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

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

                                   FORM 10-Q

(Mark One)

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

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999

[ ]   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

     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 thirty days.

                            Yes [X]          No [ ]

<TABLE>
<S>                                            <C>
         COMMON STOCK, PAR VALUE $.01                            2,314,275
                    CLASS                             OUTSTANDING AT FEBRUARY 10, 2000
</TABLE>

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<PAGE>   2

                                    CONTENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
PART I. FINANCIAL INFORMATION
  Item 1. Financial Statements
     Consolidated Statements of Financial Condition as of
      December 31, 1999 and March 31, 1999 (unaudited)......    2
     Consolidated Statements of Operations for the Three and
      Nine-Month Periods Ended December 31, 1999 and 1998
      (unaudited)...........................................    3
     Consolidated Statements of Cash Flows for the
      Nine-Month Periods Ended December 31, 1999 and 1998
      (unaudited)...........................................    4
     Notes to Consolidated Financial Statements
      (unaudited)...........................................    5
     Recent Developments....................................    5
  Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations...............    6
  Item 3. Quantitative and Qualitative Disclosures About
     Market Risk............................................   17
PART II. OTHER INFORMATION
  Item 1. Legal Proceedings.................................   17
  Item 2. Changes in Securities and Use of Proceeds.........   18
  Item 3. Defaults upon Senior Securities...................   18
  Item 4. Submission of Matters to a Vote of Security
     Holders................................................   18
  Item 5. Other Information.................................   18
  Item 6. Exhibits and Reports on Form 8-K..................   18
SIGNATURES..................................................   19
</TABLE>

                                        i
<PAGE>   3

                              CARVER BANCORP, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 AS OF           AS OF
                                                              DECEMBER 31,     MARCH 31,
                                                                  1999            1999
                                                              ------------    ------------
<S>                                                           <C>             <C>
ASSETS
Cash and due from banks.....................................  $ 11,588,724    $ 11,120,748
Other interest earning assets...............................     8,600,000      10,200,000
                                                              ------------    ------------
          Total cash and cash equivalents...................    20,188,724      21,320,748
                                                              ------------    ------------
Investment securities held to maturity......................    24,996,558              --
Securities available for sale...............................    29,832,492      29,918,137
Mortgage-backed securities held to maturity, net (estimated
  fair values of $53,997,162 and $65,693,568 at December 31,
  1999 and March 31, 1999)..................................    56,029,832      66,584,447
Loans receivable............................................   259,234,734     274,541,950
  Less allowance for loan losses............................    (3,227,338)     (4,020,099)
                                                              ------------    ------------
  Loans receivable, net.....................................   256,007,396     270,521,851
                                                              ------------    ------------
Real estate owned, net......................................       453,301         184,599
Property and equipment......................................    11,469,772      11,844,983
Federal Home Loan Bank of New York stock, at cost...........     5,754,600       5,754,600
Accrued interest receivable.................................     2,150,669       2,860,693
Excess of cost over net assets acquired, net................       870,048       1,029,853
Other assets................................................     4,755,836       6,422,933
                                                              ------------    ------------
          Total assets......................................  $412,509,228    $416,482,844
                                                              ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits..................................................  $277,354,563    $276,999,074
  Securities sold under agreement to repurchase.............    31,337,000      35,337,000
  Advances from Federal Home Loan Bank of New York..........    65,693,524      65,708,466
  Other borrowed money......................................       803,076         992,619
  Other liabilities.........................................     3,956,169       6,270,419
                                                              ------------    ------------
          Total liabilities.................................   379,144,332     385,307,578
                                                              ------------    ------------
STOCKHOLDERS' EQUITY
  Preferred stock, $0.01 par value per share; 2,000,000
     shares authorized; none issued.........................            --              --
  Common stock, $0.01 par value per share; 10,000,000 shares
     authorized; 2,314,275 shares issued and outstanding....        23,144          23,144
  Additional paid-in capital................................    21,412,879      21,423,574
  Retained Earnings-substantially restricted................    12,731,949      10,721,168
  Common stock acquired by Employee Stock Ownership Plan....      (803,076)       (992,620)
  Comprehensive Income, net of Income Tax...................            --              --
                                                              ------------    ------------
          Total stockholders' equity........................    33,364,896      31,175,266
                                                              ------------    ------------
          Total liabilities and stockholders' equity........  $412,509,228    $416,482,844
                                                              ============    ============
</TABLE>

                                        1
<PAGE>   4

                              CARVER BANCORP INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED            NINE MONTHS ENDED
                                               DECEMBER 31,                  DECEMBER 31,
                                         -------------------------    --------------------------
                                            1999          1998           1999           1998
                                         ----------    -----------    -----------    -----------
<S>                                      <C>           <C>            <C>            <C>
Interest Income:
  Loans receivable, net................  $4,911,141    $ 4,937,816    $14,649,746    $15,497,439
  Mortgage-backed securities...........     874,361      1,151,518      2,777,144      4,336,632
  Investment securities................     990,012        629,841      2,581,128      1,125,263
  Other interest earning assets........     184,935        212,192        511,993        557,980
                                         ----------    -----------    -----------    -----------
          Total interest income........   6,960,449      6,931,367     20,520,011     21,517,314
                                         ----------    -----------    -----------    -----------
Interest expense:
  Deposits.............................   2,139,617      2,037,072      6,492,359      6,249,725
  Advances and other borrowed money....   1,360,111      1,485,620      4,150,723      4,793,388
                                         ----------    -----------    -----------    -----------
          Total interest expense.......   3,499,728      3,522,692     10,643,082     11,043,113
                                         ----------    -----------    -----------    -----------
Net interest income....................   3,460,721      3,408,675      9,876,929     10,474,201
Provision for loan losses..............     225,000      3,060,569        605,000      3,810,469
                                         ----------    -----------    -----------    -----------
Net interest income after provision for
  loan losses..........................   3,235,721        348,106      9,271,929      6,663,732
                                         ----------    -----------    -----------    -----------
Non-interest income:
  Loan fees and service charges........       4,093         10,080         21,339        119,191
  Gain or (loss) on sale of
     securities........................          --             --             --          4,941
  Other income.........................     534,528        337,257      1,505,131      1,307,239
                                         ----------    -----------    -----------    -----------
          Total non-interest income....     538,621        347,337      1,526,470      1,494,371
                                         ----------    -----------    -----------    -----------
Non-interest expense:
  Salaries and employee benefits.......   1,266,464      1,378,634      3,750,900      3,982,402
  Net occupancy expenses...............     368,794        286,180      1,033,371        880,142
  Equipment............................     364,771        293,644      1,138,612      1,063,070
  Other................................   1,202,094      6,311,502      2,841,735      8,949,965
                                         ----------    -----------    -----------    -----------
          Total non-interest
            expenses...................   3,202,123      8,269,960      8,764,618     14,875,579
                                         ----------    -----------    -----------    -----------
Income (loss) before income taxes......     572,219     (7,574,517)     2,033,781     (6,717,476)
Income taxes...........................     291,943             --        978,877        345,676
Income taxes (benefit).................    (268,943)    (1,851,134)      (955,877)    (1,851,134)
                                         ----------    -----------    -----------    -----------
Net income (loss)......................  $  549,219    $(5,723,383)   $ 2,010,781    $(5,212,018)
                                         ==========    ===========    ===========    ===========
Net income (loss) per common share.....  $     0.25    $     (2.59)   $      0.90    $     (2.37)
                                         ==========    ===========    ===========    ===========
Weighted average number of common
  shares outstanding...................   2,229,392      2,208,432      2,223,664      2,203,690
                                         ==========    ===========    ===========    ===========
</TABLE>

