    
    
    (4,330
    )
    
    
    63
    
    
    
    (4,267
    )Net cash (used in) provided by operating activities
    
    
    (13,680
    )
    
    
    
    
    
    
    (13,680
    )Cash flows from investing activites:Purchases of securities:Available-for-sale
    
    
    
    
    
    
    
    
    
    
    Proceeds from principal payments, maturities and calls of securities:Available-for-sale
    
    
    26,539
    
    
    
    
    
    
    
    26,539Held-to-maturity
    
    
    7,185
    
    
    
    
    
    
    
    7,185Proceeds from sales of available-for-sale securities
    
    
    57,942
    
    
    
    
    
    
    
    57,942Originations of loans held-for-investment
    
    
    (105,284
    )
    
    
    
    
    
    
    (105,284
    )Loans purchased from third parties
    
    
    (58,191
    )
    
    
    
    
    
    
    (58,191
    )Principal collections on loans
    
    
    146,410
    
    
    
    
    
    
    
    146,410Proceeds from sales of loan originations held-for-investment
    
    
    16,548
    
    
    
    
    
    
    
    16,548Redemption of FHLB-NY stock
    
    
    1,388
    
    
    
    
    
    
    
    1,388Additions to premises and equipment
    
    
    (1,869
    )
    
    
    
    
    
    
    (1,869
    )Proceeds from sale of real estate owned
    
    
    404
    
    
    
    
    
    
    
    404Payments for acquisition, net of cash acquired
    
    
    (2,425
    )
    
    
    
    
    
    
    (2,425
    )Net cash (used in) provided by investing activities
    
    
    88,647
    
    
    
    
    
    
    
    88,647Cash flows from financing activites:Net increase (decrease) in deposits
    
    
    (33,657
    )
    
    
    
    
    
    
    (33,657
    )Net repayment of FHLB advances and other borrowings
    
    
    (45,660
    )
    
    
    
    
    
    
    (45,660
    )Common stock repurchased
    
    
    (321
    )
    
    
    
    
    
    
    (321
    )Dividends paid
    
    
    (883
    )
    
    
    
    
    
    
    (883
    )Net cash provided by (used in) financing activities
    
    
    (80,521
    )
    
    
    
    
    
    
    (80,521
    )Net (decrease) increase in cash and cash equivalents
    
    
    (5,554
    )
    
    
    
    
    
    
    (5,554
    )Cash and cash equivalents at beginning of period
    
    
    22,904
    
    
    
    
    
    
    
    22,904Cash and cash equivalents at end of period
    
    $
    17,350
    
    
    $
    
    
    
    $
    17,350Supplemental information:Noncash Transfers-Change in unrealized loss on valuation of available-for-sale
investments, net
    
    $
    765
    
    
    $
    
    
    
    $
    765Cash paid for-Interest
    
    $
    19,510
    
    
    $
    
    
    
    $
    19,510Income taxes
    
    $
    652
    
    
    $
    
    
    
    $
    652
  8




---



##### Table of Contents



PART II
 
 
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  Executive Summary
  Fiscal 2008
       9




---



##### Table of Contents



Fiscal 2009
     Acquisition of Community Capital Bank
    10




---



##### Table of Contents



New Markets Tax Credit Award
  Critical Accounting Policies
   Securities Impairment
  Allowance for Loan Losses
   11




---



##### Table of Contents




    
    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.
   12




---



##### Table of Contents



Asset/Liability Management
   Stock Repurchase Program
  Discussion of Market RiskInterest Rate Sensitivity Analysis
     13




---



##### Table of Contents



< 3 Mos.
    
    
    4-12 Mos.
    
    
    1-3 Yrs.
    
    
    3-5 Yrs.
    
    
    5-10 Yrs.
    
    
    10+ Yrs.
    
    
    TotalRate Sensitive Assets:Loans
    
    $
    171,142
    
    
    $
    65,102
    
    
    $
    113,724
    
    
    $
    127,919
    
    
    $
    70,390
    
    
    $
    107,599
    
    
    $
    655,876Mortgage Backed Securities
    
    
    5,265
    
    
    
    6,297
    
    
    
    8,728
    
    
    
    943
    
    
    
    2,823
    
    
    
    12,756
    
    
    
    36,812Federal Funds Sold
    
    
    10,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,500Investment Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,360
    
    
    
    
    
    
    
    1,360Total interest-earning assets
    
    
    186,907
    
    
    
    71,399
    
    
    
    122,452
    
    
    
    128,862
    
    
    
    74,573
    
    
    
    120,355
    
    
    
    704,548Rate Sensitive Liabilities:NOW accounts
    
    
    2,167
    
    
    
    2,500
    
    
    
    5,999
    
    
    
    5,086
    
    
    
    6,726
    
    
    
    5,689
    
    
    
    28,167Savings Accounts
    
    
    9,681
    
    
    
    11,168
    
    
    
    26,798
    
    
    
    22,719
    
    
    
    30,042
    
    
    
    25,411
    
    
    
    125,819Money market accounts
    
    
    3,502
    
    
    
    4,040
    
    
    
    9,694
    
    
    
    8,218
    
    
    
    10,867
    
    
    
    9,192
    
    
    
    45,513Certificate of Deposits
    
    
    136,426
    
    
    
    162,345
    
    
    
    25,690
    
    
    
    12,739
    
    
    
    399
    
    
    
    6
    
    
    
    337,604Borrowings
    
    
    1,000
    
    
    
    14,108
    
    
    
    
    
    
    
    30,142
    
    
    
    
    
    
    
    
    
    
    
    45,250Total interest-bearing liabilities
    
    
    152,776
    
    
    
    194,161
    
    
    
    68,181
    
    
    
    78,904
    
    
    
    48,034
    
    
    
    40,298
    
    
    
    582,353Interest Sensitivity Gap
    
    $
    34,131
    
    
    $
    (122,762
    )
    
    $
    54,271
    
    
    $
    49,958
    
    
    $
    26,539
    
    
    $
    80,057
    
    
    $
    122,194Cumulative Interest Sensitivity Gap
    
    $
    34,131
    
    
    $
    (88,631
    )
    
    $
    (34,360
    )
    
    $
    15,598
    
    
    $
    42,137
    
    
    $
    122,194Ratio of Cumulative Gap to Total
Rate
Sensitive assets
    
    
    4.84
    %
    
    
    -12.58
    %
    
    
    -4.88
    %
    
    
    2.21
    %
    
    
    5.98
    %
    
    
    17.34
    %
   Net Portfolio Value (NPV) Analysis.
   14




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##### Table of Contents



Net Portfolio Value
    
    
    NPV as % of PV of AssetsChange in Rate

    
    $ Amount
    
    
    $ Change
    
    
    % Change
    
    
    NPV Ratio
    
    
    Change+300 bp
    
    
    99,028
    
    
    
    -15,954
    
    
    
    -14
    %
    
    
    12.27
    %
    
    -154 bp+200 bp
    
    
    102,962
    
    
    
    -12,020
    
    
    
    -10
    %
    
    
    12.65
    %
    
    -117 bp+100 bp
    
    
    108,631
    
    
    
    -6,351
    
    
    
    -6
    %
    
    
    13.21
    %
    
    - 60 bp+50 bp
    
    
    111,870
    
    
    
    -3,112
    
    
    
    -3
    %
    
    
    13.52
    %
    
    - 30 bp0 bp
    
    
    114,982
    
    
    
    
    
    
    
    
    
    
    
    13.82
    %
    
     bp(50) bp
    
    
    117,979
    
    
    
    2,997
    
    
    
    3
    %
    
    
    14.10
    %
    
    28 bp(100) bp
    
    
    120,788
    
    
    
    5,806
    
    
    
    5
    %
    
    
    14.36
    %
    
    54 bp
 March 31,2008Risk Measures: +200 BP Rate Shock:Pre-Shock NPV Ratio: NPV as % of PV of Assets
    
    
    13.82
    %Post-Shock NPV Ratio
    
    
    12.65
    %Sensitivity Measure: Decline in NPV Ratio
    
    -117 bp
   15




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##### Table of Contents



Average Balance, Interest and Average Yields and Rates
  2008
    
    
    2007
    
    
    2006Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    CostInterest Earning Assets:Loans
    
    $
    639,583
    
    
    $
    44,499
    
    
    
    6.96
    %
    
    $
    558,058
    
    
    $
    37,278
    
    
    
    6.68
    %
    
    $
    443,461
    
    
    $
    26,563
    
    
    
    5.99
    %Mortgage-backed securities
    
    
    39,079
    
    
    
    2,071
    
    
    
    5.30
    %
    
    
    64,682
    
    
    
    2,877
    
    
    
    4.45
    %
    
    
    113,574
    
    
    
    4,439
    
    
    
    3.91
    %Investment securities
    
    
    22,902
    
    
    
    1,434
    
    
    
    6.26
    %
    
    
    27,161
    
    
    
    1,325
    
    
    
    4.88
    %
    
    
    25,698
    
    
    
    971
    
    
    
    3.78
    %Fed funds sold
    
    
    3,007
    
    
    
    128
    
    
    
    4.26
    %
    
    
    5,145
    
    
    
    261
    
    
    
    5.07
    %
    
    
    12,166
    
    
    
    412
    
    
    
    3.39
    %Total interest earning assets
    
    
    704,571
    
    
    
    48,132
    
    
    
    6.83
    %
    
    
    655,046
    
    
    
    41,741
    
    
    
    6.37
    %
    
    
    594,899
    
    
    
    32,385
    
    
    
    5.44
    %Non-interest earning assets
    
    
    63,440
    
    
    
    
    
    
    
    
    
    
    
    44,576
    
    
    
    
    
    
    
    
    
    
    
    35,198Total assets
    
    $
    768,011
    
    
    
    
    
    
    
    
    
    
    $
    699,622
    
    
    
    
    
    
    
    
    
    
    $
    630,097Interest Bearing Liabilities:Deposits:NOW demand
    
    $
    24,660
    
    
    
    138
    
    
    
    0.56
    %
    
    $
    25,313
    
    
    
    98
    
    
    
    0.39
    %
    
    $
    24,397
    
    
    
    74
    
    
    
    0.30
    %Savings and clubs
    
    
    131,627
    
    
    
    1,004
    
    
    
    0.76
    %
    
    
    136,785
    
    
    
    931
    
    
    
    0.68
    %
    
    
    137,934
    
    
    
    919
    
    
    
    0.67
    %Money market savings
    
    
    44,688
    
    
    
    1,193
    
    
    
    2.67
    %
    
    
    43,303
    
    
    
    1,133
    
    
    
    2.62
    %
    
    
    36,583
    
    
    
    601
    
    
    
    1.64
    %Certificates of deposit
    
    
    370,933
    
    
    
    16,489
    
    
    
    4.45
    %
    
    
    312,452
    
    
    
    13,036
    
    
    
    4.17
    %
    
    
    237,992
    
    
    
    7,297
    
    
    
    3.07
    %Mortgagors deposits
    
    
    2,687
    
    
    
    42
    
    
    
    1.56
    %
    
    
    2,154
    
    
    
    30
    
    
    
    1.39
    %
    
    
    2,044
    
    
    
    30
    
    
    
    1.47
    %Total deposits
    
    
    574,595
    
    
    
    18,866
    
    
    
    3.28
    %
    
    
    520,007
    
    
    
