<PAGE>   1

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                  FORM 10-K/A

                 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
          SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2000

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER: 0-21487

                              CARVER BANCORP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                              <C>
                    DELAWARE                                        13-3904174
        (STATE OR OTHER JURISDICTION OF                          (I.R.S. EMPLOYER
         INCORPORATION OR ORGANIZATION)                        IDENTIFICATION NO.)

    75 WEST 125TH STREET, NEW YORK, NEW YORK                          10027
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                        (ZIP CODE)
</TABLE>

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (212) 876-4747

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<S>                                              <C>
     COMMON STOCK, PAR VALUE $.01 PER SHARE                  AMERICAN STOCK EXCHANGE
                (TITLE OF CLASS)                   (NAME OF EACH EXCHANGE ON WHICH REGISTERED)
</TABLE>

       SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  NONE

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  YES [X] NO [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

     As of May 31, 2000, there were 2,314,275 shares of Common Stock of the
registrant issued and outstanding. The aggregate market value of the
Registrant's common stock held by non-affiliates (based on the closing sales
price of $8.75 per share of the registrant's Common Stock on May 31, 2000) was
approximately $16.1 million.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

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<PAGE>   2

                           FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-K contains forward-looking statements
consisting of estimates with respect to the financial condition, results of
operations and business of the Company (as defined below) that are subject to
various factors which could cause actual results to differ materially from these
estimates. These factors include changes in general, economic and market,
legislative and regulatory conditions, the development of an adverse interest
rate environment that adversely affects the interest rate spread or other income
anticipated from the Company's operations and investments, the ability of the
Company to originate and purchase loans with attractive terms and acceptable
credit quality and the ability of the Company to realize cost efficiencies.

ITEM 3.  LEGAL PROCEEDINGS

     From time to time, Carver Federal is a party to various legal proceedings
incident to its business. At March 31, 2000, except as set forth below, there
were no legal proceedings to which Carver Federal or its subsidiaries was a
party, or to which any of their property was subject, which were expected by
management to result in a material loss.

     On or about January 18, 2000, a complaint was filed in the Court of
Chancery of the State of Delaware in and for New Castle County (the "Court")
entitled BBC Capital Market, Inc. v. Carver Bancorp, Inc., et al., C.A. No.
17743, naming the Holding Company, all of the Holding Company's directors (the
"individual defendants"), Morgan Stanley & Co., Inc. ("Morgan Stanley") and
Provender Opportunities Fund, L.P. ("Provender") as defendants (the "Action").
The complaint alleged, among other things, that plaintiff BBC Capital Market,
Inc. ("BBC" or "Plaintiff") is a 7.4% stockholder of the Holding Company and
sought to challenge the Holding Company's issuance on January 11, 2000 of 40,000
shares of the Holding Company's Series A Preferred Stock to Morgan Stanley and
60,000 shares of the Holding Company's Series B Preferred Stock to Provender
(the "Transactions"). The complaint further alleged, among other things, that:
(i) the individual defendants approved the Transactions for the primary purpose
of interfering with effective stockholder action at the Holding Company's annual
meeting of stockholders on February 24, 2000 (the "Annual Meeting") at which two
director-defendants were up for re-election; (ii) Morgan Stanley sought to
intimidate Plaintiff's representatives into dropping any challenge to the
election of directors at the Holding Company and that the individual defendants
conspired with Morgan Stanley in the alleged intimidation; and (iii) the Holding
Company issued a false and misleading proxy statement in connection with the
Annual Meeting by not disclosing, among other things, certain facts relating to
Plaintiff's nomination of directors at the Annual Meeting and the circumstances
surrounding the calling of the Annual Meeting. The complaint alleged four
counts: (1) breach of fiduciary duty of loyalty against the individual
defendants; (2) breach of fiduciary duty of disclosure against the individual
defendants; (3) aiding and abetting breaches of fiduciary duty against Morgan
Stanley and Provender; and (4) pursuant to 10 Del. C. sec. 6501, a determination
that the individual defendants, Morgan Stanley and Provender, could not cast in
excess of 10% of their collective vote at the Annual Meeting.

     The complaint sought, among other things: (1) an order preliminarily and
permanently enjoining the Holding Company, the individual defendants and others
from: (a) treating the stock issued to Morgan Stanley and Provender as validly
issued for purposes of voting at the Annual Meeting; (b) taking any steps to
solicit proxies in favor of the Holding Company's nominees at the Annual Meeting
until such time that all alleged disclosure violations were cured; and (c)
taking any action to obstruct a proxy solicitation by Plaintiff; (2) an order
preliminarily and permanently enjoining Morgan Stanley, Provender and others
from aiding and abetting the individual defendants' alleged breach of fiduciary
duties and taking any action to obstruct a proxy solicitation by Plaintiff; (3)
an order rescinding the Transactions; (4) a declaration that the defendants,
Morgan Stanley and Provender, could not cast in excess of 10% of their
collective vote at the Annual Meeting; and (5) an award to Plaintiff of the cost
and disbursements of the action, including reasonable attorneys' fees and
experts' fees. On or about January 29, 2000, defendants filed an answer denying
the substantive allegations of the complaint and seeking, among other things, an
order dismissing the complaint in its entirety, with prejudice.

                                        1
<PAGE>   3

     On or about January 31, 2000, Plaintiff filed an amended complaint
repeating the allegations in the original complaint and adding a count pursuant
to 8 Del. C. sec. 220 seeking an order requiring the Holding Company to
immediately produce all information requested in Plaintiff's letter demanding
that the Holding Company produce certain information relating to the Holding
Company's Employee Stock Ownership Plan (the "ESOP") and 401(k) Savings Plan in
RSI Retirement Trust. On or about February 22, 2000, defendants filed an answer
denying the substantive allegations of the amended complaint and seeking, among
other things, an order dismissing the complaint in its entirety, with prejudice.

     On or about January 18, 2000, Plaintiff also made a motion for a
preliminary injunction to obtain the injunctive relief sought in the complaint
and a motion for expedited proceedings to obtain discovery in support of its
application for preliminary injunctive relief. The parties engaged in expedited
discovery and the Court heard Plaintiff's motion for a preliminary injunction on
February 16, 2000. On February 16, 2000, the Court denied Plaintiff's motion for
a preliminary injunction in its entirety.

     On or about March 7, 2000, after the Holding Company's Inspector of
Election declared that the Holding Company's nominees had defeated Plaintiff's
nominees at the Annual Meeting, Plaintiff filed a second amended complaint which
repeated the substantive allegations made in the complaint and the amended
complaint and added certain additional allegations, including, among others: (i)
further allegations that the Holding Company's proxy statement and related
materials issued in connection with the Annual Meeting contained false and
misleading statements; and (ii) allegations that the Inspector of Election
improperly counted the votes of certain unallocated shares in the ESOP in favor
of the Holding Company's nominees. The second amended complaint alleged five
counts: (1) breach of fiduciary duty against the individual defendants; (2)
breach of fiduciary duty of disclosure against the individual defendants; (3)
aiding and abetting breaches of fiduciary duty against Morgan Stanley and
Provender; (4) pursuant to 10 Del. C. sec. 6501, a determination that the
individual defendants, Morgan Stanley and Provender, could not cast in excess of
10% of their collective vote at the Annual Meeting; and (5) pursuant to 8 Del.
C. sec. 225, a determination that the Inspector of Election improperly counted
the votes of certain unallocated shares in the ESOP in favor of the Holding
Company's nominees.

     The second amended complaint sought, among other things: (1) an order
permanently enjoining the Holding Company, the individual defendants and others
from treating any stock issued to Morgan Stanley and Provender as validly issued
for purposes of voting; (2) an order rescinding the Transactions; (3) an order
declaring that Plaintiff's nominees were elected as directors of the Holding
Company at the Annual Meeting; (4) an award to Plaintiff of the cost and
disbursements of the Action, including reasonable attorneys' fees and experts'
fees; and (5) an award to Plaintiff of its costs and disbursements in the proxy
contest, including legal fees, proxy solicitor fees, printing fees and the like.
On or about March 27, 2000, defendants filed an answer denying the substantive
allegations of the second amended complaint and seeking, among other things, an
order dismissing the second amended complaint in its entirety, with prejudice.

     On or about March 2, 2000, Blaylock & Partners, L.P. ("Blaylock") filed an
application in the Court pursuant to section 8 Del. C. sec. 231(c) (the
"Application"). The Application alleged that Blaylock is a beneficial holder of
approximately 100,000 shares of common stock of the Holding Company and that the
Inspector of Election improperly declined to accept and count Blaylock's vote at
the Annual Meeting. The Application sought, among other things, an order
directing the Inspector of Election to accept and count Blaylock's votes at the
Annual Meeting. On or about March 8, 2000, defendants filed an answer to the
Application and took no position with respect to the relief sought in the
Application.

SUBSEQUENT EVENTS

     On or about April 6, 2000, Plaintiff filed a motion for partial summary
judgment with respect to Count V in its second amended complaint seeking a
determination that the Inspector of Election improperly counted the votes of
certain unallocated shares in the ESOP in favor of the Holding Company's
nominees and an order declaring that Plaintiff's nominees had won the election
at the Annual Meeting (the "Partial Summary Judgment Motion"). On April 24,
2000, the Court granted the Partial Summary Judgment Motion and declared that
the Inspector of Election improperly counted the votes attaching to the
unallocated ESOP shares at the Annual Meeting.

                                        2
<PAGE>   4

     By order dated April 20, 2000, the Application was consolidated with the
Action and entitled In Re the Carver Bancorp, Inc., Cons. C.A. No. 17743 (the
"Consolidated Action"). The issues in the Consolidated Action were scheduled to
be tried before the Court beginning on May 15, 2000. The trial was expected to
last between 5 and 10 days.

     On or about April 26, 2000, certain defendants filed motions in the Court
seeking: (1) an order directing the entry of a final judgment on the Court's
decision and order on the Partial Summary Judgment Motion or, in the
alternative, an order certifying an appeal from the Court's interlocutory order
on the Partial Summary Judgment Motion; and (2) to stay the proceedings in the
Consolidated Action pending appeal of the Partial Summary Judgment Motion. On or
about May 4, 2000, the Court denied these motions.

     On or about May 2, 2000, Plaintiff filed a motion for summary judgment with
respect to the Application seeking, among other things, to dismiss the
Application.

     On or about May 19, 2000, with the exception of Blaylock, the parties to
the Consolidated Action entered into a Settlement Agreement and Mutual Release
(the "Settlement Agreement"). Pursuant to the terms of the Settlement Agreement,
among other things, the parties agreed that: (a) BBC's nominees at the Annual
Meeting were appointed to the Boards of the Holding Company and Carver Federal
effective May 19, 2000 for a term expiring at the annual meeting of stockholders
for the fiscal year ending March 31, 2002; (b) the Holding Company will hold its
annual meeting of stockholders for the fiscal year ending March 31, 2000 (the
"2000 Annual Meeting") on or before March 24, 2001; (c) in connection with the
2000 Annual Meeting, the Holding Company will ensure that a sufficient number of
directors are made eligible for election to the Board of the Holding Company so
that the sum of (i) the number two and (ii) the number of directorships up for
election at the 2000 Annual Meeting will constitute a majority of the number of
directors on the Board of the Holding Company as of the date of the 2000 Annual
Meeting; (d) certain directors of the Holding Company agreed to pay and will
cause their insurance carrier to pay $475,000 to BBC; (e) all claims concerning
the subject matter of the Consolidated Action are mutually released and forever
discharged; and (f) the parties would promptly execute and file a stipulation
and order dismissing the Consolidated Action with respect to the parties to the
Settlement Agreement.

     On or about May 22, 2000, the parties to the Settlement Agreement executed
and filed with the Court a Stipulation and Order of Dismissal With Prejudice
(the "Stipulation") providing, among other things, that the Consolidated Action
is dismissed with prejudice as to the parties to the Settlement Agreement. On
May 24, 2000, the Stipulation was entered as an Order of the Court.

     In light of, among other things, the Settlement Agreement and Stipulation,
Blaylock agreed to withdraw the Application with prejudice. Accordingly, by
Order dated May 26, 2000, the Court dismissed the Application with prejudice.

     On or about June 29, 2000, a complaint was filed in the Court of Chancery
of the State of Delaware in and for New Castle County (the "Court") entitled
Kevin Cohee and Teri Williams v. Carver Bancorp, Inc. The complaint alleges,
among other things, that Plaintiffs, who are directors of the Holding Company
and Carver Federal Savings Bank, made various requests to inspect various
categories of Carver's books and records. The complaint further alleges that on
or about June 26, 2000, Plaintiffs sent a formal demand to Carver pursuant to
Section 220 of the Delaware General Corporation Law seeking the right to inspect
various categories of Carver's books and records for the purpose of assisting
Plaintiffs in fulfilling their fiduciary duties as Carver directors and becoming
appropriately informed. The complaint further alleges that Carver had not
responded to the requests or the demand as of the date of the filing of the
complaint and seeks an Order of the Court summarily requiring the Holding
Company to permit Plaintiffs and their agents to inspect and copy the documents
identified in the demand and such other relief, including reasonable attorney's
fees and costs, as the Court shall deem appropriate. On or about June 29, 2000,
the Plaintiffs also filed a motion for expedited proceedings seeking an Order of
the Court declaring that proceedings in the action be expedited. Both prior to
and since the filing of the Complaint, the Holding Company has provided various
Carver books and records to Plaintiffs. The case has not yet been scheduled for
further proceedings.

                                        3
<PAGE>   5

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

     The Holding Company held its Annual Meeting on February 24, 2000. The
purpose of the Annual Meeting was to vote on the following proposals:

          1.  The election of two directors for terms of three years each, which
              election was contested by BBC;

          2.  The ratification of the appointment of KPMG, LLP as independent
              auditors of the Holding Company for the fiscal year ending March
              31, 2000; and

          3.  The consideration of a shareholder proposal requesting that the
              shareholders adopt a nonbinding resolution recommending that the
              Board immediately engage the services of an investment banker to
              explore alternatives to enhance shareholder value, opposed by the
              Board.

          The results of voting at the Annual Meeting were as follows:*

<TABLE>
<S>          <C>                          <C>               <C>
Proposal 1:  Election of Directors:
             Holding Company Nominees
             David R. Jones               For                 888,031(1)
                                          Withheld             21,634(1)
             David N. Dinkins             For                 887,934
                                          Withheld             21,731
             BBC's Nominees
             Kevin Cohee                  For                 856,342
                                          Withheld              8,902
             Teri Williams                For                 857,264
                                          Withheld              7,980

Proposal 2:  Ratification of Appointment  For               1,657,339
             of Independent Auditors      Against             111,942
                                          Abstain               5,628
                                          Broker Non-Votes          0

Proposal 3:  Shareholder Proposal         For                 459,843
                                          Against           1,271,540
                                          Abstain              43,524
                                          Broker Non-Votes          0
</TABLE>

     (1) As described below, the Court declared that the Inspector improperly
counted approximately 86,000 votes attaching to the unallocated ESOP shares at
the Annual Meeting which had been voted for the Holding Company's nominees.

     In addition to the nominees elected at the Annual Meeting, the following
persons' terms of office as directors continued after the Annual Meeting:
Deborah C. Wright, Linda H. Dunham, Robert J. Franz, Pazel G. Jackson, Jr.,
Herman Johnson and Frederick O. Terrell.

     * Shortly after the Annual Meeting, the Holding Company's Inspector of
Election declared that the Holding Company's nominees had defeated BBC's
nominees at the Annual Meeting. On or about March 7, 2000, BBC filed a second
amended complaint to the Action described in "Legal Proceedings" which, among
other things, alleged that the Inspector of Election improperly counted the
votes of certain unallocated shares in the ESOP in favor of the Holding
Company's nominees and which, among other things, sought an order declaring that
BBC's nominees had been elected as directors of the Holding Company at the
Annual Meeting.

     On or about March 2, 2000, Blaylock filed the Application in the Court
which alleged that Blaylock is a beneficial owner of approximately 100,000
shares of common stock of the Holding Company and that the

                                        4
<PAGE>   6

Inspector of Election improperly declined to accept and count Blaylock's vote at
the Annual Meeting. The Application sought, among other things, an order
directing the Inspector of Election to accept and count Blaylock's votes at the
Annual Meeting.

     On or about April 6, 2000, BBC filed the Partial Summary Judgment Motion
with respect to Count V in its second amended complaint seeking a determination
that the Inspection of Election improperly counted approximately 86,000 votes
attaching to the unallocated ESOP shares at the Annual Meeting, which had been
voted for of the Holding Company's nominees and an order declaring that BBC's
nominees had won the election at the Annual Meeting. On April 24, 2000, the
Court granted the Partial Summary Judgment Motion and declared that the
Inspector of Election improperly counted the votes attaching to the unallocated
ESOP shares at the Annual Meeting.

