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 SEPTEMBER 30, 2005


       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________

                         Commission File Number: 0-21487

                              CARVER BANCORP, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                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)


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 90 days.

                                 Yes [X] No [ ]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in rule 12b-2 of the Exchange Act).

                                 Yes [ ] No [X]

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

COMMON STOCK, PAR VALUE $.01                              2,513,458
----------------------------                    -------------------------------
           Class                                Outstanding at October 31, 2005

<PAGE>

                                TABLE OF CONTENTS

PART I.   FINANCIAL INFORMATION
          ---------------------

          Item 1.  Financial Statements

                   Consolidated Statements of Financial Condition as of
                   September 30, 2005 (unaudited) and March 31, 2005

                   Consolidated Statements of Income for the Three and Six
                   Months Ended September 30, 2005 and 2004 (unaudited)

                   Consolidated Statement of Changes in Stockholders' Equity and
                   Comprehensive Income for the Six Months Ended September 30,
                   2005 (unaudited)

                   Consolidated Statements of Cash Flows for the Six Months
                   Ended September 30, 2005 and 2004 (unaudited)

                   Notes to Consolidated Financial Statements (unaudited)

          Item 2.  Management's Discussion and Analysis of Financial Condition
                   and Results of Operations

          Item 3.  Quantitative and Qualitative Disclosures About Market Risk

          Item 4.  Controls and Procedures

PART II.  OTHER INFORMATION
          -----------------

          Item 1.  Legal Proceedings

          Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

          Item 3.  Defaults Upon Senior Securities

          Item 4.  Submission of Matters to a Vote of Security Holders

          Item 5.  Other Information

          Item 6.  Exhibits

SIGNATURES

EXHIBITS

<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                            CARVER BANCORP, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                              (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,   MARCH 31,
                                                                      2005         2005
                                                                 -------------  -----------
                                                                  (UNAUDITED)

<S>                                                              <C>            <C>
ASSETS
Cash and cash equivalents:
  Cash and due from banks                                        $    10,468    $    13,020
  Federal funds sold                                                   8,700          6,800
  Interest Earning Deposits                                              600            600
                                                                 -----------    -----------
       Total cash and cash equivalents                                19,768         20,420
Securities:
  Available-for-sale, at fair value (including
    pledged as collateral of $104,882 at September 30, 2005
    and $112,503 at March 31, 2005)                                  108,150        118,033
  Held-to-maturity, at amortized cost (including pledged as
    collateral of $27,460 at September 30, 2005
    and $30,900 at March 31, 2005; fair value of $27,575 at
    September 30, 2005 and $31,310 at March 31, 2005)                 27,836         31,302
                                                                 -----------    -----------
       Total securities                                              135,986        149,335
Loans receivable:
  Real estate mortgage loans                                         453,837        424,387
  Consumer and commercial business loans                               1,502          1,697
  Allowance for loan losses                                           (4,064)        (4,097)
                                                                 -----------    -----------
       Total loans receivable, net                                   451,275        421,987
Office properties and equipment, net                                  13,718         13,658
Federal Home Loan Bank of New York stock, at cost                      5,624          5,125
Real estate owned                                                         10             --
Accrued interest receivable                                            2,912          2,702
Other assets                                                          18,405         13,150
                                                                 -----------    -----------
       Total assets                                              $   647,698    $   626,377
                                                                 ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits                                                       $   465,855    $   453,454
  Advances from the Federal Home Loan Bank of New York and
    other borrowed money                                             125,316        115,299
  Other liabilities                                                    9,039         11,823
                                                                 -----------    -----------
          Total liabilities                                          600,210        580,576
Stockholders' equity:
  Common stock (par value $0.01 per share: 10,000,000 shares
    authorized; 2,524,691 shares issued; 2,513,458 and
    2,501,338 outstanding at September 30, 2005 and March 31,
    2005, respectively)                                                   25             25
  Additional paid-in capital                                          23,941         23,937
  Retained earnings                                                   23,814         22,748
  Unamortized awards of common stock under ESOP and management
    recognition plan ("MRP")                                             (37)          (254)
  Treasury stock, at cost (11,233 shares at September 30, 2005
    and 23,353 shares at March 31, 2005)                                (202)          (420)
  Accumulated other comprehensive loss                                   (53)          (235)
                                                                 -----------    -----------
       Total stockholders' equity                                     47,488         45,801
                                                                 -----------    -----------
       Total liabilities and stockholders' equity                $   647,698    $   626,377
                                                                 ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

                                   CARVER BANCORP, INC. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF INCOME
                                   (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                (UNAUDITED)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED            SIX MONTHS ENDED
                                                          SEPTEMBER 30,                SEPTEMBER 30,
                                                    -------------------------    -------------------------
                                                       2005          2004           2005          2004
                                                    -----------   -----------    -----------   -----------

<S>                                                 <C>           <C>            <C>           <C>
Interest Income:
  Loans                                             $     6,214   $     5,700    $    12,421   $    11,116
  Mortgage-backed securities                              1,135         1,102          2,260         2,129
  Investment securities                                     277           189            551           422
  Federal funds sold                                        122            22            268            58
                                                    -----------   -----------    -----------   -----------
       Total interest income                              7,748         7,013         15,500        13,725

Interest expense:
  Deposits                                                2,096         1,313          3,966         2,438
  Advances and other borrowed money                       1,117         1,055          2,298         2,098
                                                    -----------   -----------    -----------   -----------
       Total interest expense                             3,213         2,368          6,264         4,536

       Net interest income                                4,535         4,645          9,236         9,189

Provision for loan losses                                    --            --             --            --
                                                    -----------   -----------    -----------   -----------
       Net interest income after
         provision for loan losses                        4,535         4,645          9,236         9,189

Non-interest income:
  Depository fees and charges                               668           535          1,297         1,055
  Loan fees and service charges                             339           557          1,013         1,080
  Gain on sale of securities                                 --            --             --            94
  Impairment of securities                                   --        (1,472)            --        (1,472)
  Gain on sale of loans                                      10            44             20            45
  Grant income                                               --         1,140             --         1,140
  Other                                                      14            26             99            28
                                                    -----------   -----------    -----------   -----------
       Total non-interest income                          1,031           830          2,429         1,970

Non-interest expense:
  Employee compensation and benefits                      2,330         2,068          4,854         4,069
  Net occupancy expense                                     578           473          1,079           876
  Equipment, net                                            488           395            929           764
  Merger related expenses                                    --           847             --           847
  Other                                                   1,240         1,286          2,568         2,452
                                                    -----------   -----------    -----------   -----------
       Total non-interest expense                         4,636         5,069          9,430         9,008

       Income before income taxes                           930           406          2,235         2,151
Income taxes                                                329           151            793           814
                                                    -----------   -----------    -----------   -----------
       Net income                                   $       601   $       255    $     1,442   $     1,337
                                                    ===========   ===========    ===========   ===========

Dividends applicable to preferred stock             $        --   $        49    $        --   $        98

       Net income available to common stockholder   $       601   $       206    $     1,442   $     1,239
                                                    ===========   ===========    ===========   ===========

Earnings per common share:
       Basic                                        $      0.24   $      0.09    $      0.58   $      0.54
                                                    ===========   ===========    ===========   ===========
       Diluted                                      $      0.23   $      0.09    $      0.56   $      0.51
                                                    ===========   ===========    ===========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

<TABLE>
                                     CARVER BANCORP, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                           AND COMPREHENSIVE INCOME
                                  FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2005
                                                (IN THOUSANDS)
                                                  (UNAUDITED)

<CAPTION>
                                                                                                  ACCUMULATED
                                                                                                     OTHER
                                                      ADDITIONAL                                    COMPRE-
                                          COMMON       PAID-IN-      RETAINED       TREASURY        HENSIVE
                                           STOCK       CAPITAL       EARNINGS        STOCK           INCOME
                                        -----------   -----------   -----------    -----------    ------------

<S>                                     <C>           <C>           <C>            <C>            <C>
BALANCE--MARCH 31, 2005                 $        25   $    23,937   $    22,748    $      (420)   $      (235)
Comprehensive income :
Net income                                       --            --           840             --             --
Change in net unrealized gain on
  available-for-sale securities,
  net of taxes                                   --            --            --             --            258
                                        -----------   -----------   -----------    -----------    -----------
Comprehensive income, net of taxes:              --            --           840             --            258
Dividends paid                                   --            --          (174)            --             --
Treasury stock activity                          --             1            --            189             --
Issuance (Purchase) of shares for
  MRP                                            --            --            --             --             --
                                        -----------   -----------   -----------    -----------    -----------
Balance--June 30, 2005                  $        25   $    23,938   $    23,414    $      (231)   $        23
Comprehensive income:
Net income                                       --            --           601             --             --
Change in net unrealized gain on
  available-for-sale securities,
  net of-taxes                                   --            --            --             --            (76)
                                        -----------   -----------   -----------    -----------    -----------
Comprehensive income, net of taxes:              --            --           601             --            (76)
Dividends paid                                   --            --          (201)            --             --
Treasury stock activity                          --             3            --             29             --
Issuance (Purchase) of shares for
  MRP                                            --            --            --             --             --
                                        -----------   -----------   -----------    -----------    -----------
BALANCE--SEPTEMBER 30, 2005             $        25   $    23,941   $    23,814    $      (202)   $       (53)
                                        ===========   ===========   ===========    ===========    ===========


[TABLE CONTINUED]


                                         COMMON STOCK   COMMON STOCK      TOTAL
                                         ACQUIRED BY    ACQUIRED BY    STOCKHOLDERS'
                                             ESOP           MRP           EQUITY
                                         ------------   ------------   ------------

BALANCE--MARCH 31, 2005                  $      (126)   $      (128)   $    45,801
Comprehensive income :
Net income                                        --             --            840
Change in net unrealized gain on
  available-for-sale securities,
  net of taxes                                    --             --            258
                                         ------------   ------------   ------------
Comprehensive income, net of taxes:               --             --          1,098
Dividends paid                                    --           (174)
Treasury stock activity                          115             29            334
Issuance (Purchase) of shares for
  MRP                                             --             --             --
                                         ------------   ------------   ------------
Balance--June 30, 2005                   $       (11)   $       (99)   $    47,059
Comprehensive income:
Net income                                        --             --            601
Change in net unrealized gain on
  available-for-sale securities,
  net of-taxes                                    --             --            (76)
                                         ------------   ------------   ------------
Comprehensive income, net of taxes:               --             --            525
Dividends paid                                    --             --           (201)
Treasury stock activity                           --             73            105
Issuance (Purchase) of shares for
  MRP                                             --             --             --
                                         -----------    -----------    ------------
BALANCE--SEPTEMBER 30, 2005              $       (11)   $       (26)   $    47,488
                                         ===========    ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