    15,228
    
    
    
    2.93
    %
    
    
    438,950
    
    
    
    8,921
    
    
    
    2.03
    %Borrowed money
    
    
    73,880
    
    
    
    3,790
    
    
    
    5.13
    %
    
    
    78,853
    
    
    
    4,007
    
    
    
    5.08
    %
    
    
    107,551
    
    
    
    4,572
    
    
    
    4.25
    %Total interest bearing liabilities
    
    
    648,475
    
    
    
    22,656
    
    
    
    3.49
    %
    
    
    598,860
    
    
    
    19,235
    
    
    
    3.21
    %
    
    
    546,501
    
    
    
    13,493
    
    
    
    2.47
    %Non-interest-bearing liabilities:Demand
    
    
    51,713
    
    
    
    
    
    
    
    
    
    
    
    40,676
    
    
    
    
    
    
    
    
    
    
    
    29,079Other liabilities
    
    
    12,803
    
    
    
    
    
    
    
    
    
    
    
    10,739
    
    
    
    
    
    
    
    
    
    
    
    6,980Total liabilities
    
    
    712,991
    
    
    
    
    
    
    
    
    
    
    
    650,275
    
    
    
    
    
    
    
    
    
    
    
    582,560Stockholders equity
    
    
    55,020
    
    
    
    
    
    
    
    
    
    
    
    49,347
    
    
    
    
    
    
    
    
    
    
    
    47,537Total liabilities and stockholders equity
    
    $
    768,011
    
    
    
    
    
    
    
    
    
    
    $
    699,622
    
    
    
    
    
    
    
    
    
    
    $
    630,097Net interest income
    
    
    
    
    
    $
    25,476
    
    
    
    
    
    
    
    
    
    
    $
    22,506
    
    
    
    
    
    
    
    
    
    
    $
    18,892Average interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.16
    %
    
    
    
    
    
    
    
    
    
    
    2.97
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.62
    %
    
    
    
    
    
    
    
    
    
    
    3.44
    %
    
    
    
    
    
    
    
    
    
    
    3.18
    %Ratio of avgerage interest-earning assets
to interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    108.65
    %
    
    
    
    
    
    
    
    
    
    
    109.38
    %
    
    
    
    
    
    
    
    
    
    
    108.86
    %
  16




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##### Table of Contents



Rate/Volume Analysis
  2008 vs. 2007
    
    
    2007 vs. 2006Increase (Decrease) due to
    
    
    Increase (Decrease) due toVolume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalInterest Earning Assets:Loans
    
    $
    5,626
    
    
    $
    1,595
    
    
    $
    7,221
    
    
    $
    6,864
    
    
    $
    3,060
    
    
    $
    9,924Investment securities
    
    
    (248
    )
    
    
    357
    
    
    
    109
    
    
    
    1,473
    
    
    
    172
    
    
    
    1,645Mortgage-backed securities
    
    
    (1,289
    )
    
    
    483
    
    
    
    (806
    )
    
    
    (3,377
    )
    
    
    1,102
    
    
    
    (2,276
    )Fed funds sold, FHLB stock & other
    
    
    (101
    )
    
    
    (32
    )
    
    
    (133
    )
    
    
    (238
    )
    
    
    205
    
    
    
    (33
    )Total interest earning assets
    
    
    3,988
    
    
    
    2,403
    
    
    
    6,391
    
    
    
    4,722
    
    
    
    4,539
    
    
    
    9,260Interest Bearing Liabilities:DepositsNOW demand
    
    
    (4
    )
    
    
    44
    
    
    
    40
    
    
    
    3
    
    
    
    20
    
    
    
    23Savings and clubs
    
    
    (39
    )
    
    
    112
    
    
    
    73
    
    
    
    (8
    )
    
    
    20
    
    
    
    12Money market savings
    
    
    37
    
    
    
    23
    
    
    
    60
    
    
    
    110
    
    
    
    356
    
    
    
    467Certificates of deposit
    
    
    2,580
    
    
    
    873
    
    
    
    3,453
    
    
    
    2,283
    
    
    
    2,632
    
    
    
    4,915Mortgagors deposits
    
    
    8
    
    
    
    4
    
    
    
    12
    
    
    
    2
    
    
    
    (2
    )
    
    
    0Total deposits
    
    
    2,582
    
    
    
    1,056
    
    
    
    3,638
    
    
    
    2,390
    
    
    
    3,026
    
    
    
    5,417Borrowed money
    
    
    (255
    )
    
    
    38
    
    
    
    (217
    )
    
    
    (1,220
    )
    
    
    893
    
    
    
    (327
    )Total interest bearing liabilities
    
    
    2,327
    
    
    
    1,094
    
    
    
    3,421
    
    
    
    1,170
    
    
    
    3,919
    
    
    
    5,090Net change in interest income
    
    $
    1,661
    
    
    $
    1,309
    
    
    $
    2,970
    
    
    $
    3,552
    
    
    $
    620
    
    
    $
    4,170
  Comparison of Financial Condition at March 31, 2008 and 2007
 Assets
     17




---



##### Table of Contents



Liabilities and Stockholders Equity
 Liabilities
      18




---



##### Table of Contents



Stockholders Equity
  Comparison of Operating Results for the Years Ended March 31, 2008 and 2007
 Net Income
  Interest Income
      19




---



##### Table of Contents



Interest Expense
    Net Interest Income Before Provision for Loan Losses
    20




---



##### 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.
  
    
    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.
  21




---



##### Table of Contents



Non-Interest Income
  Non-Interest Expense
  Income Tax Expense
   22




---



##### Table of Contents



Comparison of Operating Results for the Years Ended March 31, 2007 and 2006
 Net Income
 $ $
 Interest Income
      Interest Expense
   23




---



##### Table of Contents



Net Interest Income
   Provision for Loan Losses
    24




---



##### Table of Contents



Non-Interest Income
  Non-Interest
Expense
  Interest
Tax Expense
  Liquidity and Capital Resources
     25




---



##### Table of Contents



Off-Balance Sheet Arrangements and Contractual Obligations
    26




---



##### Table of Contents



Payments due by periodContractual
    
    
    
    
    
    Less than
    
    
    1  3
    
    
    3  5
    
    
    More thanObligations
    
    Total
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 yearsLong term debt obligations:FHLB advances
    
    $
    15,249
    
    
    $
    15,107
    
    
    $
    
    
    
    $
    142
    
    
    $
    Repo Borrowings
    
    
    30,141
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,141Guaranteed preferred beneficial
interest in
junior subordinated debentures
    
    
    13,375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,375Total long term debt obligations
    
    
    58,765
    
    
    
    15,107
    
    
    
    
    
    
    
    142
    
    
    
    43,516Operating lease obligations:Lease obligations for rental properties
    
    
    11,456
    
    
    
    1,517
    
    
    
    3,014
    
    
    
    2,262
    
    
    
    4,663Total contractual obligations
    
    $
    70,221
    
    
    $
    16,624
    
    
    $
    3,014
    
    
    $
    2,404
    
    
    $
    48,179
 Regulatory Capital Position
   Impact of Inflation and Changing Prices
   27




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 Report of Independent Registered Public Accounting Firm
 
    
  28




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  March 31,
    
    
    March 31,2008
    
    
    2007(As Restated)
    
    
    (As Restated)ASSETSCash and cash equivalents:Cash and due from banks
    
    $
    15,920
    
    
    
    14,619Federal funds sold
    
    
    10,500
    
    
    
    1,300Interest earning deposits
    
    
    948
    
    
    
    1,431Total cash and cash equivalents
    
    
    27,368
    
    
    
    17,350Securities:Available-for-sale, at fair value (including pledged as collateral of $20,621 and $34,649
at March 31, 2008 and 2007, respectively)
    
    
    20,865
    
    
    
    47,980Held-to-maturity, at amortized cost (including pledged as collateral of $16,643 and $18,581
at March 31, 2008 and 2007, respectively; fair value of $17,167 and $19,005 at March 31,
2008 and 2007, respectively)
    
    
    17,307
    
    
    
    19,137Total securities
    
    
    38,172
    
    
    
    67,117Loans held-for-sale
    
    
    23,767
    
    
    
    23,226Loans receivable:Real estate mortgage loans
    
    
    578,957
    
    
    
    533,667Commercial business loans
    
    
    51,424
    
    
    
    50,541Consumer loans
    
    
    1,728
    
    
    
    1,067Allowance for loan losses
    
    
    (4,878
    )
    
    
    (5,409
    )Total loans receivable, net
    
    
    627,231
    
    
    
    579,866Office properties and equipment, net
    
    
    15,780
    
    
    
    14,626Federal Home Loan Bank of New York stock, at cost
    
    
    1,625
    
    
    
    3,239Bank owned life insurance
    
    
    9,141
    
    
    
    8,795Accrued interest receivable
    
    
    4,063
    
    
    
    4,335Goodwill
    
    
    7,055
    
    
    
    6,401Core deposit intangibles, net
    
    
    532
    
    
    
    684Other assets
    
    
    41,448
    
    
    
    13,891Total assets
    
    $
    796,182
    
    
    $
    739,530LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits
    
    $
    654,663
    
    
    
    615,122Advances from the FHLB-NY and other borrowed money
    
    
    58,625
    
    
    
    61,093Other liabilities
    
    
    9,863
    
    
    
    12,173Total liabilities
    
    
    723,151
    
    
    
    688,388Minority interest
    
    
    19,150
    
    
    
    Stockholders equity:Preferred stock (par value $0.01 per share; 112 shares authorized; 112 issued and outstanding)
Common stock (par value $0.01 per share: 10,000,000 shares authorized; 2,524,691 shares
issued;
2,481,706 and 2,507,985 shares outstanding at March 31, 2008 and 2007, respectively)
    
    
    25
    
    
    
    25Additional paid-in capital
    
    
    24,113
    
    
    
    23,996Retained earnings
    
    
    29,988
    
    
    
    26,951Unamortized awards of common stock under ESOP
    
    
    
    
    
    
    (4
    )Treasury stock, at cost (42,985 and 16,706 shares at March 31, 2008 and 2007, respectively)
    
    
    (670
    )
    
    
    (277
    )Accumulated other comprehensive income
    
    
    425
    
    
    
    451Total stockholders equity
    
    
    53,881
    
    
    
    51,142Total liabilities and stockholders equity
    
    $
    796,182
    
    
    $
    739,530
   29




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF INCOME
  Years Ended March 31,2008
    
    
    2007
    
    
    2006(As Restated)Interest Income:Loans
    
    $
    44,499
    
    
    $
    37,277
    
    
    $
    26,563Mortgage-backed securities
    
    
    2,071
    
    
    
    2,877
    
    
    
    4,439Investment securities
    
    
    1,434
    
    
    
    1,325
    
    
    
    971Federal funds sold
    
    
    128
    
    
    
    261
    
    
    
    412Total interest income
    
    
    48,132
    
    
    
    41,740
    
    
    
    32,385Interest expense:Deposits
    
    
    18,866
    
    
    
    15,227
    
    
    
    8,921Advances and other borrowed money
    
    
    3,790
    
    
    
    4,007
    
    
    
    4,572Total interest expense
    
    
    22,656
    
    
    
    19,234
    
    
    
    13,493Net interest income
    
    
    25,476
    
    
    
    22,506
    
    
    