     On or about May 19, 2000, with the exception of Blaylock, the parties to
the Consolidated Action entered into the Settlement Agreement. Pursuant to the
terms of the Settlement Agreement, among other things, the parties agreed that
(i) BBC's nominees at the Annual Meeting were appointed to the Boards for a term
expiring at the annual meeting of stockholders for the fiscal year ending March
31, 2002, (ii) the Holding Company will hold the 2000 Annual Meeting on or
before March 24, 2001; and (iii) in connection with the 2000 Annual Meeting, the
Holding Company will ensure that a sufficient number of directors are made
eligible for election to the Board of the Holding Company so that the sum of (i)
the number two and (ii) the number of directorships up for election at the 2000
Annual Meeting will constitute a majority of directors on the Board of the
Holding Company as of the date of the 2000 Annual Meeting. Under the terms of
the Settlement Agreement, Messrs. Dinkins and Jones were not required to
relinquish their seats on the Boards; however, Mr. Dinkins and Mr. Jones
resigned from each of the Boards of the Holding Company and Carver Federal
effective May 25, 2000. See "-- Legal Proceedings."

                                        5
<PAGE>   7

                                    PART II

                             LETTERHEAD OF KPMG LLP

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
CARVER BANCORP, INC.

     We have audited the accompanying consolidated statement of financial
condition of Carver Bancorp, Inc. and subsidiaries (the "Company") as of March
31, 2000 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the year then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the consolidated financial statements
based on our audit. The accompanying financial statements of Carver Bancorp,
Inc. as of March 31, 1999 were audited by other auditors whose report thereon
dated June 29, 1999, expressed an unqualified opinion on those financial
statements.

     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
the significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of March 31, 2000, and the results of its operations and cash flows for the
year then ended in conformity with generally accepted accounting principles.

                                                     /S/ KPMG LLP

MAY 25, 2000
NEW YORK, NEW YORK

                                        6
<PAGE>   8

                          INDEPENDENT AUDITORS' REPORT

                      LETTERHEAD OF MITCHELL & TITUS, LLP

To the Board of Directors
and Stockholders
Carver Bancorp, Inc.

     We have audited the accompanying consolidated statements of financial
condition of Carver Bancorp, Inc. and subsidiaries (the "Company") as of March
31, 1999, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the years ended March 31, 1999
and 1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
consolidated financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
the significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Carver
Bancorp, Inc. and subsidiaries as of March 31, 1999, and the results of its
operations and cash flows for each of the years ended March 31, 1999 and 1998,
in conformity with generally accepted accounting principles.

/s/ MITCHELL & TITUS, LLP

June 29, 1999
New York, New York

                                        7
<PAGE>   9

                     CARVER BANCORP, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                    AS OF MARCH 31,
                                                              ----------------------------
                                                                  2000            1999
                                                              ------------    ------------
<S>                                                           <C>             <C>
                           ASSETS
ASSETS:
Cash and amounts due from depository institutions...........  $ 10,902,497    $ 11,120,748
Federal funds sold..........................................    11,300,000      10,200,000
                                                              ------------    ------------
Total cash and cash equivalents (Note 20)...................    22,202,497      21,320,748
                                                              ------------    ------------
Investment Securities held to maturity (estimated fair value
  of $24,308,640) (Notes 4, 13 and 20)......................    24,995,850              --
Securities available for sale (Notes 3, 13 and 20)..........    24,952,220      29,918,137
Mortgage-backed securities held to maturity, net (estimated
  fair values of $51,939,162 and $65,693,568 at March 31,
  2000 and March 31, 1999) (Notes 5, 12, 13 and 20).........    54,229,230      66,584,447
Loans receivable............................................   273,083,331     274,541,950
  Less allowance for loan losses............................    (2,935,314)     (4,020,099)
  Loans receivable, net (Notes 6, 13 and 20)................   270,148,017     270,521,851
                                                              ------------    ------------
Real estate owned, net......................................       922,308         184,599
Property and equipment, net (Note 8)........................    11,175,334      11,884,983
Federal Home Loan Bank of New York stock, at cost (Note
  13).......................................................     5,754,600       5,754,600
Accrued interest receivable (Notes 9 and 20)................     2,653,266       2,860,693
Excess of cost over net assets acquired, net (Note 10)......       816,780       1,029,853
Other assets (Notes 14 and 16)..............................     2,268,430       6,422,933
                                                              ------------    ------------
          Total assets......................................  $420,118,532    $416,482,844
                                                              ============    ============
            LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits (Notes 11 and 20)..................................  $281,941,338    $276,999,074
Securities sold under agreements to repurchase (Notes 12 and
  20).......................................................    31,337,000      35,337,000
Advances from Federal Home Loan Bank of New York (Notes 13
  and 20)...................................................    66,688,456      65,708,466
Other borrowed money (Notes 18 and 20)......................       553,201         992,619
Other liabilities (Notes 14 and 17).........................     6,957,680       6,270,419
                                                              ------------    ------------
          Total liabilities.................................   387,477,675     385,307,578
                                                              ------------    ------------
Commitments and contingencies (Notes 19 and 20).............            --              --
STOCKHOLDERS' EQUITY: (Note 16)
  Preferred stock, $0.01 par value per share; 1,000,000
     authorized; 100,000 shares issued and outstanding......         1,000              --
Common stock; $0.01 par value per share; 5,000,000
  authorized; 2,314,275 issued and outstanding (Note 2).....        23,144          23,144
Additional paid-in capital (Note 2).........................    23,789,111      21,423,574
Retained earnings (Notes 2 and 14)..........................     9,479,552      10,721,168
Common stock acquired by the ESOP (Notes 2 and 18)..........      (651,950)       (992,620)
Comprehensive income, net of income tax.....................            --              --
                                                              ------------    ------------
          Total stockholders' equity........................    32,640,857      31,175,266
                                                              ------------    ------------
          Total liabilities and stockholders' equity........  $420,118,532    $416,482,844
                                                              ============    ============
</TABLE>

                 See Notes to Consolidated Financial Statements
                                        8
<PAGE>   10

                     CARVER BANCORP, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                YEAR ENDED MARCH 31,
                                                      -----------------------------------------
                                                         2000           1999           1998
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
Interest income:
  Loans.............................................  $19,442,840    $20,576,506    $18,311,042
  Mortgage-backed securities........................    3,640,555      5,430,638      8,522,922
  Investment securities.............................    3,593,178      1,800,738        670,509
  Federal funds sold................................      689,929        665,544        323,243
                                                      -----------    -----------    -----------
          Total interest income.....................   27,366,502     28,473,426     27,827,716
                                                      -----------    -----------    -----------
Interest expense:
  Deposits (Note 11)................................    8,612,026      8,421,226      8,596,358
  Advances and other borrowed money.................    5,396,833      6,393,457      6,422,666
                                                      -----------    -----------    -----------
          Total interest expense....................   14,008,859     14,814,683     15,019,024
                                                      -----------    -----------    -----------
Net interest income.................................   13,357,643     13,658,743     12,808,692
Provision for loan losses (Note 6)..................    1,099,300      4,029,996      1,259,531
                                                      -----------    -----------    -----------
Net interest income after provision for loan
  losses............................................   12,258,343      9,628,747     11,549,161
                                                      -----------    -----------    -----------
Non-interest income:
  Loan fees and service charges.....................      353,215        673,541        559,960
  Gain on sale of securities held for sale (Note
     3).............................................           --          3,948        188,483
  Proceeds from Sale of Alhambra Building...........      728,000             --             --
  Other.............................................    1,458,206      1,704,667      1,603,096
                                                      -----------    -----------    -----------
          Total non-interest income.................    2,539,421      2,382,156      2,351,539
                                                      -----------    -----------    -----------
Non-interest expenses:
  Salaries and employee benefits (Notes 17 and
     18)............................................    5,722,355      5,247,525      4,739,069
  Net occupancy expense (Note 19)...................    1,463,052      1,490,592      1,118,467
  Equipment.........................................    1,350,710      1,409,429      1,255,301
  Other.............................................    7,287,053      9,815,474      4,538,111
                                                      -----------    -----------    -----------
          Total non-interest expenses...............   15,823,170     17,963,020     11,650,948
                                                      -----------    -----------    -----------
Income (loss) before income taxes...................   (1,025,406)    (5,952,117)     2,249,752
Income taxes (benefit) (Note 14)....................      110,030     (1,499,367)     1,203,466
                                                      -----------    -----------    -----------
Net income (loss)...................................  $(1,135,436)   $(4,452,750)   $ 1,046,286
                                                      -----------    -----------    -----------
Net income (loss) available to common
  stockholders......................................  $(1,179,589)   $(4,452,750)   $ 1,046,286
                                                      -----------    -----------    -----------
Net income (loss) per common share..................  $     (0.53)   $     (2.02)   $      0.48
                                                      -----------    -----------    -----------
Weighted average number of shares outstanding.......    2,238,846      2,206,133      2,187,619
                                                      ===========    ===========    ===========
</TABLE>

                 See Notes to Consolidated Financial Statements
                                        9
<PAGE>   11

                     CARVER BANCORP, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                       COMMON
                                                       ADDITIONAL                       STOCK
                                 PREFERRED   COMMON      PAID-IN       RETAINED       ACQUIRED     COMPREHENSIVE
                                   STOCK      STOCK      CAPITAL       EARNINGS        BY ESOP        INCOME          TOTAL
                                 ---------   -------   -----------   -------------   -----------   -------------   -----------
<S>                              <C>         <C>       <C>           <C>             <C>           <C>             <C>
Balance -- March 31, 1997......   $   --     $23,144   $21,410,167    $14,359,060    $(1,365,990)    $(442,659)    $33,983,722
                                  ------     -------   -----------    -----------    -----------     ---------     -----------
Net income for the year ended
  March 31, 1998...............                   --            --      1,046,286             --            --       1,046,286
Preferred Stock................                                 --             --                           --              --
Allocation of ESOP stock.......                             58,566             --        182,132            --         240,698
Dividends paid.................                   --            --       (115,714)            --            --        (115,714)
Options exercised..............                   --       (49,836)            --             --            --         (49,836)
Decrease in unrealized, loss in
  securities available for
  sale, net....................                   --            --             --             --       429,189         429,189
                                  ------     -------   -----------    -----------    -----------     ---------     -----------
Balance -- March 31, 1998......               23,144    21,418,897     15,289,632     (1,183,858)      (13,470)     35,534,345
                                  ------     -------   -----------    -----------    -----------     ---------     -----------
Net loss for the year ended
  March 31, 1999...............                   --            --     (4,452,750)            --            --      (4,452,750)
Allocation of ESOP Stock.......                   --         4,677             --        191,240            --         195,917
Dividends paid.................                   --            --       (115,714)                                    (115,714)
Decrease in unrealized, loss in
  Securities available for
  sale, net....................                   --            --             --             --        13,470          13,470
                                  ------     -------   -----------    -----------    -----------     ---------     -----------
Balance -- March 31, 1999......               23,144    21,423,574     10,721,168       (992,618)           --      31,175,268
                                  ------     -------   -----------    -----------    -----------     ---------     -----------
Net loss for the year ended
  March 31, 2000...............                   --            --     (1,135,436)            --            --      (1,135,436)
Preferred Stock................    1,000          --     2,365,537             --             --            --       2,366,537
Allocation of ESOP Stock.......                   --            --             --        340,668            --         340,668
Dividends paid.................                   --                     (106,180)                                    (106,180)
Decrease in unrealized, loss in
  Securities available for
  sale, net....................                   --            --             --             --            --              --
                                  ------     -------   -----------    -----------    -----------     ---------     -----------
Balance -- March 31, 2000......   $1,000     $23,144   $23,789,111    $ 9,479,552    $  (651,950)    $      --     $32,640,857
                                  ======     =======   ===========    ===========    ===========     =========     ===========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       10
<PAGE>   12

                     CARVER BANCORP, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              YEAR ENDED MARCH 31,
                                                 ----------------------------------------------
                                                     2000             1999             1998
                                                 -------------    -------------    ------------
<S>                                              <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income..............................  $  (1,135,436)   $  (4,452,750)   $  1,046,286
Adjustments to reconcile net (loss) income to
  net cash provided by operating activities:
Depreciation and amortization..................      1,221,742        1,042,659         695,192
Amortization of intangibles....................        213,073          216,264         209,892
Other amortization and accretion, net..........        355,109        1,108,675         402,662
Provision for loan losses......................      1,099,300        4,029,996       1,259,531
Gain from sale of Alhambra.....................       (728,000)              --              --
Proceeds from maturity sale of loans...........             --               --       1,459,491
Net gain on sale of securities available for
  sale.........................................             --           (3,948)       (188,483)
Deferred income taxes..........................             --               --          58,555
Allocation of ESOP stock.......................        340,668          195,917         240,698
(Increase) decrease in accrued interest
  receivable...................................        207,427           97,850         215,522
Increase (decrease) in refundable income
  taxes........................................             --        1,195,852              --
(Increase) decrease in other assets............      2,776,042          (38,224)      2,818,687
Increase (decrease) in other liabilities.......        687,261        4,846,323          37,294
                                                 -------------    -------------    ------------
Net cash provided by operating activities......      5,037,186        8,238,614       8,255,327
                                                 -------------    -------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal repayments on investments held to
  maturity.....................................             --               --         194,476
Principal repayments on securities available
  for sale.....................................             --        3,753,447       5,061,181
Purchases of securities available for sale.....   (460,000,000)    (331,888,674)    (17,000,000)
Proceeds from maturity, sales and call of
  securities available for sale................    465,000,000      319,510,288      55,485,112
Purchase of investment securities held to
  maturity.....................................    (25,000,000)              --      (1,946,326)
Proceeds from maturities and calls of
  investment securities held to maturity.......             --        1,797,042       8,480,705
Principal repayment of mortgage-backed
  securities held to maturity..................     12,209,146       23,592,334      19,313,831
Net change in loans receivable.................       (964,438)       4,432,486     (77,036,664)
Proceeds from sale of Alhambra.................      1,368,755               --              --
Additions to premises and equipment............       (512,093)      (1,656,535)       (897,030)
(Purchase) Federal Home Loan Bank stock........             --               --        (219,600)
                                                 -------------    -------------    ------------
Net cash (used in) provided by investing
  activities...................................     (7,898,630)      19,540,388      (8,564,315)
</TABLE>

                                       11
<PAGE>   13

<TABLE>
<CAPTION>
                                                              YEAR ENDED MARCH 31,
                                                 ----------------------------------------------
                                                     2000             1999             1998
                                                 -------------    -------------    ------------
<S>                                              <C>              <C>              <C>
                                                 -------------    -------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits.......................      4,942,264        2,104,842       8,422,745
Net (decrease) in short-term borrowings........     (4,000,000)     (51,683,000)       (942,404)
Proceeds of long term borrowing................             --               --      12,685,000
Repayment of FHLB Advances.....................    (19,020,010)              --      (8,658,686)
Federal Home Loan Bank Advances................     20,000,000       28,966,780              --
Repayment of other borrowed money..............       (439,418)        (191,238)       (182,132)
Proceeds from issuance of Preferred Stock......      2,366,537               --              --
Dividends Paid.................................       (106,180)        (115,714)       (115,714)
Increase (decrease) in advance payments by
  borrowers for taxes and insurance............             --         (659,995)        (10,507)
                                                 -------------    -------------    ------------
Net cash provided by (used in) financing
  activities...................................      3,743,193      (21,578,325)     11,198,302
                                                 -------------    -------------    ------------
Net increase (decrease) in cash and cash
  equivalents..................................        881,749        6,200,677      10,889,314
Cash and cash equivalents -- beginning.........     21,320,748       15,120,071       4,230,757
                                                 -------------    -------------    ------------
Cash and cash equivalents -- ending............  $  22,202,497    $  21,320,748    $ 15,120,071
                                                 =============    =============    ============
Supplemental disclosure of non-cash activities:
Unrealized Gain (loss) on securities available
  for sale:
Unrealized Gain (loss).........................             --               --         (25,417)
Deferred income taxes..........................             --               --          11,947
                                                 =============    =============    ============
                                                 $          --    $          --    $     13,470
                                                 =============    =============    ============
Loans receivable transferred to real estate
  owned........................................  $     737,709    $          --    $         --
                                                 =============    =============    ============
Supplemental disclosure of cash flow
  information:
Cash paid for:
Interest.......................................  $  13,505,854    $  14,814,683    $ 15,019,024
                                                 =============    =============    ============
Federal, state and city income taxes...........  $      29,354    $          --    $    515,457
                                                 =============    =============    ============
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       12
<PAGE>   14

                     CARVER BANCORP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BACKGROUND

     Carver Bancorp, Inc. is a holding company that was incorporated in May 1996
and whose principal wholly owned subsidiaries are Carver Federal Savings Bank
and Alhambra Holding Corp. CFSB Realty Corp. and CFSB Credit Corp. are wholly
owned subsidiaries of the Bank. Alhambra Realty Corp. is a majority-owned
subsidiary of Alhambra. The Bank was chartered in 1948 and began operations in
1949 as Carver Federal Savings and Loan Association, a federally chartered
mutual savings and loan association. The Bank converted to a federal savings
bank in 1986 and changed its name at that time. On October 24, 1994, the Bank
converted from mutual stock form and issued 2,314,375 shares of its common
stock, par value $0.01 per share. On October 17, 1996, the Bank completed its
reorganization into a holding company structure and became a wholly owned
subsidiary of the Holding Company. In connection with the Reorganization, each
share of the Bank's outstanding common stock was exchanged for one share of the
Holding Company's common stock, par value $.01 per share. See Note 2.