                                        2
<PAGE>   5

                              CARVER BANCORP, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED
                                                                       DECEMBER 31,
                                                              ------------------------------
                                                                  1999             1998
                                                              -------------    -------------
<S>                                                           <C>              <C>
Cash flows from operating activities:
Net income (loss)...........................................  $   2,010,781    $  (5,212,018)
Adjustments:
Depreciation and amortization of premises and equipment.....        669,973          563,371
Amortization of intangibles.................................        159,805          162,995
Other amortization and accretion, net.......................        198,889          733,264
Provision for loan losses...................................        605,000        3,810,469
Allocation of ESOP stock....................................        125,797          152,162
Changes in accrued interest receivable, net.................        710,024          181,722
Decrease in other assets....................................      1,703,864        1,480,789
Increase (decrease) in other liabilities....................     (2,314,250)       2,726,192
                                                              -------------    -------------
Net cash provided by operating activities...................      3,869,883        4,598,946
                                                              -------------    -------------
Cash flows from investing activities:
Principal repayments on available for sale securities.......             --        3,832,660
Purchases of discount notes.................................   (385,000,000)    (221,607,869)
Proceeds from matured discount notes........................    385,000,000      175,000,000
Purchase of investment securities held to maturity..........    (25,000,000)              --
Proceeds from sale/call of securities held for sale.........             --       23,841,581
Proceeds from maturities and calls of investment securities
  held to maturity..........................................             --        1,797,042
Principal repayment of mortgage backed securities held to
  maturity..................................................     10,496,098       19,284,289
Net change in loans receivable..............................     13,645,753       23,948,507
Additions to premises and equipment.........................       (294,762)      (1,052,218)
                                                              -------------    -------------
Net cash (used in) provided by investing activities.........     (1,152,911)      25,043,992
                                                              -------------    -------------
Cash flows from financing activities:
Net increase in deposits....................................        355,489        6,729,396
Net (decrease) in securities sold under agreement to
  repurchase................................................     (4,000,000)     (51,683,000)
Repayment of FHLB advances..................................        (14,942)              --
Advances from Federal Home Loan Bank of New York............             --       28,976,622
Repayment of other borrowed money...........................       (189,543)        (145,705)
Dividends paid..............................................             --         (115,714)
Advance payments by borrowers for taxes and insurance.......             --        1,102,262
                                                              -------------    -------------
Net cash provided by (used in) financing activities.........     (3,848,996)     (15,136,139)
                                                              -------------    -------------
Net increase (decrease) in cash and equivalents.............     (1,132,024)      14,506,799
Cash and equivalents -- beginning...........................     21,320,748       15,120,071
                                                              -------------    -------------
Cash and equivalents -- ending..............................  $  20,188,724    $  29,626,870
                                                              =============    =============
Unrealized gain (loss) on securities available for sale.....             --              173
Deferred income taxes.......................................             --              (82)
                                                              =============    =============
Supplemental disclosure of cash flow information:
Cash paid for:
Interest....................................................  $  10,122,297    $  11,014,629
                                                              =============    =============
Federal, state and city income taxes........................         27,938          776,829
</TABLE>

                                        3
<PAGE>   6

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements of Carver
Bancorp, Inc. (the "Holding Company" or "Bancorp"), have been prepared in
accordance with generally accepted accounting principles ("GAAP") for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation SX promulgated by the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by GAAP for complete consolidated financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
necessary for fair presentation have been included. The consolidated results of
operations and other data for the three-month and nine-month periods ended
December 31, 1999 are not necessarily indicative of results that may be expected
for the entire fiscal year ending March 31, 2000 ("fiscal year 2000"). The
unaudited consolidated financial statements include the accounts of the Holding
Company and its wholly owned subsidiaries, Carver Federal Savings Bank (the
"Bank" or "Carver Federal") and Alhambra Holding Corp., a Delaware corporation
("Alhambra Holding") and the Bank's wholly owned subsidiaries, C.F.S.B. Realty
Corp. and C.F.S.B. Credit Corp. Carver Federal and the Holding Company are
referred to herein collectively as "Carver" or the "Company." All significant
inter-company accounts and transactions have been eliminated in consolidation.

(2) EARNINGS PER SHARE CALCULATION

     Net income per share for the three month and nine-month periods ended
December 31, 1999 and 1998 are calculated based on the weighted average number
of shares outstanding during the period.

(3) ALHAMBRA HOLDING CORP.

     Other assets in the Unaudited Consolidated Statements of Financial
Condition includes an investment of $1.4 million in Alhambra Holding. During the
third quarter of the fiscal year ended March 31, 1999 ("fiscal year 1999"),
Carver established Alhambra Holding to hold 80% of the common stock and 100% of
the preferred stock of Alhambra Realty Corp. ("Alhambra Realty"). Alhambra
Realty was established to hold title to a certain piece of commercial real
property located in the City of New York, borough of Manhattan.

     Carver acquired a majority interest in Alhambra Realty through Alhambra
Holding in connection with a workout with an existing borrower of the Bank whose
loan was secured by partially occupied commercial real property. Alhambra Realty
is currently attempting to conduct a sale of the property it owns.

(4) CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

     On December 14, 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.

                              RECENT DEVELOPMENTS

(1) ISSUANCE OF SERIES A CONVERTIBLE PREFERRED STOCK AND SERIES B 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.

                                        4
<PAGE>   7

     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 June 15, 2000 and are payable thereafter 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.

ITEM 2

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

EXPLANATORY NOTE

     This Quarterly Report on Form 10-Q contains forward-looking statements
consisting of estimates with respect to the financial condition, results of
operations and business of the Company that are subject to various factors which
could cause the actual results to differ materially from these estimates. These
factors include, without limitation, the Company's ability to improve both its
loan operations, including the origination and purchase of loans which meet its
underwriting guidelines, and deposit gathering capabilities, changes in general,
economic and market, legislative and regulatory conditions and 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.

GENERAL

     Carver Bancorp, Inc., (the "Holding Company" or "Bancorp"), a Delaware
corporation, is the holding company for Carver Federal Savings Bank (the "Bank"
or "Carver Federal"), a federally chartered savings bank. Collectively, the
Holding Company and the Bank are referred to herein as the "Company" or
"Carver." At this time, the Holding Company conducts business as a unitary
savings and loan holding company and the principal business of the Holding
Company consists of the operation of its wholly-owned subsidiary, the Bank,
which operates seven full service branches in the New York City boroughs of
Brooklyn, Queens and Manhattan, and in Nassau County, New York.

