**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C.  20549**
 **_________________________________**
 
 **FORM
        10-Q/A**
 **(Amendment
        No. 1)**
 
 (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, 2007**
 
 
  ̈
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
 **For
        the transition period from _________ to _________**
 
 Commission
        File Number: **1-13007**
  **CARVER
                    BANCORP, INC.**(Exact
                    name of registrant as specified in its charter)
 
 **Delaware**
              
              **13-3904174**(State
                  or Other Jurisdiction of Incorporation or Organization)
              
              (I.R.S.
                  Employer Identification No.)**75
                  West 125th
                  Street, New
                  York, New York**
              
              **10027**(Address
                  of Principal Executive Offices)
              
              (Zip
                  Code)
 
 **Registrant’s
        Telephone Number, Including Area Code:  (718)
        230-2900**
 
 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.
 x
                  Yes
              
              o
                  No
 
 Indicate
        by check mark whether the
        registrant is a large accelerated filer, an accelerated filer, or a
        non-accelerated filer. See definition of “accelerated filer and large
        accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
        one):
 o
                  Large Accelerated
                  Filer
              o
                  Accelerated
                  Filer
              x
                  Non-accelerated
                  Filer
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
 o
                  Yes
              
              x
                  No
 
 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 $0.01**
              
              **2,494,771**Class
              
              Outstanding
                  at November 16, 2007
  
  **EXPLANATORY
        NOTE**
  Carver
          Bancorp, Inc. (the "Company") is filing this Amendment No. 1 to its Quarterly
          Report on Form 10-Q for the quarter ended September 30, 2007, originally
          filed
          with the Securities and Exchange Commission on November 19, 2007 (the "Original
          Report"), to correct certain typographical and clerical errors to Item
          1 and
          Item 2 of Part I of the Original Report including
          (1) amending the headings of certain line items in the Consolidated Statement
          of
          Cash Flows and adding a parenthesis around the figure $3,724 in the line
          item
“Purchase of available-for-sale securities” for the six months ended September
          30, 2007 and (2) amending certain text under the following headings in
          Management’s Discussion and Analysis of Financial Condition and Results of
          Operations: (a) “Comparison of Financial Condition at September 30, 2007 and
          March 31, 2007 - Assets”, (b) “Comparison of Operating Results for the Three and
          Six Months Ended September 30, 2007 and 2006 - Premium for Loan Losses
          and Asset
          Quality”, and (c) “Comparison and Operating Results for the Three and Six Months
          Ended September 30, 2007 and 2006 - Non-Interest Expense.” Other than
          these changes, this Amendment does not amend, update or change any other
          disclosures contained in the Original Report.
  
  **TABLE
        OF****CONTENTS**
 PagePART
                    I.  FINANCIAL INFORMATIONItem
                    1.
                Financial
                    StatementsConsolidated
                    Statements of Financial Condition as of September
                    30, 2007 (unaudited) and March 31, 2007
                1Consolidated
                    Statements of Income for the Three and Six
                    Months  Ended September 30, 2007 and 2006
                    (unaudited)
                2Consolidated
                    Statement of Changes in Stockholders’ Equity and
                    Comprehensive Income for the Six Months Ended September 30, 2007
                    (unaudited)
                3Consolidated
                    Statements of Cash Flows for the Six Months Ended
                    September 30, 2007 and 2006 (unaudited)
                4Notes
                    to Consolidated Financial Statements
                    (unaudited)
                5Item
                    2.
                Management’s
                    Discussion and Analysis of Financial Condition and
                    Results of Operations
                9Item
                    3.
                Quantitative
                    and Qualitative Disclosures About Market
                    Risk
                21Item
                    4.
                Controls
                    and Procedures
                21PART
                    II.  OTHER INFORMATIONItem
                    1.
                Legal
                    Proceedings
                22Item
                    1A.
                Risk
                  Factors
                22Item
                    2.
                Issuer
                    Purchases of Equity Securities
                22Item
                    3.
                Defaults
                    Upon Senior Securities
                22Item
                    4.
                Submission
                    of Matters to a Vote of Security
                    Holders
                23Item
                    5.
                Other
                    Information
                23Item
                    6.
                Exhibits
                23SIGNATURES
                
                
                24EXHIBITS
                
                
                E-1
  
  **CARVER
        BANCORP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF FINANCIAL CONDITION**
 (In
        thousands, except per share data)
 
 **September
                      30,**
                  
                  
                  **March
                      31,****2007**
                  
                  
                  **2007**(Unaudited)**ASSETS**Cash
                      and cash equivalents:Cash
                      and due from banks
                  
                  $
                  19,937
                  
                  
                  $
                  14,619Federal
                      funds sold
                  
                  
                  -
                  
                  
                  
                  1,300Interest
                      earning deposits
                  
                  
                  1,284
                  
                  
                  
                  1,431Total
                      cash and cash equivalents
                  
                  
                  21,221
                  
                  
                  
                  17,350Securities:Available-for-sale,
                      at fair value (including pledged as collateral of $40,366 and
                      $34,649 at
                      September 30 and March 31, 2007, respectively)
                  
                  
                  40,572
                  
                  
                  
                  47,980Held-to-maturity,
                      at amortized cost (including pledged as collateral of $17,286
                      and $18,581
                      at September 30 and March 31, 2007, respectively; fair value
                      of $17,624
                      and $19,005 at September 30 and March 31, 2007,
                      respectively)
                  
                  
                  17,868
                  
                  
                  
                  19,137Total
                      securities
                  
                  
                  58,440
                  
                  
                  
                  67,117Loans
                      held-for-sale
                  
                  
                  25,901
                  
                  
                  
                  23,226Gross
                      loans receivable:Real
                      estate mortgage loans
                  
                  
                  555,096
                  
                  
                  
                  533,667Consumer
                      and commercial loans
                  
                  
                  56,083
                  
                  
                  
                  52,293Allowance
                      for loan losses
                  
                  
                  (5,338
                  )
                  
                  
                  (5,409
                  )Total
                      loans receivable, net
                  
                  
                  605,841
                  
                  
                  
                  580,551Office
                      properties and equipment, net
                  
                  
                  15,181
                  
                  
                  
                  14,626Federal
                      Home Loan Bank of New York stock, at cost
                  
                  
                  2,660
                  
                  
                  
                  3,239Bank
                      owned life insurance
                  
                  
                  8,955
                  
                  
                  
                  8,795Accrued
                      interest receivable
                  
                  
                  4,460
                  
                  
                  
                  4,335Goodwill
                  
                  
                  6,370
                  
                  
                  
                  5,716Core
                      deposit intangibles, net
                  
                  
                  608
                  
                  
                  
                  684Other
                      assets
                  
                  
                  15,385
                  
                  
                  
                  14,313Total
                      assets
                  
                  $
                  765,022
                  
                  
                  $
                  739,952**LIABILITIES
                      AND STOCKHOLDERS' EQUITY**Liabilities:Deposits
                  
                  $
                  620,950
                  
                  
                  $
                  615,122Advances
                      from the FHLB-NY and other borrowed money
                  
                  
                  81,609
                  
                  
                  
                  61,093Other
                      liabilities
                  
                  
                  9,907
                  
                  
                  
                  12,110Total
                      liabilities
                  
                  
                  712,466
                  
                  
                  
                  688,325Stockholders'
                      equity:Common
                      stock (par value $0.01 per share: 10,000,000 shares; authorized;
                      2,524,691
                      shares issued; 2,480,722 and 2,507,985 shares outstanding at
                      September 30 and March 31, 2007, respectively
                  
                  
                  25
                  
                  
                  
                  25Additional
                      paid-in capital
                  
                  
                  24,062
                  
                  
                  
                  23,996Retained
                      earnings
                  
                  
                  28,919
                  
                  
                  
                  27,436Unamortized
                      awards of common stock under ESOP and MRP
                  
                  
                  (4
                  )
                  