                                 CARVER BANCORP, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            (IN THOUSANDS)
                                              (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        SIX MONTHS ENDED SEPTEMBER 30,
                                                                        ------------------------------
                                                                             2005           2004
                                                                          -----------    -----------

<S>                                                                       <C>            <C>
Cash flows from operating activities:
  Net income                                                              $     1,442    $     1,337
  Adjustments to reconcile net income to net cash used
    in operating activities:
    Provision for loan losses                                                      --             --
    ESOP and MRP expense                                                          217            114
    Depreciation and amortization expense                                         770            696
    Other amortization                                                           (259)         2,731
    Gain from sale of securities                                                   --            (94)
  Changes in assets and liabilities:
    Increase in accrued interest receivable                                      (210)          (167)
    Increase in other assets                                                   (5,265)        (7,121)
    Decrease in other liabilities                                              (2,380)        (8,680)
                                                                          -----------    -----------
       Net cash used in operating activities                                   (5,685)       (11,184)
                                                                          -----------    -----------
Cash flows from investing activities:
  Purchases of securities:
    Available-for-sale                                                        (26,811)       (68,479)
  Proceeds from principal payments, maturities and calls of securities:
    Available-for-sale                                                         35,166         31,109
    Held-to-maturity                                                            3,403         10,592
  Proceeds from sales of available-for-sale securities                          1,575          7,288
  Disbursements for loan originations                                         (52,663)       (49,878)
  Loans purchased from third parties                                          (41,512)       (31,480)
  Principal collections on loans                                               60,192         51,612
  Purchase of FHLB-NY stock                                                      (499)           (49)
  Proceeds from loans sold                                                      4,999          4,042
  Additions to premises and equipment                                            (830)        (2,241)
                                                                          -----------    -----------
       Net cash used in investing activities                                  (16,980)       (47,484)
                                                                          -----------    -----------
Cash flows from financing activities:
  Net increase in deposits                                                     12,401         53,143
  Net proceeds from (repayment of) FHLB advances and
    other borrowed money                                                        9,988         (3,729)
  Common stock repurchased                                                         --           (114)
  Dividends paid                                                                 (376)          (373)
                                                                          -----------    -----------
       Net cash provided by financing activities                               22,013         48,927
                                                                          -----------    -----------
Net decrease in cash and cash equivalents                                        (652)        (9,741)
Cash and cash equivalents at beginning of the period                           20,420         22,774
                                                                          -----------    -----------
Cash and cash equivalents at end of  the period                           $    19,768    $    13,033
                                                                          ===========    ===========


Supplemental information:
Noncash Transfers-
  Change in unrealized gain on valuation of available-for-sale
       investments, net                                                   $       182    $      (244)

Cash paid for-
  Interest                                                                $     6,261    $     4,636
  Income taxes                                                            $     2,092    $     1,940
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1)  BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements of Carver
Bancorp, Inc. (the "Holding Company") have been prepared in accordance with
accounting principles generally accepted in the United States of America
("GAAP") for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange
Commission ("SEC"). Accordingly, they do not include all of the information and
footnotes required by GAAP for complete consolidated financial statements.
Certain information and note disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or omitted
pursuant to the rules and regulations of the SEC. Certain reclassifications have
been made to prior period amounts to conform to the current period presentation.
In the opinion of management, all adjustments (consisting of only normal
recurring adjustments) necessary for a fair presentation of the financial
condition, results of operations, changes in stockholders' equity and cash flows
of the Holding Company and its subsidiaries on a consolidated basis as of and
for the periods shown have been included.

         The unaudited consolidated financial statements presented herein should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Holding Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2005 ("2005 10-K") previously filed with the SEC.
The consolidated results of operations and other data for the three-month or
six-month periods ended September 30, 2005 are not necessarily indicative of
results that may be expected for the entire fiscal year ending March 31, 2006
("fiscal 2006").

         The accompanying 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"), Alhambra Holding Corp.,
an inactive Delaware corporation, and the Bank's wholly-owned subsidiaries, CFSB
Realty Corp. and CFSB Credit Corp., and the Bank's majority owned subsidiary,
Carver Asset Corporation. The Holding Company and its consolidated subsidiaries
are referred to herein collectively as "Carver" or the "Company." All
significant inter-company accounts and transactions have been eliminated in
consolidation.

         In addition, the Holding Company has a subsidiary, Carver Statutory
Trust I, which is not consolidated with Carver for financial reporting purposes
as a result of our adoption of Financial Accounting Standards Board ("FASB"),
revised Interpretation No. 46, "CONSOLIDATION OF VARIABLE INTEREST ENTITIES, AND
INTERPRETATION OF ACCOUNTING RESEARCH BULLETIN NO. 51" ("FIN46R"), effective
January 1, 2004. Carver Statutory Trust I was formed in 2003 for the purpose of
issuing 13,000 shares, liquidation amount $1,000 per share, of floating rate
capital securities ("trust preferred securities"). Gross proceeds from the sale
of these trust preferred securities were $13.0 million, and, together with the
proceeds from the sale of the trust's common securities, were used to purchase
approximately $13.4 million aggregate principal amount of the Holding Company's
floating rate junior subordinated debt securities due 2033. The junior
subordinated debt securities are repayable quarterly at the option of the
Holding Company, beginning on or after July 7, 2007, and have a mandatory
repayment date of September 17, 2033. Interest on the junior subordinated debt
securities is cumulative and payable at a floating rate per annum (reset
quarterly) equal to 3.05% over three-month LIBOR, with a rate of 6.94% as of
September 30, 2005. The Holding Company has fully and unconditionally guaranteed
the obligations of Carver Statutory Trust I to the trust's capital security
holders. See Note 6 for further discussion of the impact of our adoption of FIN
46R.


(2)  NET INCOME PER COMMON SHARE

         Basic earnings per common share is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding over the period of determination. Diluted earnings per common share
include any additional common shares as if all potentially dilutive common
shares were issued (for instance, convertible preferred stock and stock options
with an exercise price that is less than the average market price of the common
shares for the periods stated). For the purpose of these calculations,
unreleased ESOP shares are not considered to be outstanding. For the three-month
period ended September 30, 2004, preferred dividends of $49,250 were deducted
from net income to arrive at the amount of net income available to common
stockholders. Additionally, for the three-month period ended September 30, 2004,
208,333 shares of common stock, were potentially issuable from the conversion of
preferred stock. However, in October 2004 all outstanding shares of preferred
stock were converted into common shares. Also, 62,679 shares of common stock at
September 30, 2005 and 89,018 of common stock at September 30, 2004 were
potentially issuable from the exercise of stock options with an exercise price
that is less than the average market price of the common shares for the
three-months ended September 30, 2005 and 2004, respectively. The effects of
these potentially dilutive common shares were considered in determining the
diluted net income per common share.


(3)  STOCK OPTION PLAN

ACCOUNTING FOR STOCK BASED COMPENSATION

         The Holding Company grants "incentive stock options" only to its
employees and grants "nonqualified stock options" to employees and non-employee
directors. Under Accounting Principle Board Opinion ("APB") No. 25 "ACCOUNTING
FOR STOCK ISSUED TO EMPLOYEES", no compensation expense is recognized if the
exercise price of the option is greater than or equal to the fair market value
of the underlying stock on the date of grant. In December 2004, the FASB issued
a revised Statement of Financial Accounting Standards No. 123 "ACCOUNTING FOR
STOCK BASED COMPENSATION, SHARE BASED PAYMENT", ("SFAS 123R") which requires
that compensation cost relating to share-based payment transactions be
recognized in the financial statements. The associated costs will be measured
based on the fair value of the equity or liability instruments issued. SFAS 123R
covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights and employee share purchase plans. SFAS 123R, per SEC guidance, is
effective as of the first annual reporting period beginning after June 15, 2005.
Carver Federal will adopt SFAS 123R as of April 1, 2006. Further disclosure is
presented in Note 6.

         The following table illustrates net income and earnings per common
share pro forma results with the application of SFAS 123R for Carver's Stock
Option Plan, for the quarters ended:

<TABLE>
<CAPTION>
                                                       SEPTEMBER 30,     SEPTEMBER 30,
                                                           2005              2004
                                                      ----------------  ----------------

<S>                                                              <C>               <C>
Net Income available to common shareholders:
    As reported                                                  $601              $206
       Total stock-based employee compensation
       expense determined under fair value based
       methods for all awards, net of tax effects                 (14)               (4)
                                                      ----------------  ----------------
    Pro forma                                                    $587              $202
                                                      ================  ================

Basic earnings per share:
    As reported                                                 $0.24             $0.09
    Pro forma                                                    0.23              0.09

Diluted earnings per share:
    As reported                                                 $0.23             $0.09
    Pro forma                                                    0.23              0.09
</TABLE>

        The fair value of the option grants was estimated on the date of the
grant using the Black-Scholes option pricing model applying the following
weighted average assumptions: risk-free interest rates of 4.15% and 4.50%, for
the relevant quarters ended September 30, 2005 and 2004, respectively;
volatility of 24.24% and 27.54% for the quarters ended September 30, 2005 and
2004, respectively; expected dividend yield was calculated using annual
dividends of $0.32 and $0.28 per share for the quarters ended September 30, 2005
and 2004, respectively; and an expected life ten years was used for all option
grants.


(3)  EMPLOYEE BENEFIT PLANS

EMPLOYEE PENSION PLAN

         Carver Federal has a non-contributory defined benefit pension plan
covering all eligible employees. The benefits are based on each employee's term
of service. Carver Federal's policy is to fund the plan with contributions which
equal the maximum amount deductible for federal income tax purposes. The pension
plan was curtailed and future benefit accruals ceased as of December 31, 2000.

DIRECTORS' RETIREMENT PLAN

         Concurrent with the conversion to a stock form of ownership, Carver
Federal adopted a retirement plan for non-employee directors. The benefits are
payable based on the term of service as a director. The directors' retirement
plan was curtailed during the fiscal year ended March 31, 2001.

         The following table sets forth the components of net periodic pension
expense for the pension plan and directors' retirement plan for the three months
ended September 30, of the calendar years indicated.