NATURE OF OPERATIONS

     Carver's banking subsidiary's principal business consists of attracting
passbook and other savings accounts through its branch offices and investing
those funds in mortgage loans and other investments permitted by federal savings
banks. Carver's banking subsidiary has six branches located throughout the City
of New York that primarily serve the communities in which they operate.

BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION

     The consolidated financial statements include the accounts of Carver, the
Bank, its wholly owned subsidiary, CFSB Realty Corp., CFSB Credit Corp. and
Alhambra and its majority-owned subsidiary. All significant intercompany
accounts and transactions have been eliminated in consolidation.

     The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
consolidated statement of financial condition and revenues and expenses for the
period then ended. Estimates that are particularly susceptible to significant
changes in the near-term relate to prepayment assumptions on mortgage-backed
securities, the determination of the allowance for loan losses and the valuation
of real estate owned. Actual results could differ significantly from those
estimates.

     Management believes that prepayment assumptions on mortgage-backed
securities are appropriate, the allowance for loan losses is adequate and real
estate owned is properly valued. While management uses available information to
recognize losses on loans and real estate owned, future additions to the
allowance for loan losses or future write downs of real estate owned may be
necessary based on changes in economic conditions in the areas where Carver had
extended mortgages and other credit instruments.

     In addition, various regulatory agencies, as an integral part of their
examination process, periodically review Carver's allowance for loan losses and
real estate owned valuations. Such agencies may require Carver to recognize
additions to the allowance for loan losses or additional write downs of real
estate owned based on their judgments about information available to them at the
time of their examination.

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include cash and amounts due from depository
institutions and federal funds sold. Generally, federal funds sold are sold for
one-day periods.

                                       13
<PAGE>   15
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVESTMENT AND MORTGAGE-BACKED SECURITIES

     Carver does not have trading securities, but does differentiate between
held to maturity securities and available for sale securities. When purchased,
securities are classified in either the investments held to maturity portfolio
or the securities available for sale portfolio. Securities can be classified as
held to maturity and carried at amortized cost only if the Company has a
positive intent and ability to hold those securities to maturity. If not
classified as held to maturity, such securities are classified as securities
available for sale. Available for sale securities are reported at fair value.
Unrealized holding gains or losses for securities available for sale are to be
excluded from earnings and reported net of deferred income taxes as a separate
component of other comprehensive income in the Consolidated Statements of
Changes in Stockholders' Equity.

     Investment and mortgage-backed securities held to maturity are carried at
cost, adjusted for the amortization of premiums and the accretion of discounts
using the level-yield method over the remaining period until maturity.

     Gains or losses on sales of securities of all classifications are
recognized based on the specific identification method.

LOANS RECEIVABLE

     Loans receivable are carried at unpaid principal balances plus unamortized
premiums, less the allowance for loan losses and deferred loan fees and
discounts.

     Carver defers loan origination fees and certain direct loan origination
costs and accretes such amounts as an adjustment of yield over the contractual
lives of the related loans using the interest method. Premiums and discounts on
loans purchased are amortized or accreted as an adjustment of yield over the
contractual lives of the related loans using the interest method.

     Loans are generally placed on non-accrual status when they are past due
three months or more as to contractual obligations or when other circumstances
indicate that collection is questionable. When a loan is placed on non-accrual
status, any interest accrued but not received is reversed against interest
income. Payments received on a non-accrual loan are either applied to the
outstanding principal balance or recorded as interest income, depending on an
assessment of the ability to collect the loan. A non-accrual loan is restored to
accrual status when principal and interest payments become current and its
future collectibility is assured.

     A loan is considered to be impaired, as defined by FAS No. 114, "Accounting
by Creditors for Impairment of a Loan," when it is probable that Carver will be
unable to collect all principal and interest amounts due according to the
contractual terms of the loan agreement. Carver tests loans covered under FAS
No. 114 for impairment if they are on nonaccrual status or have been
restructured. Consumer credit nonaccrual loans are not tested for impairment
because they are included in large groups of smaller-balance homogeneous loans
that, by definition along with leases, are excluded from the scope of FAS No.
114. Impaired loans are required to be measured based upon the present value of
expected future cash flows, discounted at the loan's initial effective interest
rate, or at the loan's market price or fair value of the collateral if the loan
is collateral dependent. If the loan valuation is less than the recorded value
of the loan, an impairment reserve must be established for the difference. The
impairment reserve is established by either an allocation of the reserve for
credit losses or by a provision for credit losses, depending on the adequacy of
the reserve for credit losses. Impairment reserves are not needed when interest
payments have been applied to reduce principal, or when credit losses have been
recorded so that the recorded investment in an impaired loan is less than the
loan valuation.

                                       14
<PAGE>   16
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ALLOWANCE FOR LOAN LOSSES

     An allowance for loan losses is maintained at a level considered adequate
to provide for potential loan losses. Management, in determining the allowance
for loan losses, considers the risks inherent in its loan portfolio and changes
in the nature and volume of its loan activities, along with the general economic
and real estate market conditions.

     Carver maintains a loan review system which allows for a periodic review of
its loan portfolio and the early identification of potential problem loans. Such
system takes into consideration, among other things, delinquency status, size of
loans, type of collateral and financial condition of the borrowers. Loan loss
allowances are established for problem loans based on a review of such
information and/or appraisals of the underlying collateral. On the remainder of
its loan portfolio, loan loss allowances are based upon a combination of factors
including, but not limited to, actual loan loss experience, composition of loan
portfolio, current economic conditions and management's judgment. Although
management believes that adequate loan loss allowances have been established,
actual losses are dependent upon future events and, as such, further additions
to the level of the loan loss allowance may be necessary in the future.

CONCENTRATION OF RISK

     The Bank's principle lending activities are concentrated in loans secured
by real estate, a substantial portion of which is located in the State of New
York and the State of California. Accordingly, the ultimate collectibility of a
substantial portion of the Company's loan portfolio is susceptible to changes in
New York's and California's market conditions.

PREMISES AND EQUIPMENT

     Premises and equipment are comprised of land, at cost, and buildings,
building improvements, furnishings and equipment and leasehold improvements, at
cost, less accumulated depreciation and amortization. Depreciation and
amortization charges are computed using the straight-line method over the
following estimated useful lives:

<TABLE>
<CAPTION>

<S>                                     <C>
Buildings and improvements              10 to 40 years
Furnishings and equipment               3 to 10 years
Leasehold improvements                  The lesser of useful life or
                                        remaining term of lease
</TABLE>

     Significant renewals and betterments are charged to the property and
equipment account. Maintenance and repairs are charged to expense in the year
incurred.

REAL ESTATE OWNED

     Real estate acquired by foreclosure or deed in lieu of foreclosure is
recorded at the lower of cost or fair value at the date of acquisition and
thereafter carried at the lower of cost or fair value less estimated selling
costs. The fair value of such assets is determined based primarily upon
independent appraisals and other relevant factors. The amounts ultimately
recoverable from real estate owned could differ from the net carrying value of
these properties because of economic conditions.

     Costs incurred to improve properties or get them ready for sale are
capitalized. Revenues and expenses related to the holding and operating of
properties are recognized in operations as earned or incurred. Gain or loss on
sale of properties is recognized as incurred.

                                       15
<PAGE>   17
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

EXCESS OF COST OVER NET ASSETS ACQUIRED

     In connection with the acquisition of two branches, core deposit premiums
paid and other capitalized acquisition costs are being amortized to expense over
periods from five to fifteen years using the straight-line method. The company
reviews these assets annually for signs of permanent impairment.

INTEREST-RATE RISK

     The Bank is principally engaged in the business of attracting deposits from
the general public and using these deposits, together with borrowings and other
funds, to originate and purchase loans secured by real estate and to purchase
investment and mortgage-backed securities. The potential for interest-rate risk
exists as a result of the shorter duration of interest-sensitive liabilities
compared to the generally longer duration of interest-sensitive assets. In a
rising rate environment, liabilities will reprice faster than assets, thereby
reducing the market value of long-term assets and net interest income. For this
reason, management regularly monitors the maturity structure of the assets and
liabilities in order to measure its level of interest-rate risk and plan for
future volatility.

INCOME TAXES

     Carver accounts for income taxes using the asset and liability method.
Temporary differences between the basis of assets and liabilities for financial
reporting and tax purposes are measured as of the balance sheet date. Deferred
tax liabilities or recognizable deferred tax assets are calculated on such
differences, using current statutory rates which result in future taxable or
deductible amounts. The effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date.

COMPREHENSIVE INCOME

     Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income ("SFAS 130") establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains,
and losses) in a full set of general -- purpose financial statements. SFAS 130
requires that an enterprise (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional paid
in capital in the equity section of a statement of financial position. Carver
has included the required disclosures in the Consolidated Statements of Changes
in Stockholders' Equity.

NET INCOME (LOSS) PER COMMON SHARE

     Basic EPS is computed by dividing income available to common shareholders
by the weighted-average number of common shares outstanding. Diluted EPS
includes any additional common shares as if all potentially dilutive common
shares were issued (e.g. convertible preferred stock). For the purpose of these
calculations, unreleased ESOP shares are not considered to be outstanding.

PENSION PLANS

     In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits". SFAS 132 revises employers'
disclosures about pension and other postretirement benefit plans. It does not
change the measurement or recognition of those plans. Carver has made the
required disclosures in the accompanying Notes to the Consolidated Financial
Statements.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments, and for

                                       16
<PAGE>   18
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

hedging activities. SFAS 133 supercedes the disclosure requirements in SFAS 80,
105 and 119 and is effective for fiscal periods beginning after June 15, 2000.
The adoption of SFAS No. 133 is not expected to have a material impact on the
financial position or results of operations of the Company.

RECLASSIFICATIONS

     Certain amounts in the consolidated financial statements presented for
prior periods have been reclassified to conform with the 2000 presentation.

NOTE 2.  CONVERSION TO STOCK FORM OF OWNERSHIP AND REORGANIZATION INTO A HOLDING
COMPANY

     On October 24, 1994, the Bank issued an initial offering of 2,314,375
shares of common stock (par value $0.01) at a price of $10 per share resulting
in net proceeds of $21,519,000. As part of the initial public offering, the Bank
established a liquidation account at the time of conversion, in an amount equal
to the surplus and reserves of the Bank at September 30, 1994. In the unlikely
event of a complete liquidation of the Bank (and only in such event), eligible
depositors who continue to maintain accounts shall be entitled to receive a
distribution from the liquidation account. The total amount of the liquidation
account may be decreased if the balances of eligible deposits decreased as
measured on the annual determination dates. The balance of the liquidation
account was approximately $3,507,800 (unaudited), and $4,139,000 (unaudited) at
March 31, 2000 and 1999, respectively, based on an assumed decrease of 15.25% of
eligible deposits per annum. On October 17, 1996, the Bank completed the
Reorganization and became the wholly owned subsidiary of the Holding Company.
Pursuant to an Agreement and Plan of Reorganization, dated May 21, 1996, each
share of the Bank's outstanding common stock was exchanged for one share of the
Holding Company's common stock. In connection with the Reorganization, a
shareholder of the Bank exercised appraisal rights and 100 shares of the Bank's
common stock were purchased from such shareholder in the fourth fiscal quarter
of 1997. Accordingly 2,314,275 shares of the Company's common stock remain
outstanding. The Bank's shareholder approved the Reorganization at the Bank's
annual meeting of shareholders held on July 29, 1996. As a result of the
Reorganization, the Bank will not be permitted to pay dividends to the Holding
Company on its capital stock if the effect thereof would cause its net worth to
be reduced below either: (i) the amount required for the liquidation account or
(ii) the amount required for the Bank to comply with applicable minimum
regulatory capital requirements.

NOTE 3.  SECURITIES AVAILABLE FOR SALE

     At March 31, 2000 and 1999, the Company held no MBSs as available for sale.

<TABLE>
<CAPTION>
                                                                   MARCH 31, 2000
                                                   -----------------------------------------------
                                                                  GROSS UNREALIZED
                                                    CARRYING      -----------------     ESTIMATED
                                                      VALUE       GAINS     LOSSES     FAIR-VALUE
                                                   -----------    ------    -------    -----------
<S>                                                <C>            <C>       <C>        <C>
U.S. Government Agency securities................  $24,952,220      $--       $--      $24,952,220
                                                   -----------      --        --       -----------
                                                    24,952,220      $--       $--      $24,952,220
                                                   ===========      ==        ==       ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                   MARCH 31, 1999
                                                   -----------------------------------------------
                                                                  GROSS UNREALIZED
                                                    CARRYING      -----------------     ESTIMATED
                                                      VALUE       GAINS     LOSSES     FAIR-VALUE
                                                   -----------    ------    -------    -----------
<S>                                                <C>            <C>       <C>        <C>
U. S. Government Agency securities...............  $29,918,137      $--       --       $29,918,137
                                                   -----------      --        --       -----------
                                                   $29,918,137      $--       $        $29,918,137
                                                   ===========      ==        ==       ===========
</TABLE>

                                       17
<PAGE>   19
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     At March 31, 2000 and 1999, U.S. Government Agency securities consisted of
short-term discount notes with maturities of 30 days or less. The estimated fair
value of the U.S. Government Agency securities approximates the carrying value
at March 31, 2000 and 1999.

     Proceeds from the sales of investment securities available for sale during
the years ended March 31, 1999 and 1998, were $24,365,488 and $5,188,483,
respectively, resulting in gross gains of $3,948 and $188,483 respectively.
There were no sales of investment securities available for sale during the year
ended March 31, 2000.

NOTE 4.  INVESTMENT SECURITIES HELD TO MATURITY, NET

<TABLE>
<CAPTION>
                                                                MARCH 31, 2000
                                               ------------------------------------------------
                                                               GROSS UNREALIZED
                                                CARRYING      ------------------     ESTIMATED
                                                  VALUE       GAINS     LOSSES      FAIR-VALUE
                                               -----------    -----    ---------    -----------
<S>                                            <C>            <C>      <C>          <C>
U.S. Government Agency securities............  $24,995,850     $--     $(687,210)   $24,308,640
                                               -----------     --      ---------    -----------
                                               $24,995,850     $--     $(687,210)   $24,308,640
                                               ===========     ==      =========    ===========
</TABLE>

     There were no investment securities held to maturity at March 31, 1999.
There were no sales of securities held to maturity during the years ended March
31, 2000, 1999 and 1998.