                  
                  (4
                  )Treasury
                      stock, at cost (43,969 and 16,706 shares at September
                      30 and March 31, 2007, respectively)
                  
                  
                  (694
                  )
                  
                  
                  (277
                  )Accumulated
                      other comprehensive income
                  
                  
                  248
                  
                  
                  
                  451Total
                      stockholders' equity
                  
                  
                  52,556
                  
                  
                  
                  51,627Total
                      liabilities and stockholders' equity
                  
                  $
                  765,022
                  
                  
                  $
                  739,952
 See
        accompanying notes to unaudited consolidated financial
        statements.
  1
  **CARVERBANCORP,
        INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF INCOME**
 (In
        thousands, except per share data)
 (Unaudited)
 
 **Three
                      Months Ended**
                  
                  
                  **Six
                      Months Ended****September
                      30,**
                  
                  
                  **September
                      30,****2007**
                  
                  
                  **2006**
                  
                  
                  **2007**
                  
                  
                  **2006**Interest
                      Income:Loans
                  
                  $
                  11,184
                  
                  
                  $
                  8,317
                  
                  
                  $
                  22,177
                  
                  
                  $
                  16,208Mortgage-backed
                      securities
                  
                  
                  474
                  
                  
                  
                  842
                  
                  
                  
                  976
                  
                  
                  
                  1,775Investment
                      securities
                  
                  
                  401
                  
                  
                  
                  168
                  
                  
                  
                  855
                  
                  
                  
                  349Federal
                      funds sold
                  
                  
                  29
                  
                  
                  
                  53
                  
                  
                  
                  41
                  
                  
                  
                  169Total
                      interest income
                  
                  
                  12,088
                  
                  
                  
                  9,380
                  
                  
                  
                  24,049
                  
                  
                  
                  18,501Interest
                      expense:Deposits
                  
                  
                  4,570
                  
                  
                  
                  3,026
                  
                  
                  
                  8,901
                  
                  
                  
                  6,021Advances
                      and other borrowed money
                  
                  
                  1,055
                  
                  
                  
                  1,143
                  
                  
                  
                  2,030
                  
                  
                  
                  2,233Total
                      interest expense
                  
                  
                  5,625
                  
                  
                  
                  4,169
                  
                  
                  
                  10,931
                  
                  
                  
                  8,254Net
                      interest income before provision for loan losses
                  
                  
                  6,463
                  
                  
                  
                  5,211
                  
                  
                  
                  13,118
                  
                  
                  
                  10,247Provision
                      for loan losses
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
                      interest income after provision for loan losses
                  
                  
                  6,463
                  
                  
                  
                  5,211
                  
                  
                  
                  13,118
                  
                  
                  
                  10,247Non-interest
                      income:Depository
                      fees and charges
                  
                  
                  686
                  
                  
                  
                  601
                  
                  
                  
                  1,315
                  
                  
                  
                  1,210Loan
                      fees and service charges
                  
                  
                  512
                  
                  
                  
                  245
                  
                  
                  
                  890
                  
                  
                  
                  490Write-down
                      of loans held for sale
                  
                  
                  -
                  
                  
                  
                  (702
                  )
                  
                  
                  -
                  
                  
                  
                  (702
                  )Gain
                      (loss) on sale of securities
                  
                  
                  79
                  
                  
                  
                  (645
                  )
                  
                  
                  79
                  
                  
                  
                  (645
                  )Gain
                      (loss) on sale of loans
                  
                  
                  (19
                  )
                  
                  
                  76
                  
                  
                  
                  28
                  
                  
                  
                  88Gain
                      on sale of fixed assets
                  
                  
                  1
                  
                  
                  
                  3
                  
                  
                  
                  1
                  
                  
                  
                  3Other
                  
                  
                  194
                  
                  
                  
                  85
                  
                  
                  
                  276
                  
                  
                  
                  163Total
                      non-interest income (loss)
                  
                  
                  1,453
                  
                  
                  
                  (337
                  )
                  
                  
                  2,589
                  
                  
                  
                  607Non-interest
                      expense:Employee
                      compensation and benefits
                  
                  
                  3,145
                  
                  
                  
                  2,326
                  
                  
                  
                  6,317
                  
                  
                  
                  4,611Net
                      occupancy expense
                  
                  
                  928
                  
                  
                  
                  610
                  
                  
                  
                  1,765
                  
                  
                  
                  1,194Equipment,
                      net
                  
                  
                  513
                  
                  
                  
                  514
                  
                  
                  
                  1,105
                  
                  
                  
                  991Merger
                      related expenses
                  
                  
                  -
                  
                  
                  
                  1,256
                  
                  
                  
                  -
                  
                  
                  
                  1,258Other
                  
                  
                  2,610
                  
                  
                  
                  1,536
                  
                  
                  
                  4,514
                  
                  
                  
                  2,921Total
                      non-interest expense
                  
                  
                  7,196
                  
                  
                  
                  6,242
                  
                  
                  
                  13,701
                  
                  
                  
                  10,975Income
                      (loss) before income taxes
                  
                  
                  720
                  
                  
                  
                  (1,368
                  )
                  
                  
                  2,006
                  
                  
                  
                  (121
                  )Income
                      tax (benefit) expense
                  
                  
                  (44
                  )
                  
                  
                  (464
                  )
                  
                  
                  99
                  
                  
                  
                  (19
                  )Net
                      income (loss)
                  
                  $
                  764
                  
                  
                  $
                  (904
                  )
                  
                  $
                  1,907
                  
                  
                  $
                  (102
                  )Earnings
                      (loss) per common share:Basic
                  
                  $
                  0.31
                  
                  
                  $
                  (0.36
                  )
                  
                  $
                  0.76
                  
                  
                  $
                  (0.04
                  )Diluted
                  
                  $
                  0.30
                  
                  
                  $
                  (0.36
                  )
                  
                  $
                  0.74
                  
                  
                  $
                  (0.04
                  )
 
 See
        accompanying notes to unaudited****consolidated financial
        statements.
  2
  **CARVER
        BANCORP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY**
 **AND
        COMPREHENSIVE INCOME**
 **FOR
        THE SIX MONTHS ENDED SEPTEMBER 30, 2007**
 **(In
        thousands)**
 **(Unaudited)**
 **COMMON
                    STOCK**
                
                
                **ADDITIONAL
                    PAID-IN CAPITAL**
                
                
                **RETAINED
                    EARNINGS**
                
                
                **TREASURY
                    STOCK**
                
                
                **ACCUMULATED
                    OTHER COMPREHENSIVE INCOME**
                
                
                **COMMON
                    STOCK ACQUIRED BY ESOP**
                
                
                **TOTAL
                    STOCK-HOLDERS’ EQUITY****Balance—March
                    31, 2007**
                
                **$**
                **25**
                
                
                **$**
                **23,996**
                
                
                **$**
                **27,436**
                
                
                **$**
                **(277**
                **)**
                
                **$**
                **451**
                
                
                **$**
                **(4**
                **)**
                
                **$**
                **51,627**Comprehensive
                    income :Net
                    income
                
                
                -
                
                
                
                -
                
                
                
                1,907
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,907Change
                    in accumulated other comprehensive income, net of taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (203
                )
                
                
                -
                
                
                
                (203
                )Comprehensive
                    income, net of taxes:
                
                
                -
                
                
                
                -
                
                
                
                1,907
                
                
                
                -
                
                
                
                (203
                )
                
                
                -
                
                
                
                1,704Implementation
                  of SFAS No. 156
                
                
                -
                
                
                
                -
                
                
                
                49
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                49Dividends
                    paid
                
                
                -
                
                
                
                -
                
                
                
                (473
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (473
                )Treasury
                    stock activity
                
                
                -
                
                
                
                66
                
                
                
                -
                
                
                
                (417
                )
                
                
                -
                
                
                
                -
                
                
                