<TABLE>
<CAPTION>
                                                EMPLOYEE PENSION PLAN       NON-EMPLOYEE DIRECTORS' PLAN
                                                 2005           2004           2005             2004
                                              -----------    -----------    -----------      -----------
                                                                   (IN THOUSANDS)

<S>                                           <C>            <C>            <C>              <C>
Interest Cost                                 $        42    $        42    $         2      $         2
Expected Return on Assets                             (59)           (59)            --               --
                                              -----------    -----------    -----------      -----------
    Net Periodic Benefit Expense / (Credit)   $       (17)   $       (17)   $         2      $         2
                                              ===========    ===========    ===========      ===========
</TABLE>


(5)  COMMON STOCK DIVIDEND

         On October 25, 2005, the Board of Directors of the Holding Company
declared, for the quarter ended September 30, 2005, a cash dividend of eight
cents ($0.08) per common share outstanding. The dividend is payable on November
22, 2005 to stockholders of record at the close of business on November 8, 2005.


(6)  RECENT ACCOUNTING PRONOUNCEMENTS

ACCOUNTING CHANGES AND ERROR CORRECTIONS

         In May 2005, the FASB issued SFAS No. 154, "ACCOUNTING CHANGES AND
ERROR CORRECTIONS"(SFAS No. 154), which replaces APB Opinion No. 20, "Accounting
Changes," or APB No. 20, and SFAS No. 3, "Reporting Accounting Changes in
Interim Financial Statements," and changes the requirements for the accounting
for and reporting of a change in accounting principle. SFAS No. 154 applies to
all voluntary changes in accounting principle and to changes required by an
accounting pronouncement when the pronouncement does not include specific
transaction provisions. SFAS No. 154 requires retrospective application of
changes in accounting principle to prior periods' financial statements unless it
is impracticable to determine either the period-specific effects or the
cumulative effect of the change. APB No. 20 previously required that most
voluntary changes in accounting principle be recognized by including the
cumulative effect of the change in net income for the period of the change in
accounting principle. SFAS No. 154 carries forward without change the guidance
contained in APB No. 20 for reporting the correction of an error in previously
issued financial statements and a change in accounting estimate. SFAS No. 154
also carries forward the guidance in APB No. 20 requiring justification of a
change in accounting principle on the basis of preferability. SFAS No. 154 is
effective for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005, with early adoption permitted. Carver will
adopt this pronouncement as of April 1, 2006 and it is not expected to have a
material impact on the Company's consolidated financial condition or results of
operations.

ACCOUNTING FOR STOCK BASED COMPENSATION, SHARE BASED PAYMENT

         In December 2004, the FASB issued SFAS 123R which replaces the guidance
prescribed in SFAS 123. SFAS 123R requires that compensation cost relating to
share-based payment transactions be recognized in the financial statements. The
associated costs will be measured based on the fair value of the equity or
liability instruments issued. SFAS 123R covers a wide range of share-based
compensation arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights and employee share purchase
plans. SFAS 123R, per SEC guidance, is effective as of the first annual
reporting period beginning after June 15, 2005. Carver will adopt this
pronouncement as of April 1, 2006 and it is not expected to have a material
impact on the Company's consolidated financial condition or results of
operations.

CONSOLIDATION OF VARIABLE INTEREST ENTITIES

         In December 2003, the FASB issued FIN46R. FIN46R addresses how a
business enterprise should evaluate whether it has a controlling financial
interest in an entity through means other than voting rights and, accordingly,
should consolidate the variable interest entity. FIN46R replaces an earlier
version that was issued in January 2003. All public companies, such as Carver,
were required to fully implement FIN46R no later than the end of the first
reporting period ending after March 15, 2004. The adoption of FIN46R resulted in
the deconsolidation of Carver Statutory Trust I, which did not have a material
impact on the Company's financial condition or results of operations.

ACCOUNTING FOR CERTAIN LOANS OR DEBT SECURITIES ACQUIRED IN A TRANSFER

         In December 2003, the American Institute of Certified Public
Accountants issued Statement of Position No. 03-3, "ACCOUNTING FOR CERTAIN LOANS
OR DEBT SECURITIES ACQUIRED IN A TRANSFER" ("SOP No. 03-3"). SOP No. 03-3
addresses accounting for differences between contractual cash flows and cash
flows expected to be collected from an investor's initial investment in loans or
debt securities acquired in a transfer if those differences are attributable, at
least in part, to credit quality. SOP No. 03-3 prohibits "carry over" or
creation of valuation allowances in the initial accounting of all loans acquired
in transfers within the scope of SOP No. 03-3, which includes loans acquired in
a business combination. SOP No. 03-3 is effective for loans acquired in fiscal
years beginning after December 15, 2004. The adoption of SOP No. 03-3 did not
have any impact on the Company's financial condition or results of operations.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

FORWARD-LOOKING STATEMENTS

         Statements contained in this Quarterly Report on Form 10-Q, which are
not historical facts, are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). In addition, senior management may make forward-looking
statements orally to analysts, investors, the media and others. These
forward-looking statements may be identified by the use of such words as
"believe," "expect," "anticipate," "intend," "should," "will," "would," "could,"
"may," "planned," "estimated," "potential," "outlook," "predict," "project" and
similar terms and phrases, including references to assumptions. Forward-looking
statements are based on various assumptions and analyses made by the Company in
light of the management's experience and its perception of historical trends,
current conditions and expected future developments, as well as other factors
believed to be appropriate under the circumstances. These statements are not
guarantees of future performance and are subject to risks, uncertainties and
other factors, many of which are beyond the Company's control, that could cause
actual results to differ materially from future results expressed or implied by
such forward-looking statements. Factors which could result in material
variations include, without limitation, the Company's success in implementing
its initiatives, including expanding its product line, adding new branches and
ATM centers, successfully re-branding its image and achieving greater operating
efficiencies; increases in competitive pressure among financial institutions or
non-financial institutions; legislative or regulatory changes which may
adversely affect the Company's business or the cost of doing business;
technological changes which may be more difficult or expensive than we
anticipate; changes in interest rates which may reduce net interest margins and
net interest income; changes in deposit flows, loan demand or real estate values
which may adversely affect the Company's business; changes in accounting
principles, policies or guidelines which may cause the Company's condition to be
perceived differently; litigation or other matters before regulatory agencies,
whether currently existing or commencing in the future, which may delay the
occurrence or non-occurrence of events longer than anticipated; the ability of
the Company to originate and purchase loans with attractive terms and acceptable
credit quality; and general economic conditions, either nationally or locally in
some or all areas in which the Company does business, or conditions in the
securities markets or the banking industry which could affect liquidity in the
capital markets, the volume of loan origination, deposit flows, real estate
values, the levels of non-interest income and the amount of loan losses.

         The forward-looking statements contained herein are made as of the date
of this Form 10-Q, and the Company assumes no obligation to, and expressly
disclaims any obligation to, update these forward-looking statements to reflect
actual results, changes in assumptions or changes in other factors affecting
such forward-looking statements or to update the reasons why actual results
could differ from those projected in the forward-looking statements. You should
consider these risks and uncertainties in evaluating forward-looking statements
and you should not place undue reliance on these statements.

         As used in this Form 10-Q, "we," "us" and "our" refer to the Holding
Company and its consolidated subsidiaries, unless the context otherwise
requires.

OVERVIEW

         The Holding Company, a Delaware corporation, is the holding company for
Carver Federal, a federally chartered savings bank, and, on a parent-only basis,
had minimal results of operations. The Holding Company is headquartered in New
York, New York. 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, Carver Federal. The Bank is
focused on successfully building its core business by providing superior
customer service while offering a wide range of financial products. As of
September 30, 2005, the Bank operated eight full-service banking locations in
the New York City boroughs of Brooklyn, Queens and Manhattan and five stand
alone 24/7 ATM centers.

         Carver Federal's net income, like others in the thrift industry, is
dependent primarily on net interest income, which is the difference between
interest income earned on its interest-earning assets such as loans, investment
and mortgage-backed securities portfolios and the interest paid on its
interest-bearing liabilities, such as deposits and borrowings. The Bank's
earnings are also affected by general economic and competitive conditions,
particularly changes in market interest rates and government and regulatory
policies. Additionally, net income is affected by any incremental provision for
loan losses, as well as non-interest income and operating expenses. During the
fiscal year ended March 31, 2005 ("fiscal 2005"), the Bank was impacted by the
changing interest rate environment where the Federal Open Market Committee
("FOMC") raised the federal funds rates seven separate times for a total of 175
basis points. The effect of these interest rate increases negatively impacted
our net interest margin as interest rates paid on liabilities increased more
quickly than yields earned on assets. These rate increases continue in fiscal
2006 as the FOMC has already raised rates four times in the first six months for
a total of 100 basis points. Consequently, Carver's net interest margin echoes
the effects of the interest rate environment as net interest margin declined to
3.11% for the second quarter of fiscal 2006 from 3.40% for the same prior year
period. While the Bank experienced strong growth in its core business as
reflected in loan and deposit growth year over year, this was more than offset
by the increased cost of funds, primarily deposits, partially offset by the
increase in the yield on interest-earning assets. The increase in the cost of
funds was primarily the result of higher costing certificates of deposit and
money market accounts. The Bank has been increasing the rates offered on these
products to remain competitive which has enabled retention of money market and
maturing certificates of deposit accounts as well as attracted new deposit
relationships. Comparatively, checking and savings deposit products did not
experience the same competitive interest rate pressures as did the money market
and certificate of deposit accounts and accordingly there were no significant
rate increases. The growth in core deposits further fueled improvements in
depository fees and charges. During the quarter ended September 30, 2005, loan
origination and purchase volumes were solid resulting in a 6.9% increase in the
net loan portfolio. Nonresidential mortgage loans and construction loans
accounted for much of the total loan originations and purchases. However, the
resulting increase in interest income on loans was partially offset by a decline
in the overall yield of the loan portfolio. The decrease in yield of the loan
portfolio can be primarily attributed to current rates on loans being added to
portfolio, repayment of existing higher yielding loans and repricing of
higher-priced existing loans to current lower market rates. The Bank's
securities and federal funds sold portfolios are shorter term in duration and
thereby benefit from the rise in short term interest rates. The increased yield
on these portfolios resulted in an overall increase in the yield on total
interest-earning assets.

         The Bank also generates additional income through depository and loan
fees and charges and, to a lesser extent, investment and insurance product sales
revenue and, depending on market conditions, net gains on sales of securities
and loans. Management expects to improve income contributions from these sources
through investments made for franchise expansion, better customer service and
more financial product offerings.