    18,892Provision for loan losses
    
    
    222
    
    
    
    276
    
    
    
    Net interest income after
provision for loan losses
    
    
    25,254
    
    
    
    22,230
    
    
    
    18,892Non-interest income:Depository fees and charges
    
    
    2,669
    
    
    
    2,476
    
    
    
    2,458Loan fees and service charges
    
    
    1,628
    
    
    
    1,238
    
    
    
    2,231Write-down of loans held for sale
    
    
    
    
    
    
    (702
    )
    
    
    Gain (loss) on sale of securities
    
    
    431
    
    
    
    (624
    )
    
    
    Gain on sale of loans
    
    
    323
    
    
    
    192
    
    
    
    351Loss on sale of real estate owned
    
    
    
    
    
    
    (108
    )
    
    
    New Market Tax Credit Transfer Fee
    
    
    1,700
    
    
    
    
    
    
    
    Other
    
    
    1,110
    
    
    
    397
    
    
    
    301Total non-interest income
    
    
    7,861
    
    
    
    2,869
    
    
    
    5,341Non-interest expense:Employee compensation and benefits
    
    
    13,323
    
    
    
    10,470
    
    
    
    9,512Net occupancy expense
    
    
    3,590
    
    
    
    2,667
    
    
    
    2,284Equipment, net
    
    
    2,451
    
    
    
    2,071
    
    
    
    1,939Merger related expenses
    
    
    
    
    
    
    1,258
    
    
    
    Consulting Expense
    
    
    2,733
    
    
    
    496
    
    
    
    307Other
    
    
    7,801
    
    
    
    7,138
    
    
    
    5,092Total non-interest expense
    
    
    29,898
    
    
    
    24,100
    
    
    
    19,134Income before income taxes and
minority interest
    
    
    3,217
    
    
    
    999
    
    
    
    5,099Income tax (benefit) expense
    
    
    (892
    )
    
    
    (1,099
    )
    
    
    1,329Minority interest, net of taxes
    
    
    146
    
    
    
    
    
    
    
    Net income
    
    $
    3,963
    
    
    $
    2,098
    
    
    $
    3,770Earnings per common share:Basic
    
    $
    1.59
    
    
    $
    0.84
    
    
    $
    1.50Diluted
    
    $
    1.55
    
    
    $
    0.81
    
    
    $
    1.45
   30




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In thousands)
 (As Restated)
 Common
    
    
    Common
    
    
    
    
    
    
    AccumulatedAdditional
    
    
    
    
    
    
    Stock
    
    
    Stock
    
    
    
    
    
    
    Other
    
    
    Total Stock-Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Acquired
    
    
    Acquired
    
    
    Retained
    
    
    Comprehensive
    
    
    HoldersStock
    
    
    Capital
    
    
    Stock
    
    
    By ESOP
    
    
    By MRP
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalanceMarch 31, 2005
    
    $
    25
    
    
    $
    23,937
    
    
    $
    (420
    )
    
    $
    (126
    )
    
    $
    (128
    )
    
    $
    22,748
    
    
    $
    (235
    )
    
    $
    45,801Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    
    
    
    
    3,770Loss on pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (281
    )
    
    
    (281
    )Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )
    
    
    (158
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    (439
    )
    
    
    3,331Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (782
    )
    
    
    
    
    
    
    (782
    )Treasury stock activity
    
    
    
    
    
    
    (2
    )
    
    
    117
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Balance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 (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
(as restated)
    
    
    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
(as restated)
    
    $
    25
    
    
    $
    24,113
    
    
    $
    (670
    )
    
    $
    
    
    
    $
    
    
    
    $
    29,988
    
    
    $
    425
    
    
    $
    53,881
   31




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Years Ended March 31,2008
    
    
    2007
    
    
    2006(As Restated)Cash flows from operating activites:Net income
    
    $
    3,963
    
    
    $
    2,098
    
    
    $
    3,770Adjustments to reconcile net income to net cash from operating activities:Provision for loan losses
    
    
    222
    
    
    
    276
    
    
    
    Stock based compensation expense
    
    
    272
    
    
    
    426
    
    
    
    233Depreciation and amortization expense
    
    
    1,709
    
    
    
    1,581
    
    
    
    1,546Amortization of premiums and discounts
    
    
    (250
    )
    
    
    (1,145
    )
    
    
    863(Gain) Loss from sale of securities
    
    
    (431
    )
    
    
    624
    
    
    
    Gain on sale of loans
    
    
    (323
    )
    
    
    (192
    )
    
    
    (351
    )Writedown on loans held-for-sale
    
    
    
    
    
    
    702
    
    
    
    Loss on sale of real estate owned
    
    
    
    
    
    
    108
    
    
    
    Originations of loans held-for-sale
    
    
    (20,172
    )
    
    
    (24,708
    )
    
    
    (12,646
    )Proceeds from sale of loans held-for-sale
    
    
    19,953
    
    
    
    14,422
    
    
    
    12,197Changes in assets and liabilities:Decrease (increase) in accrued interest receivable
    
    
    272
    
    
    
    (1,365
    )
    
    
    (268
    )Increase in other assets
    
    
    (29,702
    )
    
    
    (2,240
    )
    
    
    (2,430
    )(Decrease) increase in other liabilities
    
    
    (2,283
    )
    
    
    (4,267
    )
    
    
    4,249Net cash (used in) provided by operating activities
    
    
    (26,770
    )
    
    
    (13,680
    )
    
    
    7,163Cash flows from investing activites:Purchases of securities:Available-for-sale
    
    
    (15,265
    )
    
    
    
    
    
    
    (26,811
    )Held-to-maturity
    
    
    
    
    
    
    
    
    
    
    (19
    )Proceeds from principal payments, maturities and calls of securities:Available-for-sale
    
    
    7,358
    
    
    
    26,539
    
    
    
    60,645Held-to-maturity
    
    
    1,803
    
    
    
    7,185
    
    
    
    4,816Proceeds from sales of available-for-sale securities
    
    
    36,116
    
    
    
    57,942
    
    
    
    1,575Originations of loans held-for-investment
    
    
    (162,556
    )
    
    
    (105,284
    )
    
    
    (98,704
    )Loans purchased from third parties
    
    
    (29,736
    )
    
    
    (58,191
    )
    
    
    (96,140
    )Principal collections on loans
    
    
    145,458
    
    
    
    146,410
    
    
    
    113,482Proceeds from sales of loan originations held-for-investment
    
    
    
    
    
    
    16,548
    
    
    
    10,697Redemption of FHLB-NY stock
    
    
    1,614
    
    
    
    1,388
    
    
    
    498Additions to premises and equipment
    
    
    (2,862
    )
    
    
    (1,869
    )
    
    
    (1,082
    )Proceeds from sale of real estate owned
    
    
    
    
    
    
    404
    
    
    
    Payments for acquisition, net of cash acquired
    
    
    
    
    
    
    (2,425
    )
    
    
    Net cash (used in) provided by investing activities
    
    
    (18,070
    )
    
    
    88,647
    
    
    
    (31,043
    )Cash flows from financing activites:Net increase (decrease) in deposits
    
    
    39,541
    
    
    
    (33,657
    )
    
    
    48,768Net repayment of FHLB advances and other borrowings
    
    
    (2,527
    )
    
    
    (45,660
    )
    
    
    (21,507
    )Capital contribution by minority interest
    
    
    19,150
    
    
    
    
    
    
    
    Common stock repurchased
    
    
    (331
    )
    
    
    (321
    )
    
    
    (115
    )Dividends paid
    
    
    (975
    )
    
    
    (883
    )
    
    
    (782
    )Net cash provided by (used in) financing activities
    
    
    54,858
    
    
    
    (80,521
    )
    
    
    26,364Net (decrease) increase in cash and cash equivalents
    
    
    10,018
    
    
    
    (5,554
    )
    
    
    2,484Cash and cash equivalents at beginning of period
    
    
    17,350
    
    
    
    22,904
    
    
    
    20,420Cash and cash equivalents at end of period
    
    $
    27,368
    
    
    $
    17,350
    
    
    $
    22,904Supplemental information:Noncash Transfers-Change in unrealized loss on valuation of available-for-sale
investments, net
    
    $
    221
    
    
    $
    765
    
    
    $
    (158
    )Cash paid for-Interest
    
    $
    21,973
    
    
    $
    19,510
    
    
    $
    13,502Income taxes
    
    $
    922
    
    
    $
    652
    
    
    $
    2,107
   32




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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
 .
   33




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##### Table of Contents



NOTE 2. RESTATEMENT
     Immaterial
Corrections
     34




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2007(As Previously
    
    
    
    
    
    
    
    
    
    
    (As PreviouslyReported)(1)
    
    
    Adjustment
    
    
    (As Restated)
    
    
    Reported)(1)
    
    
    Adjustment
    
    
    (As Restated)ASSETSCash and cash equivalents:Cash and due from banks
    
    $
    15,920
    
    
    $
    
    
    
    $
    15,920
    
    
    $
    14,619
    
    
    $
    
    
    
    
    14,619Federal funds sold
    
    
    10,500
    
    
    
    
    
    
    
    10,500
    
    
    
    1,300
    
    
    
    
    
    
    
    1,300Interest earning deposits
    
    
    948
    
    
    
    
    
    
    
    948
    
    
    
    1,431
    
    
    
    
    
    
    
    1,431Total cash and cash equivalents
    
    
    27,368
    
    
    
    
    
    
    
    27,368
    
    
    
    17,350
    
    
    
    
    
    
    
    17,350Securities:Available-for-sale, at fair value
    
    
    20,865
    
    
    
    
    
    
    
    20,865
    
    
    
    47,980
    
    
    
    
    
    
    
    47,980Held-to-maturity, at amortized cost
    
    
    17,307
    
    
    
    
    
    
    
    17,307
    
    
    
    19,137
    
    
    
    
    
    
    
    19,137Total securities
    
    
    38,172
    
    
    
    
    
    
    
    38,172
    
    
    
    67,117
    
    
    
    
    
    
    
    67,117Loans held-for-sale
    
    
    23,767
    
    
    
    
    
    
    
    23,767
    
    
    
    23,226
    
    
    
    
    
    
    
    23,226Loans receivable:Real estate mortgage loans
    
    
    578,957
    
    
    
    
    
    
    
    578,957
    
    
    
    533,667
    
    
    
    
    
    
    
    533,667Commercial business loans
    
    
    51,424
    
    
    
    
    
    
    
    51,424
    
    
    
    50,541
    
    
    
    
    
    
    
    50,541Consumer loans
    
    
    1,728
    
    
    
    
    
    
    
    1,728
    
    
    
    1,067
    
    
    
    
    
    
    
    1,067Allowance for loan losses
    
    
    (4,878
    )
    
    
    
    
    
    
    (4,878
    )
    
    
    (5,409
    )
    
    
    
    
    
    
    (5,409
    )Total loans receivable, net
    
    
    627,231
    
    
    
    
    
    
    
    627,231
    
    
    
    579,866
    
    
    
    
    
    
    
    579,866Office properties and equipment, net
    
    
    15,780
    
    
    
    
    
    
    
    15,780
    
    
    
    14,626
    
    
    
    
    
    
    
    14,626Federal Home Loan Bank of New York stock, at cost
    
    
    1,625
    
    
    
    
    
    
    