     On January 28, 1998, the Company announced that the Bank had entered into a
definitive agreement to sell its branch office located in Roosevelt, New York,
to City National Bank of New Jersey ("City National"). The Roosevelt Office is
located in Nassau County, New York and had deposits of approximately $8.2
million at December 31, 1999. Due to certain regulatory issues, the transaction,
which was expected to close by March 31, 1999, has not yet been consummated.
During the third quarter of fiscal year 2000 the Company and City National
worked to resolve the issues preventing the transaction from closing. On January
18, 2000, the Company and City National executed an amended agreement containing
similar terms and conditions as the original agreement and the transaction is
currently expected to close no later than March 31, 2000.

ADDITION OF SENIOR EXECUTIVE OFFICER

     On February 4, 2000, the Company announced the appointment of James Boyle
as Senior Vice President and Chief Financial Officer. Mr. Boyle was formerly
Senior Vice President and Chief Financial Officer of Broad National Bank, which
was recently acquired by Independence Community Bank. Walter Bond, Acting Chief
Financial Officer was appointed Senior Vice President, Special Assistant to the
President and CEO, focusing on the Company's strategic initiatives.

                                        5
<PAGE>   8

FINANCIAL CONDITION

  Assets

     Total assets decreased by $4.0 million or 0.95% to $412.5 million compared
to $416.5 million at March 31, 1999. The decrease in total assets was primarily
attributable to decreases in loans receivable, net and mortgage-backed
securities ("MBSs") held to maturity and other interest earning assets, offset
in part by an increase in investment securities held to maturity ("HTM").

     Total cash and cash equivalents decreased by $1.1 million or 5.31% to $20.2
million compared to $21.3 million at March 31, 1999. The decrease reflects a
$1.6 million or 15.69% reduction in other interest earning assets, consisting
primarily of federal funds sold, offset in part by a $468,000 increase in cash
and cash equivalents.

     Investment securities HTM increased by $25.0 million at December 31, 1999,
whereas at March 31, 1999 the Company did not carry any investment securities as
HTM. The investment in securities HTM reflects the reinvestment of principal and
interest received during the first quarter on MBSs and loans receivable. At
December 31, 1999, securities held as available for sale ("AFS") totaled $29.8
million, compared to $29.9 million at March 31, 1999.

     MBSs held to maturity decreased by $10.6 million or 15.85% to $56.0 million
compared to $66.6 million at March 31, 1999. These decreases primarily reflect
principal repayments on MBSs held to maturity and the Company's strategy to
reinvest these repayments directly into loans or short term securities until
such time as suitable loans become available for origination or purchase.

     Loans receivable net, decreased by $14.5 million or 5.37% to $256.0 million
at December 31, 1999 compared to $270.5 at March 31, 1999. The decrease in loans
receivable, net primarily reflects scheduled loan payments as well as increased
loan prepayments. The prepayments primarily reflect the refinancing of loans due
to lower market interest rates available during the nine-month period.

  Liabilities and Stockholders' Equity

     Total deposits increased by $355,000 or 0.13% to $277.4 million at December
31, 1999, compared to $277.0 million at March 31, 1999. The increase in total
deposits was primarily attributable to increases of $1.6 million in NOW accounts
and $927,000 in certificates of deposits, offset in part by decreases of $1.3
million in money market accounts and $880,000 in savings and club accounts.

     Total borrowings decreased by $4.2 million or 4.12% to $97.8 million at
December 31, 1999, compared to $102.0 million at March 31, 1999. The decrease in
total borrowings was due to a decrease in securities sold under agreements to
repurchase ("repos") of $4.0 million or 11.32% to $31.3 million. The decrease in
total borrowings reflects the Company's ability to fund loan originations and
loan purchases with repayments on MBSs and loans receivable together with the
increase in deposits.

     Total stockholders' equity increased by $2.2 million, or 7.02% to $33.4
million at December 31, 1999, compared to $31.2 million at March 31, 1999. The
increase in stockholders' equity primarily reflects an increase in retained
earnings for the nine-month period.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of funds are deposits and principal and
interest payments on loans, MBSs and investment securities. While maturities and
scheduled amortization of loans, MBSs and investment securities are predictable
sources of funds, deposit flows, loans and prepayments on MBSs are strongly
influenced by changes in general interest rates, economic conditions and
competition.

     For the nine-month period ended December 31, 1999 the primary investment
activity of the Company was the purchase of loans and the purchase of investment
securities. During the nine-month period ended December 31, 1999, the Company
purchased approximately $37.7 million of mortgage loans and $25.0 million

                                        6
<PAGE>   9

of investment securities. During the nine-month period ended December 31, 1999,
the Company sold no investment securities, mortgage loans or MBSs.

     The Company's most liquid assets are federal funds sold and cash and due
from banks. In addition to the liquidity provided by federal funds sold and cash
and due from banks, the Company derives liquidity from its line of credit with
the FHLB, which equals 30% of total assets. The levels of the Company's cash and
cash equivalents are dependent on the Company's operating, financing, lending
and investing activities during any given period. At December 31, 1999, the
Company's cash and cash equivalents totaled $20.2 million compared to $21.3
million at March 31, 1999. This decrease in cash and cash equivalents is not
expected to have a material impact on the Company's operations.

     The Office of Thrift Supervision (the "OTS"), the Bank's primary federal
regulator, requires that the Bank meet minimum tangible, leverage (core) and
risk-based capital requirements. As of December 31, 1999, the Bank exceeded all
of its regulatory capital requirements. The Bank's required, actual and excess
capital levels as of December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                                         AMOUNT     % OF ASSETS
                                                         -------    -----------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                      <C>        <C>
Tangible capital:
Capital level..........................................  $28,611        6.98%
Less requirement.......................................    6,152        1.50
                                                         -------       -----
Excess.................................................  $22,459        5.48%
                                                         =======       =====
Core capital:
Capital level..........................................  $28,643        6.98%
Less requirement.......................................   16,406        4.00
                                                         -------       -----
Excess.................................................  $12,237        2.98%
                                                         =======       =====
Risk-based capital:
Capital level..........................................  $31,046       15.90%
Less requirement.......................................   15,619        8.00
                                                         -------       -----
Excess.................................................  $15,427        7.90%
                                                         =======       =====
</TABLE>

     On January 25, 2000, the Holding Company contributed $2.5 million,
representing the proceeds from the issuance of the convertible preferred
securities to the Bank in the form of additional paid in capital increasing the
Bank's tier one capital and core capital to $31.1 million or 7.59% and risk
based capital to $33.5 million or 17.18%. See Note 4 to Consolidated Financial
Statements.