         The level of operating expenses such as salaries and benefits,
occupancy and equipment costs, other general and administrative expenses, net
losses on sales of securities and loans and income tax expense further affects
the Bank's net income. Management's goal is to continue to control, and where
possible reduce non-interest expense, consistent with its franchise expansion
objectives. Initiatives have already begun with outsourcing of our core
processing and ATM driving technology and a number of other outsourcing actions
are planned in the near future.

         This discussion and analysis of the Company's financial condition
should be read in conjunction with the audited Consolidated Financial
Statements, the notes thereto and other financial information included in the
Company's 2005 10-K.

CRITICAL ACCOUNTING POLICIES

         Note 1 to our audited Consolidated Financial Statements for fiscal 2005
included in our 2005 10-K, as supplemented by this report, contains a summary of
our significant accounting policies and is incorporated herein. We believe our
policies with respect to the methodology for our determination of the allowance
for loan losses and asset impairment judgments, including other than temporary
declines in the value of our securities, involve a high degree of complexity and
require management to make subjective judgments which often require assumptions
or estimates about highly uncertain matters. Changes in these judgments,
assumptions or estimates could cause reported results to differ materially. The
following description of these policies should be read in conjunction with the
corresponding section of our 2005 10-K.


ALLOWANCE FOR LOAN LOSSES

         Allowance for loan losses are maintained at a level considered adequate
to provide for probable loan losses inherent in the portfolio as of September
30, 2005. Management is responsible for determining the adequacy of the
allowance for loan losses and the periodic provisioning for estimated losses
included in the consolidated financial statements. The evaluation process is
undertaken on a quarterly basis, but may increase in frequency should conditions
arise that would require management's prompt attention, such as business
combinations and opportunities to dispose of non-performing and marginally
performing loans by bulk sale or any development which may indicate an adverse
trend.

         Carver Federal maintains a loan review system, which calls 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.

         The methodology employed for assessing the appropriateness of the
allowance consists of the following criteria:

         o    Establishment of reserve amounts for all specifically identified
              criticized loans that have been designated as requiring attention
              by management's internal loan review program, bank regulatory
              examinations or the Bank's external auditors.

         o    An average loss factor, giving effect to historical loss
              experience over several years and linked to cyclical trends, is
              applied to smaller balance homogenous types of loans not subject
              to specific review. These loans include residential one- to
              four-family, multifamily, non-residential and construction loans
              and also include consumer and business loans.

         Recognition is also given to the changed risk profile brought about by
business combinations, customer knowledge, the results of ongoing credit quality
monitoring processes and the cyclical nature of economic and business
conditions. An important consideration in applying these methodologies is the
concentration of real estate related loans located in the New York City
metropolitan area.

         The initial allocation or specific-allowance methodology commences with
loan officers and underwriters grading the quality of their loans on an
eight-category risk classification scale. Loans identified from this process as
below investment grade are referred to the Bank's Internal Asset Review
Committee for further analysis and identification of those factors that may
ultimately affect the full recovery or collectibility of principal and/or
interest. These loans are subject to continuous review and monitoring while they
remain in the criticized category. Additionally, the Internal Asset Review
Committee is responsible for performing periodic reviews of the loan portfolio
that are independent from the identification process employed by loan officers
and underwriters. Gradings that fall into criticized categories are further
evaluated and reserve amounts are established for each loan.

         The second allocation or loss factor approach to common or homogeneous
loans is made by applying the average loss factor based on several years of loss
experience to the outstanding balances in each loan category. It gives
recognition to the loss experience of acquired businesses, business cycle
changes and the real estate components of loans. Since many loans depend upon
the sufficiency of collateral, any adverse trend in the real estate markets
could seriously affect underlying values available to protect against loss.

         Other evidence used to support the amount of the allowance and its
components include:

         o    Regulatory examinations

         o    Amount and trend of criticized loans

         o    Actual losses

         o    Peer comparisons with other financial institutions

         o    Economic data associated with the real estate market in the
              Company's market area

         o    Opportunities to dispose of marginally performing loans for cash
              consideration

         A loan is considered to be impaired, as defined by SFAS No. 114,
"ACCOUNTING BY CREDITORS FOR IMPAIRMENT OF A LOAN" ("SFAS 114"), when it is
probable that Carver Federal will be unable to collect all principal and
interest amounts due according to the contractual terms of the loan agreement.
Carver Federal tests loans covered under SFAS 114 for impairment if they are on
non-accrual status or have been restructured. Consumer credit non-accrual 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 SFAS 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 allowance for credit losses or by a provision for
credit losses, depending on various circumstances. Impairment reserves are not
needed when credit losses have been recorded so that the recorded investment in
an impaired loan is less than the loan valuation.

STOCK REPURCHASE PROGRAM

         In August 2002, Carver's Board of Directors authorized a stock
repurchase program to acquire up to 231,635 shares of the Company's outstanding
common stock, or approximately 10 percent of the then outstanding shares. Since
that time, the Company has purchased 83,584 shares at an average price of $17.03
to fund its stock-based benefit and compensation plans. On October 25, 2005, the
Board of Directors approved accelerating repurchase of the remaining 148,051
shares under the 2002 stock repurchase program, or up to a $2.5 million total
investment, to take place over the next 18 months. This acceleration is intended
not only to return capital to shareholders and capitalize on current trading
values, but to continue funding stock-based benefit and compensation plans.
Purchases for the stock repurchase program may be made from time to time on the
open market and in privately negotiated transactions. The timing and actual
number of shares repurchased under the plan depends on a variety of factors
including price, corporate and regulatory requirements, and other market
conditions.

LIQUIDITY AND CAPITAL RESOURCES

         Liquidity is a measure of the Bank's ability to generate adequate cash
to meet its financial obligations. The principal cash requirements of a
financial institution are to cover potential deposit outflows, fund increases in
its loan and investment portfolios and cover ongoing operating expenses. The
Company's primary sources of funds are deposits, borrowed funds and principal
and interest payments on loans, mortgage-backed securities and investment
securities. While maturities and scheduled amortization of loans,
mortgage-backed securities and investment securities are predictable sources of
funds, deposit flows and loan and mortgage-backed securities prepayments are
strongly influenced by changes in general interest rates, economic conditions
and competition.

         The Bank monitors its liquidity utilizing guidelines that are contained
in a policy developed by management of the Bank and approved by the Bank's Board
of Directors. The Bank's several liquidity measurements are evaluated on a
frequent basis. Management believes the Bank's short-term assets have sufficient
liquidity to cover loan demand, potential fluctuations in deposit accounts and
to meet other anticipated cash requirements. Additionally, the Bank has other
sources of liquidity including the ability to borrow from the Federal Home Loan
Bank of New York ("FHLB-NY") utilizing unpledged mortgage-backed securities and
certain mortgage loans, the sale of available-for-sale securities and the sale
of loans. At September 30, 2005, based on available collateral held at the
FHLB-NY the Bank had the ability to borrow from the FHLB-NY an additional $29.4
million on a secured basis, utilizing mortgage-related loans and securities as
collateral.

         The unaudited Consolidated Statements of Cash Flows present the change
in cash from operating, investing and financing activities. During the six
months ended September 30, 2005, total cash and cash equivalents decreased by
$652,000 reflecting cash used in operating and investing activities mainly
offset by cash provided by financing activities. Net cash used in operating
activities during this period was $5.7 million, primarily representing cash due
from receivables included in other assets and cash used in the satisfaction of
other liabilities offset in part by cash provided from operations. Net cash used
in investing activities was $17.0 million, primarily representing cash
disbursements to fund mortgage loan originations and purchases partially offset
by principal collections on loans, repayment of principal on securities,
maturities of securities and proceeds from the sale of available-for-sale
securities. Net cash provided by financing activities was $22.0 million,
primarily representing a net increase in advances from the FHLB-NY as a result
of new borrowings and a net increase in deposit balances. See "Liabilities and
Stockholders Equity--Liabilities" for a discussion of the changes in deposits
and FHLB-NY borrowings.

         The levels of the Bank's short-term liquid assets are dependent on the
Bank's operating, investing and financing activities during any given period.
The most significant liquidity challenge the Bank faces is variability in its
cash flows as a result of mortgage refinance activity. When mortgage interest
rates decline, customers' refinance activities tend to accelerate, causing the
cash flow from both the mortgage loan portfolio and the mortgage-backed
securities portfolio to accelerate. In contrast, when mortgage interest rates
increase, refinance activities tend to slow causing a reduction of liquidity.
However, in a rising rate environment, customers generally tend to prefer fixed
rate mortgage loan products over variable rate products. Since the Bank
generally sells its 15-year and 30-year fixed rate loan production into the
secondary mortgage market, the origination of such products for sale does not
significantly reduce the Bank's liquidity.

         Since the beginning of fiscal 2006, the FOMC raised the federal funds
rate four times resulting in a 100 basis point increase. Although short-term
rates have increased, mortgage loans and mortgage-backed securities are
typically tied to longer-term rates which have not increased as dramatically.
When mortgage interest rates increase, customers' refinance activities tend to
decelerate, causing the cash flow from both the mortgage loan portfolio and the
mortgage-backed securities portfolio to decline.

         The OTS requires that the Bank meet minimum capital requirements.
Capital adequacy is one of the most important factors used to determine the
safety and soundness of individual banks and the banking system. At September
30, 2005, the Bank exceeded all regulatory minimum capital requirements and
qualified, under OTS regulations, as a well-capitalized institution.

         The table below presents certain information relating to the Bank's
capital compliance at September 30, 2005.


                               REGULATORY CAPITAL
                              AT SEPTEMBER 30, 2005
                             (DOLLARS IN THOUSANDS)

                                                         Amount     % of Assets
                                                      -----------   -----------

Total capital (to risk-weighted assets):
Capital level                                         $    64,227       14.72 %
Less requirement                                           34,909          8.00
                                                      -----------   -----------
Excess                                                $    29,318          6.72
                                                      ===========   ===========

Tier 1 capital (to risk-weighted assets):
Capital level                                         $    60,163       13.79 %
Less requirement                                           17,455          4.00
                                                      -----------   -----------
Excess                                                $    42,708          9.79
                                                      ===========   ===========

Tier 1 Leverage capital (to adjusted total assets):
Capital level                                         $    60,163        9.26 %
Less requirement                                           25,999          4.00
                                                      -----------   -----------
Excess                                                $    34,164        5.26 %
                                                      ===========   ===========


COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2005 AND MARCH 31, 2005

ASSETS

         Total assets increased $21.3 million, or 3.4%, to $647.7 million at
September 30, 2005 compared to $626.4 million at March 31, 2005. The increase in
total assets was primarily the result of net loan growth of $29.3 million and
increases in other assets, FHLB-NY stock and accrued interest receivable of $5.3
million, $499,000 and $210,000, respectively. These increases to total assets
were partially offset by decreases in total securities and cash and cash
equivalents of $13.3 million and $652,000, respectively.