    1,625
    
    
    
    3,239
    
    
    
    
    
    
    
    3,239Bank owned life insurance
    
    
    9,141
    
    
    
    
    
    
    
    9,141
    
    
    
    8,795
    
    
    
    
    
    
    
    8,795Accrued interest receivable
    
    
    4,063
    
    
    
    
    
    
    
    4,063
    
    
    
    4,335
    
    
    
    
    
    
    
    4,335Goodwill
    
    
    7,055
    
    
    
    
    
    
    
    7,055
    
    
    
    6,401
    
    
    
    
    
    
    
    6,401Core deposit intangibles, net
    
    
    532
    
    
    
    
    
    
    
    532
    
    
    
    684
    
    
    
    
    
    
    
    684Other assets
    
    
    41,870
    
    
    
    (422
    )
    
    
    41,448
    
    
    
    14,313
    
    
    
    (422
    )
    
    
    13,891Total assets
    
    $
    796,604
    
    
    $
    (422
    )
    
    $
    796,182
    
    
    $
    739,952
    
    
    $
    (422
    )
    
    $
    739,530LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits
    
    $
    654,663
    
    
    $
    
    
    
    $
    654,663
    
    
    $
    615,122
    
    
    $
    
    
    
    
    615,122Advances from the FHLB-NY and other borrowed
money
    
    
    58,625
    
    
    
    
    
    
    
    58,625
    
    
    
    61,093
    
    
    
    
    
    
    
    61,093Other liabilities
    
    
    9,800
    
    
    
    63
    
    
    
    9,863
    
    
    
    12,110
    
    
    
    63
    
    
    
    12,173Total liabilities
    
    
    723,088
    
    
    
    63
    
    
    
    723,151
    
    
    
    688,325
    
    
    
    63
    
    
    
    688,388Minority interest
    
    
    19,150
    
    
    
    
    
    
    
    19,150
    
    
    
    
    
    
    
    
    
    
    
    Stockholders equity:Common stock
    
    
    25
    
    
    
    
    
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    25Additional paid-in capital
    
    
    24,113
    
    
    
    
    
    
    
    24,113
    
    
    
    23,996
    
    
    
    
    
    
    
    23,996Retained earnings
    
    
    30,473
    
    
    
    (485
    )
    
    
    29,988
    
    
    
    27,436
    
    
    
    (485
    )
    
    
    26,951Unamortized awards of common stock under ESOP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Treasury stock, at cost
    
    
    (670
    )
    
    
    
    
    
    
    (670
    )
    
    
    (277
    )
    
    
    
    
    
    
    (277
    )Accumulated other comprehensive income
    
    
    425
    
    
    
    
    
    
    
    425
    
    
    
    451
    
    
    
    
    
    
    
    451Total stockholders equity
    
    
    54,366
    
    
    
    (485
    )
    
    
    53,881
    
    
    
    51,627
    
    
    
    (485
    )
    
    
    51,142Total liabilities and stockholders equity
    
    $
    796,604
    
    
    $
    (422
    )
    
    $
    796,182
    
    
    $
    739,952
    
    
    $
    (422
    )
    
    $
    739,530
 (1)
    
    Includes adjustments for
immaterial corrections to reclassify $685,000 from commercial
business loans to goodwill as of 3/31/07 and to reflect additional
audit expenses of $28,000 ($17,000 after tax) in fiscal
2008 net income.  35




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF INCOME
  Years Ended March 31,2007
    
    
    2007
    
    
    2007(As PreviouslyReported)
    
    
    Adjustment
    
    
    (As Restated)Interest Income:Loans
    
    $
    37,277
    
    
    $
    
    
    
    $
    37,277Mortgage-backed securities
    
    
    2,877
    
    
    
    
    
    
    
    2,877Investment securities
    
    
    1,325
    
    
    
    
    
    
    
    1,325Federal funds sold
    
    
    261
    
    
    
    
    
    
    
    261Total interest income
    
    
    41,740
    
    
    
    
    
    
    
    41,740Interest expense:Deposits
    
    
    15,227
    
    
    
    
    
    
    
    15,227Advances and other borrowed money
    
    
    4,007
    
    
    
    
    
    
    
    4,007Total interest expense
    
    
    19,234
    
    
    
    
    
    
    
    19,234Net interest income
    
    
    22,506
    
    
    
    
    
    
    
    22,506Provision for loan losses
    
    
    276
    
    
    
    
    
    
    
    276Net interest income after provision for loan losses
    
    
    22,230
    
    
    
    
    
    
    
    22,230Non-interest income:Depository fees and charges
    
    
    2,476
    
    
    
    
    
    
    
    2,476Loan fees and service charges
    
    
    1,238
    
    
    
    
    
    
    
    1,238Write-down of loans held for sale
    
    
    (702
    )
    
    
    
    
    
    
    (702
    )Gain (loss) on sale of securities
    
    
    (624
    )
    
    
    
    
    
    
    (624
    )Gain on sale of loans
    
    
    192
    
    
    
    
    
    
    
    192Loss on sale of real estate owned
    
    
    (108
    )
    
    
    
    
    
    
    (108
    )Other
    
    
    397
    
    
    
    
    
    
    
    397Total non-interest income
    
    
    2,869
    
    
    
    
    
    
    
    2,869Non-interest expense:Employee compensation and benefits
    
    
    10,470
    
    
    
    
    
    
    
    10,470Net occupancy expense
    
    
    2,667
    
    
    
    
    
    
    
    2,667Equipment, net
    
    
    2,071
    
    
    
    
    
    
    
    2,071Merger related expenses
    
    
    1,258
    
    
    
    
    
    
    
    1,258Consulting Expense
    
    
    496
    
    
    
    
    
    
    
    496Other
    
    
    6,377
    
    
    
    761
    
    
    
    7,138Total non-interest expense
    
    
    23,339
    
    
    
    761
    
    
    
    24,100Income before income taxes and minority interes
    
    
    1,760
    
    
    
    (761
    )
    
    
    999Income tax (benefit) expense
    
    
    (823
    )
    
    
    (276
    )
    
    
    (1,099
    )Minority interest, net of taxes
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    2,583
    
    
    $
    (485
    )
    
    $
    2,098Earnings per common share:Basic
    
    $
    1.03
    
    
    $
    (0.19
    )
    
    $
    0.84Diluted
    
    $
    1.00
    
    
    $
    (0.19
    )
    
    $
    0.81
  36




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In thousands)
 (As Previously Reported)
 Common
    
    
    CommonAdditional
    
    
    
    
    
    
    Stock
    
    
    Stock
    
    
    
    
    
    
    Accumulated Other
    
    
    Total Stock-Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Acquired
    
    
    Acquired
    
    
    Retained
    
    
    Comprehensive
    
    
    HoldersStock
    
    
    Capital
    
    
    Stock
    
    
    By ESOP
    
    
    By MRP
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalanceMarch 31, 2005
    
    $
    25
    
    
    $
    23,937
    
    
    $
    (420
    )
    
    $
    (126
    )
    
    $
    (128
    )
    
    $
    22,748
    
    
    $
    (235
    )
    
    $
    45,801Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    
    
    
    
    3,770Loss on pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (281
    )
    
    
    (281
    )Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )
    
    
    (158
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    (439
    )
    
    
    3,331Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (782
    )
    
    
    
    
    
    
    (782
    )Treasury stock activity
    
    
    
    
    
    
    (2
    )
    
    
    117
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Balance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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,583
    
    
    
    
    
    
    
    2,583Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    79Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    765
    
    
    
    765Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,583
    
    
    
    844
    
    
    
    3,427Dividends 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
    )
    
    
    
    
    
    
    27,436
    
    
    
    451
    
    
    
    51,627Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,980
    
    
    
    
    
    
    
    3,980Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    195
    
    
    
    195Change in net unrealized loss on
available-for-sale securities, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (221
    )
    
    
    (221
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,980
    
    
    
    (26
    )
    
    
    3,954Adjustment 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
    )
    
    $
    
    
    
    $
    
    
    
    $
    30,490
    
    
    $
    425
    
    
    $
    54,383
   37




---



##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In thousands)
 (As Restated)
 Common
    
    
    CommonAdditional
    
    
    
    
    
    
    Stock
    
    
    Stock
    
    
    
    
    
    
    Accumulated Other
    
    
    Total Stock-Common
    
    
    Paid-In
    
    
    Treasury
    
    
    Acquired
    
    
    Acquired
    
    
    Retained
    
    
    Comprehensive
    
    
    HoldersStock
    
    
    Capital
    
    
    Stock
    
    
    By ESOP
    
    
    By MRP
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalanceMarch 31, 2005
    
    $
    25
    
    
    $
    23,937
    
    
    $
    (420
    )
    
    $
    (126
    )
    
    $
    (128
    )
    
    $
    22,748
    
    
    $
    (235
    )
    
    $
    45,801Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    
    
    
    
    3,770Loss on pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (281
    )
    
    
    (281
    )Change in net unrealized loss on
available-
for-sale securities, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )
    
    
    (158
    )Comprehensive income, net of taxes:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    (439
    )
    
    
    3,331Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (782
    )
    
    
    
    
    
    
    (782
    )Treasury stock activity
    
    
    
    
    
    
    (2
    )
    
    
    117
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Balance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 (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
(as restated)
    
    
    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
    )Allocation of ESOP Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of shares for MRP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceMarch 31, 2008
(as restated)
    
    $
    25
    
    
    $
    24,113
    
    
    $
    (670
    )
    
    $
    
    
    
    $
    
    
    
    $
    29,988
    
    
    $
    425
    
    
    $
    53,881
   38




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##### Table of Contents



CARVER BANCORP, INC. AND SUBSIDIARIES
 
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Years Ended March 31,2007
    
    
    2007
    
    
    2007(As PreviouslyReported)
    
    
    Adjustment
    
    
    (As Restated)Cash flows from operating activites:Net income
    
    $
    2,583
    
    
    $
    (485
    )
    
    $
    2,098Adjustments to reconcile net income to net cash from operating activities:Provision for loan losses
    
    
    276
    
    
    
    
    
    
    
    276Stock based compensation expense
    
    
    426
    
    
    
    
    
    
    
    426Depreciation and amortization expense
    
    
    1,581
    
    
    
    
    
    
    
    1,581Amortization of premiums and discounts
    
    
    (1,145
    )
    
    
    
    
    
    
    (1,145
    )Impairment charge on securities
    
    
    
    
    
    
    
    
    
    
    (Gain) Loss from sale of securities
    
    
    624
    
    
    
    
    
    
    
    624Gain on sale of loans
    
    
    (192
    )
    
    
    
    
    
    
    (192
    )Writedown on loans held-for-sale
    
    
    702
    
    
    
    
    
    
    
    702Loss on sale of real estate owned
    
    
    108
    
    
    
    
    
    
    
    108Originations of loans held-for-sale
    
    
    (24,708
    )
    
    
    
    
    
    
    (24,708
    )Proceeds from sale of loans held-for-sale
    
    
    14,422
    
    
    
    
    
    
    
    14,422Changes in assets and liabilities:Decrease (increase) in accrued interest receivable
    
    
    (1,365
    )
    
    
    
    
    
    
    (1,365
    )Increase in other assets
    
    
    (2,662
    )
    
    
    422
    
    
    
    (2,240
    )(Decrease) increase in other liabilities
    
    
    (4,330
    )
    