NOTE 5.  MORTGAGE-BACKED SECURITIES HELD TO MATURITY, NET

     A summary of gross unrealized gains and losses and estimated fair value
follows:

<TABLE>
<CAPTION>
                                                              MARCH 31, 2000
                                            ---------------------------------------------------
                                                             GROSS UNREALIZED
                                             CARRYING      ---------------------     ESTIMATED
                                               VALUE        GAINS       LOSSES      FAIR-VALUE
                                            -----------    -------    ----------    -----------
<S>                                         <C>            <C>        <C>           <C>
Government National Mortgage
  Association.............................  $ 6,516,167    $    --    $  271,846    $ 6,244,321
Federal Home Loan Mortgage Corporation....   18,780,043         --       787,917     17,992,126
Federal National Mortgage Association.....   26,222,474         --     1,218,331     25,004,143
Small Business Administration.............      759,922      6,260            --        766,182
Collateralized Mortgage Obligations:
  Resolution Trust Corporation............    1,708,032         --        12,442      1,695,590
  Other...................................      242,592         --         5,792        236,800
                                            -----------    -------    ----------    -----------
                                            $54,229,230    $ 6,260    $2,296,328    $51,939,162
                                            ===========    =======    ==========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                              MARCH 31, 1999
                                            ---------------------------------------------------
                                                             GROSS UNREALIZED
                                             CARRYING      ---------------------     ESTIMATED
                                               VALUE        GAINS       LOSSES      FAIR-VALUE
                                            -----------    -------    ----------    -----------
<S>                                         <C>            <C>        <C>           <C>
Government National Mortgage
  Association.............................  $ 7,630,635    $55,247    $       --    $ 7,685,882
Federal Home Loan Mortgage Corporation....   24,635,700         --       772,154     23,863,546
Federal National Mortgage Association.....   29,718,567         --       140,411     29,578,156
Small Business Administration.............    1,325,753      4,255            --      1,330,008
Collateralized Mortgage Obligations:
  Resolution Trust Corporation............    2,282,016         --        36,023      2,245,993
  Federal Home Loan Mortgage
     Corporation..........................      647,010         --         1,820        645,190
  Other...................................      344,766         27            --        344,793
                                            -----------    -------    ----------    -----------
                                            $66,584,447    $59,529    $  950,408    $65,693,568
                                            ===========    =======    ==========    ===========
</TABLE>

                                       18
<PAGE>   20
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following is a schedule of final maturities as of March 31, 2000:

<TABLE>
<CAPTION>
                                                             CARRYING       ESTIMATED
                                                               VALUE       FAIR VALUE
                                                            -----------    -----------
<S>                                                         <C>            <C>
After one through five years..............................  $   525,207    $   498,118
After five through ten years..............................    5,193,818      5,017,419
After ten years...........................................   48,510,205     46,423,625
                                                            -----------    -----------
                                                            $54,229,230    $51,939,162
                                                            ===========    ===========
</TABLE>

     There were no sales of mortgage-backed securities held to maturity during
the years ended March 31, 2000, 1999 and 1998.

NOTE 6.  LOANS RECEIVABLE, NET

<TABLE>
<CAPTION>
                                                                  YEAR ENDED MARCH 31,
                                                              ----------------------------
                                                                  2000            1999
                                                              ------------    ------------
<S>                                                           <C>             <C>
Real estate mortgage:
  One- to four-family.......................................  $152,457,753    $181,320,829
  Multi-family..............................................    86,184,032      52,365,984
  Non-residential...........................................    22,721,310      23,092,010
  Equity and second mortgages...............................       251,738         424,981
                                                              ------------    ------------
                                                               261,614,833     257,203,804
                                                              ------------    ------------
Real estate construction....................................     6,392,759      11,047,185
                                                              ------------    ------------
Commercial loans............................................       699,844         616,325
                                                              ------------    ------------
Consumer:
  Deposit accounts..........................................       294,495         376,227
  Student education.........................................        67,191         147,064
  Other.....................................................     5,412,059       7,883,501
                                                              ------------    ------------
                                                                 5,773,745       8,406,792
                                                              ------------    ------------
Total loans.................................................   274,481,181     277,274,106
                                                              ------------    ------------
Add: Premium................................................       582,263       1,013,770
Less: Loans in process......................................    (1,062,242)     (2,635,520)
Allowance for loan losses...................................    (2,935,314)     (4,020,099)
Deferred loan fees and discounts............................      (917,871)     (1,110,406)
                                                              ------------    ------------
                                                                (4,333,164)     (6,752,255)
                                                              ------------    ------------
                                                              $270,148,017    $270,521,851
                                                              ============    ============
</TABLE>

                                       19
<PAGE>   21
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following is an analysis of the allowance for loan losses:

<TABLE>
<CAPTION>
                                                         YEAR ENDED MARCH 31,
                                               ----------------------------------------
                                                  2000           1999           1998
                                               -----------    -----------    ----------
<S>                                            <C>            <C>            <C>
Balance -- beginning.........................  $ 4,020,099    $ 3,138,000    $2,245,747
Provision charged to operations..............    1,099,300      4,029,996     1,259,531
Recoveries of amounts previously charged
  off........................................      384,625         81,711            --
Loans charged off............................   (2,568,710)    (3,229,608)     (367,278)
                                               -----------    -----------    ----------
Balance -- ending............................  $ 2,935,314    $ 4,020,099    $3,138,000
                                               ===========    ===========    ==========
</TABLE>

     Non-accrual loans consist of loans for which the accrual of interest has
been discounted as a result of such loans becoming three months or more
delinquent as to principal and/or interest payments. Interest income on
non-accrual loans is recorded when received. Restructured loans consist of loans
where borrowers have been granted concessions in regards to the terms of their
loans due to financial or other difficulties which rendered them unable to
service their loans under the original contractual terms. The balances of
non-accrual and restructured loans and their impact in interest income are as
follows:

<TABLE>
<CAPTION>
                                                              YEAR ENDED MARCH 31,
                                                           --------------------------
                                                            2000      1999      1998
                                                           ------    ------    ------
                                                                 (IN THOUSANDS)
<S>                                                        <C>       <C>       <C>
Non-accrual loans........................................  $2,126    $2,417    $5,568
Restructured loans.......................................      --        --       807
                                                           ------    ------    ------
                                                           $2,126    $2,417    $6,375
                                                           ======    ======    ======
</TABLE>

<TABLE>
<CAPTION>
                                                              YEAR ENDED MARCH 31,
                                                              ---------------------
                                                              2000    1999    1998
                                                              -----   -----   -----
                                                                 (IN THOUSANDS)
<S>                                                           <C>     <C>     <C>
Interest income which would have been recorded had loans
  performed in accordance with original contracts...........  $345    $419    $762
Interest income received....................................    --     107     285
                                                              ----    ----    ----
Interest income lost........................................  $345    $312    $477
                                                              ====    ====    ====
</TABLE>

     At March 31, 2000 and 1999, the recorded investment in impaired loans was
$2,126,000 and $2,417,000, respectively. The related allowance for credit losses
was approximately $330,000 and $553,000 at December 31, 2000 and 1999,
respectively. The impaired loan portfolio is primarily collateral dependent. The
average recorded investment in impaired loans during the fiscal years ended
March 31, 2000 and 1999 was approximately $2,272,000 and $3,993,000,
respectively. For the years ended March 31, 2000, 1999 and 1998, the Company
recognized cash basis interest income on these impaired loans of $0, 107,000 and
$285,000, respectively.

     At March 31, 2000, loans to officers totaled $111,722.

                                       20
<PAGE>   22
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following is a summary of loans to the Bank's directors and officers
(and to any associates of such persons), exclusive of loans to any such person
which in aggregate did not exceed $60,000:

<TABLE>
<CAPTION>
                                                               YEAR ENDED MARCH 31,
                                                              ----------------------
                                                                2000         1999
                                                              ---------    ---------
<S>                                                           <C>          <C>
Balance -- beginning........................................  $ 659,491    $ 850,195
Loans originated............................................         --           --
Other(1)....................................................   (530,534)          --
Repayments..................................................    (17,235)    (190,704)
                                                              ---------    ---------
Balance -- ending...........................................  $ 111,722    $ 659,491
                                                              =========    =========
</TABLE>

---------------
(1) Represents loans to individuals who are no longer directors and officers of
    Carver at March 31, 2000.

NOTE 7.  LOANS SERVICING

     The mortgage loan portfolios serviced for the FHLMC and Fannie Mae are not
included in the accompanying financial statements. The unpaid principal balances
of these loans aggregated $2,775,000, $3,035,000 and $3,696,000 at March 31,
2000, 1999 and 1998, respectively.

     Custodial escrow balances, maintained in connection with the foregoing loan
servicing, were approximately $56,000, $55,000 and $61,000 at March 31, 2000,
1999 and 1998, respectively.

NOTE 8.  PREMISES AND EQUIPMENT, NET

     The detail of premises and equipment is as follows:

<TABLE>
<CAPTION>
                                                                    MARCH 31,
                                                            --------------------------
                                                               2000           1999
                                                            -----------    -----------
<S>                                                         <C>            <C>
Land......................................................  $   450,952    $   450,952
Buildings and improvements................................    8,521,565      8,501,923
Leasehold improvements....................................      718,764        697,903
Furnishings and equipment.................................    6,017,827      5,546,237
                                                            -----------    -----------
                                                             15,709,108     15,197,015
Less accumulated depreciation and amortization............    4,533,774      3,312,032
                                                            -----------    -----------
                                                            $11,175,334    $11,884,983
                                                            ===========    ===========
</TABLE>

     Depreciation and amortization charged to operations for the years ended
March 31, 2000, 1999 and 1998 were $1,221,742, $1,042,659 and $695,192,
respectively.

NOTE 9.  ACCRUED INTEREST RECEIVABLE

     The detail of accrued interest receivable is as follows:

<TABLE>
<CAPTION>
                                                                     MARCH 31,
                                                              ------------------------
                                                                 2000          1999
                                                              ----------    ----------
<S>                                                           <C>           <C>
Loans.......................................................  $1,768,295    $2,311,991
Mortgage-backed securities..................................     849,471       522,530
Investments and other interest-bearing assets...............      35,500        26,172
                                                              ----------    ----------
                                                              $2,653,266    $2,860,693
                                                              ==========    ==========
</TABLE>

                                       21
<PAGE>   23
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10.  EXCESS OF COST OVER ASSETS ACQUIRED, NET

     The excess of cost over assets acquired relates to the acquisition of the
Bedford-Stuyvesant office. The detail is as follows:

<TABLE>
<CAPTION>
                                                                    MARCH 31,
                                                              ----------------------
                                                                2000         1999
                                                              --------    ----------
<S>                                                           <C>         <C>
Core deposit premium........................................  $787,517    $  992,956
Acquisition costs...........................................    29,263        36,897
                                                              --------    ----------
                                                              $816,780    $1,029,853
                                                              ========    ==========
</TABLE>

NOTE 11.  DEPOSITS

<TABLE>
<CAPTION>
                                                                MARCH 31,
                                      -------------------------------------------------------------
                                                  2000                            1999
                                      -----------------------------   -----------------------------
                                      WEIGHTED                        WEIGHTED
                                      AVERAGE                         AVERAGE
                                        RATE      AMOUNT    PERCENT     RATE      AMOUNT    PERCENT
                                      --------   --------   -------   --------   --------   -------
                                                         (DOLLARS IN THOUSANDS)
<S>                                   <C>        <C>        <C>       <C>        <C>        <C>
DEMAND:
  Interest-bearing..................    1.66%    $ 18,873     6.68%     1.94%    $ 16,102     5.81%
  Non-interest-bearing..............      --       12,337     4.38        --       10,609     3.83
                                        1.00       31,210    11.06      1.17       26,711     9.64

SAVINGS:
  Savings and club..................    2.51      145,277    51.53      2.51      143,795    51.91
  Money Management..................    3.25       19,418     6.89      2.93       20,932     7.56
  Certificate of deposit............    4.70       86,036    30.52      4.55       85,561    30.89
                                        3.31      250,731    88.94      3.24      250,288    90.36
                                        3.06%    $281,941   100.00%     3.04%    $276,999   100.00%
</TABLE>

     The scheduled maturities of certificates of deposits are as follows:

<TABLE>
<CAPTION>
                                                                  MARCH 31,
                                                              ------------------
                                                               2000       1999
                                                              -------    -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
One year or less............................................  $22,860    $18,033
After one year to three years...............................   29,699     30,944
After three years to five years.............................   10,984     10,197
After five years............................................   22,493     26,387
                                                              -------    -------
                                                              $86,036    $85,561
                                                              =======    =======
</TABLE>

     The aggregate amount of certificates of deposit with minimum denominations
of $100,000 or more was approximately $17,514,000 and $15,915,000 at March 31,
2000 and 1999, respectively.

                                       22
<PAGE>   24
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Interest expense on deposits consists of the following:

<TABLE>
<CAPTION>
                                                        FOR YEAR ENDED MARCH 31,
                                                 --------------------------------------
                                                    2000          1999          1998
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
Demand.........................................  $  314,204    $  313,391    $  364,774
Savings and clubs..............................   3,649,742     3,604,347     3,601,095
Money Management...............................     631,452       613,267       691,939
Certificates of deposit........................   4,046,587     3,902,435     3,948,687
                                                 ----------    ----------    ----------
                                                  8,641,985     8,433,440     8,606,495
Penalty for early withdrawals of certificate of
  deposit......................................     (29,959)      (12,214)      (10,137)
                                                 ----------    ----------    ----------
                                                 $8,612,026    $8,421,226    $8,596,358
                                                 ==========    ==========    ==========
</TABLE>

NOTE 12.  SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

     The scheduled maturities of securities sold under agreements to repurchase
are as follows:

<TABLE>
<CAPTION>
                                                                         MARCH 31,
                                                  INTEREST       --------------------------
LENDER                         MATURITY             RATE            2000           1999
------                     -----------------    -------------    -----------    -----------
<S>                        <C>                  <C>              <C>            <C>
Morgan Stanley Repo......    August 13, 1999        5.61%        $              $ 4,000,000
Federal Home Loan Bank...      March 2, 2000        5.82                          7,000,000
Federal Home Loan Bank...       May 22, 2000        5.88           4,400,000      4,400,000
Federal Home Loan Bank...      July 26, 2000        5.41           8,000,000      8,000,000
Federal Home Loan Bank...  September 5, 2000        5.40           6,750,000      6,750,000
Federal Home Loan Bank...   October 26, 2000        4.81           5,187,000      5,187,000
Federal Home Loan Bank...   December 4, 2000        6.44           7,000,000
                                                                 -----------    -----------
                                                                 $31,337,000    $35,337,000
                                                                 ===========    ===========
</TABLE>

     Information concerning securities sold under agreements to repurchase are
summarized as follows:

<TABLE>
<CAPTION>
                                                              FOR THE YEAR ENDED
                                                                  MARCH 31,
                                                              ------------------
                                                               2000       1999
                                                              -------    -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Average balance during the year.............................  $32,670    $59,296
Average interest rate during the year.......................     5.46%      5.74%
Maximum month-end balance during the year...................  $35,337    $85,720
Mortgage-backed securities underlying the agreements at year
  end:
  Carrying value............................................  $34,225    $39,343
  Estimated fair value......................................  $32,878    $39,316
</TABLE>

                                       23
<PAGE>   25
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13.  ADVANCES FROM FEDERAL HOME LOAN BANK OF NEW YORK

     Information relating to the maturities of advances from the Federal Home
Loan Bank of New York follows:

<TABLE>
<CAPTION>
                                                          MARCH 31,
                                  ----------------------------------------------------------
                                             2000                           1999
MATURING                          ---------------------------    ---------------------------
YEAR ENDED                          WEIGHTED                       WEIGHTED
MARCH 31,                         AVERAGE RATE      AMOUNT       AVERAGE-RATE      AMOUNT
----------                        ------------    -----------    ------------    -----------
<S>                               <C>             <C>            <C>             <C>
2000............................                                     5.78%       $19,000,000
2001............................      5.76%       $51,000,000        5.44         31,000,000
2002............................      5.17         15,000,000        5.17         15,000,000
2003............................      3.58            358,700        3.58            358,700
2012............................      3.50            329,756        3.50            349,766
                                      ----        -----------        ----        -----------
                                      5.60        $66,688,456        5.46        $65,708,466
                                      ====        ===========        ====        ===========
</TABLE>

     At March 31, 2000 and 1999, the advances were secured by pledges of the
Bank's investment in the capital stock of the Federal Home Loan Bank totaling
$5,754,600 respectively and a blanket assignment of the Bank's unpledged
qualifying mortgage, mortgage-backed securities and investment portfolios.

NOTE 14.  INCOME TAXES

     The components of income tax expense for the years ended March 31, 2000,
1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                         YEAR ENDED MARCH 31,
                                                 -------------------------------------
                                                   2000         1999           1998
                                                 --------    -----------    ----------
<S>                                              <C>         <C>            <C>
Federal income tax expense (benefit)
  Current......................................  $      0    $  (701,458)   $  521,917
  Deferred.....................................         0       (688,823)      237,466
State and local income tax expense (benefit)
  Current......................................   110,030        152,059       444,083
  Deferred.....................................         0       (261,145)            0
                                                 --------    -----------    ----------
Total provision for income tax expense.........  $110,030    $(1,499,367)   $1,203,466
                                                 ========    ===========    ==========
</TABLE>

     The reconciliation of the expected Federal tax rate to the consolidated
effective tax rate for the years ended March 31, 2000, 1999 and 1998 are as
follows:

<TABLE>
<CAPTION>
                                                      YEAR ENDED MARCH 31,
                               ------------------------------------------------------------------
                                      2000                   1999                    1998
                               -------------------   ---------------------   --------------------
                                AMOUNT     PERCENT     AMOUNT      PERCENT     AMOUNT     PERCENT
                               ---------   -------   -----------   -------   ----------   -------
<S>                            <C>         <C>       <C>           <C>       <C>          <C>
Statutory Federal income
  tax........................  $(348,638)    34.0%   $(2,023,720)    34.0%   $  764,916    34.0%
State and local income taxes,
  net of Federal tax
  benefit....................    110,030    (10.7)       (71,997)     1.2       293,094    13.0
Change in valuation
  allowance..................    297,492    (26.0)       596,350    (10.0)      145,456     6.5
Other........................     51,146     (8.0)             0      0.0             0     0.0
                               ---------    -----    -----------    -----    ----------    ----
Total income tax expense.....  $ 110,030    (10.7)%  $(1,499,367)    25.2%   $1,203,466    53.5%
                               =========    =====    ===========    =====    ==========    ====
</TABLE>

                                       24
<PAGE>   26
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The bank has net operating loss carryforwards for Federal income tax
purposes at March 31, 2000 and 1999 of approximately $5,705,000 and $4,043,000
respectively. These net operating loss carryforwards begin to expire in the year
ended March 31, 2019.