         Cash and cash equivalents for the first six months of fiscal 2006
decreased $652,000 or 3.2%, to $19.8 million at September 30, 2005 compared to
$20.4 million at March 31, 2005. The decrease was primarily a result of the Bank
using its net liquid assets to fund additions to the mortgage loan portfolio and
pay off matured borrowings.

         Total securities decreased $13.3 million, or 8.9%, to $136.0 million at
September 30, 2005 from $149.3 million at March 31, 2005 as security repayments,
maturities and sales exceeded new purchases. The securities portfolio decline
reflects $22.8 million in total principal repayments, maturities of $15.8
million and the sale of $1.6 million of Independence Federal Savings Bank
("IFSB") common stock. Reductions to the securities portfolio were offset in
part by new purchases amounting to $26.8 million, to replace repaid securities
held as collateral for deposits. These purchases consisted of $23.3 million in
United States Treasury and Agency securities and $3.5 million in Government
National Mortgage Association mortgage-backed securities. Also offsetting
decreases to total securities was a net unrealized gain on securities of
$316,000 resulting from the mark-to-market of the available for sale securities
in portfolio.

         Total loans receivable, net, increased $29.3 million, or 6.9%, to
$451.3 million at September 30, 2005 from $422.0 million at March 31, 2005. The
increase resulted primarily from $94.2 million in loan originations and
purchases exceeding $65.2 million in repayments and sales during the first half
of fiscal 2006. Loan originations for the period totaled $52.7 million and were
comprised of $18.8 million in construction, $18.3 million in non-residential
mortgage loans, $8.6 million in one-to four residential loans, $6.8 million in
multi-family loans and $246,000 in consumer loans. Total loan purchases for the
same period amounted to $41.5 million of which $24.2 were non-residential
mortgages, $13.4 million were construction loans and $3.9 million were
multi-family loans. Management continues to evaluate yields and loan quality in
the competitive New York metropolitan area market and in certain instances has
decided to purchase loans to supplement internal originations. Management also
assesses yields and economic risk in determining the balance of interest-earning
assets allocated to loan originations and purchases compared to additional
purchases of mortgage-backed securities.

         The Bank's investment in FHLB-NY stock increased by $499,000, or 9.7%,
to $5.6 million compared to $5.1 million at March 31, 2005. This additional
stock purchase was necessary as the Bank acquired an additional $18.0 million
advance at the end of the quarter to fund loan purchases.

         Other assets increased $5.2 million, or 40.0%, to $18.4 million at
September 30, 2005 from $13.2 million at March 31, 2005. The increase was
primarily attributable to a short-term receivable at the end of September 2005
related to mortgage-backed security principal repayments being held as
collateral by New York State.

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

         At September 30, 2005, total liabilities increased by $19.6 million, or
3.4%, to $600.2 million compared to $580.6 million at March 31, 2005. The
increase in liabilities primarily reflects increases of $12.4 million and $10.0
million in total deposits and advances from the FHLB-NY and other borrowed
money, respectively, partially offset by a decrease of $2.8 million in other
liabilities.

         The $12.4 million increase in total deposits represents a 2.7% increase
to $465.9 million at September 30, 2005 from $453.5 million at March 31, 2005.
The increase in deposit balances was the result of balance increases in
certificates of deposits, money market and demand accounts of $4.8 million, $4.8
million and $4.1 million, respectively, partially offset by a decrease of $1.2
million in the balance of savings accounts. Contributing to overall deposit
growth was the Bank's continued emphasis on developing depository relationships
with borrowers and the offering of special promotions and campaigns to attract
new consumer depositors. At September 30, 2005, the Bank managed eight branches
and five stand-alone 24/7 ATM Centers. Management believes that deposits will
continue to grow as the Bank begins to capitalize on its investment in franchise
expansions, customer service and the offering of a wider array of financial
products.

         Advances from the FHLB-NY and other borrowed money increased $10.0
million, or 8.7% to $125.3 million at September 30, 2005 compared to $115.3
million at March 31, 2005. This increase is the net result of $18.0 million in
additional advances from the FHLB-NY and the repayment of two matured FHLB-NY
advances: a $7.0 million advance with a cost of 5.21% and a $1.0 million advance
with a cost of 2.50%. Management, with its commitment to manage the impact of
margin compression, elected to repay high cost borrowings with available excess
liquidity.

         Other liabilities decreased $2.8 million, or 23.6%, to $9.0 million at
September 30, 2005 from $11.8 million at March 31, 2005. The decrease was
primarily attributable to a $2.1 million corporate tax remittance to taxing
authorities, in the first quarter of fiscal 2006, which reduced the Bank's
liability for income taxes.

STOCKHOLDERS' EQUITY

         Total stockholders' equity increased $1.7 million or 3.7%, to $47.5
million at September 30, 2005 compared to $45.8 million at March 31, 2005. The
increase in total stockholders' equity was primarily attributable to an increase
of $1.1 million in retained earnings principally resulting from net income,
distributions of the Company's treasury stock to fund benefit plans resulting in
an increase in capital of $435,000 and an increase of $182,000 in accumulated
other comprehensive income related to the mark-to-market of the Bank's
available-for-sale securities. As required by SFAS No. 115 "ACCOUNTING FOR
CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES" securities accounted for as
held-to-maturity are carried at cost while such securities designated as
available-for-sale are carried at market with any adjustments made directly to
stockholders' equity, net of taxes, and does not impact the Consolidated
Statements of Income.

         During the quarter ended September 30, 2005, the Holding Company did
not purchase any additional shares of its Common Stock under its stock
repurchase program.

ASSET/LIABILITY MANAGEMENT

         The Company's primary earnings source is net interest income, which is
affected by changes in the level of interest rates, the relationship between the
rates on interest-earning assets and interest-bearing liabilities, the impact of
interest rate fluctuation on asset prepayments, the level and composition of
deposits and the credit quality of earning assets. Management's asset/liability
objectives are to maintain a strong, stable net interest margin, to utilize its
capital effectively without taking undue risks, to maintain adequate liquidity
and to manage its exposure to changes in interest rates.

         The Company's Asset/Liability and Interest Rate Risk Committee,
comprised of members of the Board of Directors, meets periodically with senior
management to evaluate the impact of changes in market interest rates on assets
and liabilities, net interest margin, capital and liquidity. Risk assessments
are governed by Board policies and limits.

         The economic environment is uncertain regarding future interest rate
trends. Management regularly monitors the Company's cumulative gap position,
which is the difference between the sensitivity to rate changes on our
interest-earning assets and interest-bearing liabilities. In addition, the
Company uses various tools to monitor and manage interest rate risk, such as a
model that projects net interest income based on increasing or decreasing
interest rates.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

         The Bank is a party to financial instruments with off-balance sheet
risk in the normal course of business in order to meet the financing needs of
its customers and in connection with its overall investment strategy. These
instruments involve, to varying degrees, elements of credit, interest rate and
liquidity risk. In accordance with GAAP, these instruments are not recorded in
the consolidated financial statements. Such instruments primarily include
lending commitments.

         Lending obligations include commitments to originate mortgage and
consumer loans and to fund unused lines of credit. Additionally, the Bank has a
contingent liability related to a standby letter of credit.

         As of September 30, 2005, the Bank has outstanding loan commitments and
a letter of credit as follows:

                                                                  OUTSTANDING
                                                                  COMMITMENTS
                                                                 --------------
                                                                 (IN THOUSANDS)

Commitments to originate mortgage loans                           $    68,608
Commitments to originate consumer and business  loans                     485
Letter of credit                                                        1,908
                                                                  -----------
         Total                                                    $    71,001
                                                                  ===========


         The Bank also has contractual obligations related to long-term debt
obligations and operating leases. As of September 30, 2005, the Bank has
contractual obligations as follows:

<TABLE>
<CAPTION>
                                                                           PAYMENTS DUE BY PERIOD
                                                      -------------------------------------------------------------------
                    Contractual                                      Less than      1 - 3         3 - 5        More than
                    Obligations                          Total        1 year         years         years        5 years
----------------------------------------------------  -----------   -----------   -----------   -----------   -----------
                                                      (IN THOUSANDS)

<S>                                                   <C>           <C>           <C>           <C>           <C>
Long term debt obligations:
  FHLB advances                                       $   112,488   $    64,490   $    42,684   $     5,108   $       206
  Guaranteed preferred beneficial interest in
    junior subordinated debentures                         12,828            --            --        12,828            --
                                                      -----------   -----------   -----------   -----------   -----------
         Total long term debt obligations                 125,316        64,490        42,684        17,936           206

Operating lease obligations:
  Lease obligations for rental properties                   4,987           615         1,119         1,106         2,147
                                                      -----------   -----------   -----------   -----------   -----------
Total contractual obligations                         $   130,303   $    65,105   $    43,803   $    19,042   $     2,353
                                                      ===========   ===========   ===========   ===========   ===========
</TABLE>


ANALYSIS OF EARNINGS

         The Company's profitability is primarily dependent upon net interest
income and further affected by provisions for loan losses, non-interest income,
non-interest expense and income taxes. The earnings of the Company, which are
principally earnings of the Bank, 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.

         The following tables set forth, for the periods indicated, certain
information relating to Carver's average interest-earning assets, average
interest-bearing liabilities, net interest income, interest rate spread and
interest rate margin. It reflects the average yield on assets and the average
cost of liabilities. Such yields and costs are derived by dividing annualized
income or expense by the average balances of assets or liabilities,
respectively, for the periods shown. Average balances are derived from daily or
month-end balances as available. Management does not believe that the use of
average monthly balances instead of average daily balances represents a material
difference in information presented. The average balance of loans includes loans
on which the Company has discontinued accruing interest. The yield and cost
include fees, which are considered adjustments to yields.