ANALYSIS OF CORE EARNINGS

     The Company's profitability is primarily dependent upon net interest
income, which represents the difference between income on interest-earning
assets and expense on interest-bearing liabilities. Net interest income is
dependent on the difference between the average balances and rates earned on
interest-earning assets and the average balances and rates paid on
interest-bearing liabilities. Net income is further affected by provisions for
loan losses, non-interest income, non-interest expense and income taxes. The
earnings of the Company are significantly affected by general economic and
competitive conditions, particularly changes in market interest rates, and to a
lesser extent by government policies and actions of regulatory authorities.

     During the three and nine-month periods ended December 31, 1999 the Company
placed primary emphasis on its whole loan portfolio through the purchase of
whole loans. It is expected that the Company's future earnings will be derived
primarily from direct lending and purchases rather than investing in securities.

     The following tables set forth certain information relating to Carver's
average interest-earning assets and average interest-bearing liabilities and
reflect the average yield on assets and the average cost of liabilities for the
periods indicated. Such yields and costs are derived by dividing annualized
income or expense by the

                                        7
<PAGE>   10

average balances of assets or liabilities, respectively, for the periods shown.
Average balances are derived from average month-end balances, except for federal
funds, which are derived from daily balances. Management does not believe that
the use of average monthly balances instead of average daily balances on all
other accounts has caused any material difference in information presented. The
average balance of loans includes loans on which the Company has discontinued
accruing interest. The yield includes fees which are considered adjustments to
yields.

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED DECEMBER 31,
                                     -------------------------------------------------------------------------------
                                                      1999                                     1998
                                     --------------------------------------   --------------------------------------
                                     AVERAGE    QUARTERLY     ANNUALIZED      AVERAGE    QUARTERLY     ANNUALIZED
                                     BALANCE    INTEREST    AVG. YIELD/COST   BALANCE    INTEREST    AVG. YIELD/COST
                                     --------   ---------   ---------------   --------   ---------   ---------------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                  <C>        <C>         <C>               <C>        <C>         <C>
ASSETS
INTEREST EARNING ASSETS
  Loans(1).........................  $249,726    $4,911           7.87%       $256,575    $4,937           7.70%
  Investment securities(2).........    66,041       990           6.00          46,849       630           5.38
  Mortgage-backed securities.......    57,155       874           6.12          74,454     1,152           6.19
  Other interest earning assets....    11,575       185           6.39          15,475       212           5.48
                                     --------    ------          -----        --------    ------          -----
         Total interest earning
           assets..................   384,497    $6,960           7.24%        393,353    $6,931           7.05%
                                                 ------                                   ------
  Non-interest earning assets......    28,444                                   35,384
                                     --------                                 --------
         Total Assets..............  $412,941                                 $428,737
                                     ========                                 ========
LIABILITIES
INTEREST BEARING LIABILITIES
Deposits
  DDA..............................  $ 11,025    $   --             --%       $  7,193    $   --             --%
  NOW..............................    16,755        76           1.81          21,016        82           1.56
  Savings and clubs................   144,132       919           2.55         144,154       900           2.50
  Money market accounts............    19,558       123           2.52          21,479       130           2.42
  Certificates of deposit..........    86,493     1,022           4.73          80,483       925           4.60
                                     --------    ------          -----        --------    ------          -----
         Total Deposits............   277,963     2,140           3.08         274,325     2,037           2.97
Borrowed money.....................    97,906     1,360           5.56         104,750     1,486           5.67
                                     --------    ------          -----        --------    ------          -----
Total interest-bearing
  liabilities......................   375,869     3,500           3.72%        379,075     3,523           3.72%
                                                 ------                                   ------
Non-interest-bearing liabilities...     4,060                                   13,408
                                     --------                                 --------
Total liabilities..................   379,929                                  392,483
Stockholders' equity...............    33,012                                   36,253
                                     --------                                 --------
Total liabilities and stockholders'
  equity...........................  $412,941                                 $428,736
                                     ========                                 ========
Net interest income................              $3,460                                   $3,408
                                                 ======                                   ======
Interest rate spread...............                               3.52%                                    3.33%
                                                                 =====                                    =====
Net interest margin................                               3.60%                                    3.47%
                                                                 =====                                    =====
Ratio of average interest earning
  assets to interest-bearing
  liabilities......................                              102.3x                                   103.8x
                                                                 =====                                    =====
</TABLE>

---------------
(1) Includes non-accrual loans.

(2) Includes FHLB stock and fair value of investments available for sale of
    $29.8 million at December 31, 1999.

                                        8
<PAGE>   11

<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED DECEMBER 31,
                                 ------------------------------------------------------------------------
                                                1999                                  1998
                                 ----------------------------------    ----------------------------------
                                 AVERAGE                 ANNUALIZED    AVERAGE                 ANNUALIZED
                                 BALANCE     INTEREST    YIELD/COST    BALANCE     INTEREST    YIELD/COST
                                 --------    --------    ----------    --------    --------    ----------
                                                          (DOLLARS IN THOUSANDS)
<S>                              <C>         <C>         <C>           <C>         <C>         <C>
ASSETS
INTEREST EARNING ASSETS
  Loans(1).....................  $254,857    $14,650        7.66%      $268,113    $15,497        7.71%
  Investment securities(2).....    58,795      2,581        5.85         25,846      1,125        5.81
  Mortgage-backed securities...    60,504      2,777        6.12         90,747      4,337        6.37
  Other interest earning
    assets.....................    11,359        512        6.01         14,375        558        5.18
                                 --------    -------       -----       --------    -------       -----
         Total interest earning
           assets..............   385,515    $20,520        7.10%       399,081    $21,517        7.19%
                                             -------                               -------
  Non-interest earning
    assets.....................    31,349                                28,933
                                 --------                              --------
         Total Assets..........  $416,864                              $428,014
                                 ========                              ========
LIABILITIES
INTEREST BEARING LIABILITIES:
Deposits
  DDA..........................  $ 11,467    $    --          --%      $  9,546    $    --          --%
  NOW..........................    16,753        233        1.85         19,130        248        1.73
  Savings and clubs............   145,568      2,755        2.52        145,553      2,721        2.49
  Money market accounts........    20,601        476        3.08         21,822        459        2.80
  Certificates of deposit......    86,284      3,028        4.68         80,371      2,822        4.68
                                 --------    -------       -----       --------    -------       -----
         Total Deposits........   280,673      6,492        3.08        276,422      6,250        3.01
Borrowed money.................    99,966      4,151        5.54        108,329      4,793        5.90
                                 --------    -------       -----       --------    -------       -----
Total interest-bearing
  liabilities..................   380,639     10,643        3.73%       384,751     11,043        3.83%
                                             -------                               -------
Non-interest-bearing
  liabilities..................     3,904                                 7,372
                                 --------                              --------
Total liabilities..............   384,543                               392,123
Stockholders' equity...........    32,321                                35,893
                                 --------                              --------
Total liabilities and
  stockholders' equity.........  $416,864                              $428,016
                                 ========                              ========
Net interest income............              $ 9,877                               $10,474
                                             =======                               =======
Interest rate spread...........                             3.37%                                 3.36%
                                                           =====                                 =====
Net interest margin............                             3.42%                                 3.50%
                                                           =====                                 =====
Ratio of average interest
  earning assets to
  interest-bearing
  liabilities..................                            101.3x                                103.7x
                                                           =====                                 =====
</TABLE>

---------------
(1) Includes non-accrual loans.