     The Bank's stockholders' equity includes approximately $2.94 million and
$4.02 million at March 31, 2000 and 1999, respectively, which has been
segregated for Federal income tax purposes as a bad debt reserve. The use of
this amount for purposes other than to absorb losses on loans may result in
taxable income for Federal income taxes at the then current tax rate.

     The tax effects of existing temporary differences that give rise to
significant portions of deferred tax assets and deferred tax liabilities are as
follows:

<TABLE>
<CAPTION>
                                                                     MARCH 31,
                                                              ------------------------
                                                                 2000          1999
                                                              ----------    ----------
<S>                                                           <C>           <C>
DEFERRED TAX ASSETS
Net operating loss carryforward.............................  $1,939,777    $1,374,601
Allowance for loan losses...................................   1,376,364     1,885,017
Deferred loan fees..........................................     430,388       520,667
Employees pension plan......................................      84,305        21,843
Management recognition plan.................................       4,689        21,350
Directors' retirement plan..................................     207,669            --
Contributions carryforward..................................      28,278            --
                                                              ----------    ----------
Total deferred tax assets before valuation allowance........   4,071,470     3,823,478
Valuation allowance.........................................  (2,281,334)   (1,983,842)
                                                              ----------    ----------
Total deferred tax asset....................................   1,790,136     1,839,636
                                                              ----------    ----------
DEFERRED TAX LIABILITIES
Excess of cost over net assets acquired.....................     328,077       399,827
Depreciation................................................     423,606       401,356
Excess tax bad debt reserve.................................      16,428        16,428
                                                              ----------    ----------
Total deferred tax liabilities..............................     768,111       817,611
                                                              ----------    ----------
Net deferred tax assets included in other assets............  $1,022,025    $1,022,025
                                                              ==========    ==========
</TABLE>

     Management believes it is more likely than not that the results of future
operations will generate sufficient future taxable income to realize the
deferred tax asset. The Company will have to generate approximately $2.5 million
of future taxable income to realize this asset.

                                       25
<PAGE>   27
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 15.  EARNINGS PER SHARE

     The following table reconciles the income available to common shareholders
(numerator) and the weighted average common stock outstanding (denominator) for
both basic and diluted earnings per share for the periods presented:

<TABLE>
<CAPTION>
                                                         YEAR ENDED MARCH 31,
                                               ----------------------------------------
                                                  2000           1999           1998
                                               -----------    -----------    ----------
<S>                                            <C>            <C>            <C>
Net income (loss)............................  $(1,135,436)   $(4,452,750)   $1,046,286
Preferred income.............................      (44,153)            --            --
                                               -----------    -----------    ----------
Net income (loss) -- Basic...................  $(1,179,589)   $(4,452,750)   $1,046,286
Impact of potential conversion of convertible
  preferred stock to common stock............       44,153             --            --
                                               -----------    -----------    ----------
Net income (loss) -- Diluted.................  $(1,135,436)   $(4,452,750)   $1,046,286
                                               ===========    ===========    ==========
Weighted average common shares outstanding --
  Basic......................................    2,238,846      2,206,133     2,187,619
Effect of dilutive securities Convertible
  preferred stock............................       46,107             --            --
                                               -----------    -----------    ----------
Weighted average common shares outstanding --
  Diluted....................................    2,284,953      2,206,133     2,187,619
                                               ===========    ===========    ==========
</TABLE>

NOTE 16.  STOCKHOLDERS' EQUITY

     Convertible Preferred Stock.  On January 11, 2000, Carver sold, pursuant to
a Securities Purchase Agreement, dated January 11, 2000, in a private placement
40,000 shares of Series A Convertible Preferred Stock (the "Series A Preferred
Stock") to Morgan Stanley & Co. Incorporated ("MSDW") and 60,000 Shares of
Series B Convertible Preferred Stock (the "Series B Preferred Stock") to
Provender Opportunities Fund L.P. ("Provender"). In addition, Carver entered
into a Registration Rights Agreement, dated January 11, 2000 with MSDW and
Provender. The gross proceeds from the private placement were $2.5 million.

     The Series A Preferred Stock and Series B Preferred Stock (collectively the
"Preferred Stock") accrue annual dividends at $1.97 per share. Dividends are
payable semi-annually commencing on June 15 and December 15 of each year. Each
share of Preferred Stock is convertible at the option of the holder, at any
time, into 2.083 shares of Carver's Common Stock, subject to certain
antidilution adjustments. Carver may redeem the Preferred Stock beginning
January 15, 2004. In the event of any liquidation, dissolution or winding up of
Carver, whether voluntary or involuntary, the holders of the shares of Preferred
Stock shall be entitled to receive $25 per share of Preferred Stock plus all
dividends accrued and unpaid thereon. Each share of Preferred Stock is entitled
to one vote for each share of Common Stock into which the Preferred Stock can be
converted.

     At March 31, 2000 unpaid accrued dividends amounted to $44,153.

     Regulatory Capital.  The operations and profitability of the Bank are
significantly affected by legislation and the policies of the various regulatory
agencies. As required by the Financial Institutions Reform, Recovery, and
Enforcement Act, the OTS promulgated capital requirements for financial
institutions consisting of minimum tangible and core capital ratios of 1.5% and
3.0%, respectively, of the institution's adjusted total assets and a minimum
risk-based capital ratio of 8.0% of the institution's risk weighted assets.
Although the minimum core capital ratio is 3.0%, the FDICIA stipulates that an
institution with less than

                                       26
<PAGE>   28
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4.0% core capital is deemed undercapitalized. At March 31, 2000 and 1999, the
Bank exceeded all the current capital requirements.

     The following table sets out the Bank's various regulatory capital
categories at March 31, 2000.

<TABLE>
<CAPTION>
                                                                AT MARCH 31, 2000
                                                              ---------------------
                                                              DOLLARS    PERCENTAGE
                                                              -------    ----------
                                                                 (IN THOUSANDS)
<S>                                                           <C>        <C>
Tangible equity.............................................  $28,715       6.85%
Core/leverage capital.......................................   28,715       6.85
Tier 1 risk-based capital...................................   28,715      14.15
Total risk-based capital....................................   31,213      15.38
</TABLE>

     The following table reconciles the Bank's stockholders' equity at March 31,
2000, under generally accepted accounting principles to regulatory capital
requirements:

<TABLE>
<CAPTION>
                                                           REGULATORY CAPITAL REQUIREMENTS
                                                   ------------------------------------------------
                                                    GAAP      TANGIBLE    TIER I/CORE    RISK-BASED
                                                   CAPITAL    CAPITAL       CAPITAL       CAPITAL
                                                   -------    --------    -----------    ----------
<S>                                                <C>        <C>         <C>            <C>
Stockholders' Equity at March 31, 2000(1)........  $29,532    $29,532       $29,532       $29,532
                                                   =======
Add:
  General valuation allowances...................                  --            --         2,538
Deduct:
  Goodwill.......................................                (817)         (817)         (817)
  Asset required to be deducted..................                  --            --           (40)
                                                              -------       -------       -------
  Regulatory capital.............................              28,715        28,715        31,213
  Minimum capital requirement....................               6,283        16,766        16,235
                                                              -------       -------       -------
  Regulatory capital excess......................             $22,432       $11,949       $14,978
                                                              =======       =======       =======
</TABLE>

---------------
(1) Reflects Bank only.

NOTE 17.  BENEFIT PLANS

PENSION PLAN

     Carver has a non-contributory defined benefit pension plan covering all
eligible employees. The benefits are based on each employee's term of service.
Carver's policy is to fund the plan with contributions which equal the maximum
amount deductible for federal income tax purposes. The following table sets
forth the

                                       27
<PAGE>   29
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

plan's changes in benefit obligation, changes in plan assets and funded status
and amounts recognized in Carver's consolidated financial statements:

<TABLE>
<CAPTION>
                                                                     MARCH 31,
                                                             -------------------------
                                                                2000           1999
                                                             -----------    ----------
<S>                                                          <C>            <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at the beginning of the year............  $ 3,144,934    $2,796,385
  Service cost.............................................      159,270       161,729
  Interest cost............................................      190,648       188,592
  Actuarial (gain)/loss....................................     (488,146)      154,737
  Benefits paid............................................     (160,921)     (156,509)
                                                             -----------    ----------
Benefit obligation at the end of the year..................  $ 2,845,785    $3,144,934
                                                             ===========    ==========
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year.............  $ 3,625,222    $3,275,671
  Actual return on plan assets.............................      250,871       456,614
  Employer Contributions...................................       75,637        49,446
  Benefits paid............................................     (160,921)     (156,509)
                                                             -----------    ----------
Fair value of plan assets at end of year...................  $ 3,790,809    $3,625,222
                                                             ===========    ==========
Funded Status..............................................  $   945,024    $  480,288
  Contributions............................................           --        28,847
  Unrecognized transition obligation.......................      259,170       294,873
  Unrecognized gain........................................   (1,336,832)     (943,321)
  Unrecognized past service liability......................       14,410        16,544
                                                             -----------    ----------
Accrued pension cost.......................................  $  (118,228)   $ (122,769)
                                                             ===========    ==========
</TABLE>

     Net periodic pension cost included the following components:

<TABLE>
<CAPTION>
                                                         YEAR ENDED MARCH 31,
                                                  -----------------------------------
                                                    2000         1999         1998
                                                  ---------    ---------    ---------
<S>                                               <C>          <C>          <C>
Service cost....................................  $ 159,270    $ 161,729    $ 158,235
Interest cost...................................    190,648      188,592      182,273
Expected return on plan assets..................   (283,757)    (260,201)    (233,435)
Amortization of:
  Unrecognized transition obligation............     35,703       35,703       35,703
  Unrecognized gain.............................    (61,749)     (46,076)     (58,131)
  Unrecognized past service liability...........      2,134        2,134        2,134
                                                  ---------    ---------    ---------
Net periodic pension cost.......................  $  42,249    $  81,881    $  86,779
                                                  =========    =========    =========
</TABLE>

     Significant actuarial assumptions used in determining plan benefits are:

<TABLE>
<CAPTION>
                                                              YEAR ENDED MARCH 31,
                                                              --------------------
                                                              2000    1999    1998
                                                              ----    ----    ----
<S>                                                           <C>     <C>     <C>
Annual salary increase......................................  5.50%   4.50%   5.50%
Long-term return on assets..................................  8.00%   8.00%   8.00%
Discount rate used in measurement of benefit obligations....  8.00%   6.50%   7.50%
</TABLE>

                                       28
<PAGE>   30
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SAVINGS INCENTIVE PLAN

     The Bank has a savings incentive plan, pursuant to Section 401(k) of the
Code, for all eligible employees of the Bank. Employees may elect to defer up to
the lesser of 15% or the maximum amount allowed under law of their compensation
and may receive a 50% matching contribution from the Bank up to the maximum
allowed by law. Total incentive plan expenses for the years ended March 31,
2000, 1999 and 1998 were $56,000, $68,000 and $73,000 respectively.

DIRECTORS' RETIREMENT PLAN

     Concurrent with the conversion to the stock form of ownership, the Bank
adopted a retirement plan for non-employee directors. The benefits are payable
based on the term of service as a director.

<TABLE>
<CAPTION>
                                                                    MARCH 31,
                                                              ----------------------
                                                                2000         1999
                                                              ---------    ---------
<S>                                                           <C>          <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at the beginning of the year.............  $ 795,439    $ 479,672
  Service cost..............................................         --       42,403
  Interest cost.............................................     50,918       31,562
  Actuarial (gain)/loss.....................................   (151,202)     265,977
  Benefits paid.............................................    (25,025)     (24,175)
                                                              ---------    ---------
Benefit obligation at the end of the year...................  $ 670,130    $ 795,439
                                                              =========    =========
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year..............  $      --    $      --
  Actual return on plan assets..............................         --           --
  Employer Contributions....................................     25,025       24,175
  Benefits paid.............................................    (25,025)     (24,175)
                                                              ---------    ---------
Fair value of plan assets at end of year....................  $      --    $      --
                                                              =========    =========
Funded Status...............................................  $(670,130)   $(795,439)
  Contributions.............................................      6,256        6,256
  Unrecognized loss.........................................    165,758      343,826
  Unrecognized past service liability.......................     55,228      110,464
                                                              ---------    ---------
Accrued pension cost........................................  $(442,888)   $(334,893)
                                                              =========    =========
</TABLE>

     Net periodic pension cost for the years ended March 31, 2000, 1999 and 1998
included the following:

<TABLE>
<CAPTION>
                                                       2000        1999        1998
                                                     --------    --------    --------
<S>                                                  <C>         <C>         <C>
Service cost.......................................  $     --    $ 42,403    $ 24,330
Interest cost......................................    50,918      31,562      31,395
Expected return on plan assets.....................        --          --          --
Amortization of:
  Unrecognized gain................................    26,866       3,522          88
  Unrecognized past service liability..............    55,236      55,236      55,236
                                                     --------    --------    --------
Net periodic pension cost..........................  $133,020    $132,723    $111,049
                                                     ========    ========    ========
</TABLE>

     The actuarial assumptions used in determining plan benefits include annual
fee increases of 5.50%, 4.50% and 4.50%, and a discount rate of 8.00%, 6.50% and
6.75%, for the years ended March 31, 2000, 1999 and 1998, respectively.

     Subsequent to March 31, 2000 the directors voted to terminate the
Directors' Retirement Plan.

                                       29
<PAGE>   31
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MANAGEMENT RECOGNITION PLAN

     Pursuant to the management recognition plan approved at the stockholders
meeting held on September 12, 1995, the Bank recognized $178,000, $62,000 and
$93,000 as expense for the years ended March 31, 2000, 1999 and 1998,
respectively.

NOTE 18.  EMPLOYEE STOCK OWNERSHIP PLAN

     Effective upon conversion, an ESOP was established for all eligible
employees. The ESOP used $1,821,320 in proceeds from a term loan obtained from a
third-party institution to purchase 182,132 shares of Bank common stock in the
initial public offering. The term loan principal is payable over forty equal
quarterly installments through September 2004. Interest on the term loan is
payable quarterly, at a rate of 3.00% over the average federal funds rate. Each
year, the Bank intends to make discretionary contributions to the ESOP which
will be equal to principal and interest payments required on the term loan less
any dividends received by the ESOP on unallocated shares.

     Shares purchased with the loan proceeds were initially pledged as
collateral for the term loan and are held in a suspense account for future
allocation among the participants on the basis of compensation, as described by
the Plan, in the year of allocation.

     Accordingly, the ESOP shares pledged as collateral are reported as unearned
ESOP shares in the consolidated statements of financial condition. As shares are
committed to be released from collateral, the Bank reports compensation expense
equal to the current market price of the shares, and the shares become
outstanding for net income per common share computations. ESOP compensation
expense was $326,000, $171,000 and $241,000 for the years ended March 31, 2000,
1999 and 1998 respectively.

     The ESOP shares at March 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                   MARCH 31,
                                                              --------------------
                                                                2000        1999
                                                              --------    --------
<S>                                                           <C>         <C>
Allocated shares............................................   116,937      75,755
Shares committed to be released.............................        --      19,995
Unreleased shares...........................................    65,195      86,382
Total ESOP shares...........................................   182,132     182,132
Fair value of unreleased shares.............................  $570,456    $755,843
</TABLE>

NOTE 19.  COMMITMENTS AND CONTINGENCIES

     The Bank is a party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of its customers.

     These financial instruments primarily include commitments to extend credit
and to sell loans. Those instruments involve, to varying degrees, elements of
credit and interest rate risk in excess of the amount recognized in the
statements of financial condition. The contract amounts of those instruments
reflect the extent of involvement the Bank has in particular classes of
financial instruments.

     The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual notional amount of those instruments. The Bank
uses the same credit policies making commitments as it does for on-balance-sheet
instruments.