<TABLE>
                                            CARVER BANCORP, INC. AND SUBSIDIARIES
                                                CONSOLIDATED AVERAGE BALANCES
                                                    (DOLLARS IN THOUSANDS)
                                                         (UNAUDITED)

<CAPTION>
                                                                       THREE MONTHS ENDED SEPTEMBER 30,
                                               ------------------------------------------------------------------------------
                                                                 2005                                          2004
                                               --------------------------------------    ------------------------------------
                                                AVERAGE                     AVERAGE       AVERAGE                   AVERAGE
INTEREST EARNING ASSETS:                        BALANCE       INTEREST     YIELD/COST     BALANCE      INTEREST    YIELD/COST
                                               ----------    ----------    ----------    ----------   ----------   ----------
                                                                            (DOLLARS IN THOUSANDS)

<S>                                            <C>           <C>                 <C>     <C>          <C>                <C>
Loans (1)                                      $  424,882    $    6,214          5.85%   $  380,052   $    5,700         6.00%

Total securities (2)                              146,781         1,412          3.85%      159,616        1,291         3.24%

Fed funds sold                                     14,639           122          3.31%        6,579           22         1.34%
                                               ----------    ----------    ----------    ----------   ----------   ----------
  Total interest earning assets                   586,302         7,748          5.29%      546,247        7,013         5.14%

Non-interest earning assets                        37,090                                    26,593
                                               ----------                                ----------
  Total assets                                 $  623,392                                $  572,840
                                               ==========                                ==========


INTEREST BEARING LIABILITIES:
Deposits:
  Checking                                     $   24,028            18          0.30%   $   20,549           17         0.34%
  Savings and clubs                               137,562           226          0.65%      132,848          202         0.61%
  Money market accounts                            40,573           160          1.56%       29,621           70         0.95%
  Certificates of deposit                         229,670         1,684          2.91%      204,125        1,018         2.00%
                                               ----------    ----------    ----------    ----------   ----------   ----------
  Total deposits                                  431,833         2,088          1.92%      387,143        1,307         1.35%
Mortgagors deposits                                 1,989             8          1.60%        2,846            6         0.90%
Borrowed money                                    107,508         1,117          4.12%      105,690        1,055         4.01%
                                               ----------    ----------    ----------    ----------   ----------   ----------
  Total interest bearing liabilities              541,330         3,213          2.35%      495,679        2,368         1.92%
Non-interest-bearing liabilities:
  Demand                                           27,888                                    24,568
  Other Liabilities                                 7,049                                     6,820
                                               ----------                                ----------
  Total liabilities                               576,267                                   527,067
Stockholders' equity                               47,125                                    45,773
                                               ----------                                ----------
  Total liabilities and stockholders' equity   $  623,392                                $  572,840
                                               ==========                                ==========

Net interest income                                          $    4,535                               $    4,645
                                                             ==========                               ==========

Average interest rate spread                                                     2.94%                                   3.22%
                                                                           ==========                              ==========

Net interest margin                                                              3.11%                                   3.40%
                                                                           ==========                              ==========
</TABLE>

---------------
(1)  Includes non-accrual loans
(2)  Includes FHLB-NY stock

<PAGE>

<TABLE>
                                                CARVER BANCORP, INC. AND SUBSIDIARIES
                                                    CONSOLIDATED AVERAGE BALANCES
                                                       (DOLLARS IN THOUSANDS)
                                                             (UNAUDITED)

<CAPTION>
                                                                           SIX MONTHS ENDED SEPTEMBER 30,
                                               ------------------------------------------------------------------------------------
                                                                 2005                                           2004
                                               -----------------------------------------    ---------------------------------------
                                                 AVERAGE                       AVERAGE        AVERAGE                     AVERAGE
INTEREST EARNING ASSETS:                         BALANCE        INTEREST     YIELD/COST       BALANCE       INTEREST    YIELD/COST
                                               -----------    -----------    -----------    -----------   -----------   -----------
                                                                               (DOLLARS IN THOUSANDS)

<S>                                            <C>            <C>                   <C>     <C>           <C>                  <C>
Loans (1)                                      $   421,895    $    12,421           5.89%   $   370,276   $    11,116          6.00%
Total securities (2)                               150,594          2,811           3.73%       153,990         2,551          3.31%
Fed funds sold                                      17,347            268           3.08%        11,294            58          1.02%
                                               -----------    -----------    -----------    -----------   -----------   -----------
  Total interest earning assets                    589,836         15,500           5.26%       535,560        13,725          5.11%
Non-interest earning assets                         36,372                                      24,837
                                               -----------                                 -----------
  Total assets                                 $   626,208                                 $   560,397
                                               ===========                                 ===========


INTEREST BEARING LIABILITIES:
Deposits:
  Checking                                     $    24,858             38           0.30%   $    11,763            36          0.59%
  Savings and clubs                                138,695            449           0.65%       132,867           400          0.60%
  Money market accounts                             38,635            285           1.47%        30,197           136          0.90%
  Certificates of deposit                          228,540          3,177           2.77%       192,270         1,854          1.92%
                                               -----------    -----------    -----------    -----------   -----------   -----------
  Total deposits                                   430,728          3,949           1.83%       367,097         2,426          1.32%
Mortgagors deposits                                  2,290             17           1.48%         2,472            12          0.94%
Borrowed money                                     110,907          2,298           4.13%       105,023         2,098          4.00%
                                               -----------    -----------    -----------    -----------   -----------   -----------
  Total interest bearing liabilities               543,925          6,264           2.30%       474,592         4,536          1.91%
Non-interest-bearing liabilities:
  Demand                                            27,660                                      33,209
  Other Liabilities                                  7,767                                       7,247
                                               -----------                                 -----------
  Total liabilities                                579,352                                     515,048
Stockholders' equity                                46,856                                      45,349
                                               -----------                                 -----------
  Total liabilities and stockholders' equity   $   626,208                                 $   560,397
                                               ===========                                 ===========

Net interest income                                           $     9,236                                 $     9,189
                                                              ===========                                 ===========

Average interest rate spread                                                        2.96%                                      3.20%
                                                                             ===========                                ===========

Net interest margin                                                                 3.14%                                      3.44%
                                                                             ===========                                ===========
</TABLE>

---------------
(1)  Includes non-accrual loans
(2) Includes FHLB-NY stock

<PAGE>

     COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
     2005 AND 2004

         OVERVIEW. The Company reported consolidated net income for the
three-month period ended September 30, 2005 of $601,000, an increase of $346,000
compared to $255,000 for the prior year period. These results primarily reflect
increases in interest income and non-interest income of $735,000 and $201,000,
respectively and a decrease of $433,000 in non-interest expense, partially
offset by increases in interest expense and income tax expense of $845,000 and
$178,000, respectively. This year over year increase in net income contributed
to both the increases in return on average equity and return on average assets
for the corresponding period.

         Selected operating ratios for the three months ended September 30, 2005
and 2004 are set forth in the table below and the following analysis discusses
the changes in components of operating results.


                      CARVER BANCORP, INC. AND SUBSIDIARIES
                               SELECTED KEY RATIOS
                                   (Unaudited)

                                                      THREE MONTHS ENDED
SELECTED OPERATING RATIOS:                                SEPTEMBER 30,
                                                      2005           2004
                                                  -------------   -----------

Return on average assets (1)                               0.39 %        0.18 %
Return on average equity (2)                               5.10          2.23
Interest rate spread (3)                                   2.94          3.22
Net interest margin (4)                                    3.11          3.40
Operating expenses to average assets (5)                   2.97          3.54
Equity-to-assets (6)                                       7.33          7.84
Efficiency ratio (7)                                      83.29         92.58
Average interest-earning assets to
  interest-bearing liabilities                             1.08 x        1.10 x

---------------
(1)  Net income divided by average total assets, annualized.
(2)  Net income divided by average total equity, annualized.
(3)  Combined weighted average interest rate earned less combined weighted
     average interest rate cost.
(4)  Net interest income divided by average interest-earning assets, annualized.
(5)  Non-interest expenses less loss on real estate owned divided by average
     total assets, annualized.
(6)  Total equity divided by assets at period end.
(7)  Operating expenses divided by sum of net interest income plus non-interest
     income.


         INTEREST INCOME. Interest income increased by $735,000, or 10.5%, to
$7.7 million for the three months ended September 30, 2005, compared to $7.0
million in the prior year period. Interest income increased primarily as a
result of higher average balances in all interest-earning assets: total loans,
total securities and federal funds balances, compared to the prior year period.
The average balance of interest-earning assets increased by $40.1 million, or
7.3%, to $586.3 million for the three months ended September 30, 2005 compared
to $546.2 million for the prior year period. Also contributing to the increase
in net income was a 15 basis points increase in the annualized average yield on
interest-earning assets to 5.29% for the three months ended September 30, 2005
compared to 5.14% for the prior year period, reflecting increases in yields on
federal funds and total securities of 197 basis points and 61 basis points,
respectively. The increase in yield on interest-earning assets was partially
offset by a decrease of 15 basis points in yields on total loans.

         Interest income on loans increased by $514,000, or 9.0%, to $6.2
million for the three months ended September 30, 2005 compared to $5.7 million
for the prior year period. The change was primarily due to an increase in
average mortgage loan balances of $44.8 million to $424.9 million compared to
$380.1 million for the prior year period. The increase was partially offset by a
15 basis points decline in the annualized average yield on loans for the three
months ended September 30, 2005 to 5.85% compared to 6.00% for the prior year
period. The year over year growth in loan balance is reflective of management's
commitment to grow assets primarily through originations and purchases of high
quality mortgage loans for its portfolio at a level that exceeds loan
repayments. The decline in loan yields is reflective of the current rate
environment where longer term rates, which dictate mortgage loans yields, have
not yet caught up with rising shorter term rates, so that new loans entering the
portfolio are at a lower interest rate than those being paid off.

         Interest income on total securities increased by $121,000, or 9.4%, to
$1.4 million for the three months ended September 30, 2005 compared to $1.3
million for the prior year period. The increase was primarily the result of a 61
basis points rise in the annualized average yield on securities to 3.85% from
3.24% in the prior year period as matured and repaid securities are only
replaced to the extent additional deposit collateral is needed and are usually
at a higher yield. Partially offsetting the increase in interest on total
securities is the effect of a reduction in the average balance of investment
securities of $12.8 million to $146.8 million compared to $159.6 million in the
prior year period.

         Interest income on federal funds sold increased by $100,000 to $122,000
for the three months ended September 30, 2005 compared to $22,000 for the prior
year period. The rise was primarily attributable to an increase of 197 basis
points in the annualized yield on federal funds sold combined with an increase
in the average balance of federal funds of $8.1 million to $14.6 million from
$6.6 million in the prior year period. Yields on federal funds increased as the
FMOC again raised rates twice in the quarter for a total of 50 basis points.