    
    63
    
    
    
    (4,267
    )Net cash (used in) provided by operating activities
    
    
    (13,680
    )
    
    
    
    
    
    
    (13,680
    )Cash flows from investing activites:Purchases of securities:Available-for-sale
    
    
    
    
    
    
    
    
    
    
    Proceeds from principal payments, maturities and calls of securities:Available-for-sale
    
    
    26,539
    
    
    
    
    
    
    
    26,539Held-to-maturity
    
    
    7,185
    
    
    
    
    
    
    
    7,185Proceeds from sales of available-for-sale securities
    
    
    57,942
    
    
    
    
    
    
    
    57,942Originations of loans held-for-investment
    
    
    (105,284
    )
    
    
    
    
    
    
    (105,284
    )Loans purchased from third parties
    
    
    (58,191
    )
    
    
    
    
    
    
    (58,191
    )Principal collections on loans
    
    
    146,410
    
    
    
    
    
    
    
    146,410Proceeds from sales of loan originations held-for-investment
    
    
    16,548
    
    
    
    
    
    
    
    16,548Redemption of FHLB-NY stock
    
    
    1,388
    
    
    
    
    
    
    
    1,388Additions to premises and equipment
    
    
    (1,869
    )
    
    
    
    
    
    
    (1,869
    )Proceeds from sale of real estate owned
    
    
    404
    
    
    
    
    
    
    
    404Payments for acquisition, net of cash acquired
    
    
    (2,425
    )
    
    
    
    
    
    
    (2,425
    )Net cash (used in) provided by investing activities
    
    
    88,647
    
    
    
    
    
    
    
    88,647Cash flows from financing activites:Net increase (decrease) in deposits
    
    
    (33,657
    )
    
    
    
    
    
    
    (33,657
    )Net repayment of FHLB advances and other borrowings
    
    
    (45,660
    )
    
    
    
    
    
    
    (45,660
    )Common stock repurchased
    
    
    (321
    )
    
    
    
    
    
    
    (321
    )Dividends paid
    
    
    (883
    )
    
    
    
    
    
    
    (883
    )Net cash provided by (used in) financing activities
    
    
    (80,521
    )
    
    
    
    
    
    
    (80,521
    )Net (decrease) increase in cash and cash equivalents
    
    
    (5,554
    )
    
    
    
    
    
    
    (5,554
    )Cash and cash equivalents at beginning of period
    
    
    22,904
    
    
    
    
    
    
    
    22,904Cash and cash equivalents at end of period
    
    $
    17,350
    
    
    $
    
    
    
    $
    17,350Supplemental information:Noncash Transfers-Change in unrealized loss on valuation of available-for-sale
investments, net
    
    $
    765
    
    
    $
    
    
    
    $
    765Cash paid for-Interest
    
    $
    19,510
    
    
    $
    
    
    
    $
    19,510Income taxes
    
    $
    652
    
    
    $
    
    
    
    $
    652
  39




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##### Table of Contents



NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of consolidated financial statement presentation
     Cash and cash equivalents
  Securities
   Loans Held-for-Sale
  Loans Receivable
     40




---



##### 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.
  41




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##### Table of Contents



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
  Bank Owned Life Insurance
   42




---



##### Table of Contents



Mortgage Servicing Rights
  Real Estate Owned
  Identifiable Intangible Assets
 Goodwill and Other
Intangible Assets
  Accounting for Servicing of
Financial Assets  an amendment of FASB Statement No. 140
  Income Taxes
    43




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##### Table of Contents



Securities Impairment
  Earnings per Common Share
  Treasury Stock
  Pension Plans
  and Other Post-retirement Plans- an amendment of SFAS Statement Nos. 87, 88, 106
and 132(R)
 Stock-Based Compensation Plans
 Accounting for Stock-Based Compensation, Accounting for Stock Issued to Employees 
  44




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##### Table of Contents



Accounting for Stock-based Compensation  Transition and Disclosure
 2006Net Income available to common shareholders:As reported
    
    $
    3,770Total stock-based employee compensation expense
determined under fair value based methods for
all awards, net of related tax effects
    
    
    (105
    )Pro forma
    
    $
    3,665Basic earnings per share:As reported
    
    $
    1.50Pro forma
    
    
    1.46Diluted earnings per share:As reported
    
    $
    1.45Pro forma
    
    
    1.43Weighted average number of shares outstanding
    
    
    2,506,029
    45




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##### Table of Contents



Reclassifications
  NOTE 4. IMPAIRMENT AND GOODWILL
     46




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##### Table of Contents



NOTE 5. SECURITIES
  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
    )
    
    
    20,865Held-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
  Amortized
    
    
    Gross Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair-ValueAvailable-for-Sale:Mortgage-backed securities:Government National Mortgage Association
    
    $
    13,637
    
    
    $
    47
    
    
    $
    (65
    )
    
    $
    13,619Federal Home Loan Mortgage Corporation
    
    
    1,116
    
    
    
    12
    
    
    
    (3
    )
    
    
    1,125Federal National Mortgage Association
    
    
    5,905
    
    
    
    30
    
    
    
    (40
    )
    
    
    5,895Other
    
    
    517
    
    
    
    20
    
    
    
    
    
    
    
    537Total mortgage-backed securities
    
    
    21,175
    
    
    
    109
    
    
    
    (108
    )
    
    
    21,176U.S. Government Agency Securities
    
    
    26,417
    
    
    
    387
    
    
    
    
    
    
    
    26,804Total available-for-sale
    
    
    47,592
    
    
    
    496
    
    
    
    (108
    )
    
    
    47,980Held-to-Maturity:Mortgage-backed securities:Government National Mortgage Association
    
    
    727
    
    
    
    25
    
    
    
    
    
    
    
    752Federal Home Loan Mortgage Corporation
    
    
    13,308
    
    
    
    9
    
    
    
    (166
    )
    
    
    13,151Federal National Mortgage Association
    
    
    4,792
    
    
    
    53
    
    
    
    (50
    )
    
    
    4,795Other
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    120Total mortgage-backed securities
    
    
    18,947
    
    
    
    87
    
    
    
    (216
    )
    
    
    18,818Other
    
    
    190
    
    
    
    
    
    
    
    (3
    )
    
    
    187Total held-to-maturity
    
    
    19,137
    
    
    
    87
    
    
    
    (219
    )
    
    
    19,005Total securities
    
    $
    66,729
    
    
    $
    583
    
    
    $
    (327
    )
    
    $
    66,985
  47




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Available-for-Sale:Proceeds
    
    $
    22,428
    
    
    $
    14,422
    
    
    $
    12,197Gross gains
    
    
    431
    
    
    
    22
    
    
    
    Gross losses
    
    
    
    
    
    
    646
    
    
    
    
   Amortized
    
    
    
    
    
    
    WeightedCost
    
    
    Fair Value
    
    
    Avg RateAvailable-for-Sale:Less than one year
    
    $
    42
    
    
    $
    43
    
    
    
    5.44
    %One through five years
    
    
    181
    
    
    
    188
    
    
    
    5.31
    %Five through ten years
    
    
    6,706
    
    
    
    6,264
    
    
    
    5.42
    %After ten years
    
    
    14,280
    
    
    
    14,370
    
    
    
    5.02
    %$
    21,209
    
    
    $
    20,865
    
    
    
    5.13
    %Held-to-maturity:One through five years
    
    $
    11
    
    
    $
    11
    
    
    
    5.15
    %Five through ten years
    
    
    493
    
    
    
    486
    
    
    
    5.00
    %After ten years
    
    
    16,803
    
    
    
    16,670
    
    
    
    5.78
    %$
    17,307
    
    
    $
    17,167
    
    
    
    5.76
    %
  48




---



##### Table of Contents



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
  Less than 12 months
    
    
    12 months or longer
    
    
    TotalUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value(in thousands)Available-for-Sale:Mortgage-backed securities
    
    
    (108
    )
    
    
    9,498
    
    
    
    
    
    
    
    
    
    
    
    (108
    )
    
    
    9,498Total available-for-sale
    
    
    (108
    )
    
    
    9,498
    
    
    
    
    
    
    
    
    
    
    
    (108
    )
    
    
    9,498Held-to-Maturity:Mortgage-backed securities
    
    
    (216
    )
    
    
    15,241
    
    
    
    
    
    
    
    
    
    
    
    (216
    )
    
    
    15,241U.S. Government Agency Securities
    
    
    (3
    )
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    187Total Held-to- Maturity
    
    
    (219
    )
    
    
    15,428
    
    
    
    
    
    
    
    
    
    
    
    (219
    )
    
    
    15,428Total securities
    
    
    (327
    )
    
    
    24,926
    
    
    
    
    
    
    
    
    
    
    
    (327
    )
    
    
    24,926
   49




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##### Table of Contents



NOTE 6. LOANS RECEIVABLE, NET
  2008
    
    
    2007Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentGross loans receivable:One- to four-family
    
    $
    103,419
    
    
    
    16.33
    %
    
    $
    100,910
    
    
    
    17.22
    %Multifamily
    
    
    78,657
    
    
    
    12.42
    %
    
    
    91,877
    
    
    
    15.68
    %Non-residential
    
    
    238,508
    
    
    
    37.66
    %
    
    
    203,187
    
    
    
    34.68
    %Construction
    
    
    158,877
    
    
    
    25.09
    %
    
    
    137,697
    
    
    
    23.50
    %Business
    
    
    51,424
    
    
    
    8.23
    %
    
    
    51,226
    
    
    
    8.74
    %Consumer and other (1)
    
    
    1,728
    
    
    
    0.27
    %
    
    
    1,067
    
    
    
    0.18
    %Total loans receivable
    
    
    633,298
    
    
    
    100.00
    %
    
    
    585,964
    
    
    
    100.00
    %Add:Premium on loans
    
    
    725
    
    
    
    
    
    
    
    990Less:Deferred fees and loan discounts
    
    
    (1,229
    )
    
    
    
    
    
    
    (994
    )Allowance for loan losses
    
    
    (4,878
    )
    
    
    
    
    
    
    (5,409
    )Total loans receivable, net
    
    $
    627,231
    
    
    
    
    
    
    $
    580,551
 (1)
    
    Includes personal, credit
card, and home improvement.     2008
    
    
    2007
    
    
    2006Balance at beginning of the year
    
    $
    5,409
    
    
    $
    4,015
    
    
    $
    4,097Provision charged to operations
    
    
    222
    
    
    
    276
    
    
    
    Recoveries of amounts previously charged-off
    
    
    153
    
    
    
    47
    
    
    
    35Charge-offs of loans
    
    
    (906
    )
    
    
    (120
    )
    
    
    (117
    )Acquisition of CCB
    
    
    
    
    
    
    1,191
    
    
    
    Balance at end of the year
    
    $
    4,878
    
    
    $
    5,409
    
    
    $
    4,015
   50




---



##### Table of Contents



NOTE 7. OFFICE PROPERTIES AND EQUIPMENT, NET
  2008
    
    
    2007Land
    
    $
    415
    
    
    $
    415Building and improvements
    
    
    9,874
    
    
    
    9,834Leasehold improvements
    
    
    6,041
    
    
    
    5,262Furniture and equipment
    
    
    12,079
    
    
    
    10,03928,409
    
    
    
    25,550Less accumulated depreciation and amortization
    
    
    (12,629
    )
    