(2) Includes FHLB stock and fair value of investments available for sale of
    $29.8 million at December 31, 1999.

  Comparison of Operating Results for the Three Months Ended December 31, 1999
and 1998

     General

     The Company reported net income of $549,000, for the three month period
ended December 31, 1999, compared to a loss of $5.7 million, for the three month
period ended December 31, 1998. Earnings for the third quarter of the prior
fiscal year included non-recurring pre-tax charges of $7.8 million reflecting a
$2.5 million special provision for loan losses, $4.1 million in reconciliation
adjustments and $1.2 million in related

                                        9
<PAGE>   12

consulting fees. Excluding these charges and the related partial tax benefits,
net income for the third quarter of fiscal year 1999 was $173,000. The increase
in net income primarily reflects an income tax benefit, an increase in
non-interest income and decreases in the provision for loan losses and
non-interest expense.

     Interest Income

     Interest income increased by $29,000, or 0.42% to $7.0 million for the
three month period ended December 31, 1999 compared to $6.9 million for the same
period last year. The increase in interest income primarily reflects a 19 basis
point increase in the average yield on interest-earning assets to 7.24% compared
to 7.05% for the same period last year, offset in part by an $8.9 million
decrease in the average balance of interest earning assets to $384.5 million.
The increase in the average yield for the three month period is primarily
attributable to an increase in the yield on adjustable rate and short term
assets due to higher market interest rates during the third quarter compared to
the same period last year.

     Interest income on loans receivable net was stable at $4.9 million for the
three month period ended December 31, 1999 compared to same period last year.
The average balance of loans receivable net decreased by approximately $6.8
million or 2.67% to $249.7 million for the three month period ended December 31,
1999 compared to $256.6 million for the same period last year, which was offset
by a 17 basis point increase in the average yield on the loan portfolio to
7.87%. The decrease in the average balance of the loan portfolio primarily
reflects an increase in loan prepayments and a decrease in loan originations.
The increase in the average yield on loans receivable net primarily reflects an
increase in the yield on adjustable rate loans due to higher market interest
rates during the third quarter compared to the same period last year.

     Interest income on MBSs decreased $277,000, or 24.07% to $874,000 for three
month period ended December 31, 1999 compared to $1.2 million for the same
period last year. The decrease in interest income on MBSs primarily reflects a
decrease of approximately $17.3 million or 23.23% in the average balance of
mortgage-backed securities to $57.2 million compared to $74.5 million for the
same period last year coupled with a 7 basis point decrease in the average yield
to 6.12%. The decrease in the average balance of MBSs primarily reflects a shift
during the second quarter of fiscal 1999 of approximately $24.0 million from
MBSs to loans and the Company's strategy to reinvest principal repayments on
MBSs into higher yielding loans.

     Interest income on investment securities increased by $360,000, or 57.18%
to $990,000 for the three month period ended December 31, 1999 compared to
$630,000 for the same period last year. The increase in interest income on
investment securities consisting of short and intermediate term agency
securities primarily reflects a $19.2 million or 40.97% increase in the average
balance of such securities to $66.0 million for the three month period ended
December 31, 1999 compared to $46.8 million for the same period last year
coupled with a 62 basis point increase in the average yield to 6.00%. The
increase in the average balance of investment securities reflects an investment
of repayments from loan and MBSs into intermediate term securities. The increase
in the average yield on investment securities primarily reflects the higher
yield earned by shifting assets from short term securities to intermediate term
securities and generally higher market rates.

     Interest income on other interest-earning assets decreased by $27,000, or
12.85% to $185,000 for the three month period ended December 31, 1999 compared
to $212,000 for the same period last year. The decrease in interest income on
other interest earning assets primarily reflects a $3.9 million or 25.20%
decrease in the average balance of such securities to $11.6 million for the
three month period ended December 31, 1999 compared to $15.5 million for the
same period last year, offset in part by a 91 basis point increase the average
yield to 6.39%. The decrease in the average balance of other interest earning
assets primarily reflects a decrease in short term investments held during the
third quarter. The increase in the average yield on other interest earning
assets primarily reflects generally higher market rates.

     Interest Expense

     Interest expense was stable at $3.5 million for the three month period
ended December 31, 1999 compared to same period last year.

                                       10
<PAGE>   13

     Interest expense on deposits increased by $103,000 or 5.03% to $2.1 million
for the three month period ended December 31, 1999 compared to $2.0 million for
the same period last year. The increase in the cost of deposits primarily
reflects a $3.6 million increase in the average balance of deposits to $278.0
million compared to $274.3 million for the same period last year coupled with an
11 basis point increase in the cost of deposits to 3.08%. The increase in the
cost of deposits primarily reflects higher market interest rates during the
third quarter. The increase in deposit cost also reflects an increase of $6.0
million or 7.47% in the average balance of certificates of deposit to $86.5
million coupled with a 13 basis point increase in the average cost of these
deposits.

     Interest expense on borrowings decreased by $126,000 or 8.45% to $1.4
million for the three month period ended December 31, 1999 compared to $1.5
million for the same period last year. The decrease primarily reflects an 11
basis point decrease in the average cost of borrowings to 5.56% compared to
5.67% for the same period last year coupled with a $6.8 million decrease in the
average balance of borrowings to $97.9 million. The decrease in the average
balance of borrowings primarily reflects the Company's ability to fund
investments and loan purchases with deposits and principal and interest receipts
on loans and MBSs. The decrease in the cost of borrowings primarily reflects the
replacement of higher cost borrowings with lower cost borrowings during fiscal
year 1999.

     Net Interest Income Before Provisions for Loan Losses

     Net interest income increased $52,000 or 1.53%, to $3.5 million for the
three month period ended December 31, 1999 compared to $3.4 million for the same
period last year. The increase in net interest income primarily reflects an
increase in the average yield of average interest earning assets while the
average cost of interest bearing liabilities was stable for the third quarter.

     The Company's interest rate spread increased by 19 basis points to 3.52%
for the three month period ended December 31, 1999 compared to 3.33% for the
three month period ended December 31, 1998. The Company's net interest margin
increased by 13 basis point to 3.60% for the three month period ended December
31, 1999 compared to 3.47% for the same period last year. The increase in
interest rate spread and net interest margin primarily reflects a 19 basis point
increase in the average yield on interest earning assets to 7.24% while the
average cost of interest bearing liabilities was stable at 3.72%. The increase
in the average yield of interest earning assets was partially offset by a
decrease in the average balance of interest earning assets.

     The increase in interest rate spread and net interest margin was primarily
attributable to increases in the average yield on loans, investment securities
and other interest earning assets. The Company's ratio of average
interest-earning assets to average interest-bearing liabilities was 102.3x for
the three month period ended December 31, 1999 compared to 103.8x for the same
period last year.