                (351
                )**Balance—September
                    30, 2007**
                
                **$**
                **25**
                
                
                **$**
                **24,062**
                
                
                **$**
                **28,919**
                
                
                **$**
                **(694**
                **)**
                
                **$**
                **248**
                
                
                **$**
                **(4**
                **)**
                
                **$**
                **52,556**
 See
        accompanying notes to unaudited****consolidated financial
        statements.
  3
 
 **CARVER
        BANCORP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 (In
        thousands)
 (Unaudited)
 
 **Six
                  Months Ended September 30,****2007**
              
              
              **2006**Cash
                  flows from operating activities:Net
                  income (loss)
              
              $
              1,907
              
              
              $
              (102
              )Adjustments
                  to reconcile net income (loss) to net cash used in operating
                  activities:Stock
                  based compensation expense
              
              
              75
              
              
              
              125Depreciation
                  and amortization expense
              
              
              840
              
              
              
              802Other
                  amortization
              
              
              105
              
              
              
              29Loss
                  from sale of securities
              
              
              -
              
              
              
              645Writedown
                  on loans held-for-sale
              
              
              -
              
              
              
              702Gain
                  on sale of fixed assets
              
              
              (1
              )
              
              
              (3
              )Gain
                  on sale of loans
              
              
              (28
              )
              
              
              (88
              )Originations
                  of loans held-for-sale
              
              
              (10,187
              )
              
              
              (12,873
              )Proceeds
                  from sale of loans held-for-sale
              
              
              7,540
              
              
              
              6,394Changes
                  in assets and liabilities:Increase
                  in accrued interest receivable
              
              
              (125
              )
              
              
              (175
              )Increase
                  in loan premiums and discounts and deferred charges
              
              
              30
              
              
              
              301Increase
                  (decrease) in premiums and discounts - securities
              
              
              (190
              )
              
              
              287Increase in
                  other assets
              
              
              (1,799
              )
              
              
              (211
              )Decrease
                  in other liabilities
              
              
              (2,203
              )
              
              
              (1,377
              )Net
                  cash used in operating activities
              
              
              (4,036
              )
              
              
              (5,544
              )Cash
                  flows from investing activities:Proceeds
                  from principal payments, maturities and calls of
                  securities:Available-for-sale
              
              
              5,490
              
              
              
              17,225Held-to-maturity
              
              
              1,233
              
              
              
              5,358Proceeds
                  from sale of available-for-sale securities
              
              
              5,540
              
              
              
              46,425Purchase
                  of available-for-sale securities
              
              
              (3,724
              )
              
              
              -Originations
                  of loans held-for-investment
              
              
              (81,588
              )
              
              
              (47,490
              )Loans
                  purchased from third parties
              
              
              (15,261
              )
              
              
              (40,242
              )Principal
                  collections on loans
              
              
              71,600
              
              
              
              69,423Redemption
                  of FHLB-NY stock
              
              
              579
              
              
              
              601Additions
                  to premises and equipment, net
              
              
              (1,394
              )
              
              
              (702
              )Payments
                  for acquisition, net of cash acquired
              
              
              -
              
              
              
              (2,425
              )Net
                  cash (used in) provided by investing activities
              
              
              (17,525
              )
              
              
              48,173Cash
                  flows from financing activities:Net
                  increase (decrease) in deposits
              
              
              5,828
              
              
              
              (25,153
              )Net
                  borrowings (repayments) of FHLB advances
              
              
              20,487
              
              
              
              (13,662
              )Common
                  stock repurchased
              
              
              (410
              )
              
              
              (152
              )Dividends
                  paid
              
              
              (473
              )
              
              
              (430
              )Net
                  cash provided by (used in) financing activities
              
              
              25,432
              
              
              
              (39,397
              )Net
                  increase in cash and cash equivalents
              
              
              3,871
              
              
              
              3,232Cash
                  and cash equivalents at beginning of the period
              
              
              17,350
              
              
              
              22,904Cash
                  and cash equivalents at end of  the period
              
              $
              21,221
              
              
              $
              26,136Supplemental
                  information:Noncash
                  Transfers-Change
                  in unrealized loss on valuation of available-for-sale investments,
                  net
              
              $
              (203
              )
              
              $
              (166
              )Cash
                  paid for-Interest
              
              $
              10,804
              
              
              $
              4,034Income
                  Taxes
              
              $
              862
              
              
              $
              1,726
  See
        accompanying notes to unaudited consolidated
        financial statements.
  4
  **NOTES
        TO CONSOLIDATEDFINANCIAL STATEMENTS
        (UNAUDITED)**
  **(1)**
              **A)  
                  Basis of Presentation**
  The
        accompanying unaudited consolidated financial statements of the Holding Company
        have been prepared in accordance with United States generally accepted
        accounting principles (“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.  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
          preparation of financial statements in conformity with U.S. generally accepted
          accounting principles requires management to make estimates and assumptions
          that
          affect the reported amounts in the consolidated financial statements. Amounts
          subject to significant estimates and assumptions are items such as the
          allowance
          for loan losses and lending-related commitments, goodwill and intangibles,
          pension and the fair value of financial instruments. Actual results could
          differ
          from these estimates.
  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, 2007, as amended (“2007 Form 10-K”) previously filed with the
        SEC.  The consolidated results of operations and other data for the
        three- and six-month periods ended September 30, 2007 are not necessarily
        indicative of results that may be expected for the entire fiscal year ending
        March 31, 2008 (“fiscal 2008”).
  “Holding
        Company” means Carver Bancorp, Inc., the holding company for the wholly-owned
        subsidiaries, Carver Federal Savings Bank (the “Bank” or “Carver Federal”),
        Alhambra Holding Corp., an inactive Delaware corporation, and Carver Federal’s
        wholly-owned subsidiaries, CFSB Realty Corp., Carver Municipal Bank (“CMB”),
        Carver Community Development Corp. (“CCDC”), CFSB Credit Corp., and Carver
        Federal’s majority owned subsidiary, Carver Asset Corporation (collectively, the
        “Company”).  “Carver,” the “Company,” “we,” “us” or “our” refers to
        the Holding Company along with its consolidated subsidiaries.
  In
        addition, the Holding Company has a subsidiary, Carver Statutory Trust I,
        which
        was formed for the purpose of issuing trust preferred securities.  In
        accordance with Financial Accounting Standards Board (“FASB”) revised
        Interpretation No. 46, *Consolidation of Variable Interest Entities, and
        Interpretation of Accounting Research Bulletin No. 51*, Carver Statutory
        Trust I is not consolidated for financial reporting purposes.
  **B) 
                       Immaterial
                      Restatement**
 The
            Company is restating its previous disclosure relating to Off-Balance
            Sheet
            Arrangements and Contractual Obligations included in the Management's
            Discussion
            and Analysis of Financial Condition and Results of Operations in the
            June 30,
            2007. As of June 30, 2007, the outstanding loan commitments amounted
            to $169.8
            million compared to $23.7 million previously disclosed. Management believes
            these misstatements to be immaterial as it does not impact the Company's
            reported income, total assets and cash flows.
 **C) 
                       Reclassifications**
 Certain
            amounts in the consolidated financial statements presented for prior
            year period
            have been reclassified to conform to the current year presentation.
 **(2)**
              **Earnings
                  (Loss) Per Share**
  Basic
        earnings (loss) per common share is computed by dividing net income (loss)
        by
        the weighted-average number of common shares outstanding over the period
        of
        determination.  Diluted earnings (loss) per common share includes any
        additional common shares as if all potentially dilutive common shares were
        issued (for instance, 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
        periods ended September 30, 2007 and 2006, respectively, 69,462 and 60,914
        shares of common stock 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 and unvested restricted stock grants for the same
        period.  For the six-month periods ended September 30, 2007 and 2006,
        72,104 and 61,503 shares of common stock 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 six-months ended September 30,
        2007
        and 2006, respectively.  The effects of these potentially dilutive
        common shares were considered in determining the diluted earnings per common
        share.
  **(3)**
              **Accounting
                  for Stock Based
                  Compensation**
  The
        Company follows Statement of Financial Accounting Standards No. 123R,
*Share-Based Payment* ("SFAS No. 123R"), which requires that all
        stock-based compensation be recognized as an expense in the financial statements
        and that such cost be measured at the fair value of the award.  This
        statement was adopted using the modified prospective method of application,
        which requires the Company to recognize compensation expense on a prospective
        basis.  Therefore, prior period financial statements have not been
        restated.  Under this method, in addition to reflecting compensation
        expense for new share-based awards, expense is also recognized to reflect
        the
        remaining service period of awards that had been included in pro forma
        disclosures in prior periods.  SFAS No. 123R also requires that excess
        tax benefits related to stock option exercises be reflected as financing
        cash
        inflows instead of operating cash inflows.  Stock-based compensation
        expense and the related tax benefit recognized for the three months ended
        September 30, 2007 totaled $24,000 and $9,000, respectively.  For the
        six months ended September 30, 2007, stock-based compensation expense and
        the
        related tax benefit were $75,000 and $29,000,
        respectively.
  5
 