                                       30
<PAGE>   32
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Bank has outstanding various loan commitments as follows:

<TABLE>
<CAPTION>
                                                                    MARCH 31,
                                                            --------------------------
                                                               2000           1999
                                                            -----------    -----------
<S>                                                         <C>            <C>
Commitments to originate loans mortgage...................  $ 2,472,000    $ 7,440,520
Commitments to purchase loans mortgage....................   15,000,000             --
Consumer loans............................................    4,488,000      4,096,000
                                                            -----------    -----------
          Total...........................................  $21,960,000    $11,536,520
                                                            ===========    ===========
</TABLE>

     At March 31, 2000, of the $2,472,000 in outstanding commitments to
originate mortgage loans, $1,465,000 represents commitments to originate
multi-family mortgage loans at fixed rates within a range of 8% to 9 3/4% and
$1,007,000 represent the undisbursed balance of construction loans at rates
ranging from 8.25% to 8.83%.

     The commitment to purchase mortgage loans consists of one- to four- family
mortgage loans at rates ranging from 7% to 8.375%.

     At March 31, 2000, undisbursed funds from approved commercial lines of
credit totaled $4,579,000. All such lines are secured, including $1,000,000 in
warehouse lines of credit secured by the underlying warehoused mortgages, expire
within one year, and carry interest rates that float at 1.00% above the prime
rate.

     At March 31, 2000, undisbursed funds from approved consumer lines of
credit, primarily credit cards, totaled $4,488,000. $4,256,000 of such lines are
unsecured and $232,000 of such lines are secured. All such lines carry
adjustable rates.

     Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since some of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Bank evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained if
deemed necessary by the Bank upon extension of credit is based on management's
credit evaluation of the counter-party.

     Collateral held consists primarily of residential real estate, but may
include income-producing commercial properties.

     Rentals, including real estate taxes, under long-term operating leases for
certain branch offices aggregated approximately $273,000, $266,000, and $263,000
for the years ended March 31, 2000, 1999 and 1998, respectively. As of March 31,
2000, minimum rental commitments under all noncancellable leases with initial or
remaining terms of more than one year and expiring through 2011 are as follows:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,   MINIMUM RENTAL
--------------------   --------------
                       (IN THOUSANDS)
<S>                    <C>
  2001                     $  283
  2002                        288
  2003                        293
  2004                        298
  2005                        144
  Thereafter                  994
                           ------
                           $2,300
                           ======
</TABLE>

                                       31
<PAGE>   33
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Bank also has, in the normal course of business, commitments for
services and supplies. Management does not anticipate losses on any of these
transactions.

LEGAL PROCEEDINGS

     From time to time, Carver Federal is a party to various legal proceedings
incident to its business. At March 31, 2000, except as set forth below, there
were no legal proceedings to which Carver Federal or its subsidiaries was a
party, or to which any of their property was subject, which were expected by
management to result in a material loss.

     At March 31, 2000, two properties as to which the Bank is mortgagee are the
subject of criminal forfeiture action pending in U.S. District Court. The
forfeiture proceeding arises from the criminal conviction of principals of the
borrowers on the properties. One property is carried as a loan on the Bank's
books at an approximate value of $500,000 while the second property is carried
as real estate owned, also with an approximate value of $500,000. It is the
Bank's position that it is a good faith holder for value and the Bank is
opposing the government's attempt to forfeit the properties in disregard of the
Bank's interest as mortgagee. The proceedings are in the preliminary stages. See
"Asset Quality -- Asset Classification and Allowances for Losses."

     On or about January 18, 2000, a complaint was filed in the Court of
Chancery of the State of Delaware in and for New Castle County entitled BBC
Capital Market, Inc. v. Carver Bancorp, Inc., et al., C.A. No. 17743, naming the
Holding Company, the individual defendants, Morgan Stanley and Provender as
defendants. The complaint alleged, among other things, that plaintiff BBC is a
7.4% stockholder of the Holding Company and sought to challenge the Holding
Company's issuance on January 11, 2000 of 40,000 shares of the Holding Company's
Series A Preferred Stock to Morgan Stanley and 60,000 shares of the Holding
Company's Series B Preferred Stock to Provender. The complaint further alleged,
among other things, that: (i) the individual defendants approved the
Transactions for the primary purpose of interfering with effective stockholder
action at the Holding Company's annual meeting of stockholders on February 24,
2000 at which two director-defendants were up for re-election; (ii) Morgan
Stanley sought to intimidate Plaintiff's representatives into dropping any
challenge to the election of directors at the Holding Company and that the
individual defendants conspired with Morgan Stanley in the alleged intimidation;
and (iii) the Holding Company issued a false and misleading proxy statement in
connection with the Annual Meeting by not disclosing, among other things,
certain facts relating to Plaintiff's nomination of directors at the Annual
Meeting and the circumstances surrounding the calling of the Annual Meeting. The
complaint alleged four counts: (1) breach of fiduciary duty of loyalty against
the individual defendants; (2) breach of fiduciary duty of disclosure against
the individual defendants; (3) aiding and abetting breaches of fiduciary duty
against Morgan Stanley and Provender; and (4) pursuant to 10 Del. C. sec. 6501,
a determination that the individual defendants, Morgan Stanley and Provender,
could not cast in excess of 10% of their collective vote at the Annual Meeting.

     The complaint sought, among other things: (1) an order preliminarily and
permanently enjoining the Holding Company, the individual defendants and others
from: (a) treating the stock issued to Morgan Stanley and Provender as validly
issued for purposes of voting at the Annual Meeting: (b) taking any steps to
solicit proxies in favor of the Holding Company's nominees at the Annual Meeting
until such time that all alleged disclosure violations were cured; and (c)
taking any action to obstruct a proxy solicitation by Plaintiff; (2) an order
preliminarily and permanently enjoining Morgan Stanley, Provender and others
from aiding and abetting the individual defendants' alleged breach of fiduciary
duties and taking any action to obstruct a proxy solicitation by Plaintiff; (3)
an order rescinding the Transactions; (4) a declaration that the defendants,
Morgan Stanley and Provender, could not cast in excess of 10% of their
collective vote at the Annual Meeting; and (5) an award to Plaintiff of the cost
and disbursements of the action, including reasonable attorneys' fees and
experts' fees. On or about January 29, 2000, defendants filed an answer denying
the substantive allegations

                                       32
<PAGE>   34
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of the complaint and seeking, among other things, an order dismissing the
complaint in its entirety, with prejudice.

     On or about January 31, 2000, Plaintiff filed an amended complaint
repeating the allegations in the original complaint and adding a count pursuant
to 8 Del. C. sec. 220 seeking an order requiring the Holding Company to
immediately produce all information requested in Plaintiff's letter demanding
that the Holding Company produce certain information relating to the Holding
Company's ESOP and 401(k) Savings Plan in RSI Retirement Trust. On or about
February 22, 2000, defendants filed an answer denying the substantive
allegations of the amended complaint and seeking, among other things, an order
dismissing the complaint in its entirety, with prejudice.

     On or about January 18, 2000, Plaintiff also made a motion for a
preliminary injunction to obtain the injunctive relief sought in the complaint
and a motion for expedited proceedings to obtain discovery in support of its
application for preliminary injunctive relief. The parties engaged in expedited
discovery and the Court heard Plaintiff's motion for a preliminary injunction on
February 16, 2000. On February 16, 2000, the Court denied Plaintiff's motion for
a preliminary injunction in its entirety.

     On or about March 7, 2000, after the Holding Company's Inspector of
Election declared that the Holding Company's nominees had defeated Plaintiff's
nominees at the Annual Meeting, Plaintiff filed a second amended complaint which
repeated the substantive allegations made in the complaint and the amended
complaint and added certain additional allegations, including, among others: (i)
further allegations that the Holding Company's proxy statement and related
materials issued in connection with the Annual Meeting contained false and
misleading statements; and (ii) allegations that the Inspector of Election
improperly counted the votes of certain unallocated shares in the ESOP in favor
of the Holding Company's nominees. The second amended complaint alleged five
counts: (1) breach of fiduciary duty against the individual defendants; (2)
breach of fiduciary duty of disclosure against the individual defendants; (3)
aiding and abetting breaches of fiduciary duty against Morgan Stanley and
Provender, (4) pursuant to 10 Del. C. sec. 6501, a determination that the
individual defendants, Morgan Stanley and Provender, could not cast in excess of
10% of their collective vote at the Annual Meeting; and (5) pursuant to 8 Del.
C. sec. 225, a determination that the Inspector of Election improperly counted
the votes of certain unallocated shares in the ESOP in favor of the Holding
Company's nominees.

     The second amended complaint sought, among other things: (1) an order
permanently enjoining the Holding Company, the individual defendants and others
from treating any stock issued to Morgan Stanley and Provender as validly issued
for purposes of voting; (2) an order rescinding the Transactions; (3) an order
declaring that Plaintiff's nominees were elected as directors of the Holding
Company at the Annual Meeting; (4) an award to Plaintiff of the cost and
disbursements of the Action, including reasonable attorneys' fees and experts'
fees; and (5) an award to Plaintiff of its costs and disbursements in the proxy
contest, including legal fees, proxy solicitor fees, printing fees and the like.
On or about March 27, 2000, defendants filed an answer denying the substantive
allegations of the second amended complaint and seeking, among other things, an
order dismissing the second amended complaint in its entirety, with prejudice.

     On or about March 2, 2000, Blaylock filed an application in the Court
pursuant to section 8 Del. C. sec. 231(c). The Application alleged that Blaylock
is a beneficial holder of approximately 100,000 shares of common stock of the
Holding Company and that the Inspector of Election improperly declined to accept
and count Blaylock's vote at the Annual Meeting. The Application sought, among
other things, an order directing the Inspector of Election to accept and count
Blaylock's votes at the Annual Meeting. On or about March 8, 2000, defendants
filed an answer to the Application and took no position with respect to the
relief sought in the Application.

                                       33
<PAGE>   35
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SUBSEQUENT EVENTS

     On or about April 6, 2000, Plaintiff filed a motion for partial summary
judgment with respect to Count V in its second amended complaint seeking a
determination that the Inspector of Election improperly counted the votes of
certain unallocated shares in the ESOP in favor of the Holding Company's
nominees and an order declaring that Plaintiff's nominees had won the election
at the Annual Meeting. On April 24, 2000, the Court granted the Partial Summary
Judgment Motion and declared that the Inspector of Election improperly counted
the votes attaching to the unallocated ESOP shares at the Annual Meeting. The
effect of the Court's decision was Plaintiff's nominees, not the Holding
Company's nominees, had won the election.

     By order dated April 20, 2000, the Application was consolidated with the
Action and entitled In Re the Carver Bancorp, Inc., Cons. C.A. No. 17743. The
issues in the Consolidated Action were scheduled to be tried before the Court
beginning on May 15, 2000. The trial was expected to last between 5 and 10 days.

     On or about April 26, 2000, certain defendants filed motions in the Court
seeking; (1) an order directing the entry of a final judgment on the Court's
decision and order on the Partial Summary Judgment Motion or, in the
alternative, an order certifying an appeal from the Court's interlocutory order
on the Partial Summary Judgment Motion, and (2) to stay the proceedings in the
Consolidated Action pending appeal of the Partial Summary Judgment Motion. On or
about May 4, 2000, the Court denied these motions.

     On or about May 2, 2000, Plaintiff filed a motion for summary judgment with
respect to the Application seeking, among other things, to dismiss the
Application.

     On or about May 19, 2000, with the exception of Blaylock, the parties to
the Consolidated Action entered into a Settlement Agreement and Mutual Release.
Pursuant to the terms of the Settlement Agreement, among other things, the
parties agreed that: (a) BBC's nominees at the Annual Meeting were appointed to
the boards of directors of the Holding Company and Carver Federal effective May
19, 2000 for a term expiring at the annual meeting of stockholders for the
fiscal year ending March 31, 2002; (b) the Holding Company will hold the 2000
Annual Meeting on or before March 24, 2001; (c) in connection with the 2000
Annual Meeting, the Holding Company will ensure that a sufficient number of
directors are made eligible for election to the board of directors of the
Holding Company so that the sum of (i) the number two and (ii) the number of
directorships up for election at the 2000 Annual Meeting will constitute a
majority of the number of directors on the board of directors of the Holding
Company as of the date of the 2000 Annual Meeting; (d) certain directors of the
Holding Company agreed to pay and will cause their insurance carrier to pay
$475,000 to BBC; (e) all claims concerning the subject matter of the
Consolidated Action are mutually released and forever discharged; and (f) the
parties would promptly execute and file a stipulation and order dismissing the
Consolidated Action with respect to the parties to the Settlement Agreement.

     On or about May 22, 2000, the parties to the Settlement Agreement executed
and filed with the Court a Stipulation and Order of Dismissal With Prejudice
providing, among other things, that the Consolidated Action is dismissed with
prejudice as to the parties to the Settlement Agreement. On May 24, 2000, the
Stipulation was entered as an Order of the Court.

     In light of, among other things, the Settlement Agreement and Stipulation,
Blaylock agreed to withdraw the Application with prejudice. Accordingly, by
Order dated May 26, 2000, the Court dismissed the Application with prejudice.

     On or about June 29, 2000, a complaint was filed in the Court entitled
Kevin Cohee and Teri Williams v. Carver Bancorp, Inc. The complaint alleges,
among other things, that Plaintiffs, who are directors of the Holding Company
and Carver Federal, made various requests to inspect various categories of
Carver's books and records. The complaint further alleges that on or about June
26, 2000, Plaintiffs sent a formal demand to Carver pursuant to Section 220 of
the Delaware General Corporation Law seeking the right to inspect various
categories of Carver's books and records for the purpose of assisting Plaintiffs
in fulfilling their fiduciary duties

                                       34
<PAGE>   36
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

as Carver directors and becoming appropriately informed. The complaint further
alleges that Carver had not responded to the requests or the demand as of the
date of the filing of the complaint and seeks an Order of the Court summarily
requiring the Holding Company to permit Plaintiffs and their agents to inspect
and copy the documents identified in the demand and such other relief, including
reasonable attorneys' fees and costs, as the Court shall deem appropriate. On or
about June 29, 2000, the Plaintiffs also filed a motion for expedited
proceedings seeking an Order of the Court declaring that proceedings in the
action be expedited. Both prior to and since the filing of the Complaint, the
Holding Company has provided various Carver books and records to Plaintiffs. The
case has not yet been scheduled for further proceedings.

NOTE 20.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of a financial instrument is defined as the amount at which
the instrument could be exchanged in a current transaction between willing
parties, other than a forced or liquidation sale. Significant estimations were
used by the Bank for the purpose of this disclosure. Estimated fair values have
been determined by the Bank using the best available data and estimation
methodology suitable for each category of financial instrument. For those loans
and deposits with floating interest rates, it is presumed that estimated fair
values generally approximate their recorded book balances. The estimation
methodologies used and the estimated fair values and carrying values of the
Bank's financial instruments are set forth below:

CASH AND CASH EQUIVALENTS AND ACCRUED INTEREST RECEIVABLE

     The carrying amounts for cash and cash equivalents and accrued interest
receivable approximate fair value because they mature in three months or less.

SECURITIES

     The fair values for securities available for sale, mortgage-backed
securities held to maturity and investment securities held to maturity are based
on quoted market or dealer prices, if available. If quoted market or dealer
prices are not available, fair value is estimated using quoted market or dealer
prices for similar securities.

LOANS RECEIVABLE

     The fair value of loans receivable is estimated by discounting future cash
flows, using current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities of such loans.

DEPOSITS

     The fair value of demand, savings and club accounts is equal to the amount
payable on demand at the reporting date. The fair value of certificates of
deposit is estimated using rates currently offered for deposits of similar
remaining maturities. The fair value estimates do not include the benefit that
results from the low-cost funding provided by deposit liabilities compared to
the cost of borrowing funds in the market.

ADVANCES FROM FEDERAL HOME LOAN BANK OF NEW YORK, SECURITIES SOLD UNDER
AGREEMENT TO REPURCHASE AND OTHER BORROWED MONEY

     The fair values of advances from Federal Home Loan Bank of New York,
securities sold under agreement to repurchase and other borrowed money are
estimated using the rates currently available to the Bank for debt with similar
terms and remaining maturities.

                                       35
<PAGE>   37
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

COMMITMENTS

     The fair market value of unearned fees associated with financial
instruments with off-balance sheet risk at March 31, 2000 approximates the fees
received. The fair value is not considered material.