    
    (10,924
    )Office properties and equipment, net
    
    $
    15,780
    
    
    $
    14,626
  NOTE 8. ACCRUED INTEREST RECEIVABLE
  2008
    
    
    2007Loans receivable
    
    $
    3,751
    
    
    $
    3,689Mortgage-backed securities
    
    
    273
    
    
    
    590Investments and other interest bearing assets
    
    
    39
    
    
    
    56Total accrued interest receivable
    
    $
    4,063
    
    
    $
    4,335
  51




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##### Table of Contents



NOTE 9. DEPOSITS
  2008
    
    
    2007Percent
    
    
    Weighted
    
    
    
    
    
    
    Percent
    
    
    Weightedof Total
    
    
    Average
    
    
    
    
    
    
    of Total
    
    
    AverageAmount
    
    
    Deposits
    
    
    Rate
    
    
    Amount
    
    
    Deposits
    
    
    RateNon-interest-bearing demand
    
    $
    51,736
    
    
    
    7.90
    %
    
    
    0.00
    %
    
    $
    50,891
    
    
    
    8.27
    %
    
    
    0.00
    %NOW accounts
    
    
    28,168
    
    
    
    4.30
    %
    
    
    0.20
    %
    
    
    28,910
    
    
    
    4.70
    %
    
    
    0.31
    %Savings and club
    
    
    125,819
    
    
    
    19.22
    %
    
    
    0.53
    %
    
    
    137,960
    
    
    
    22.43
    %
    
    
    0.78
    %Money market savings account
    
    
    45,514
    
    
    
    6.95
    %
    
    
    2.94
    %
    
    
    46,996
    
    
    
    7.64
    %
    
    
    2.18
    %Certificates of deposit
    
    
    400,587
    
    
    
    61.20
    %
    
    
    4.10
    %
    
    
    347,753
    
    
    
    56.53
    %
    
    
    4.28
    %Other
    
    
    2,839
    
    
    
    0.43
    %
    
    
    1.51
    %
    
    
    2,612
    
    
    
    0.43
    %
    
    
    1.39
    %Total
    
    $
    654,663
    
    
    
    100.00
    %
    
    
    2.83
    %
    
    $
    615,122
    
    
    
    100.00
    %
    
    
    2.78
    %
  Period to MaturityTotal
    
    
    PercentRate
    
    < 1 Yr.
    
    
    1-2 Yrs.
    
    
    2-3 Yrs.
    
    
    3+ Yrs.
    
    
    2007
    
    
    of Total0%  0.99%
    
    $
    2,993
    
    
    $
    389
    
    
    $
    48
    
    
    $
    231
    
    
    $
    3,661
    
    
    
    0.91
    %1%  1.99%
    
    
    27,640
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,640
    
    
    
    6.90
    %2%  3.99%
    
    
    98,003
    
    
    
    9,577
    
    
    
    4,202
    
    
    
    1,743
    
    
    
    113,525
    
    
    
    28.34
    %4% and over
    
    
    231,542
    
    
    
    9,054
    
    
    
    3,995
    
    
    
    11,170
    
    
    
    255,761
    
    
    
    63.85
    %Total
    
    $
    360,178
    
    
    $
    19,020
    
    
    $
    8,245
    
    
    $
    13,144
    
    
    $
    400,587
    
    
    
    100.00
    %
   2008
    
    
    2007
    
    
    2006NOW demand
    
    $
    138
    
    
    $
    98
    
    
    $
    74Savings and clubs
    
    
    1,004
    
    
    
    931
    
    
    
    919Money market savings
    
    
    1,193
    
    
    
    1,133
    
    
    
    601Certificates of deposit
    
    
    16,522
    
    
    
    13,079
    
    
    
    7,321Mortgagors deposits
    
    
    42
    
    
    
    30
    
    
    
    3018,899
    
    
    
    15,271
    
    
    
    8,945Penalty for early withdrawal of
certificates of deposit
    
    
    (33
    )
    
    
    (44
    )
    
    
    (24
    )Total interest expense
    
    $
    18,866
    
    
    $
    15,227
    
    
    $
    8,921
  52




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##### Table of Contents



NOTE 10. BORROWED MONEY
 Federal Home Loan Bank Advances and Repurchase agreements.
 Maturing
    
    2008
    
    
    2007Year Ended
    
    Weighted
    
    
    
    
    
    
    WeightedMarch 31,
    
    Average Rate
    
    
    Amount
    
    
    Average Rate
    
    
    Amount2008
    
    
    0.00
    %
    
    $
    
    
    
    
    4.58
    %
    
    $
    32,5002009
    
    
    3.77
    %
    
    $
    15,107
    
    
    
    3.78
    %
    
    
    15,1072012
    
    
    4.63
    %
    
    
    30,143
    
    
    
    3.50
    %
    
    
    1684.34
    %
    
    $
    45,250
    
    
    
    4.32
    %
    
    $
    47,775
  Repurchase agreements.
 Subordinated Debt Securities.
  53




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Amounts outstanding at the end of year:FHLB advances
    
    $
    15,250
    
    
    $
    47,775
    
    
    $
    80,935Guaranteed preferred beneficial interest in
junior subordinated debentures
    
    $
    13,375
    
    
    $
    13,318
    
    
    $
    13,260Rate paid at year end:FHLB advances
    
    
    3.77
    %
    
    
    4.32
    %
    
    
    4.13
    %Guaranteed preferred beneficial interest in
junior subordinated debentures
    
    
    5.85
    %
    
    
    8.40
    %
    
    
    7.97
    %Maximum amount of borrowing outstanding at any
month end:FHLB advances
    
    $
    60,874
    
    
    $
    93,975
    
    
    $
    112,488Guaranteed preferred beneficial interest in
junior subordinated debentures
    
    $
    13,375
    
    
    $
    13,318
    
    
    $
    13,260Approximate average amounts outstanding for year:FHLB advances
    
    $
    36,724
    
    
    $
    65,567
    
    
    $
    94,798Guaranteed preferred beneficial interest in
junior subordinated debentures
    
    $
    13,344
    
    
    $
    13,286
    
    
    $
    13,230Approximate weighted average rate paid during year:FHLB advances
    
    
    5.18
    %
    
    
    4.36
    %
    
    
    3.81
    %Guaranteed preferred beneficial interest in
junior subordinated debentures
    
    
    7.76
    %
    
    
    8.33
    %
    
    
    7.50
    %
 NOTE 11. INCOME TAXES
  2008
    
    
    2007
    
    
    2006(Restated)Federal income tax expense (benefit):Current
    
    $
    70
    
    
    $
    1,628
    
    
    $
    1,155Deferred
    
    
    (1,107
    )
    
    
    (3,018
    )
    
    
    35(1,037
    )
    
    
    (1,390
    )
    
    
    1,190State and local income tax expense:Current
    
    
    169
    
    
    
    296
    
    
    
    196Deferred
    
    
    (24
    )
    
    
    (5
    )
    
    
    (57
    )145
    
    
    
    291
    
    
    
    139Total provision for income tax (benefit) expense
    
    $
    (892
    )
    
    $
    (1,099
    )
    
    $
    1,329
  2008
    
    
    2007
    
    
    2006Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Restated)Statutory Federal income tax
    
    $
    1,094
    
    
    
    34.0
    %
    
    $
    339
    
    
    
    34.0
    %
    
    $
    1,734
    
    
    
    34.0
    %State and local income taxes,
net of
Federal tax benefit
    
    
    86
    
    
    
    2.7
    %
    
    
    187
    
    
    
    11.6
    %
    
    
    92
    
    
    
    1.8
    %New markets tax credit
    
    
    (2,000
    )
    
    
    -61.6
    %
    
    
    (1,475
    )
    
    
    -83.8
    %
    
    
    
    
    
    
    General business credit
    
    
    (41
    )
    
    
    -1.3
    %
    
    
    (69
    )
    
    
    -3.9
    %
    
    
    (73
    )
    
    
    -1.5
    %Release of contingency reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (500
    )
    
    
    -9.8
    %Other
    
    
    (31
    )
    
    
    -1.0
    %
    
    
    (81
    )
    
    
    -4.6
    %
    
    
    76
    
    
    
    1.5
    %Total income tax (benefit)
expense
    
    $
    (892
    )
    
    
    -27.2
    %
    
    $
    (1,099
    )
    
    
    -46.7
    %
    
    $
    1,329
    
    
    
    26.0
    %
  54




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##### Table of Contents



2008
    
    
    2007Deferred Tax Assets:Income from affiliate
    
    $
    
    
    
    $
    1,876Allowance for loan losses
    
    
    1,427
    
    
    
    1,839Deferred loan fees
    
    
    461
    
    
    
    371Compensation and benefits
    
    
    102
    
    
    
    109Non-accrual loan interest
    
    
    579
    
    
    
    587Capital loss carryforward
    
    
    591
    
    
    
    591Deferred rent
    
    
    111
    
    
    
    111Purchase accounting adjustment
    
    
    159
    
    
    
    702Net operating loss carry forward
    
    
    2,072
    
    
    
    New markets tax credit
    
    
    3,227
    
    
    
    1,242Depreciation
    
    
    330
    
    
    
    Other
    
    
    28
    
    
    
    2Total Deferred Tax Assets
    
    
    9,087
    
    
    
    7,430Deferred Tax Liabilities:Depreciation
    
    
    
    
    
    
    128Income from affiliate
    
    
    690
    
    
    
    Minimum pension liability
    
    
    170
    
    
    
    50Unrealized gain on available-for-sale securities
    
    
    92
    
    
    
    228Total Deferred Tax Liabilities
    
    
    952
    
    
    
    406Net Deferred Tax Assets
    
    $
    8,135
    
    
    $
    7,024
     55




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##### Table of Contents



NOTE 12. EARNINGS PER COMMON SHARE
  2008
    
    
    2007
    
    
    2006(Restated)Net income  basic and diluted
    
    $
    3,963
    
    
    $
    2,098
    
    
    $
    3,770Weighted average common shares outstanding  basic
    
    
    2,492
    
    
    
    2,511
    
    
    
    2,506Effect of dilutive options
    
    
    50
    
    
    
    57
    
    
    
    59Effect of dilutive MRP shares
    
    
    19
    
    
    
    18
    
    
    
    27Weighted average common shares outstanding  diluted
    
    
    2,561
    
    
    
    2,586
    
    
    
    2,592
 NOTE 13. STOCKHOLDERS EQUITY
 Conversion and Stock Offering.
 Regulatory Capital
  56




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##### Table of Contents



GAAP
    
    
    Tangible
    
    
    Leverage
    
    
    Risk-BasedCapital
    
    
    Equity
    
    
    Capital
    
    
    CapitalStockholders
Equity at March 31, 2008(1)(As restated)
    
    $
    68,184
    
    
    $
    68,184
    
    
    $
    68,184
    
    
    $
    68,184Add:General valuation allowances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,878Deduct:Unrealized gains on securities available-for-sale,
net
    
    
    
    
    
    
    (151
    )
    
    
    (151
    )
    
    
    (151
    )Goodwill and qualifying intangible assets, net
    
    
    
    
    
    
    (7,587
    )
    
    
    (7,587
    )
    
    
    (7,587
    )Other
    
    
    
    
    
    
    (33
    )
    
    
    (33
    )
    