 **(4)**
              **Benefit
                  Plans**
  *Employee
        Pension Plan*
  The
        Bank
        has a non-contributory defined benefit pension plan covering all eligible
        employees.  The benefits are based on each employee’s term of
        service.  The Bank’s policy was to fund the plan with contributions
        equal to 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, the Bank 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 as follows (in
        thousands):
  **For
                  Three Months Ended September 30,****Employee
                  Pension Plan**
              
              
              **Directors'
                  Retirement Plan****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Interest
                  cost
              
              $
              40
              
              
              $
              40
              
              
              $
              1
              
              
              $
              1Expected
                  return on assets
              
              
              (55
              )
              
              
              (55
              )
              
              
              -
              
              
              
              --Unrecognized
                  loss (gain)
              
              
              -
              
              
              
              4
              
              
              
              -
              
              
              
              (1
              )Net
                  periodic benefit credit
              
              $
              (15
              )
              
              $
              (11
              )
              
              $
              1
              
              
              $
              --
 
 **For
                  Six Months Ended September 30,****Employee
                  Pension Plan**
              
              
              **Directors'
                  Retirement Plan****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Interest
                  cost
              
              $
              80
              
              
              $
              80
              
              
              $
              2
              
              
              $
              2Expected
                  return on assets
              
              
              (110
              )
              
              
              (110
              )
              
              
              -
              
              
              
              -Unrecognized
                  loss (gain)
              
              
              -
              
              
              
              8
              
              
              
              -
              
              
              
              (2
              )Net
                  periodic benefit credit
              
              $
              (30
              )
              
              $
              (22
              )
              
              $
              2
              
              
              $
              -
  **(5)**
              **Common
                  Stock Dividend**
  On
        November 19, 2007, the Board of Directors of the Holding Company declared,
        for the quarter ended September 30, 2007, a cash dividend
        of****ten cents ($0.10) per common share
        outstanding.  The dividend is payable on December 17, 2007 to
        stockholders of record at the close of business on December 3,
        2007.
  **(6)**
              **Recent
                  Accounting Pronouncements**
  *Fair
        Value Measurements*
  In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS
        No. 157”).  The Statement establishes a single definition of fair
        value, sets up a framework for measuring it, and requires additional disclosures
        about the use of fair value to measure assets and liabilities.  SFAS
        No. 157 also emphasizes that fair value is a market-based measurement by
        establishing a three level “fair value hierarchy” that ranks the quality and
        reliability of inputs used in valuation models, i.e., the lower the level,
        the
        more reliable the input.  The hierarchy provides the basis for the
        Statement’s new disclosure requirements which are dependent upon the frequency
        of an item’s measurement (recurring versus nonrecurring).  SFAS No.
        157 is effective for fair-value measures already required or permitted by
        other
        standards for financial statements issued for fiscal years beginning after
        November 15, 2007 and interim periods within those fiscal years.  Its
        provisions will generally be applied prospectively.  The adoption of
        SFAS No. 157 is not expected to have a material impact on our consolidated
        financial statements.
  6
  *The
        Fair Value Option for Financial Assets and Liabilities*
  In
        February 2007, the FASB issued SFAS No. 159, *The Fair Value Option for
        Financial Assets and Financial Liabilities— including an amendment of FASB
        Statement No. 115* (“SFAS No. 159”).  SFAS No. 159 permits
        entities to choose to measure financial instruments and certain other items
        at
        fair value even though such financial instruments and other items are not
        currently required to be measured at fair value.  This Statement is
        effective as of the beginning of an entity’s first fiscal year beginning after
        November 15, 2007.  The Bank is currently assessing the impact of this
        pronouncement.
  *Accounting
        for Purchases of Life Insurance*
  In
        September 2006, the Emerging Issues Task Force (“EITF”) of the FASB reached
        final consensus on accounting for life insurance in Issue No. 06-5,
        Accounting for Purchases of Life Insurance – Determining the Amount That Could
        Be Realized in Accordance with FASB Technical Bulletin (“FTB”) No. 85-4,
        Accounting for Purchases of Life Insurance (“EITF Issue
        No. 06-5”).  EITF Issue No. 06-5 concluded that a
        policyholder should consider other amounts included in the contractual terms
        of
        an insurance policy, in addition to cash surrender value, when determining
        the
        asset value that could be realized under the terms of the insurance contract
        in
        accordance with FTB 85-4.  As of April 1, 2007, Carver Federal adopted
        this consensus which was effective for fiscal years beginning after
        December 15, 2006.  EITF Issue No. 06-5 had no impact on the
        Company’s financial position or its results of operations.
  *Accounting
        for Uncertainty in Income Taxes*
  In
        June
        2006, the FASB issued Interpretation No. 48, *Accounting for Uncertainty in
        Income Taxes – an Interpretation of FASB Statement No. 109* (“FIN
        48”).  FIN 48 clarifies Statement 109 by establishing a criterion that
        an individual tax position would have to meet in order for some or all of
        the
        associated benefit to be recognized in an entity’s financial
        statements.  The Interpretation applies to all tax positions within
        the scope of Statement 109.  In applying FIN 48, an entity is required
        to evaluate each individual tax position using a two
        step-process.  First, the entity should determine whether the tax
        position is recognizable in its financial statements by assessing whether
        it is
“more-likely-than-not” that the position would be sustained by the taxing
        authority on examination.  The term “more-likely-than-not” means “a
        likelihood of more than 50 percent.”  Second, the entity should
        measure the amount of benefit to recognize in its financial statements by
        determining the largest amount of tax benefit that is greater than 50 percent
        likely of being realized upon ultimate settlement with the taxing
        authority.  Each tax position must be re-evaluated at the end of each
        reporting period to determine whether recognition or derecognition is
        warranted.  The liability resulting from the difference between the
        tax return position and the amount recognized and measured under FIN 48 should
        be classified as current or non-current depending on the anticipated timing
        of
        settlement.  An entity should also accrue interest and penalties on
        unrecognized tax benefits in a manner consistent with the tax
        law.  The Company’s Federal, New York State and City tax filings for
        years 2003 through the present are subject to examination.
  FIN
        48
        requires significant new annual disclosures in the notes to an entity’s
        financial statements that include a tabular roll-forward of the beginning
        to
        ending balances of an entity’s unrecognized tax benefits.  The
        Interpretation is effective for fiscal years beginning after December 15,
        2006
        and the cumulative effect of applying FIN 48 should be reported as an adjustment
        to retained earnings at the beginning of the period in which it is
        adopted.  This pronouncement, which was adopted as of April 1, 2007,
        had no impact on the Company’s financial position or its results of operations
        for the quarter and six months ended September 30, 2007.
  *Accounting
        for Servicing of Financial Assets*
  In
        March
        2006, the FASB issued SFAS No. 156, *Accounting for Servicing of Financial
        Assets – an Amendment of FASB Statement No. 140* (“SFAS No. 156”), which
        amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets
        and Extinguishments of Liabilities” with respect to the accounting for
        separately recognized servicing assets and servicing
        liabilities.  SFAS No. 156 requires all separately recognized
        servicing assets and servicing liabilities to be initially measured at fair
        value, if practicable, and permits an entity to choose either the amortization
        or fair value measurement method for subsequent measurements.  The
        Company determines the fair value of its mortgage servicing rights on the
        basis
        of a third party market valuation of the Company’s servicing portfolio
        stratified by predominant risk characteristics – loan type and
        coupon.  The valuation of the Company’s mortgage servicing rights
        utilizes market derived assumptions for discount rates, servicing costs,
        escrow
        earnings rate, and prepayments.  The Company, upon adoption of SFAS
        No. 156 as of April 1, 2007, recorded a cumulative effect adjustment to retained
        earnings (net of tax) as of the beginning of fiscal 2008 for the difference
        between the mortgage servicing rights fair value and its carrying amount
        as
        reflected in the consolidated statement of changes in stockholders’
equity.  At September 30, 2007, the fair value of mortgage servicing
        rights totaled $0.8 million.
  7
  *Application
        of Accounting Principles to Loan Commitments*
  In
        November 2007, the Securities and Exchange Commission (SEC) issued Staff
        Accounting Bulletin No. 109 (SAB 109). SAB 109 supersedes Staff Accounting
        Bulletin No. 105 (SAB 105), "Application of Accounting Principles to Loan
        Commitments." It clarifies that the expected net future cash flows related
        to
        the associated servicing of a loan should be included in the measurement
        of all
        written loan commitments that are accounted for at fair value through earnings.
        However, it retains the guidance in SAB 105 that internally-developed intangible
        assets should not be recorded as part of the fair value of a derivative loan
        commitment. The guidance is effective on a prospective basis to derivative
        loan
        commitments issued or modified in fiscal quarters beginning after
        December 15, 2007. In conjunction with the adoption of SFAS 157 and
        SFAS 159, this guidance generally would result in higher fair values being
        recorded upon initial recognition of derivative loan commitments. The Bank
        is
        currently assessing the impact of this pronouncement.
  8
  **ITEM2.**
              **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 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 but are not limited to the following:
 