         INTEREST EXPENSE. Total interest expense increased by $845,000, or
35.7%, to $3.2 million for the three months ended September 30, 2005, compared
to $2.4 million for the prior year period. The rise resulted primarily from an
increase in the average balance of interest-bearing liabilities of $45.7
million, or 9.2%, to $541.3 million from $495.7 million during the prior year
period. Also contributing to the increase in interest expense was a higher
annualized average cost of interest-bearing liabilities of 43 basis points to
2.35% for the second quarter of fiscal 2006 from 1.92% for the prior year
period.

         Interest expense on deposits increased $783,000 or 59.6%, to $2.1
million for the three months ended September 30, 2005, compared to $1.3 million
for the prior year period. The increase in interest expense on deposits was due
primarily to a $43.8 million, or 11.2%, increase in the average balance of
interest-bearing deposits to $433.8 million for the three months ended September
30, 2005 from $390.0 million for the prior year period. Additionally, a 57 basis
point rise in the rate paid on deposits to 1.92% compared to 1.35% for the prior
year period added to the increase. Customer deposits have historically provided
Carver with a relatively low cost funding source from which its net interest
income and net interest margin have benefited. The Bank has grown core deposits
including new deposits from branch expansion, however, these new deposits are
increasing in cost as short-term rates rise, thus decreasing the Bank's net
interest margin. See "Liabilities and Stockholders' Equity--Liabilities."

         Interest expense on advances and other borrowed money increased
$62,000, or 5.9%, to $1.1 million for the three months ended September 30, 2005
which is relatively unchanged from the prior year period. The nominal increase
was primarily the result of an 11 basis point increase in the cost of borrowed
money to 4.12% from 4.01% for the prior year period. The increased cost of
borrowed money is mainly related to the cost of debt service of the $13 million
in floating rate junior subordinated notes raised by the Company through an
issuance of trust preferred securities by Carver Statutory Trust I in September
2003 which has increased since issuance and is expected to continue to rise as
rates increase. Also contributing to the increase in interest expense on
advances and other borrowed money was a $1.8 million increase in the average
balance of outstanding borrowings to $107.5 million from $105.7 million from the
prior year period. While the Bank paid down some of its high cost FHLB-NY
advances during the fiscal year, an additional advance was taken at quarter end
to fund the purchase of some non-residential mortgage loans. As opportunities
arise, management intends to replace matured FHLB-NY advances with lower costing
deposits. See "Liabilities and Stockholders' Equity--Liabilities."

         NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES. Net interest
income before the provision for loan losses decreased $110,000, or 2.4%, to $4.5
million for the three months ended September 30, 2005, compared to $4.6 million
for the prior year period. This decrease resulted from increased cost of funds
for deposits and borrowings which are out pacing the returns on loans and
investments, as deposits especially, reprice more quickly in this short-term
rising rate environment. The Company's annualized average interest rate spread
for the three months ended September 30, 2005 decreased by 28 basis points to
2.94% compared to 3.22% in the prior year period. Net interest margin,
represented by annualized net interest income divided by average total
interest-earning assets, decreased 29 basis points to 3.11% for the three months
ended September 30, 2005 from 3.40% in the prior year period.

         PROVISION FOR LOAN LOSSES AND ASSET QUALITY. The Company did not
provide for additional loan loss reserves for the three-month periods ended
September 30, 2005 or 2004 as the Company considers the overall allowance for
loan losses to be adequate. During the second quarter of fiscal 2006, the
Company recorded net charge-offs of $34,000 compared to net recoveries of
$11,000 for the prior year period. At September 30, 2005, the Bank's allowance
for loan losses was $4.1 million, substantially unchanged from March 31, 2005.
The ratio of the allowance for loan losses to non-performing loans was 150.8% at
September 30, 2005 compared to 410.7% at March 31, 2005. The ratio of the
allowance for loan losses to total loans was 0.89% at September 30, 2005
compared to 0.96% at March 31, 2005.

         At September 30, 2005, non-performing assets totaled $2.7 million, or
0.59% of total loans receivable compared to $1.0 million, or 0.23% of total
loans receivable, at March 31, 2005. Non-performing assets include loans 90 days
past due, non-accrual loans and other real estate owned. As of the end of
September 30, 2005, the Bank held one real estate owned property as a result of
a property tax redemption. While non performing assets have increased due to
increases in loans 90 days past due, the level of non performing assets to total
loans remains within the range the Bank has experienced over the trailing eight
quarters. At September 30, 2005, non-performing assets consisted of 13 loans 90
days or more delinquent at an average balance of $205,000, compared to 5 loans
with an average balance of $196,000 at March 31, 2005. Future levels of
non-performing assets will be influenced by economic conditions, including the
impact of those conditions on our customers, interest rates and other internal
and external factors existing at the time.

         Management's judgment in determining the adequacy of the allowance for
loan losses is based on an evaluation of certain individual loans, the risk
characteristics and size of the loan portfolio, an assessment of current
economic and real estate market conditions, estimates of the current value of
underlying collateral, past loan loss experience, review of regulatory authority
examination reports and guidance and other relevant factors. See also "Critical
Accounting Policies - Allowance for Loan Losses".

         NON-INTEREST INCOME. Total non-interest income for the quarter ended
September 30, 2005 increased $201,000, or 24.2%, to $1.0 million, compared to
$830,000 for the prior year period. Non-interest income was affected by two
significant events in the prior year's quarter. The first was a $1.5 million
impairment charge deemed other than temporary that resulted from a decline in
the market price of IFSB common stock that the Company held. Partially
offsetting the impairment charge in the prior year's quarter was the receipt of
a net $1.1 million grant from the Department of the Treasury. In the current
quarter, non-interest income increased as a result of additional deposit fees
and charges of $133,000 from increased ATM and debit card fees as well as
commissions from the sale of investments and life insurance. Partially
offsetting non-interest income was a decline in loan fees and service charges of
$218,000, primarily a reduction in prepayment penalty income as a result of
slowing mortgage refinance activity.

         Management anticipates continued momentum in depository fees and
services charges as the Bank moves toward recognizing the full potential of its
franchise expansions and offering more financial products. Although it is not
expected that mortgage prepayments will revert to previous high levels, the
Company's strategy is to boost future loan fee income through new product
offerings such as subprime and fixed-rate jumbo mortgage products. These new
products will be originated and subsequently sold to a pre-established secondary
market purchaser, thereby generating additional non-interest income while
mitigating the Bank's exposure to additional credit risk.

         NON-INTEREST EXPENSE. For the quarter ended September 30, 2005, total
non-interest expense decreased $433,000, or 8.5%, to $4.6 million compared to
$5.1 million for the same period last year. The decrease in non-interest expense
was primarily due to a charge of $847,000 taken in the prior year's quarter
resulting from the expensing of capitalized costs related to the cessation of
the merger with IFSB. In the current quarter, employee compensation and benefits
expense increased $262,000 primarily as a result of staffing our new branches,
Company-wide annual salary increases and the increased cost of employee benefit
plans. Also contributing to the increase in non-interest expense in the current
quarter were additional net occupancy and equipment expenses of $105,000 and
$93,000, respectively, primarily resulting from the new branches and 24/7 ATM
centers. Partially offsetting these increases was a decrease in other
non-interest expense of $46,000.

         Management believes that while the Company's efficiency ratio exceeds
its peers, it is reflective of the dramatic steps that have been taken to grow
the franchise as part of a broader objective of accelerating the pace along the
path to higher earnings. In addition, management is continuing to conduct a
comprehensive review of costs to improve the Company's efficiency ratio. As
such, Carver made progress last quarter in reducing costs by successfully
completing the outsourcing of our core deposit processing and ATM driving
technology. Management is also working on outsourcing a number of corporate
administrative functions.

         INCOME TAX EXPENSE. For the three-month period ended September 30,
2005, income before taxes increased $524,000, or 129.1%, to $930,000 compared to
$406,000 for the prior year period. Consequently, income tax expense increased
$178,000, or 117.9%, to $329,000 compared to $151,000 for the prior year period.

<PAGE>

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2005 AND
2004

OVERVIEW

         Selected operating ratios for the six months ended September 30, 2005
and 2004 are set forth in the table below. The following analysis discusses the
changes in components of operating results giving rise to net income.


                      CARVER BANCORP, INC. AND SUBSIDIARIES
                               SELECTED KEY RATIOS
                                   (Unaudited)

                                                       SIX MONTHS ENDED
SELECTED OPERATING RATIOS:                               SEPTEMBER 30,
                                                     2005            2004
                                                ---------------  -------------

Return on average assets (1)                              0.46 %         0.48 %
Return on average equity (2)                              6.12           5.90
Interest rate spread (3)                                  2.96           3.20
Net interest margin (4)                                   3.14           3.44
Operating expenses to average assets (5)                  3.03           3.21
Equity-to-assets (6)                                      7.33           7.84
Efficiency ratio (7)                                     80.84          80.72
Average interest-earning assets to
  interest-bearing liabilities                           1.08x          1.13x

---------------
(1)  Net income divided by average total assets, annualized.

(2)  Net income divided by average total equity, annualized.

(3)  Combined weighted average interest rate earned less combined weighted
     average interest rate cost.

(4)  Net interest income divided by average interest-earning assets, annualized.

(5)  Non-interest expenses less loss on real estate owned divided by average
     total assets, annualized.

(6)  Total equity divided by assets at period end.

(7)  Operating expenses divided by sum of net interest income plus non-interest
     income.


         NET INCOME. The Company reported a $105,000 or 7.9% increase in net
income for the six months ended September 30, 2005 to $1.4 million compared to
$1.3 million for the corresponding prior year period. This income resulted in a
year-to-date earnings per diluted share of $0.56, compared to $0.51 for the
corresponding prior year period. Income for the six months ended September 30,
2004 included a grant from the Department of the Treasury of $1.1 million offset
by a $1.5 million impairment charge for IFSB stock deemed other than temporary
and an $847,000 charge for the terminated merger with IFSB. Net income for the
six months ended September 30, 2005 benefited from increases in non-interest
income and net interest income of $459,000 and $47,000, respectively, and a
decrease in income tax expense of $21,000, partially offset by an increase of
$422,000 in non-interest expense.

         INTEREST INCOME. Interest income increased by $1.8 million, or 12.9%,
to $15.5 million for the six months ended September 30, 2005 compared to $13.7
million in the corresponding prior year period. The rise in interest income was
primarily due to an increase in the average balance of interest-earning assets
of $54.3 million, or 10.1%, to $589.8 million for the six months ended September
30, 2005 compared with $535.6 million for the corresponding prior year period.
There was also a decrease of 15 basis points in the annualized average yield on
interest-earning assets to 5.26% for the six months ended September 30, 2005
compared to 5.11% for the corresponding prior year period.