    
    (33
    )Regulatory Capital
    
    
    
    
    
    
    60,413
    
    
    
    60,413
    
    
    
    65,291Minimum Capital requirement
    
    
    
    
    
    
    11,852
    
    
    
    23,709
    
    
    
    51,673Regulatory Capital Excess
    
    
    
    
    
    $
    48,561
    
    
    $
    36,704
    
    
    $
    13,618
 (1)
    
    Carver Federal only. Comprehensive Income.
 NOTE 14. EMPLOYEE BENEFIT AND STOCK COMPENSATION PLANS
 Pension Plan
  57




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##### Table of Contents



2008
    
    
    2007Change in
projected benefit obligation during the year:Projected benefit obligation at the beginning of year
    
    $
    2,887
    
    
    $
    2,892Interest cost
    
    
    163
    
    
    
    159Actuarial (gain) loss
    
    
    (308
    )
    
    
    55Benefits paid
    
    
    (170
    )
    
    
    (219
    )Settlements
    
    
    (173
    )
    
    
    Projected benefit obligation at end of year
    
    $
    2,399
    
    
    $
    2,887Change in
fair value of plan assets during the year:Fair value of plan assets at beginning of year
    
    $
    2,877
    
    
    $
    2,870Actual return on plan assets
    
    
    232
    
    
    
    226Benefits paid
    
    
    (170
    )
    
    
    (219
    )Settlements
    
    
    (173
    )
    
    
    Fair value of plan assets at end of year
    
    $
    2,766
    
    
    $
    2,877Funded status
    
    $
    367
    
    
    $
    (10
    )Unrecognized loss
    
    
    
    
    
    
    Accrued pension cost
    
    $
    367
    
    
    $
    (10
    )
  2008
    
    
    2007
    
    
    2006Interest cost
    
    $
    163
    
    
    $
    159
    
    
    $
    163Expected return on plan assets
    
    
    (221
    )
    
    
    (220
    )
    
    
    (227
    )Net periodic pension (benefit)
    
    $
    (58
    )
    
    $
    (61
    )
    
    $
    (64
    )
  YEAR ENDED MARCH 31,2008
    
    
    2007
    
    
    2006Annual salary increase (1)
    
    
    
    
    
    
    
    
    
    
    Expected long-term return on assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Discount rate used in measurement of
benefit obligations
    
    
    6.50
    %
    
    
    5.88
    %
    
    
    5.75
    %
 (1)
    
    The annual salary increase rate is not applicable as the plan is frozen and no new
benefits accrue.  58




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##### Table of Contents



Directors Retirement Plan.
 2008
    
    
    2007Change in projected benefit obligation during the year:Projected benefit obligation at beginning of year
    
    $
    36
    
    
    $
    102Interest cost
    
    
    2
    
    
    
    5Actuarial gain
    
    
    
    
    
    
    (50
    )Benefits paid
    
    
    (13
    )
    
    
    (21
    )Projected benefit obligation at end of year
    
    $
    25
    
    
    $
    36Change in
fair value of plan assets during the year:Fair value of plan assets at beginning of year
    
    $
    
    
    
    $
    Employer contributions
    
    
    13
    
    
    
    21Benefits paid
    
    
    (13
    )
    
    
    (21
    )Fair value of plan assets at end of year
    
    $
    
    
    
    $
    Funded status
    
    $
    (25
    )
    
    $
    (36
    )Unrecognized (gain)
    
    
    
    
    
    
    Accrued pension cost
    
    $
    (25
    )
    
    $
    (36
    )
 Savings Incentive Plan.
 BOLI.
  Management Recognition Plan .
  59




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##### Table of Contents



Employee Stock Ownership Plan.
   2008
    
    
    2007Allocated shares
    
    
    69
    
    
    
    73Unallocated shares
    
    
    
    
    
    
    Total ESOP shares
    
    
    69
    
    
    
    73Fair value of unallocated shares
    
    $
    3
    
    
    $
    10
 Stock Option Plans.
   60




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##### Table of Contents



2008
    
    
    2007
    
    
    2006Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding, beginning
of year
    
    
    240,087
    
    
    $
    13.24
    
    
    
    238,061
    
    
    $
    12.90
    
    
    
    225,292
    
    
    $
    12.37Granted
    
    
    15,978
    
    
    
    16.93
    
    
    
    21,019
    
    
    
    16.50
    
    
    
    35,277
    
    
    
    16.98Exercised
    
    
    (3,475
    )
    
    
    11.58
    
    
    
    (11,776
    )
    
    
    9.57
    
    
    
    (9,903
    )
    
    
    9.57Forfeited
    
    
    (15,408
    )
    
    
    17.72
    
    
    
    (7,217
    )
    
    
    17.44
    
    
    
    (12,605
    )
    
    
    17.44Outstanding, end of year
    
    
    237,182
    
    
    $
    13.22
    
    
    
    240,087
    
    
    $
    13.24
    
    
    
    238,061
    
    
    $
    12.90Exercisable, at year end
    
    
    198,088
    
    
    
    
    
    
    
    192,110
    
    
    
    
    
    
    
    144,836
  Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageRange of
    
    
    
    
    
    
    Remaining
    
    
    Exercise
    
    
    
    
    
    
    ExerciseExercise Prices
    
    
    Shares
    
    
    Life
    
    
    Price
    
    
    Shares
    
    
    Price$
    8.00
    
    
    $
    8.99
    
    
    
    60,000
    
    
    2 years
    
    $
    8.17
    
    
    
    60,000
    
    
    $
    8.179.00
    
    
    
    9.99
    
    
    
    32,000
    
    
    3 years
    
    
    9.93
    
    
    
    32,000
    
    
    
    9.9310.00
    
    
    
    10.99
    
    
    
    2,000
    
    
    2 years
    
    
    10.38
    
    
    
    2,000
    
    
    
    10.3812.00
    
    
    
    12.99
    
    
    
    37,400
    
    
    4 years
    
    
    12.10
    
    
    
    37,400
    
    
    
    12.1016.00
    
    
    
    16.99
    
    
    
    54,721
    
    
    7 years
    
    
    16.59
    
    
    
    38,252
    
    
    
    16.5917.00
    
    
    
    17.99
    
    
    
    29,033
    
    
    6 years
    
    
    17.18
    
    
    
    6,408
    
    
    
    17.1819.00
    
    
    
    19.99
    
    
    
    20,918
    
    
    6 years
    
    
    19.66
    
    
    
    20,918
    
    
    
    19.6620.00
    
    
    
    20.99
    
    
    
    729
    
    
    7 years
    
    
    20.00
    
    
    
    729
    
    
    
    20.0021.00
    
    
    
    21.99
    
    
    
    381
    
    
    6 years
    
    
    21.76
    
    
    
    381
    
    
    
    21.76Total
    
    
    
    
    
    
    237,182
    
    
    
    
    
    
    
    
    
    
    
    198,088
  2008
    
    
    2007
    
    
    2006Risk-free interest rate
    
    
    4.3
    %
    
    
    4.5
    %
    
    
    3.5
    %Volatility
    
    
    31.2
    %
    
    
    19.0
    %
    
    
    35.0
    %Annual dividends
    
    $
    0.29
    
    
    $
    0.32
    
    
    $
    0.28Expected life of option grants
    
    7 yrs
    
    
    7 yrs
    
    
    7 yrs
   61




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##### Table of Contents



Performance Compensation Plan.
 NOTE 14. COMMITMENTS AND CONTINGENCIES
 Credit Related Commitments.
    2008
    
    
    2007Commitments to originate mortgage loans
    
    $
    81,754
    
    
    $
    107,115Commitments to originate commercial
and consumer loans
    
    
    4,236
    
    
    
    214Lines of credit
    
    
    24,518
    
    
    
    300Letters of credit
    
    
    4,518
    
    
    
    Total
    
    $
    115,026
    
    
    $
    107,629
     62




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##### Table of Contents



Lease Commitments.
 Year Ending
    
    MinimumMarch 31,
    
    Rental2009
    
    $
    1,5172010
    
    
    1,5562011
    
    
    1,4582012
    
    
    1,1372013
    
    
    1,125Thereafter
    
    
    4,663$
    11,456
  Legal Proceedings
 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
   63




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##### Table of Contents



Mortgage servicing rights
  Deposits
  Borrowings
  Commitments
   2008
    
    
    2007Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueFinancial Assets:Cash and cash equivalents
    
    $
    27,368
    
    
    $
    27,368
    
    
    $
    17,350
    
    
    $
    17,350Investment securities available-for-sale
    
    
    1,735
    
    
    
    1,525
    
    
    
    26,804
    
    
    
    26,804Mortgage backed securities available-for-sale
    
    
    19,130
    
    
    
    19,340
    
    
    
    21,176
    
    
    
    21,176Mortgage backed securities held-to-maturity
    
    
    17,307
    
    
    
    17,167
    
    
    
    19,137
    
    
    
    19,005Loans receivable
    
    
    627,231
    
    
    
    644,702
    
    
    
    580,551
    
    
    
    580,854Loans held-for-sale
    
    
    23,767
    
    
    
    24,084
    
    
    
    23,226
    
    
    
    23,226Accrued interest receivable
    
    
    4,063
    
    
    
    4,063
    
    
    
    4,335
    
    
    
    4,335Mortgage servicing rights
    
    
    605
    
    
    
    605
    
    
    
    388
    
    
    
    467Financial Liabilities:Deposits
    
    $
    654,663
    
    
    $
    660,813
    
    
    $
    615,122
    
    
    $
    614,199Advances from FHLB of New York
    
    
    15,249
    
    
    
    15,191
    
    
    
    47,775
    
    
    
    47,307Other borrowed money
    
    
    43,375
    
    
    
    44,984
    
    
    
    13,318
    
    
    
    13,318
 Limitations
     64




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NOTE 17. QUARTERLY FINANCIAL DATA (UNAUDITED)
  June 30
    
    
    September 30
    
    
    December 30
    
    
    March 31Fiscal 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
    )
    
    
    (8,235
    )Income tax benefit (expense)
    
    
    (143
    )
    
    
    44
    
    
    
    268
    
    
    
    723Minority interest, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146
    )Net income
    
    $
    1,143
    
    
    $
    764
    
    
    $
    1,578
    
    
    $
    478Earnings per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .Basic
    
    $
    0.46
    
    
    $
    0.31
    
    
    $
    0.63
    
    
    $
    0.19Diluted
    
    $
    0.44
    
    
    $
    0.30
    
    
    $
    0.62
    
    
    $
    0.19Fiscal 2007 (As Previously Reported)Interest income
    
    $
    9,120
    
    
    $
    9,380
    
    
    $
    11,770
    
    
    $
    11,470Interest expense
    
    
    (4,085
    )
    
    
    (4,169
    )
    
    
    (5,643
    )
    
    
    (5,337
    )Net interest income
    
    
    5,035
    
    
    
    5,211
    
    
    
    6,127
    
    
    
    6,133Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    (120
    )
    
    
    (156
    )Non-interest income
    
    
    945
    
    
    
    (337
    )
    
    
    966
    
    
    
    1,295Non-interest expense
    
    
    (4,733
    )
    
    
    (6,242
    )
    
    
    (5,884
    )
    
    
    (6,479
    )Income tax benefit (expense)
    
    
    (445
    )
    
    
    464
    
    
    