 ·
              the
                  Company's success in implementing its new business initiatives,
                  including
                  expanding its product line, adding new branches and ATM centers
                  and
                  successfully re-building its brand
                  image;
  ·
              increases
                  in competitive pressure among financial institutions or non-financial
                  institutions;
  ·
              legislative
                  or regulatory changes which may adversely affect the Company’s
                  business;
  ·
              technological
                  changes which may be more difficult or expensive than
                  anticipated;
  ·
              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 business;
  ·
              changes
                  in accounting principles, policies or guidelines which may cause
                  conditions to be perceived
                  differently;
  ·
              litigation
                  or other matters before regulatory agencies, whether currently
                  existing or
                  commencing in the future, which may delay the occurrence or non-occurrence
                  of events longer than anticipated;
  ·
              the
                  ability to originate and purchase loans with attractive terms and
                  acceptable credit quality;
  ·
              success
                  in integrating Community Capital Bank into existing
                  operations;
  ·
              the
                  ability to realize cost efficiencies;
                  and
  ·
              general
                  economic conditions, either nationally or locally in some or all
                  areas in
                  which business is conducted, or conditions in the 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.
  **Overview**
  The
        following should be read in conjunction with the audited Consolidated Financial
        Statements, the notes thereto and other financial information included in
        the
        Company’s 2007 Form 10-K.
  Carver
        Bancorp, Inc., 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.  As of September 30, 2007,
        Carver Federal operated ten full-service banking locations and ten stand-alone
        ATM locations, including six 24/7 ATM centers in the New York City boroughs
        of
        Manhattan, Brooklyn and Queens.
  9
  Carver
        Federal operates as a traditional community bank, and offers consumer and
        commercial banking services.  Carver Federal provides deposit products
        including demand, savings and time deposits for consumers, businesses, and
        governmental and non-profit institutions in its local market area within
        New
        York City.  In addition to deposit products, Carver
        Federal  offers other consumer and commercial banking products and
        services, including debit cards, online banking, online bill pay, and telephone
        banking.  Through its affiliation with Merrill Lynch & Co., Carver
        Federal  offers a comprehensive range of wealth management
        products.
  Carver
        Federal offers loan products covering a variety of asset classes, including
        commercial and residential mortgages, construction loans and business
        loans.  Carver Federal finances its mortgage and loan products through
        its deposit operations or borrowings.  Funds not used to originate
        mortgages and loans are invested primarily in U.S. government agency securities
        and mortgage-backed securities.
  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.  Carver Federal’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 incremental
        provisions for loan losses, if any, non-interest income and operating
        expenses.
  During
        the three months ended September 30, 2007, the local real estate markets
        remained strong and continued to support new and existing lending
        opportunities.  The average Federal Funds rate of 5.19% for the three
        months ended September 30, 2007 was 5 basis points lower than the average
        rate
        for the corresponding prior year period.  As a result of the rate
        environment that prevailed throughout fiscal 2007 and continues in fiscal
        2008,
        the Company pursued an asset/liability management strategy of using the proceeds
        from the repayment and maturities of the Company’s lower earning investment
        portfolio and the growth in deposits to fund higher yielding loans, primarily
        construction loans, which grew by 9.1%.
  Carver
        Federal’s total loan portfolio increased during the three months ended September
        30, 2007.  The increase in total loans receivable, net, is primarily
        the result of an increase in construction loans.  Total deposits also
        increased during the three months ended September 30, 2007.  The
        growth was primarily the result of an increase in certificates of
        deposit.  Available-for-sale and held-to-maturity securities decreased
        during the three months ended September 30, 2007 due to principal payments
        and
        maturities.  Advances and borrowings increased during the three months
        ended September 30, 2007, primarily the result of an increase in repurchase
        obligations.
  Net
        income for the three months ended September 30, 2007 increased compared to
        the
        three months ended September 30, 2006, which included one-time charges related
        to the Community Capital Bank (“CCB”) acquisition and balance sheet
        repositioning that resulted in losses on the sale of loans and
        securities.  The increase in quarterly results was due to an increase
        in net interest income and non-interest income, partially offset by an increase
        in non-interest expense.  Net interest income increased due to Carver
        Federal’s larger loan portfolio resulting from the CCB acquisition, described
        further below, and the Bank’s balance sheet repositioning strategy that involved
        reducing lower yielding securities and replacing them with higher yielding
        loans, while replacing higher cost borrowings with lower cost
        deposits.  The increase in non-interest expense is primarily due to
        the absorption
        of CCB’s operations, investments in new talent, cost in preparation for
        implementation of Sarbanes-Oxley Act Section 404 at the end of this fiscal
        year,
        and other consulting assistance.  Occupancy and equipment costs
        also contributed to the increase in non-interest expense compared to prior
        year
        period as a result of the larger infrastructure following the CCB
        acquisition.
  For
        the
        three months ended September 30, 2007, the net interest margin and net interest
        rate spread increased to 3.66% and 3.38%, respectively, compared to 3.46%
        and
        3.20%, respectively, for the three months ended September 30,
        2006.  These increases were primarily due to the yield on
        interest-earning assets rising more rapidly than the cost of interest-bearing
        liabilities as a result of the higher yielding assets acquired from CCB,
        loan
        originations and the previously discussed asset/liability management
        strategy.
  **Acquisition
        of Community Capital Bank**
  On
        September 29, 2006, the Bank completed its acquisition of CCB, a Brooklyn-based
        New York State chartered commercial bank, with approximately $165.4 million
        in
        assets and two branches, in a cash transaction totaling approximately
        $11.1 million.  Under the terms of the merger agreement, CCB’s
        shareholders were paid $40.00 per outstanding share (including options which
        immediately vested with the consummation of the merger) and the Bank incurred
        an
        additional $0.8 million in transaction related costs.  The combined
        entities operate under Carver Federal’s thrift charter and Carver Federal
        continues to be supervised by the Office of Thrift Supervision
        (“OTS”).
  10
  The
        transaction, which was accounted for under the purchase accounting method,
        included the recognition of approximately $0.8 million of core deposit
        intangibles and $5.1 million representing the excess of the purchase price
        over the fair value of identifiable net assets (“goodwill”).  At
        September 30, 2007, goodwill relating to the transaction and subsequent
        additional purchase accounting adjustments, primarily income taxes, sales
        tax
        assessment and professional fees, totaled approximately $6.4
        million.
  **New
        Markets Tax Credit Award**
  In
        June
        2006, Carver Federal was selected by the U.S. Department of Treasury to receive
        an award of $59 million in New Markets Tax Credits (“NMTC”).  The NMTC
        award is used to stimulate economic development in low- to moderate-income
        communities.  The NMTC award enables the Bank to invest with community
        and development partners in economic development projects with attractive
        terms
        including, in some cases, below market interest rates, which may have the
        effect
        of attracting capital to underserved communities and facilitating the
        revitalization of the community, pursuant to the goals of the NMTC
        program.  The NMTC award provides a credit to Carver Federal against
        Federal income taxes when the Bank makes qualified investments.  The
        credits are allocated over seven years from the time of the qualified
        investment.  During the seven year period, assuming the Bank meets
        compliance requirements, the Bank will receive 39% of the invested award
        amount
        (5% over each of the first three years, and 6% over each of the next four
        years).  Recognition of the Bank’s NMTC award began in December 2006
        when the Bank invested $29.5 million, one-half of its $59 million
        award. For the three- and six-months ended September 30, 2007, the Company
        recognized a tax benefit of $0.4 million and $0.7 million, respectively,
        related to the NMTC award.
  **Critical
        Accounting Policies**
  Note
        1 to
        the Company’s audited Consolidated Financial Statements for fiscal 2007 included
        in its 2007 Form 10-K, as supplemented by this Form 10-Q, contains a summary
        of
        significant accounting policies and is incorporated by reference.  The
        Company believes its policies, with respect to the methodology for determining
        the allowance for loan losses and asset impairment judgments, including other
        than temporary declines in the value of the Company’s investment 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 the Company’s 2007 Form 10-K:
  **Securities
        Impairment**
  Carver
        Federal’s available-for-sale securities portfolio is carried at estimated fair
        value, with any unrealized gains and losses, net of taxes, reported as
        accumulated other comprehensive income/loss in stockholders’
equity.  Securities that the Bank has the positive intent and ability
        to hold to maturity are classified as held-to-maturity and are carried at
        amortized cost.  The fair values of securities in portfolio are based
        on published or securities dealers’ market values and are affected by changes in
        interest rates.  The Bank periodically reviews and evaluates the
        securities portfolio to determine if the decline in the fair value of any
        security below its cost basis is other-than-temporary.  The Bank
        generally views changes in fair value caused by changes in interest rates
        as
        temporary, which is consistent with its experience.  However, if such
        a decline is deemed to be other-than-temporary, the security is written down
        to
        a new cost basis and the resulting loss is charged to earnings.  At
        September 30, 2007, the Bank carried no permanently impaired
        securities.
  **Allowance
        for Loan Losses**
  The
        allowance for loan losses is maintained at a level considered adequate to
        provide for probable loan losses inherent in the portfolio as of September
        30,
        2007.  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.
  11
  The
        methodology employed for assessing the appropriateness of the allowance consists
        of the following criteria:
  ·
              Establishment
                  of loan loss allowance amounts for all specifically identified
                  criticized
                  loans that have been designated as requiring attention by management’s
                  internal loan review process, bank regulatory examinations or Carver
                  Federal’s external auditors.
  ·
              An
                  average loss factor, giving effect to historical loss experience
                  over
                  several years and linked to cyclical trends, is applied to all
                  loans not
                  subject to specific review.
  ·
              Evaluation
                  of any changes in risk profile brought about by business combinations,
                  customer knowledge, the results of ongoing credit quality monitoring
                  processes and the cyclical nature of economic and business
                  conditions.  An important consideration in performing this
                  evaluation is the concentration of real estate related loans located
                  in
                  the New York City metropolitan
                  area.
  The
        initial allocation or specific-allowance methodology commences with loan
        officers and underwriters grading the quality of their loans on a nine-category
        risk classification scale.  Loans identified from this process as
        being higher risk are referred to Carver Federal’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 of 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 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
        includes:
  ·
              Amount
                  and trend of criticized loans
 ·
              Actual
                  losses
 ·
              Peer
                  comparisons with other financial
                  institutions
 ·
              Economic
                  data associated with the real estate market in the Company’s lending
                  market areas
 