     Provision for Loan Losses

     The Company provided $225,000 for loan losses for the three month period
ended December 31, 1999, compared to $3.1 million for the same period of the
prior year. The provision for loan losses for the third quarter of the prior
year reflected a special provision of approximately $2.5 million taken in
response to an increase in non-performing consumer loans and to maintain an
adequate level of allowance consistent with the Bank's policies. The decrease in
the provision for the third quarter of the current fiscal year reflects an
overall decrease in non-performing assets, which includes non-performing
consumer loans. During the third quarter of fiscal year 2000, the Bank charged
off approximately $512,000 in previously reserved non-performing consumer loans
and $169,000 in previously reserved assets. At December 31, 1999, non-performing
loans totaled $3.0 million or 1.16% of total loans compared to $4.1 million or
1.63% at September 30, 1999. At December 31, 1999, Carver's allowance for loan
losses was $3.2 million compared to $3.6 million at September 30, 1999,
resulting in a ratio of allowance to non-performing loans of 108.97% at December
31, 1999 compared to 82.26% at September 30, 1999 and a ratio of allowances for
loan losses to total loans of 1.26% and 1.41% respectively. The decrease in the
allowance for loan losses and the ratio of allowance for loan losses to total
loans reflects loan charge offs during the third quarter.

                                       11
<PAGE>   14

     Management believes that the allowance for loan losses is adequate. While
management estimates loan losses using the best available information, no
assurance can be made that future adjustments to the allowance will not be
necessary based on changes in economic and real estate market conditions,
further information obtained regarding known problem loans, identification of
additional problem loans, and other factors, both within and outside of
management's control.

     Non-Interest Income

     Non-interest income increased by $191,000 or 55.07% to $539,000 for the
three month period ended December 31, 1999 compared to $347, 000 for the same
period of the prior year. The increase in non-interest income for the third
quarter primarily reflects a $197,000 or 58.49% increase in other income which
consist of bank service charges and mortgage loan prepayment fees, offset in
part by a $6,000 or 59.39% decrease in loan fees due to a decrease in loan
originations.

     Non-Interest Expense

     Non-interest expense decreased by approximately $5.1 million or 61.28% to
$3.2 million for the three month period ended December 31, 1999 compared to $8.3
million for the three month period ended December 31, 1998. Non-interest expense
for the third quarter of the prior fiscal year included non-recurring charges of
approximately $5.3 million. Excluding the non-recurring charges non-interest
expense increased by $232,000 or 8.10%.

     The increase in non-interest expense for the three-month period, excluding
the non-recurring charges, primarily reflects increases of $83,000 or 28.87% in
occupancy expense due to major branch repairs, $120,000 or 289.87% in FDIC
expense, related to the Bank's OTS rating, $100,000 or 290.30% in advertising
expense due to increased marketing expenses and $38,000 or 97.39% in expenses
for legal services, offset in part by decreases of $112,000 or 8.14% in salaries
and benefit expense, $53,000 or 47.96% in security service, $17,000 or 17.88% in
Bank charges and $22,000 or 4.06% in other expenses.

     Income Tax Expense

     In connection with a loss from operations incurred during the three month
period ended December 31, 1998, the Company has reflected a tax benefit
reflecting the carry forward of the loss for the income taxes paid. The Company
utilized a net operating loss deduction to reduce income tax expense for the
three month period ended December 31, 1999 to $23,000. The Company's effective
tax rate for the three-month period ended December 31, 1999 was 4.02%.

  Comparison of Operating Results for the Nine Months Ended December 31, 1999
and 1998

     General

     The Company reported net income for the nine-month period ended December
31, 1999 of $2.0 million compared to a net loss of $5.2 million for the same
period of the prior year. Earnings for the nine-month period for the prior
fiscal year included non-recurring pre-tax charges of $7.8 million. Earnings
excluding those charges were $685,000. The increase in net income primarily
reflects an income tax benefit, an increase in non-interest income and decreases
in provision for loan losses and non-interest expense.

     Interest Income

     Interest income decreased by approximately $997,000 or 4.63% to $20.5
million for the nine-month period ended December 31, 1999 compared to $21.5
million for the nine-month period ended December 31, 1998. The decrease in
interest income for the nine-month period ended December 31, 1999 primarily
reflects a 9 basis point decrease in the average yield of interest earning
assets to 7.10% compared to 7.19% for the same period last year and a $13.6
million or 3.40% decrease in the average balance of interest earning assets to
$385.5 million. The decrease in the average yield for the nine-month period is
primarily attributable to a shift in assets from loans and MBSs to lower
yielding investment securities.

                                       12
<PAGE>   15

     Interest income on loans receivable net decreased by $848,000 or 5.47% to
$14.6 million for the nine-month period ended December 31, 1999 compared to
$15.5 million for the same period last year. The decrease in interest income on
loans receivable net primarily reflects a $13.3 million or 4.94% decrease in the
average balance of loans receivable to $254.9 million for the nine-month period
ended December 31, 1999 compared to $268.1 million for the same period last
year, coupled with a decrease of 5 basis points in the average yield on the loan
portfolio. The decrease in the average balances of the loan portfolio primarily
reflects the impact of increased loan prepayments and to a lesser extent, a
decrease in loan originations. The decrease in average yield primarily reflects
the repayment of higher yielding loans and lower market interest rates during
the first two quarters of the fiscal year compared to the same period last year.

     Interest income on MBSs decreased $1.6 million, or 35.96% to $2.8 million
for the nine-month period ended December 31, 1999 compared to $4.3 million for
the same period last year. The decrease in interest income on MBSs primarily
reflects a decrease of $30.2 million or 33.33% in the average balance of
mortgage-backed securities to $60.5 million for the nine-month period ended
December 31, 1999 compared to $90.7 million for the same period last year
coupled with a decrease of 25 basis points in the average yield on MBSs to 6.12%
compared to 6.37%. The decrease in the average balance of MBSs primarily
reflects the shift of approximately $24.0 million from MBSs to loans and the
Company's strategy to reinvest principal repayments on MBSs into higher yielding
loans.

     Interest income on investment securities increased by $1.5 million or
129.38%, to $2.6 million for the nine-month period ended December 31, 1999
compared to $1.1 for the same period last year. The increase in interest income
on investment securities, consisting of short term and intermediate term agency
securities primarily reflects a $33.0 million or 127.48% increase in the average
balance of investment securities to $58.8 million for the nine- month period
ended December 31, 1999 compared to $25.8 million for the same period last year
coupled with a 4 basis point increase in the average yield to 5.85%. The
increase in the average balance of investment securities reflects an investment
of repayments from loan and MBSs into intermediate term securities. The increase
in the average yield on investment securities primarily reflects the higher
yield earned by shifting assets from short-term securities to intermediate term
securities.