    311
    
    
    
    493Net income (loss)
    
    $
    802
    
    
    $
    (904
    )
    
    $
    1,400
    
    
    $
    1,286Earnings (loss) per common shareBasic
    
    $
    0.32
    
    
    $
    (0.36
    )
    
    $
    0.56
    
    
    $
    0.51Diluted
    
    $
    0.31
    
    
    $
    (0.36
    )
    
    $
    0.54
    
    
    $
    0.50Fiscal 2007 (Restated)Interest income
    
    $
    9,120
    
    
    $
    9,380
    
    
    $
    11,770
    
    
    $
    11,470Interest expense
    
    
    (4,085
    )
    
    
    (4,169
    )
    
    
    (5,643
    )
    
    
    (5,337
    )Net interest income
    
    
    5,035
    
    
    
    5,211
    
    
    
    6,127
    
    
    
    6,133Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    (120
    )
    
    
    (156
    )Non-interest income
    
    
    945
    
    
    
    (337
    )
    
    
    966
    
    
    
    1,295Non-interest expense
    
    
    (4,861
    )
    
    
    (6,305
    )
    
    
    (6,001
    )
    
    
    (6,933
    )Income tax benefit (expense)
    
    
    (399
    )
    
    
    487
    
    
    
    354
    
    
    
    657Net income (loss)
    
    $
    720
    
    
    $
    (944
    )
    
    $
    1,326
    
    
    $
    996Earnings (loss) per common shareBasic
    
    $
    0.29
    
    
    $
    (0.38
    )
    
    $
    0.53
    
    
    $
    0.40Diluted
    
    $
    0.28
    
    
    $
    (0.38
    )
    
    $
    0.52
    
    
    $
    0.39
  65




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NOTE 18. CARVER BANCORP, INC.   PARENT COMPANY ONLY
 CONDENSED STATEMENTS OF FINANCIAL CONDITION (in thousands):
 As of March 31,2008
    
    
    2008
    
    
    2007
    
    
    2007(As Previously
    
    

            
    
    (As PreviouslyReported)
    
    
    (Restated)
    
    
    Reported)
    
    
    (Restated)AssetsCash on deposit with subsidiaries
    
    $
    384
    
    
    $
    384
    
    
    $
    399
    
    
    $
    399Investment in subsidiaries
    
    
    69,401
    
    
    
    68,916
    
    
    
    64,996
    
    
    
    64,511Other assets
    
    
    32
    
    
    
    32
    
    
    
    16
    
    
    
    16Total Assets
    
    $
    69,817
    
    
    $
    69,332
    
    
    $
    65,411
    
    
    $
    64,926Liabilities and Stockholders EquityBorrowings
    
    $
    13,376
    
    
    $
    13,376
    
    
    $
    13,318
    
    
    $
    13,318Accounts payable to subsidiaries
    
    
    1,945
    
    
    
    1,945
    
    
    
    291
    
    
    
    291Other liabilities
    
    
    113
    
    
    
    113
    
    
    
    175
    
    
    
    175Total liabilities
    
    $
    15,434
    
    
    $
    15,434
    
    
    $
    13,784
    
    
    $
    13,784Stockholders equity
    
    
    54,383
    
    
    
    53,898
    
    
    
    51,627
    
    
    
    51,142Total Liabilities and Stockholders
Equity
    
    $
    69,817
    
    
    $
    69,332
    
    
    $
    65,411
    
    
    $
    64,926
 CONDENSED STATEMENTS OF INCOME (in thousands):
 Years Ended March 31,2008
    
    
    2007
    
    
    2007
    
    
    2006(As PreviouslyReported)
    
    
    (Restated)IncomeEquity in net income from subsidiaries
    
    $
    5,089
    
    
    $
    3,551
    
    
    $
    2,790
    
    
    $
    6,758Interest income from deposit with
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Other income
    
    
    34
    
    
    
    34
    
    
    
    34
    
    
    
    22Total income
    
    
    5,123
    
    
    
    3,585
    
    
    
    2,824
    
    
    
    6,785ExpensesInterest Expense on Borrowings
    
    
    1,185
    
    
    
    1,196
    
    
    
    1,196
    
    
    
    985Salaries and employee benefits
    
    
    157
    
    
    
    180
    
    
    
    180
    
    
    
    287Shareholder expense
    
    
    664
    
    
    
    439
    
    
    
    439
    
    
    
    407Other
    
    
    46
    
    
    
    10
    
    
    
    10
    
    
    
    7Total expense
    
    
    2,052
    
    
    
    1,825
    
    
    
    1,825
    
    
    
    1,686Income before income taxes
    
    
    3,071
    
    
    
    1,760
    
    
    
    999
    
    
    
    5,099Income tax (benefit) expense
    
    
    (892
    )
    
    
    (823
    )
    
    
    (1,099
    )
    
    
    1,329Net Income
    
    $
    3,963
    
    
    $
    2,583
    
    
    $
    2,098
    
    
    $
    3,770
  66




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CONDENSED STATEMENTS OF CASH FLOWS (in thousands):
 Years Ended March 31,2008
    
    
    2007
    
    
    2007
    
    
    2006(As PreviouslyReported)
    
    
    (Restated)Cash Flows From Operating ActivitiesNet income
    
    $
    3,963
    
    
    $
    2,583
    
    
    $
    2,098
    
    
    $
    3,770Adjustments to reconcile net income to net cash
from operating activities:Equity in net income of Subsidiaries
    
    
    (5,224
    )
    
    
    (3,551
    )
    
    
    (2,790
    )
    
    
    (6,758
    )Income taxes from the Bank
    
    
    (881
    )
    
    
    (823
    )
    
    
    (1,099
    )
    
    
    1,329Increase in other assets
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    Increase (decrease) in accounts payable to subsidiaries
    
    
    1,654
    
    
    
    225
    
    
    
    225
    
    
    
    (443
    )(Decrease) increase in other liabilities
    
    
    (34
    )
    
    
    (83
    )
    
    
    (83
    )
    
    
    40Other, net
    
    
    140
    
    
    
    (13
    )
    
    
    (13
    )
    
    
    299Net cash used in operating activities
    
    
    (409
    )
    
    
    (1,662
    )
    
    
    (1,662
    )
    
    
    (1,763
    )Cash Flows From Investing ActivitiesDividends Received from Bank
    
    
    1,700
    
    
    
    3,201
    
    
    
    3,201
    
    
    
    850Proceeds from sale of investment securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,575Net cash from investing activities
    
    
    1,700
    
    
    
    3,201
    
    
    
    3,201
    
    
    
    2,425Cash Flows From Financing ActivitiesPurchase of treasury stock, net
    
    
    (331
    )
    
    
    (321
    )
    
    
    (321
    )
    
    
    (115
    )Dividends paid
    
    
    (975
    )
    
    
    (878
    )
    
    
    (878
    )
    
    
    (777
    )Net cash used in financing activities
    
    
    (1,306
    )
    
    
    (1,199
    )
    
    
    (1,199
    )
    
    
    (892
    )Net increase (decrease) in cash
    
    
    (15
    )
    
    
    340
    
    
    
    340
    
    
    
    (230
    )Cash and cash equivalents  beginning
    
    
    399
    
    
    
    59
    
    
    
    59
    
    
    
    289Cash and cash equivalents  ending
    
    $
    384
    
    
    $
    399
    
    
    $
    399
    
    
    $
    59
  67




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NOTE 19. RECENT ACCOUNTING PRONOUNCEMENTS
 Accounting for Certain Hybrid Financial Instruments
 Accounting for Certain Hybrid Financial
Instruments
 Accounting for Servicing of Financial Assets
 Accounting for Servicing of Financial Assets  an
Amendment of FASB Statement No. 140
 Fair Value Measurements
 Fair Value Measurements
 The Fair Value Option for Financial Assets and Liabilities
 The Fair Value Option for Financial Assets and
Financial Liabilities including an amendment of FASB Statements No. 115
   68




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Accounting for Uncertainty in Income Taxes
 Accounting for Uncertainty in Income
Taxes  an Interpretation of FASB Statement No. 109
  Accounting for Purchases of Life Insurance
 Accounting for Purchases of Life Insurance  Determining the Amount That Could Be Realized in
Accordance with FASB Technical Bulletin No. 85-4 , Accounting for Purchases of
Life Insurance
 Prior Year Misstatements
   69




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Application of Accounting Principles to Loan Commitments
 Application of Accounting Principles to Loan Commitments
 Business Combinations
 Business Combinations (revised 2007)
 Non-controlling Interests in Consolidated Financial Statements
 Non-controlling Interests in Consolidated
Financial Statements
 Sale with Repurchase Financing Agreements
 Accounting for
Transfers of Financial Assets and Repurchase Financing Transactions
   70




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Disclosures about Derivative Instruments and Hedging Activities
 Disclosures about Derivative Instruments and
Hedging Activities
 Elimination of QSPEs and Changes in the FIN 46(R) Consolidation Model
 Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities
  NOTE 20. SUBSEQUENT EVENT
    71




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##### Table of Contents



ITEM 9A. DISCLOSURE CONTROLS AND PROCEDURES.
   Material Weakness in Internal Control Over Financial Reporting
    Changes in Internal Control Over Financial Reporting
   72




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##### Table of Contents



PART IV
 
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
 I.
    
    List of Documents Filed as Part of this Annual Report on Form 10-K/A
 A.
    
    The following consolidated financial statements are included in Item 8 of this annual
report:
 1.
    
    Report of Independent Registered Public Accounting Firm2.
    
    Consolidated Statement of Financial Condition as of March 31, 2008 and 20073.
    
    Consolidated Statements of Income for the years ended as of March 31, 2008,
2007 and 20064.
    
    Consolidated Statements of Changes in Stockholders Equity and Comprehensive
Income for the years ended March 31, 2008, 2007 and 20065.
    
    Consolidated Statements of Cash Flows for the years ended March 31, 2008, 2007
and 20066.
    
    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.
 II.
    
    Exhibits required by Item 601 of Regulation S-K:
 A.
    
    See Index of Exhibits on page E-1.
  73




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SIGNATURES
  CARVER BANCORP, INC.June 29, 2009
    By:
    /s/ Deborah C. WrightDeborah C. WrightChairman and Chief Executive Officer  /s/ Deborah C. Wright
    
    Chairman and Chief Executive OfficerDeborah C. Wright
    
    (Principal Executive Officer)/s/ Thomas Sperzel
    
    Senior Vice President and ControllerThomas Sperzel
    
    (Principal Accounting Officer)/s/ Carol Baldwin Moody
    
    DirectorCarol Baldwin Moody/s/ Dr. Samuel J. Daniel
    
    DirectorSamuel J. Daniel/s/ David L. Hinds
    
    DirectorDavid L. Hinds/s/ Robert Holland, Jr.
    
    Lead DirectorRobert Holland, Jr./s/ Pazel Jackson
    
    DirectorPazel G. Jackson, Jr./s/ Edward B. Ruggiero
    
    DirectorEdward B. Ruggiero/s/ Robert R. Tarter
    
    DirectorRobert R. Tarter
  74




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EXHIBIT INDEX
 23.1
    
    

Consent
of KPMG LLP31.1
    
    
    Certifications of Chief Executive Officer31.2
    
    
    Certifications of Principal Accounting 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 Principal Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350
  75