 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, 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 allowance must be established for the difference.  The
        allowance is established by either an allocation of the existing allowance
        for
        credit losses or by a provision for credit losses, depending on various
        circumstances.  Allowances 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, the Company’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.  As of
        September 30, 2007, the Company has purchased a total of 146,174 shares at
        an
        average price of $16.54.  Purchases under 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
        Bank’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.
  12
  Carver
        Federal monitors its liquidity utilizing guidelines that are contained in
        a
        policy developed by its management and approved by its Board of
        Directors.  Carver Federal’s several liquidity measurements are
        evaluated on a frequent basis.  Management believes Carver Federal’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, 2007, based on available collateral held at
        the FHLB-NY, Carver Federal had the ability to borrow from the FHLB-NY an
        additional $32.8 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, 2007, total cash and cash equivalents increased by $3.8
        million reflecting cash provided by financing activities offset by cash used
        in
        operating and investing activities.  Net cash used in operating
        activities during this period was $4.0 million, primarily representing cash
        used
        in originations of loans held-for-sale and the satisfaction of other
        liabilities.  Net cash used in investing activities was $17.5 million,
        primarily representing cash disbursed to fund mortgage loan originations
        and
        purchase loans.  Net cash provided by financing activities was $25.4
        million, primarily resulting from increased borrowings and deposits, offset
        partially by the payment of common dividends and repurchases of 28,471 shares
        of
        the Company’s common stock for an aggregate purchase price of $0.4
        million.  See “Comparison of Financial Condition at September 30, 2007
        and March 31, 2007” for a discussion of the changes in securities, loans,
        deposits and FHLB-NY borrowings.
  The
        levels of Carver Federal’s short-term liquid assets are dependent on Carver
        Federal’s operating, investing and financing activities during any given
        period.  The most significant liquidity challenge Carver Federal 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.  Because 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 Carver Federal’s
        liquidity.
  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, 2007, 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 regulatory capital
        compliance at September 30, 2007 (dollars in thousands):
  **Amount**
              
              
              **%
                  of Adj. Assets****Tangible
                  Equity:**Capital
                  level
              
              $
              60,360
              
              
              
              7.89
              %Less
                  required capital level
              
              
              11,475
              
              
              
              1.50
              %Excess
                  capital
              
              $
              48,885
              
              
              
              6.39
              %**Core
                  Capital:**Capital
                  level
              
              $
              60,015
              
              
              
              7.90
              %Less
                  required capital level
              
              
              30,349
              
              
              
              4.00
              %Excess
                  capital
              
              $
              29,666
              
              
              
              3.90
              %**Risk-Based
                  Capital:**Capital
                  level
              
              $
              65,353
              
              
              
              10.00
              %Less
                  required capital level
              
              
              52,282
              
              
              
              8.00
              %Excess
                  capital
              
              $
              13,071
              
              
              