     Interest income on other interest-earning assets decreased by $46,000 or
8.24%, to $512,000 for the nine-month period ended December 31, 1999 compared to
$558,000 for the same period last year. The decrease in interest income on other
interest earning assets primarily reflects a $3.0 million decrease in the
average balance of other interest earning assets, offset in part by an 83 basis
point increase in the average yield to 6.01%. The decrease in the average
balance of other interest earning assets primarily reflects a decrease in
short-term investments held during the nine-month period. The increase in the
average yield on other interest earning assets primarily reflects higher market
rates on such assets.

     Interest Expense

     Interest expense decreased by $400,000 or 3.62% to $10.6 million for the
nine-month period ended December 31, 1999 compared to $11.0 million for the same
period of the prior year. The decrease in interest expense primarily reflects a
10 basis point decrease in the cost of interest bearing liabilities to 3.73%
coupled with a $4.1 million decrease in the average balance of interest bearing
liabilities to $380.6 million.

     Interest expense on deposits increased by $243,000 or 3.88% to $6.5 million
for the nine-month period ended December 31, 1999 compared to $6.2 million for
the same period last year. The increase in interest expense on deposits
primarily reflects a $4.3 million or 1.54% increase in the average balance of
deposits to $280.7 million compared to $276.4 million for the same period last
year coupled with a 7 basis point increase in the average cost of deposits to
3.08%.

     Interest expense on borrowings decreased by $643,000 or 13.41% to $4.2
million for the nine-month period ended December 31, 1999 compared to $4.8
million. The decrease in interest expense in borrowings primarily reflects a 36
basis point decrease in the average cost of borrowings to 5.54% coupled with an
$8.4 million or 7.72% decrease in the average balance of borrowings to $100.0
million. The decrease in the average balance of borrowings primarily reflects
the Company's ability to fund investments and loans with deposits and

                                       13
<PAGE>   16

principal and interest receipts. The decrease in the cost of borrowings
primarily reflects the replacement of higher cost borrowings with lower cost
borrowings during fiscal year 1999.

     Net Interest Income Before Provisions for Loan Losses

     Net interest income before provision for loan losses decreased by $597,000,
or 5.70% to $9.9 million for the nine-month period ended December 31, 1999
compared to $10.5 million for the same period last year The decrease in net
interest income primarily reflects a decrease in the average yield of average
interest earning assets, offset in part by a decrease in the average cost of
interest bearing liabilities.

     The Company's interest rate spread increased by 1 basis point to 3.37% for
the nine-month period ended December 31, 1999 compared to 3.36% for the
nine-month period ended December 31, 1998. The Company's net interest margin
decreased by 8 basis points to 3.42% for the nine-month period ended December
31, 1999 compared to 3.50% for the same period last year. The increase in
interest rate spread primarily reflects a 10 basis point decrease in the average
cost of interest bearing liabilities to 3.73%, offset in part by a 9 basis point
decrease in the average yield on interest earning assets to 7.10%. The decrease
in net interest margin primarily reflects decreases in the yield on interest
earning assets and the ratio of interest earning assets to interest bearing
liabilities. The Company's ratio of average interest-earning assets to average
interest-bearing liabilities was 101.3x for the nine-month period ended December
31, 1999 compared to 103.7x for the same period last year.

     Provision for Loan Losses

     The Company provided $605,000 for loan losses for the nine-month period
ended December 31, 1999, compared to $3.8 million for the same period of the
prior year. Provision for loan losses for the nine-month period of the prior
year reflected a special provision of approximately $2.5 million taken in
response to an increase in non-performing consumer loans and to maintain an
adequate level of allowance consistent with the Bank's policies. The decrease in
the provision for the current nine-month period reflects an overall decrease in
non-performing assets, which includes non-performing consumer loans. During the
nine-month period, the Bank charged off approximately $960,000 in previously
reserved non-performing consumer loans and $763,000 in previously reserved
assets.

     Management believes that the allowance for loan losses is adequate. While
management estimates loan losses using the best available information, no
assurance can be made that future adjustments to the allowance will not be
necessary based on changes in economic and real estate market conditions,
further information obtained regarding known problem loans, identification of
additional problem loans, and other factors, both within and outside of
management's control.

     Non-Interest Income

     Non-interest income was stable at $1.5 million for the nine-month period
ended December 31, 1999. The increase in non-interest income for the nine-month
period primarily reflects a $135,000 or 9.84% increase in other income which
consists of bank service charges and mortgage loan prepayment fees, offset in
part by a $98,000 or 82.10% decrease in loan fees due to a decrease in loan
originations.

     Non-Interest Expenses

     Non-interest expense decreased by approximately $6.1 million or 41.08% to
$8.8 million for the nine-month period ended December 31, 1999 compared to $14.9
million for the nine-month period ended December 31, 1998. Non-interest expense
for the nine-month period of the prior fiscal year included non-recurring
charges of approximately $5.3 million. Excluding the non-recurring charges
non-interest expense decreased by $811,000 or 8.47%.

     The decrease in non-interest expense for the nine-month period excluding
the non-recurring charges primarily reflects decreases of $232,000 or 5.81% in
salaries and benefits expense, $52,000 or 18.44% in bank charges and $82,000 or
27.23% in security service, offset in part by increases of $79,000 or 71.13% in

                                       14
<PAGE>   17

advertising expense, $87,000 or 18.67% in net occupancy expenses, $107,000 or
76.75% in legal expense, and $328,000 or 220.08% in FDIC insurance expense.

     Income Tax Expense

     In connection with a loss from operations incurred during the three month
period ended December 31, 1998, the Company has reflected a tax benefit
reflecting the carry forward of the loss for the income taxes paid. The Company
utilized a net operating loss deduction to reduce income tax expense for the
nine-month period ended December 31, 1999 to $23,000. The Company's effective
tax rate for the nine-month period ended December 31, 1999 was 1.13%.

THE YEAR 2000 ISSUE

     Over the past several quarters, we had reported, on a regular basis,
concerns relating to the "Year 2000 Issue," which centered upon the inability of
computer systems to recognize the change into the year 2000. Carver did not
experience any significant interruptions in any computer operations related to
the Year 2000 Issue. Carver's loan and deposit functions were not effected by
the change into the year 2000. Carver estimates that total costs related to the
Year 2000 Issue, from inception to date, did not exceed $200,000 and we do not
anticipate any additional costs to be incurred related to this matter.
Additionally, we did not encounter any significant delays in loan payments from
our borrowers due to difficulties they may have encountered as a result of the
Year 2000 Issue.

               IMPACT OF ENACTMENT OF THE GRAMM-LEACH-BLILEY ACT

     On November 12, 1999, President Clinton signed the Gramm-Leach Bliley Act,
which among other things, establishes a comprehensive framework to permit
affiliations among commercial banks, insurance companies and securities firms.
Generally, the new law (i) repeals the historical restrictions and eliminates
many federal and state law barriers to affiliations among banks and securities
firms, insurance companies and other financial service providers, (ii) provides
a uniform framework for the activities of banks, savings institutions and their
holding companies, (iii) broadens the activities that may be conducted by
subsidiaries of national banks and state banks, (iv) provides an enhanced
framework for protecting the privacy of information gathered by financial
institutions regarding their customers and consumers, (v) adopts a number of
provisions related to the capitalization, membership, corporate governance and
other measures designed to modernize the Federal Home Loan Bank System, (vi)
requires public disclosure of certain agreements relating to funds expended in
connection with an institution's compliance with the Community Retirement Act,
(vii) addresses a variety of other legal and regulatory issues affecting both
day-to-day operations and long-term activities of financial institutions,
including the functional regulation of bank securities and insurance activities.