         Interest income on loans increased by $1.3 million, or 11.7%, to $12.4
million for the six months ended September 30, 2005 compared to $11.1 million
for the corresponding prior year period. The increase in interest income on
loans was due primarily to an increase in average mortgage loan balances of
$51.6 million, or 13.9%, to $421.9 million for the six months ending September
30, 2005 compared to $370.3 million for the corresponding prior year period. The
increase in interest income on loans was partially offset by a decrease of 11
basis points in the annualized average yield on mortgage loans to 5.89% compared
to 6.00% for the six months ended September 30, 2004.

         Interest income on total securities increased by $260,000, or 10.2%, to
$2.8 million for the six months ended September 30, 2005 compared to $2.6
million for the corresponding prior year period. The change was primarily due to
an increase in the annualized average yield on investment securities of 42 basis
points to 3.73% from 3.31% during the corresponding prior year period. Partially
offsetting the increase was a decrease in the average balance of total
securities of $3.4 million, or 2.2%, to $150.6 million for the six months ended
September 30, 2005 compared to $154.0 million for the same period ended
September 30, 2004.

         Interest income on federal funds sold increased by $210,000 to $268,000
for the six months ended September 30, 2005 compared to $58,000 for the
corresponding prior year period. The average balance of federal funds increased
$6.0 million to $17.3 million from $11.3 million for the corresponding prior
year period. In addition, the annualized yield on federal funds sold increased
206 basis points to 3.08% for the six months ended September 30, 2005 compared
to 1.02% for the corresponding prior year period. Yields on federal funds
increased as the FMOC raised rates four separate times in the current fiscal
year for a total of 100 basis points.

         INTEREST EXPENSE. Total interest expense increased by $1.7 million, or
38.1%, to $6.3 million for the six months ended September 30, 2005 compared to
$4.5 million for the corresponding prior year period. The increase in interest
expense is primarily due to growth in the average balance of interest-bearing
liabilities of $69.3 million, or 14.6%, to $543.9 million from $474.6 million
for the corresponding prior year period. Also contributing to the increase in
total interest expense was an increase in the annualized average cost of
interest-bearing liabilities of 39 basis points to 2.30% from 1.91% for the
corresponding prior year period.

         Interest expense on deposits increased $1.5 million, or 62.7%, to $3.9
million for the six months ended September 30, 2005 compared to $2.4 million for
the corresponding prior year period. The increase in interest expense on
deposits was due primarily to a $63.4 million increase in the average balance of
interest-bearing deposits to $433.0 million from $369.6 million for the
corresponding prior year period combined with a 51 basis point increase in the
average rate paid on deposits to 1.83% for the six months ended September 30,
2005 compared to 1.32% for the corresponding prior year period.

         Interest expense on advances and other borrowed money increased
$200,000, or 9.5%, to $2.3 million for the six months ended September 30, 2005
compared to $2.1 million for the corresponding prior year period. This change
resulted primarily from an increase of $5.9 million in advances from the FHLB-NY
and a 13 basis point increase in the total cost of advances and other borrowed
money including the Company's floating rate trust preferred securities.

         NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES. Net interest
income before the provision for loan losses increased by $47,000, or 0.5%, to
$9.2 million for the six months ended September 30, 2005, relatively unchanged
from the corresponding prior year period. The Company's annualized average
interest rate spread decreased by 24 basis points to 2.96% for the six months
ended September 30, 2005 compared to 3.20% for the corresponding prior year
period. Net interest margin, represented by annualized net interest income
divided by average total interest-earning assets, decreased 30 basis points to
3.14% for the six months ended September 30, 2005 from 3.44% for the
corresponding prior year period.

         PROVISION FOR LOAN LOSSES AND ASSET QUALITY. The Company did not
provide for additional loan losses for each six months ended September 30, 2005
and 2004. The Company believes the total loan loss allowance to be adequate.

         NON-INTEREST INCOME. Non-interest income increased $459,000, or 23.3%,
to $2.4 million compared to $2.0 million for the same period last year.
Non-interest income increased compared to the second quarter of fiscal 2005 when
the Company recognized an impairment charge deemed other than temporary of $1.5
million, resulting from the decline in market price of 150,000 shares of IFSB
stock held by the Company. In the second quarter of fiscal 2006, depository fees
and charges increased $242,000, resulting from higher ATM usage, growth in debit
card income and commissions earned from the sale of investments and life
insurance. Also contributing to the rise in non-interest income was an increase
of $71,000 in other income, primarily income earned as a result of the Bank's
investment in a Bank owned life insurance ("BOLI") program. These increases were
partially offset by a net $1.1 million grant from the Department of the
Treasury's Community Development Financial Institution Fund and a $94,000 gain
from the sale of securities, both in the same period last year. Loan fees and
service charges declined $67,000, primarily as a result of decreased mortgage
prepayment penalties following continued decline in mortgage refinancing
activity.

         NON-INTEREST EXPENSE. Non-interest expense increased $422,000, or 4.7%,
to $9.4 million compared to $9.0 million for the same period last year. The
increase in non-interest expense was due to increases in employee compensation
and benefits expense of $785,000, resulting from the staffing of new branches,
Company-wide annual salary increases in the second quarter of fiscal 2006 and
the increased cost of employee benefit plans. Also contributing to the increase
in non-interest expense were additional net occupancy and equipment expenses of
$203,000 and $165,000, respectively, also as a result of opening the new
branches and 24/7 ATM centers. Partially offsetting the increase in non-interest
expense was a charge of $847,000 incurred in the same period last year, which
resulted from expensing previously capitalized costs related to cessation of the
merger with IFSB.

          INCOME TAX EXPENSE. For the six months ended September 30, 2005,
income before taxes increased $84,000, or 3.9%, to $2.2 million, substantially
unchanged from the prior year period. Income tax expense for the period
decreased $21,000, or 2.6%, to $793,000 compared to $814,000 for the prior year
period, as a result of the tax benefit associated with the BOLI investment the
Company made in September 2004.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         Quantitative and qualitative disclosure about market risk is presented
at March 31, 2005 in Item 7A of the Company's 2005 10-K and is incorporated
herein by reference. The Company believes that there has been no material
changes in the Company's market risk at September 30, 2005 compared to March 31,
2005.



ITEM 4.  CONTROLS AND PROCEDURES

         The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 ("Exchange Act") is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC. As of September 30, 2005, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer (the Company's principal executive officer and principal financial
officer, respectively), of the effectiveness of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures were effective to ensure
that information required to be disclosed in the reports we file and submit
under the Exchange Act is recorded, processed, summarized and reported as and
when required and that such information is accumulated and communicated to our
management as appropriate to allow timely decisions regarding required
disclosure.

         There were no changes in our internal control over financial reporting
that occurred during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.



PART II. OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

         Disclosure regarding legal proceedings that the Company is a party to
is presented in Note 13 to our audited Consolidated Financial Statements in the
2005 10-K and is incorporated herein by reference. Except as set forth below,
there have been no material changes with regard to such legal proceedings since
the filing of the 2005 10-K.

         In January 2004, Michael Lee & Company ("Michael Lee"), former
accountants for Hale House Center, Inc., filed an action against Carver Federal
in New York County Supreme Court, asserting a single claim for contribution
against Carver Federal. The complaint alleges that Carver Federal should be
liable to Michael Lee in the event that Michael Lee is found liable to
non-parties Hale House Center, Inc. and its affiliated corporations ("Hale House
plaintiffs") in a separate action that the Hale House plaintiffs have filed
against Michael Lee asserting claims of professional malpractice and breach of
contract due to Michael Lee's alleged provision of deficient accounting services
to Hale House. The basis of Michael Lee's contribution claim against Carver
Federal was that Carver Federal allegedly breached a legal duty it owed Hale
House by improperly opening and maintaining a checking account on behalf of one
of the Hale House affiliates. Carver Federal and Michael Lee entered into a
Settlement Agreement on August 15, 2005, the terms of which the Company does not
believe are material to it or any of its subsidiaries.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         During the quarter ended September 30, 2005, the Holding Company made
no purchases of additional shares of its common stock under its stock repurchase
program. As of September 30, 2005 the number of shares yet to be repurchased
under the stock repurchase program authorized in 2002 was 148,051. Based on the
closing price of Carver's common stock on September 30, 2005, the approximate
value of the 148,051 shares was $2,456,000.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable.


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

         The Holding Company held its Annual Meeting on September 13, 2005 for
the fiscal year ended March 31, 2005.

         The purpose of the Annual Meeting was to vote on the following
proposals:

         1.   the election of three directors for terms of three years each; and

         2.   the ratification of the appointment of KPMG, LLP as independent
              auditors of the Holding Company for the fiscal year ended March
              31, 2006.

         The results of voting were as follows:

         Proposal 1:  Election of Directors:
                      Holding Company Nominees

                      Carol Baldwin Moody                 For         2,268,759
                                                          Withheld        3,152

                      Edward B. Ruggiero                  For         2,135,095
                                                          Withheld      136,815

                      Strauss Zelnick                     For         2,268,859
                                                          Withheld        3,002


         Proposal 2:  Ratification of Appointment of
                      Independent Auditors                For         2,251,915
                                                          Against        17,990
                                                          Abstain         2,004

         In addition to the nominees elected at the Annual Meeting, the
following persons' terms of office as directors continued after the Annual
Meeting: Robert Holland, Jr., David L. Hinds, Pazel Jackson, Jr. and Deborah C.
Wright.


ITEM 5.  OTHER INFORMATION

         Not applicable.


ITEM 6.  EXHIBITS

         The following exhibits are submitted with this report:

              Exhibit 11.       Computation of Net Income Per Share.

              Exhibit 31.1      Certification of Chief Executive Officer.

              Exhibit 31.2      Certification of Chief Financial Officer.

              Exhibit 32.1(*)   Written Statement of Chief Executive Officer
                                furnished pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
                                1350.

              Exhibit 32.2(*)   Written Statement of Chief Financial Officer
                                furnished pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
                                1350.

---------------
* Pursuant to SEC rules, this exhibit will not be deemed filed for purposes
  of Section 18 of the Exchange Act or be otherwise subject to the liability
  of that section.

<PAGE>

                                   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.


Date: November 14, 2005               /S/ DEBORAH C. WRIGHT
                                      ------------------------------------------
                                      Deborah C. Wright
                                      Chairman, President and
                                         Chief Executive Officer



Date: November 14, 2005               /S/ WILLIAM C. GRAY
                                      ------------------------------------------
                                      William C. Gray
                                      Senior Vice President and
                                        Chief Financial Officer