              2.00
              %
  13
  **Comparison
        of Financial Condition at September 30, 2007 and March 31,
        2007**
  ***Assets***
  Total
        assets increased $25.0 million, or 3.4%, to $765.0 million at September 30,
        2007
        compared to $740.0 million at March 31, 2007.  The increase in total
        assets was primarily the result of an increase in loans receivable and loans
        held-for-sale of $27.9 million and an increase in cash and cash equivalents
        of
        $3.8 million partially offset by a decrease in investment securities of $8.7
        million.
  Cash
        and
        cash equivalents for the six months ended September 30, 2007 increased $3.8
        million, or 22.3%, to $21.2 million, compared to $17.4 million at March 31,
        2007.  The increase was primarily a result of a $5.3 million increase
        in cash and due from banks which was partially offset by a $1.3 million decrease
        in Federal funds sold.
  Total
        securities decreased $8.7 million, or 12.9%, to $58.4 million at September
        30, 2007 compared to $67.1 million at March 31, 2007 due to collection of
        normal
        principal repayments and maturities.  There were $3.7 million
        purchases of securities during the six months ended September 30,
        2007.  Total securities also declined due to an increase in the net
        unrealized loss on securities of $0.2 million resulting from the mark-to-market
        of the available-for-sale securities portfolio.
  Total
        loans receivable, including loans held-for-sale, increased $27.9 million,
        or
        4.6%, to $637.1 million at September 30, 2007 compared to $609.2 million
        at
        March 31, 2007.  The increase resulted primarily from an increase in
        construction loans of $27.4 million to
        $164.5
        million at September 30, 2007 compared to $137.1 million at March 31,
        2007.  At September 30, 2007, construction loans represented 26.9% of
        the loan portfolio.Approximately 73.5% of the Bank’s construction
        loans are participations in loans originated by Community Preservation
        Corporation (“CPC”), a ninety plus member bank organization whose mission is to
        enhance the quality and quantity of affordable housing in the New York-New
        Jersey-Connecticut tri-state area.  The Bank’s construction lending
        activity is concentrated in the New York City market.  At this time, the
        New York City real estate market continues to exhibit indications of insulation
        from the real estate downturn impacting other parts of the U.S.  Based on
        recent reports, various factors including continuing strong demand, relatively
        low proportion of subprime loans, interest from international buyers, and
        a lack
        of affordable housing supply contribute to New York City real estate’s
        continuing strength.  Despite those favorable factors, the Bank will
        continue to closely monitor trends for signs of
        weakness.
  The
        Bank’s investment in FHLB-NY stock decreased by $0.5 million, or 17.9%, to $2.7
        million compared to $3.2 million at March 31, 2007.  The FHLB-NY
        requires banks to own membership stock as well as borrowing activity-based
        stock.  The decrease in investment in FHLB-NY stock was the result of
        the repayment of FHLB-NY borrowings, resulting in the net redemption of stock
        during the period.
  **Liabilities
        and Stockholders’ Equity**
  ***Liabilities***
  At
        September 30, 2007, total liabilities increased by $24.2 million, or 3.5%,
        to
        $712.5 million compared to $688.3 million at March 31, 2007.  The
        increase in total liabilities was primarily the result of a net increase
        of
        $20.5 million in advances and borrowed money and $5.9 million of additional
        customer deposits, offset by a reduction of $2.2 million in other
        liabilities.
  Advances
        from the FHLB-NY and other borrowed money increased $20.5 million, or 33.6%,
        to
        $81.6 million at September 30, 2007 compared to $61.1 million at March 31,
        2007.  The increase in advances and borrowed money was primarily the
        result of an increase in repurchase obligations of $30.0 million at September
        30, 2007 compared to zero repurchase obligations at March 31,
        2007.  The increase was offset by a $9.5 million, or 20.0%, reduction
        in FHLB advances to $38.3 million at September 30, 2007 compared to $47.8
        million at March 31, 2007.
  Deposits
        increased $5.9 million, or 1.0%, to $621.0 million at September 30, 2007
        compared to $615.1 million at March 31, 2007.  The increase in deposit
        balances was largely the result of an increase in certificates of deposit
        of
        $20.5 million of which were offset by decreases of $7.7 million in savings
        deposits, $4.0 million in checking deposits, and $2.9 million in money market
        deposit accounts. At September 30, 2007, the Bank has $25.0 million in brokered
        deposits.
  Other
        liabilities decreased $2.2 million, or 18.2%, to $9.9 million at September
        30,
        2007 compared to from $12.1 million at March 31, 2007.  The reduction
        was primarily attributable to decreases of $2.7 million in lending liabilities
        and $1.1 million in retail obligations.
  ***Stockholders’
        Equity***
  Total
        stockholders’ equity increased $1.0 million, or 1.8%, to $52.6 million at
        September 30, 2007 compared to $51.6 million at March 31, 2007.  The
        increase in total stockholders’ equity was primarily attributable to net income
        for the six months ended September 30, 2007 totaling $1.9 million, partially
        offset by dividends paid of $0.5 million, the repurchase of common stock
        totaling $0.4 million in accordance with our stock repurchase program and
        a
        decrease of $0.2 million in accumulated other comprehensive income related
        to
        the mark-to-market of Carver Federal’s available-for-sale
        securities.
  14
  **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 fluctuations 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
        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 the
        Company’s 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 obligations, including commitments to originate mortgage
        and
        consumer loans and to fund unused lines of credit.
  As
        of
        September 30, 2007, the Bank had outstanding loan commitments as follows
        (in
        thousands):
  Commitments
                  to fund construction mortgage loans
              
              $
              113,458Commitments
                  on loans not closed
              
              
              19,600Commitments
                  to commercial and industrial revolving credit
              
              
              16,500Business
                  lines of credit
              
              
              7,482Letters
                  of credit
              
              
              4,261$
              161,301
  **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 table sets forth, for the periods indicated, certain information
        relating to Carver Federal’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.
  15
  **CARVER
        BANCORP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        AVERAGE BALANCES**
 (In
        thousands)
 (Unaudited)
 
 **For
                  the Three Months Ended September 30,****2007**
              
              
              **2006****Average**
              
              
              
              
              
              **Average**
              
              
              **Average**
              
              
              
              
              
              **Average****Balance**
              
              
              **Interest**
              
              
              **Yield/Cost**
              
              
              **Balance**
              
              
              **Interest**
              
              
              **Yield/Cost****Interest
                  Earning Assets:**Loans
                  (1)
              
              $
              639,264
              
              
              $
              11,184
              
              
              
              7.00
              %
              
              $
              507,492
              
              
              $
              8,317
              
              
              
              6.56
              %Investment
                  securities (2)
              
              
              28,475
              
              
              
              401
              
              
              
              5.63
              %
              
              
              16,086
              
              
              
              168
              
              
              
              4.18
              %Mortgage-backed
                  securities
              
              
              35,838
              
              
              
              474
              
              
              
              5.29
              %
              
              
              79,578
              
              
              
              842
              
              
              
              4.23
              %Fed
                  funds sold
              
              
              2,171
              
              
              
              29
              
              
              
              5.36
              %
              
              
              3,927
              
              
              
              53
              
              
              
              5.35
              %Total
                  interest-earning assets
              
              
              705,748
              
              
              
              12,088
              
              
              
              6.85
              %
              
              
              607,083
              
              
              
              9,380
              
              
              
              6.18
              %Non-interest-earning
                  assets
              
              
              55,964
              
              
              
              
              
              
              
              
              
              
              
              37,927Total
                  assets
              
              $
              761,712
              
              
              
              
              
              
              
              
              
              
              $
              645,010**Interest
                  Bearing Liabilities:**Deposits:Now
                  demand
              
              $
              24,933
              
              
              
              24
              
              
              
              0.39
              %
              
              $
              23,198
              
              
              
              16
              
              
              
              0.27
              %Savings
                  and clubs
              
              
              132,991
              
              
              
              265
              
              
              
              0.80
              %
              
              
              135,629
              
              
              
              220
              
              
              
              0.64
              %Money
                  market
              
              
              45,529
              
              
              
              258
              
              
              