     The Act also restricts the powers of new unitary savings and loan
association holding companies. Unitary savings and loan holding companies that
are "grandfathered," i.e., unitary savings and loan holding companies in
existence or with applications filed with the OTS on or before May 4, 1999, such
as the Holding Company, retain their authority under the prior law. All other
unitary savings and loan holding companies are limited to financially related
activities permissible for bank holding companies, as defined under the Act. The
Act also prohibits non-financial companies from acquiring grandfathered unitary
savings and loan association holding companies.

     The Act also requires financial institutions to disclose, on ATM machines,
any non-customer fees and to disclose to their customers upon the issuance of an
ATM card any fees that may be imposed by the institutions on ATM users. For
other ATMs, financial institutions will have until December 31, 2004 to provide
such notices.

     Bank holding companies are permitted to engage in a wider variety of
financial activities than permitted under the prior law, particularly with
respect to insurance and securities activities. In addition, in a change from
the prior law, bank holding companies are in a position to be owned, controlled
or acquired by any company engaged in financially related activities.

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     The OTS has recently proposed regulations implementing the privacy
protection provision of the Act. The proposed regulations would require each
financial institution to adopt procedures to protect customers' and consumers'
"nonpublic personal information" by November 13, 2000. We would be required to
disclose our privacy policy, including identifying with whom we share "nonpublic
personal information," to customers at the time of establishing the customer
relationship and annually thereafter. In addition, we would be required to
provide our customers with the ability to "opt-out" of having us share their
personal information with unaffiliated third parties

     The Act also provides for the ability of each state to enact legislation
that is more protective of consumers' personal information. Currently, there are
a number of privacy bills pending in the New York Assembly. No action has been
taken on any of these bills, and we cannot predict what impact, if any, these
bills would have.

     We do not believe that the new law will have a material adverse affect upon
our operations in the near term. However, to the extent the new law permits
banks, securities firms and insurance companies to affiliate, the financial
services industry may experience further consolidation. This could result in a
growing number of larger financial institutions that offer a variety of
financial services than we currently offer and that can aggressively compete in
the markets we currently serve.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Quantitative and qualitative disclosure about market risk is presented at
March 31, 1999 in Carver's Annual Report on Form 10-K, as amended and filed with
the Securities and Exchange Commission on July 29, 1999. There have been no
material changes in our market risk at December 31, 1999 compared to March 31,
1999. The following is an update of the discussion provided therein:

     GENERAL.  Our largest component of market risk continues to be interest
rate risk. Virtually all of this risk continues to reside at the Bank level. The
Bank still is not subject to foreign currency exchange or commodity price risk.
At December 31, 1999, we owned no trading assets, nor did we utilize hedging
transactions such as interest rate swaps and caps.

     ASSETS, DEPOSIT LIABILITIES AND WHOLESALE FUNDS.  There has been no change
in the composition of assets, deposit liabilities or wholesale funds from March
31, 1999 to December 31, 1999 that would result in a material adverse effect on
the Bank's interest rate risk.

     GAP ANALYSIS.  The one-year and five-year cumulative interest sensitivity
gap as a percentage of total assets have not materially changed from their
levels at March 31, 1999 utilizing the same assumptions as at March 31, 1999.

     INTEREST RATE RISK COMPLIANCE.  We continue to monitor the impact of
interest rate volatility upon net interest income and net portfolio value in the
same manner as at March 31, 1999. There have been no changes in our board
approved limits of acceptable variance in net interest income and net portfolio
value at December 31, 1999 compared to March 31, 1999, and the projected changes
continue to fall within the board approved limits at all levels of potential
interest rate volatility.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     From time to time, Carver Federal is a party to various legal proceedings
incident to its business. At December 31, 1999, there were no legal proceedings
to which the Bank 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.

     In addition, on November 9, 1999, a shareholder of the Company, BBC Capital
Market, Inc., filed a suit in the Court of Chancery of Delaware against the
Holding Company to require the Holding Company to hold an annual meeting of
stockholders. The action is encaptioned BBC Capital Market, Inc. v. Carver
Bancorp, Inc. The Holding Company announced on November 11, 1999 that the
stockholders meeting for the fiscal year
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ended March 31, 1999 would be held on Thursday, February 24, 2000 and
stockholders of record as of January 11, 2000 would be eligible to vote thereat.
The suit was settled on December 8, 1999. As part of the settlement, the parties
stipulated that the annual meeting would be held on February 24, 2000, that
Kevin Cohee and Teri Williams, BBC's nominees for the Company's Board of
Directors, were validly nominated in compliance with the Company's Bylaws and
that the Company would provide BBC with a list of its shareholders of record as
of January 11, 2000, within five business days of such record date.

     On January 19, 2000, BBC Capital Market, Inc. filed a suit in the Delaware
Court of Chancery encaptioned BBC Capital Market, Inc. v. Carver Bancorp, Inc.,
et al. in connection with the Company's issuance of two series of convertible
voting preferred stock to Morgan Stanley & Co. Inc. ("Morgan Stanley") and
Provender Opportunities Fund, L.P. ("Provender") on January 11, 2000. The suit
also names Morgan Stanley, Provender and the directors of the Company as
defendants. Among other things, the suit sought (i) a preliminary injunction to
enjoin Morgan Stanley and Provender from voting their shares at the Company's
annual meeting of stockholders, (ii) to rescind the issuance of the preferred
stock and (iii) to enjoin Carver, Morgan Stanley and Provender from taking
certain actions in connection with such annual meeting. The suit also seeks
reimbursement for the plaintiff's costs and disbursements, including reasonable
attorney's fees and experts' fees. On February 16, 2000 the Delaware Court of
Chancery denied BBC's request for a preliminary injunction to prevent Carver
from counting Morgan Stanley and Provender's votes. See Part I, "Recent
Developments" for a description of the terms of the preferred stock.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None

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

     None

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

          Exhibit 11. Net income (loss) per share.

          Exhibit 27. Financial Data Schedule.

     (b) Reports on Form 8-K.

          Form 8-K, dated December 21, 1999, reporting change in certifying
     accountant.

          Form 8-K, dated January 14, 2000, reporting issuance of preferred
     stock.

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                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          CARVER BANCORP, INC.

                                          /s/ DEBORAH C. WRIGHT
                                          --------------------------------------
                                          Deborah C. Wright
                                          President and Chief Executive Officer

Date: February 22, 2000

                                          /s/ ANTHONY M. GALLENO
                                          --------------------------------------
                                          Anthony M. Galleno
                                          Vice President and Controller

Date: February 22, 2000

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