     The carrying amounts and estimated fair values of the Company's financial
instruments at March 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                    AT MARCH 31,
                                                  ------------------------------------------------
                                                           2000                      1999
                                                  ----------------------    ----------------------
                                                  CARRYING    ESTIMATED     CARRYING    ESTIMATED
                                                   AMOUNT     FAIR VALUE     AMOUNT     FAIR VALUE
                                                  --------    ----------    --------    ----------
                                                                         (IN THOUSANDS)
<S>                                               <C>         <C>           <C>         <C>
Financial Assets:
  Cash and cash equivalents.....................  $ 22,202     $ 22,202     $ 21,321     $ 21,321
  Securities available for sale.................  $ 24,952     $ 24,952     $ 29,918     $ 29,918
  Investment securities held to maturity........  $ 24,996     $ 24,309     $     --     $     --
  Mortgage backed securities....................  $ 54,229     $ 51,939     $ 66,584     $ 65,694
  Loans receivable..............................  $270,148     $254,439     $270,522     $272,711
  Accrued interest receivable...................  $  2,653     $  2,653     $  2,861     $  2,861
Financial Liabilities:
  Deposits......................................  $281,941     $279,773     $276,999     $276,999
  Securities sold under agreements to
     purchase...................................  $ 31,337     $ 31,337     $ 35,337     $ 35,337
  Advances from Federal Home Loan Bank of New
     York.......................................  $ 66,688     $ 66,688     $ 65,708     $ 65,708
  Other borrowed money..........................  $    553     $    553     $    993     $    993
</TABLE>

LIMITATIONS

     The fair value estimates are made at a discrete point in time based on
relevant market information about the financial instruments. These estimates do
not reflect any premium or discount that could result from offering for sale at
one time the entire holdings of a particular financial instrument. Because no
quoted market value exists for a significant portion of the Bank's financial
instruments, fair value estimates are based on judgments regarding future
expected loss experience, current economic conditions, risk characteristics of
various financial instruments, and other factors. These estimates are subjective
in nature and involve uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.

     In addition, the fair value estimates are based on existing on an off
balance sheet financial instruments without attempting to value anticipated
future business and the value of assets and liabilities that are not considered
financial instruments. Other significant assets and liabilities that are not
considered financial assets and liabilities include premises and equipment and
advances from borrowers for taxes and insurance. In addition, the tax
ramifications related to the realization of unrealized gains and losses can have
a significant effect on fair value estimates and have not been considered in any
of the estimates.

     Finally, reasonable comparability between financial institutions may not be
likely due to the wide range of permitted valuation techniques and numerous
estimates which must be made given the absence of active secondary markets for
many of the financial instruments. This lack of uniform valuation methodologies
introduces a greater degree of subjectively to these estimated fair values.

                                       36
<PAGE>   38
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 21.  QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                               YEAR ENDED MARCH 31, 2000(1)
                                                         ----------------------------------------
                                                          FIRST     SECOND      THIRD     FOURTH
                                                         QUARTER    QUARTER    QUARTER    QUARTER
                                                         -------    -------    -------    -------
                                                                      (IN THOUSANDS)
<S>                                                      <C>        <C>        <C>        <C>
Interest income........................................  $6,865     $6,694     $6,960     $ 6,848
Interest expense.......................................  (3,580)    (3,563)    (3,500)     (3,366)
Net interest income....................................   3,285      3,131      3,460       3,482
Provision for loan losses..............................    (150)      (230)      (225)       (494)
Non-interest income....................................     475        513        539       1,012
Non-interest expense...................................  (2,824)    (3,155)    (3,202)     (6,642)
Income taxes...........................................                           (23)        (87)
                                                         ------     ------     ------     -------
Net income (loss)......................................  $  786     $  259     $  549     $(2,729)
                                                         ======     ======     ======     =======
Net income (loss) per common share.....................  $  .35     $  .11     $  .25     $ (1.23)
                                                         ======     ======     ======     =======
</TABLE>

<TABLE>
<CAPTION>
                                                               YEAR ENDED MARCH 31, 1999(1)
                                                         ----------------------------------------
                                                          FIRST     SECOND      THIRD     FOURTH
                                                         QUARTER    QUARTER    QUARTER    QUARTER
                                                         -------    -------    -------    -------
<S>                                                      <C>        <C>        <C>        <C>
Interest income........................................  $7,585     $7,001     $ 6,931    $6,956
Interest expense.......................................  (3,887)    (3,633)     (3,523)   (3,772)
Net interest income....................................   3,698      3,368       3,408     3,184
Provision for loan losses..............................    (450)      (300)     (3,061)     (218)
Non-interest income....................................     575        572         347       888
Non-interest expense...................................  (3,269)    (3,337)     (8,270)   (3,089)
Income taxes (benefit).................................     236        110      (1,847)       --
                                                         ------     ------     -------    ------
Net income (loss)......................................  $  318     $  193     $(5,729)   $  765
                                                         ======     ======     =======    ======
Net income (loss) per common share.....................  $ 0.14     $ 0.09     $ (2.59)   $ 0.35
                                                         ======     ======     =======    ======
</TABLE>

---------------
(1) Sum of four quarter results may not equal year-end results due to rounding.

NOTE 22.  RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. This
statement also requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and those
instruments at fair value. This statement, as amended, is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. The adoption of
this statement is not anticipated to have a material impact on the financial
position or results of operations.

NOTE 23.  SUBSEQUENT EVENTS (UNAUDITED)

     On May 12, 2000, the Holding Company announced the completion of the sale
of the Bank's branch office located in Roosevelt, New York (the "Branch"), to
City National Bank of New York ("CNBNY"), an interim national bank formed by
City National Bank of New Jersey ("CNBNJ") to acquire substantially all the
assets of the Branch. CNBNY assumed approximately $8.5 million of deposit
liabilities and acquired the related branch assets consisting of cash, fixed
assets and loans secured by deposits. CNBNY paid a premium of $255,325,
representing 3% of deposits. Immediately upon the consummation of the sale,
CNBNY merged with and into CNBNJ.

                                       37
<PAGE>   39
                     CARVER BANCORP, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     In December, 1999, Carver engaged KPMG LLP ("KPMG") as its independent
auditors for the fiscal year ending March 31, 2000. Since November, 1995,
Mitchell & Titus LLP ("Mitchell & Titus") has been Carver's independent auditor.
The decision to change auditors was recommended by Carver's Audit Committee and
was approved by Carver's Board of Directors based on a review by Carver of its
accounting and tax service needs for future operations.

     The reports of Mitchell & Titus on Carver's consolidated financial
statements for the fiscal years ended March 31, 1999 and 1998 did not contain an
adverse opinion or a disclaimer of opinion, and the reports were not qualified
or modified as to uncertainty, audit scope or accounting principles.

     In connection with Carver's audits of consolidated financial statements for
each of the two fiscal years ended March 31, 1999 and 1998, there were no
disagreements with Mitchell & Titus on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which,
if not resolved to the satisfaction of Mitchell & Titus would have caused
Mitchell & Titus to make reference to the matter in their report.

     In connection with the audits of Carver's consolidated financial statements
for each of the two fiscal years ended March 31, 1999 and 1998;

          (a) Mitchell & Titus did not advise Carver that the internal controls
     necessary for Carver to develop reliable financial statements do not exist;

          (b) Mitchell & Titus did not advise Carver that information had come
     to the attention of Mitchell & Titus that had led it to no longer be able
     to rely on Carver's management representations, or that had made Mitchell &
     Titus unwilling to be associated with the financial statements prepared by
     Carver's management;

          (c) Mitchell & Titus did not advise Carver that Mitchell & Titus would
     need to expand significantly the scope of its audit, or that information
     had come to the attention of Mitchell & Titus during such time period that
     if further investigated may (i) materially impact the fairness or
     reliability of either a previously issued audit report or the underlying
     financial statements, or the financial statements issued or to be issued
     covering the fiscal periods subsequent to the date of the most recent
     financial statements covered by an audit report (including information that
     may prevent it from rendering an unqualified audit report on those
     financial statements) or (ii) cause Mitchell & Titus to be unwilling to
     rely on Carver's management representations or be associated with Carver's
     consolidated financial statements; and

          (d) Mitchell & Titus did not advise Carver that information had come
     to the attention of Mitchell & Titus of the type described in subparagraph
     (c) above, the issue not being resolved to the satisfaction of Mitchell &
     Titus prior to its dismissal.

     The Company provided Mitchell & Titus with a copy of report Form 8-K and
received from Mitchell & Titus a letter addressed to the Securities and Exchange
Commission stating that it agrees with the statements made therein.

     Effective as of December 14, 1999, Carver has entered into an agreement
with KPMG that provides for, among other things, the engagement of KPMG as the
independent accounting firm that will audit the financial statements of Carver
for the fiscal year ending March 31, 2000 and 2001;

     During Carver's fiscal years ended March 31, 1999 and 1998 and the
subsequent period prior to engaging KPMG, Carver (or anyone on Carver's behalf)
did not consult KPMG regarding:

          (1) Either the application of accounting principles to a specified
     transaction, either completed or proposed; or the type of audit opinion
     that might be rendered on Carver's financial statements; and as such no
     written report was provided to Carver and no oral advice was provided that
     the new accountant concluded was an important factor considered by Carver
     in reaching a decision as to any accounting, auditing or financial
     reporting issue; or

          (2) Any matter that was either the subject of disagreement or a
     reportable event.

                                       38
<PAGE>   40

                                    PART III

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the
outstanding shares of Common Stock or Preferred Stock on May 31, 2000, as
disclosed in certain reports regarding such ownership filed by such persons,
with the Holding Company or the SEC in accordance with Section 13 of the
Exchange Act. Other than those persons listed below, the Company is not aware of
any person or group, as such term is defined in the Exchange Act, that
beneficially owns more than 5% of the outstanding shares of Common Stock as of
May 31, 2000. For purposes of the table set forth below and the table set forth
under "-- Stock Ownership of Management," an individual is considered to
"beneficially own" any securities (a) over which such individual exercises sole
or shared voting or investment power, or (b) of which such individual has the
right to acquire beneficial ownership, including the right to acquire beneficial
ownership by the exercise of stock options within 60 days after May 31, 2000. As
used herein, "voting power" includes the power to vote, or direct the voting of,
such securities, and "investment power" includes the power to dispose of, or
direct the disposition of, such securities.

<TABLE>
<CAPTION>
                                                                       AMOUNT AND      PERCENT OF
                                                                       NATURE OF       SHARES OF
                                          NAME AND ADDRESS             BENEFICIAL    CLASS OF STOCK
TITLE OF CLASSES                         OF BENEFICIAL OWNER           OWNERSHIP     OUTSTANDING(1)
----------------                  ---------------------------------    ----------    --------------
<S>                               <C>                                  <C>           <C>
Common Stock....................
                                  EQSF Advisers, Inc.                   218,500(2)         9.44%
                                  767 Third Avenue
                                  New York, NY 10017
Common Stock....................
                                  Carver Bancorp, Inc.                  166,656(3)         7.20%
                                  Employee Stock Ownership Plan
                                  Trust (the "ESOP Trust")
                                  75 West 125th Street
                                  New York, NY 10027
Common Stock....................
                                  Koch Asset Management, L.L.C          222,550(4)         9.64%
                                  1293 Mason Road
                                  Town & Country, MO 63131
Common Stock....................
                                  BBC Capital Market, Inc.              170,700(5)         7.38%
                                  133 Federal Street
                                  Boston, MA 02110
Series A........................
                                  Morgan Stanley & Co. Incorporated      40,000(6)       100.00%
Preferred Stock
                                  1585 Broadway
                                  New York, New York 10036
Series B........................
                                  Provender Opportunities Fund L.P.      60,000(7)       100.00%
Preferred Stock
                                  17 State Street
                                  New York, NY 10004
</TABLE>

---------------
(1) The total number of shares of Common Stock outstanding on May 31, 2000 was
    2,314,275 shares.

(2) Based on a Schedule 13G, dated February 14, 2000, and filed with the SEC
    jointly by EQSF Advisers, Inc. ("EQSF") and Martin J. Whitman, the Chief
    Executive Officer and controlling person of EQSF. EQSF beneficially owns
    218,500 shares of Common Stock. Mr. Whitman disclaims beneficial ownership
    of such stock. Third Avenue Value Fund, Inc., an investment Company
    registered under the Investment Company Act of 1940, has the right to
    receive dividends with respect to, and proceeds from the sale of, such
    shares. EQSF has sole voting and dispositive power over such shares.

(3) Based on a Schedule 13G, dated February 14, 2000, and filed with the SEC by
    the Carver Bancorp, Inc. ESOP Committee (the "Administrative Committee").
    The Administrative Committee established to administer the ESOP consists of
    officers of the Bank. The ESOP's assets are held in the ESOP Trust, for
    which HSBC Bank USA serves as trustee (the "ESOP Trustee"). The
    Administrative Committee

                                       39
<PAGE>   41

    instructs the ESOP Trustee regarding the investment of funds contributed to
    the ESOP. Common Stock purchased by the ESOP Trust is held in a suspense
    account and allocated to participants' accounts annually based on
    contributions made to the ESOP by the Bank. Shares released from the
    suspense account are allocated among participants in proportion to their
    compensation, as defined in the ESOP, for the year the contributions are
    made, up to the limits permitted under the Code. The ESOP Trustee must vote
    all allocated shares held in the ESOP Trust in accordance with the
    instructions of participants. As of December 31, 1999, a total of 801,274
    shares had been allocated, but not distributed, to participants. Under the
    ESOP, unallocated shares or shares for which no voting instructions have
    been received will be voted by the ESOP Trustee in the same proportion as
    allocated shares with respect to which the ESOP Trustee receives
    instructions. In the absence of any voting instructions with respect to
    allocated shares, the Board, on behalf of the Holding Company, directs the
    voting of all shares of unallocated stock, or in the absence of such
    directions from the Board, the ESOP Trustee has sole discretion with respect
    to the voting of such shares. Each member of the Board disclaims beneficial
    ownership of the shares held in the ESOP Trust.

(4) Based on a Schedule 13G, dated February 25, 1999, as subsequently amended
    and filed with the SEC jointly by Koch Asset Management, L.L.C. ("KAM") and
    Donald Leigh Koch, the sole Managing Member of KAM. KAM is a registered
    investment adviser which furnishes investment advice to individual clients
    by exercising trading authority over securities held in accounts on behalf
    of such clients (collectively, the "Managed Portfolios"). In its role as an
    investment adviser to its clients, KAM has sole dispositive power over the
    Managed Portfolios and may be deemed to be the beneficial owner of shares of
    Common Stock held by such Managed Portfolios. However, KAM does not have the
    right to vote or to receive dividends from, or proceeds from the sale of,
    the Common Stock held in such Managed Portfolios and disclaims any ownership
    associated with such rights. Mr. Koch may be deemed to have the power to
    exercise any dispositive power that KAM may have with respect to the Common
    Stock held by the Managed Portfolios. Mr. Koch, individually, owns and holds
    voting power with respect to Managed Portfolios containing approximately
    44,400 shares of Common Stock, or an aggregate of approximately 1.9% of the
    total number of outstanding shares of Common Stock (the "Koch shares").
    Other than with respect to the Koch shares, all shares reported in the
    Schedule 13G have been acquired by Koch Asset Management, L.L.C., and Mr.
    Koch does not have beneficial ownership, voting rights, rights to dividends,
    or rights to sale proceeds associated with such shares.

(5) Based on a Schedule 13D, dated April 2, 1999, as subsequently amended and
    filed with the SEC jointly by BBOC and BBC. Kevin Cohee, the Chairman,
    President and Chief Executive Officer of BBOC, and Teri Williams, the Senior
    Vice President-Marketing/Human Resources of BBOC, collectively own as joint
    tenants 66.6% of the outstanding common stock of BBOC. Mr. Cohee and Ms.
    Williams disclaim beneficial ownership of the Common Stock owned
    beneficially by BBOC or BBC Capital. BBOC and BBC Capital have sole voting
    and sole dispositive power over all of the shares of Common Stock shown.

(6) Morgan Stanley holds 40,000 shares of the Holding Company's Series A
    Preferred Stock, which Carver issued on January 11, 1999 through a private
    placement. The Series A Preferred Stock accrues annual dividends at $1.96875
    per share. Dividends are payable semi-annually commencing on June 15 and
    December 15 of each year. Each share of Series A Preferred Stock was
    purchased for $25.00 and is convertible at the option of the holder at any
    time into 2.083 shares of the Holding Company's Common Stock, subject to
    certain antidilution adjustments. The Holding Company may redeem the Series
    A Preferred Stock beginning January 15, 2004. In the event of any
    liquidation, dissolution or winding up of the Holding Company, whether
    voluntary or involuntary, the holders of the shares of Series A Preferred
    Stock shall be entitled to receive $25 per share of Series A Preferred Stock
    plus all dividends accrued and unpaid thereon. Morgan Stanley is deemed to
    have beneficial ownership of 83,333 shares of the Holding Company's Common
    Stock since it may elect to convert the Series A Preferred Stock at any
    time. Pursuant to a Securities Purchase Agreement, dated January 11, 2000,
    among Morgan Stanley, Provender (as defined below) and the Holding Company,
    Morgan Stanley has agreed not to grant any proxies with respect to the
    Series A Preferred Stock or any Common Stock of the Holding Company other
    than as recommended by the Holding Company's Board of Directors without
    first obtaining the Holding Company's prior consent.

                                       40
<PAGE>   42

(7) Provender holds 60,000 shares of the Holding Company's Series B Preferred
    Stock, which the Holding Company issued on January 11, 1999 through a
    private placement. The Series B Preferred Stock accrues annual dividends at
    $1.96875 per share. Dividends are payable semi-annually commencing on June
    15 and December 15 of each year. Each share of Series B Preferred Stock was
    purchased for $25.00 and is convertible at the option of the holder at any
    time into 2.083 shares of the Holding Company's Common Stock, subject to
    certain antidilution adjustments. The Holding Company may redeem the Series
    B Preferred Stock beginning January 15, 2004. In the event of any
    liquidation, dissolution or winding up of the Holding Company, whether
    voluntary or involuntary, the holders of the shares of Series B Preferred
    Stock shall be entitled to receive $25 per share of Series B Preferred Stock
    plus all dividends accrued and unpaid thereon. Provender is deemed to have
    beneficial ownership of 125,000 shares of the Holding Company's Common Stock
    since it may elect to convert the Series B Preferred Stock at any time.
    Pursuant to a Securities Purchase Agreement, dated January 11, 2000, among
    Morgan Stanley, Provender and the Holding Company, Provender has agreed not
    to grant any proxies with respect to the Series B Preferred Stock or any
    Common Stock of the Holding Company other than as recommended by the Holding
    Company's Board without first obtaining the Holding Company's prior consent.

SECURITY OWNERSHIP OF MANAGEMENT

     The following table sets forth information, determined as of May 31, 2000,
as to the total number of shares of Common Stock beneficially owned by each
director and each Named Executive Officer, as defined herein, identified in the
Summary Compensation Table, appearing elsewhere herein, and all directors and
executive officers of the Holding Company or the Bank as a group. Ownership
information is based upon information furnished by the respective individuals.
Except as otherwise indicated, each person and the group shown in the table has
sole voting and investment power with respect to the shares indicated.

<TABLE>
<CAPTION>
                                                                      AMOUNT AND         PERCENT OF
                                                                       NATURE OF           COMMON
                                                                      BENEFICIAL           STOCK
NAME                                           TITLE                OWNERSHIP(1)(2)    OUTSTANDING(3)
----                               -----------------------------    ---------------    --------------
<S>                                <C>                              <C>                <C>
Deborah C. Wright(4).............  President and Chief Executive         23,300                  *
                                   Officer, Director
Robert J. Franz..................  Director                               2,700                  *
Pazel G. Jackson, Jr.............  Director                               1,500                  *
Frederick O. Terrell(5)..........  Director                             125,000               5.40%
Kevin Cohee(6)...................  Director                             170,700               7.38%
Teri Williams(7).................  Director                             170,700               7.38%
All directors, former directors and executive officers as a
  group (13 persons)(8)(9)(10)(11)..............................        472,067              20.42%
</TABLE>

---------------
  *  Less than 1% of outstanding Common Stock.

 (1) Includes 20,000, 400 and 400 shares which may be acquired by Ms. Wright and
     Messrs. Franz and Jackson, respectively, pursuant to options granted under
     the Carver Bancorp, Inc. 1995 Stock Option Plan (the "Option Plan").

 (2) Excludes 5,000, 600 and 600 shares of restricted stock granted to Ms.
     Wright and Messrs. Franz and Jackson, respectively, pursuant to the Carver
     Bancorp, Inc. Management Recognition Plan (the "MRP") and/or the Incentive
     Compensation Plan with respect to which such individuals have neither
     voting nor dispositive power.

 (3) Percentages with respect to each person or group of persons have been
     calculated on the basis of 2,314,275 shares of Common Stock, the total
     number of shares of the Holding Company's Common Stock outstanding as of
     May 31, 2000, plus the number of shares of Common Stock which such person
     or group has the right to acquire within 60 days after May 31, 2000, by the
     exercise of stock options.

 (4) Ms. Wright was awarded 30,000 options to purchase the Holding Company's
     Common Stock at a price per share of $8.125 under the Option Plan, 15,000
     of which vested as of June 1, 1999, 5,000 of which

                                       41
<PAGE>   43

     vested on June 1, 2000, and the remainder of which vest in two equal
     installments of 5,000 beginning on June 1, 2001. Ms. Wright was also
     awarded 7,500 shares of restricted stock under the MRP, 2,500 of which
     vested on June 1, 2000, and the remainder will vest in two equal
     installments of 2,500 beginning on June 1, 2001.

 (5) Includes 60,000 Shares of the Series B Preferred Stock owned by Provender.
     Provender is also deemed to have beneficial ownership of 125,000 shares of
     Common Stock, which represents 5.12% of the Holding Company's outstanding
     Common Stock (since the Series B Preferred Stock may be converted at any
     time.) As a Managing General Partner of Provender, Mr. Terrell may be
     deemed to beneficially own such securities. Mr. Terrell disclaims
     beneficial ownership to such securities.

 (6) Represents shares owned by BBC Capital, a subsidiary of Boston Bank of
     Commerce, in which Kevin Cohee is an executive officer and controlling
     shareholder.

 (7) Represents shares owned by BBC Capital, a subsidiary of Boston Bank of
     Commerce, in which Teri Williams is an executive officer and controlling
     shareholder.

 (8) Includes 3,224 shares in the aggregate held by the ESOP Trust that have
     been allocated as of December 31, 1999 to the individual accounts of
     executive officers under the ESOP and as to which an executive officer has
     sole voting power for the shares allocated to such person's account, but no
     dispositive power, except in limited circumstances. Also includes 65,795
     unallocated shares held by the ESOP Trust as to which the Board shares
     voting and dispositive power. Each member of the Board disclaims beneficial
     ownership of the shares held in the ESOP.

 (9) Includes 105 shares in the aggregate attributable to the individual
     accounts of executive officers under the 401(k) Plan and as to which each
     executive officer has sole dispositive power for the shares allocated to
     such person's account and shared voting power with the members of the
     committee established to administer the 401(k) Plan.

(10) Includes 3,140 shares which may be acquired by executive officers pursuant
     to options granted under the Option Plan. Also includes 309 shares which
     may be acquired by the executive officers pursuant to options granted under
     the Incentive Compensation Plan. Excludes the 240 shares of restricted
     stock awarded to the executive officers under the MRP and Incentive
     Compensation Plan with respect to which such executive officers have
     neither voting nor dispositive power.

(11) Includes 125,000 shares of Common Stock issuable on conversion of the
     Series B Preferred Stock held by Provender Opportunities Fund L.P.
     Excluding the effect of the Series B Preferred Stock, the directors, former
     directors and executive officers of the Holding Company own 347,467 shares
     of the Common Stock representing 15.04% of such securities. See footnote 6
     above.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a) List of Documents Filed as Part of this Report

     (1) Consolidated Financial Statements. The following are incorporated by
reference from Item 8 hereof.

                                       42
<PAGE>   44

                          INDEPENDENT AUDITORS' REPORT

     Consolidated Statements of Financial Condition as of March 31, 2000 and
1999

     Consolidated Statements of Operations for Each of the Years in the
Three-Year Period Ended March 31, 2000

     Consolidated Statements of Changes in Stockholders' Equity for Each of the
Years in the Three-Year Period Ended March 31, 2000

     Consolidated Statements of Cash Flows for Each of the Years in the
Three-Year Period Ended March 31, 2000

     (2) Financial Statement Schedules. All financial statement schedules have
         been omitted as the required information is either inapplicable or
         included in the Financial Statements or related notes.

     (b) Reports on Form 8-K Filed During the Last Quarter of the Registrant's
         Fiscal Year Ended March 31, 2000

     The following reports on Form 8-K were filed during the fourth quarter of
the Company's fiscal year ended March 31, 2000:

          (1) Form 8-K dated January 14, 2000 announcing the sale of Series A
     and Series B Convertible Preferred Stock.

          (2) Form 8-K dated March 3, 2000 announcing the results of the Annual
     Meeting of Stockholders.

     (c) Exhibits required by Item 601 of Regulation S-K:

         Exhibits. The following is a list of exhibits filed as part of this
         Annual Report and is also the Exhibit Index.

<TABLE>
<CAPTION>
 NO.                               EXHIBIT
 ---                               -------
<S>      <C>
 3.1     Certificate of Incorporation of Carver Bancorp, Inc.(1)
 3.2     Bylaws of Carver Bancorp, Inc.(1)
 4.1     Stock certificate of Carver Bancorp, Inc.(1)
 4.2     Federal Stock Charter of Carver Federal Savings Bank(1)
 4.3     Bylaws of Carver Federal Savings Bank(1)
 4.4     Amendments to Bylaws of Carver Federal Savings Bank(3)
 4.5     Certificate of Designations, Preferences and Rights of
         Series A Convertible Preferred Stock(6)
 4.6     Certificate of Designations, Preferences and Rights of
         Series B Convertible Preferred Stock(6)
10.1     Carver Bancorp, Inc. 1995 Stock Option Plan, effective as of
         September 12, 1995(1)
10.2     Carver Federal Savings Bank Retirement Income Plan, as
         amended and restated effective as of January 1, 1989(1)
10.3     Carver Federal Savings Bank 401(k) Savings Plan in RSI
         Retirement Trust, as amended and restated effective as of
         May 1, 1993(1)
10.4     Carver Bancorp, Inc. Employee Stock Ownership Plan,
         effective as of January 1, 1993(1)
10.5     Carver Federal Savings Bank Deferred Compensation Plan,
         effective as of August 10, 1993(1)
10.6     Carver Federal Savings Bank Retirement Plan for Nonemployee
         Directors, effective as of October 24, 1994(1)
10.7     Carver Bancorp, Inc. Management Recognition Plan, effective
         as of September 12, 1995(1)
10.8     Carver Bancorp, Inc. Incentive Compensative Plan, effective
         as of September 12, 1995(1)
10.9     Employment Agreement by and between Carver Federal Savings
         Bank and Thomas L. Clark, entered into as of April 1,
         1997(2)
</TABLE>

                                       43
<PAGE>   45

<TABLE>
<CAPTION>
 NO.                               EXHIBIT
 ---                               -------
<S>      <C>
10.10    Employment Agreement by and between Carver Bancorp, Inc. and
         Thomas L. Clark, entered into as of April 1, 1997(2)
10.11    Employment Agreement by and between Carver Federal Savings
         Bank and Deborah C. Wright, entered into as of June 1,
         1999(4)
10.12    Employment Agreement by and between Carver Bancorp, Inc. and
         Deborah C. Wright, entered into as of June 1, 1999(4)
10.13    Securities Purchase Agreement by and among Carver Bancorp,
         Inc., Morgan Stanley & Co. Incorporated and Provender
         Opportunities Fund L.P.(5)
10.14    Registration Rights Agreement by and among Carver Bancorp,
         Inc., Morgan Stanley & Co. Incorporated and Provender
         Opportunities Fund L.P.(5)
10.15    Settlement Agreement and Mutual Release by and among BBC
         Capital Market, Inc., The Boston Bank of Commerce, Kevin
         Cohee and Teri Williams; Carver Bancorp, Inc., Deborah C.
         Wright, David N. Dinkins, Linda H. Dunham, Robert J. Franz,
         Pazel G. Jackson, Jr., Herman Johnson and David R. Jones;
         Morgan Stanley & Co., Incorporated; and Provender
         Opportunities Fund, L.P. and Frederick O. Terrell.(5)
10.16    Stipulation and Order of Dismissal with Prejudice(5)
21.1     Subsidiaries of the Registrant(5)
23.1     Consent of Mitchell & Titus LLP
23.2     Consent of KPMG LLP(5)
27.1     Financial Data Schedule (only submitted with filing in
         electronic format)(5)
</TABLE>

---------------
(1) Incorporated herein by reference to Registration Statement No. 333-0559 on
    Form S-4 of Carver Bancorp. Inc., filed with the Securities and Exchange
    Commission during July 1997, as amended.

(2) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 1997.

(3) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 1998.

(4) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report of Form 10-K for the fiscal year ended March 31, 1999.

(5) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 2000.

(6) Incorporated herein by reference to the Exhibits to the Registrant's Current
    Report on Form 8-K, dated January 14, 2000.

                                       44
<PAGE>   46

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                          CARVER BANCORP, INC.

July 20, 2000                              By      /s/ DEBORAH C. WRIGHT
                                            ------------------------------------
                                            Deborah C. Wright
                                            President and Chief Executive
                                             Officer
                                            (Duly Authorized Representative)

                                       45
<PAGE>   47

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<C>           <S>
    3.1       Certificate of Incorporation of Carver Bancorp, Inc.(1)
    3.2       Bylaws of Carver Bancorp, Inc.(1)
    4.1       Stock certificate of Carver Bancorp, Inc.(1)
    4.2       Federal Stock Charter of Carver Federal Savings Bank(1)
    4.3       Bylaws of Carver Federal Savings Bank(1)
    4.4       Amendments to Bylaws of Carver Federal Savings Bank(3)
    4.5       Certificate of Designations, Preferences and Rights of
              Series A Convertible Preferred Stock(6)
    4.6       Certificate of Designations, Preferences and Rights of
              Series B Convertible Preferred Stock(6)
   10.1       Carver Bancorp, Inc. 1995 Stock Option Plan, effective as of
              September 12, 1995(1)
   10.2       Carver Federal Savings Bank Retirement Income Plan, as
              amended and restated effective as of January 1, 1989(1)
   10.3       Carver Federal Savings Bank 401(k) Savings Plan in RSI
              Retirement Trust, as amended and restated effective as of
              May 1, 1993(1)
   10.4       Carver Bancorp, Inc. Employee Stock Ownership Plan,
              effective as of January 1, 1993(1)
   10.5       Carver Federal Savings Bank Deferred Compensation Plan,
              effective as of August 10, 1993(1)
   10.6       Carver Federal Savings Bank Retirement Plan for Nonemployee
              Directors, effective as of October 24, 1994(1)
   10.7       Carver Bancorp, Inc. Management Recognition Plan, effective
              as of September 12, 1995(1)
   10.8       Carver Bancorp, Inc. Incentive Compensative Plan, effective
              as of September 12, 1995(1)
   10.9       Employment Agreement by and between Carver Federal Savings
              Bank and Thomas L. Clark, entered into as of April 1,
              1997(2)
   10.10      Employment Agreement by and between Carver Bancorp, Inc. and
              Thomas L. Clark, entered into as of April 1, 1997(2)
   10.11      Employment Agreement by and between Carver Federal Savings
              Bank and Deborah C. Wright, entered into as of June 1,
              1999(4)
   10.12      Employment Agreement by and between Carver Bancorp, Inc. and
              Deborah C. Wright, entered into as of June 1, 1999(4)
   10.13      Securities Purchase Agreement by and among Carver Bancorp,
              Inc., Morgan Stanley & Co. Incorporated and Provender
              Opportunities Fund L.P.(5)
   10.14      Registration Rights Agreement by and among Carver Bancorp,
              Inc., Morgan Stanley & Co. Incorporated and Provender
              Opportunities Fund L.P.(5)
   10.15      Settlement Agreement and Mutual Release by and among BBC
              Capital Market, Inc., The Boston Bank of Commerce, Kevin
              Cohee and Teri Williams; Carver Bancorp, Inc., Deborah C.
              Wright, David N. Dinkins, Linda H. Dunham, Robert J. Franz,
              Pazel G. Jackson, Jr., Herman Johnson and David R. Jones;
              Morgan Stanley & Co., Incorporated; and Provender
              Opportunities Fund, L.P. and Frederick O. Terrell.(5)
   10.16      Stipulation and Order of Dismissal with Prejudice(5)
</TABLE>

                                       46
<PAGE>   48

<TABLE>
<CAPTION>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<C>           <S>
   21.1       Subsidiaries of the Registrant(5)
   23.1       Consent of Mitchell & Titus LLP
   23.2       Consent of KPMG LLP(5)
   27.1       Financial Data Schedule (only submitted with filing in
              electronic format)(5)
</TABLE>

---------------
(1) Incorporated herein by reference to Registration Statement No. 333-0559 on
    Form S-4 of Carver Bancorp. Inc., filed with the Securities and Exchange
    Commission during July 1997, as amended.

(2) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 1997.

(3) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 1998.

(4) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 1999.

(5) Incorporated herein by reference to the Exhibits to the Registrant's Annual
    Report on Form 10-K for the fiscal year ended March 31, 2000.

(6) Incorporated herein by reference to the Exhibits to the Registrant's Current
    Report on Form 8-K, dated January 14, 2000.

                                       47