              2.27
              %
              
              
              38,584
              
              
              
              235
              
              
              
              2.42
              %Certificates
                  of deposit
              
              
              361,231
              
              
              
              4,014
              
              
              
              4.46
              %
              
              
              266,942
              
              
              
              2,549
              
              
              
              3.79
              %Mortgagors
                  deposits
              
              
              2,793
              
              
              
              9
              
              
              
              1.29
              %
              
              
              1,571
              
              
              
              6
              
              
              
              1.52
              %Total
                  deposits
              
              
              567,477
              
              
              
              4,570
              
              
              
              3.23
              %
              
              
              465,924
              
              
              
              3,026
              
              
              
              2.58
              %Borrowed
                  money
              
              
              82,027
              
              
              
              1,055
              
              
              
              5.16
              %
              
              
              89,531
              
              
              
              1,143
              
              
              
              5.06
              %Total
                  interest-bearing liabilities
              
              
              649,504
              
              
              
              5,625
              
              
              
              3.47
              %
              
              
              555,455
              
              
              
              4,169
              
              
              
              2.98
              %Non-interest-bearing
                  liabilities:Demand
              
              
              53,028
              
              
              
              
              
              
              
              
              
              
              
              31,977Other
                  liabilities
              
              
              9,006
              
              
              
              
              
              
              
              
              
              
              
              9,116Total
                  liabilities
              
              
              711,538
              
              
              
              
              
              
              
              
              
              
              
              596,548Stockholders'
                  equity
              
              
              50,174
              
              
              
              
              
              
              
              
              
              
              
              48,462Total
                  liabilities & stockholders' equity
              
              $
              761,712
              
              
              
              
              
              
              
              
              
              
              $
              645,010Net
                  interest income
              
              
              
              
              
              $
              6,463
              
              
              
              
              
              
              
              
              
              
              $
              5,211Average
                  interest rate spread
              
              
              
              
              
              
              
              
              
              
              3.38
              %
              
              
              
              
              
              
              
              
              
              
              3.20
              %Net
                  interest margin
              
              
              
              
              
              
              
              
              
              
              3.66
              %
              
              
              
              
              
              
              
              
              
              
              3.46
              %
 
 (1)
        Includes non-accrual loans
 (2)
        Includes FHLB-NY stock
  16
  **CARVER
        BANCORP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        AVERAGE BALANCES**
 (In
        thousands)
 (Unaudited)
 
 **For
                  the Six Months Ended September 30,****2007**
              
              
              **2006****Average**
              
              
              
              
              
              **Average**
              
              
              **Average**
              
              
              
              
              
              **Average****Balance**
              
              
              **Interest**
              
              
              **Yield/Cost**
              
              
              **Balance**
              
              
              **Interest**
              
              
              **Yield/Cost****Interest
                  Earning Assets:**Loans
                  (1)
              
              $
              628,677
              
              
              $
              22,177
              
              
              
              7.06
              %
              
              $
              500,515
              
              
              $
              16,208
              
              
              
              6.48
              %Investment
                  securities (2)
              
              
              29,831
              
              
              
              855
              
              
              
              5.73
              %
              
              
              16,887
              
              
              
              349
              
              
              
              4.13
              %Mortgage-backed
                  securities
              
              
              37,464
              
              
              
              976
              
              
              
              5.21
              %
              
              
              85,723
              
              
              
              1,775
              
              
              
              4.14
              %Fed
                  funds sold
              
              
              1,555
              
              
              
              41
              
              
              
              5.29
              %
              
              
              6,821
              
              
              
              169
              
              
              
              4.94
              %Total
                  interest-earning assets
              
              
              697,527
              
              
              
              24,049
              
              
              
              6.90
              %
              
              
              609,946
              
              
              
              18,501
              
              
              
              6.07
              %Non-interest-earning
                  assets
              
              
              55,231
              
              
              
              
              
              
              
              
              
              
              
              37,673Total
                  assets
              
              $
              752,758
              
              
              
              
              
              
              
              
              
              
              $
              647,619**Interest
                  Bearing Liabilities:**Deposits:Now
                  demand
              
              $
              24,951
              
              
              
              58
              
              
              
              0.47
              %
              
              $
              24,943
              
              
              
              39
              
              
              
              0.31
              %Savings
                  and clubs
              
              
              135,120
              
              
              
              530
              
              
              
              0.79
              %
              
              
              137,542
              
              
              
              443
              
              
              
              0.64
              %Money
                  market
              
              
              46,193
              
              
              
              501
              
              
              
              2.18
              %
              
              
              39,164
              
              
              
              477
              
              
              
              2.43
              %Certificates
                  of deposit
              
              
              350,817
              
              
              
              7,792
              
              
              
              4.45
              %
              
              
              264,516
              
              
              
              5,048
              
              
              
              3.81
              %Mortgagors
                  deposits
              
              
              2,807
              
              
              
              20
              
              
              
              1.43
              %
              
              
              1,870
              
              
              
              14
              
              
              
              1.49
              %Total
                  deposits
              
              
              559,888
              
              
              
              8,901
              
              
              
              3.19
              %
              
              
              468,035
              
              
              
              6,021
              
              
              
              2.57
              %Borrowed
                  money
              
              
              78,683
              
              
              
              2,030
              
              
              
              5.17
              %
              
              
              89,708
              
              
              
              2,233
              
              
              
              4.96
              %Total
                  interest-bearing liabilities
              
              
              638,571
              
              
              
              10,931
              
              
              
              3.43
              %
              
              
              557,743
              
              
              
              8,254
              
              
              
              2.95
              %Non-interest-bearing
                  liabilities:Demand
              
              
              53,809
              
              
              
              
              
              
              
              
              
              
              
              31,562Other
                  liabilities
              
              
              10,447
              
              
              
              
              
              
              
              
              
              
              
              10,075Total
                  liabilities
              
              
              702,827
              
              
              
              
              
              
              
              
              
              
              
              599,380Stockholders'
                  equity
              
              
              49,931
              
              
              
              
              
              
              
              
              
              
              
              48,239Total
                  liabilities & stockholders' equity
              
              $
              752,758
              
              
              
              
              
              
              
              
              
              
              $
              647,619Net
                  interest income
              
              
              
              
              
              $
              13,118
              
              
              
              
              
              
              
              
              
              
              $
              10,247Average
                  interest rate spread
              
              
              
              
              
              
              
              
              
              
              3.46
              %
              
              
              
              
              
              
              
              
              
              
              3.12
              %Net
                  interest margin
              
              
              
              
              
              
              
              
              
              
              3.76
              %
              
              
              
              
              
              
              
              
              
              
              3.37
              %
  (1)
        Includes non-accrual loans
 (2)
        Includes FHLB-NY stock
  17
  **Comparison
        of Operating Results for the Three and Six Months Ended September 30, 2007
        and
        2006**
  **Overview**
  The
        Company reported consolidated net income for the quarter ended September
        30,
        2007 of $0.8 million compared to a net loss of $0.9 million for the prior
        year
        period, an increase of $1.7 million.  These results primarily reflect
        an increase in net interest income of $1.3 million and an increase in
        non-interest income of $1.8 million, offset by increases in non-interest
        expense
        of $1.1 million and a decline in income tax benefit of $0.3
        million.  The prior year period included special charges of $1.3
        million related to CCB acquisition costs, and $1.3 million related to the
        balance sheet repositioning.
  Net
        income for the six months ended September 30, 2007 was $1.9 million compared
        to
        a net loss of $0.1 million for the prior year period, an increase of $2.0
        million.  These results primarily reflect an increase in net interest
        income of $2.9 million and an increase in non-interest income of $2.0 million,
        offset by increases in non-interest expense of $2.8 million, and income tax
        expense of $23,000 compared to a prior year period benefit of
        $19,000.
  Selected
        operating ratios for the three and six months ended September 30, 2007 and
        2006
        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**
              
              
              **Six
                  Months Ended****Selected
                  Financial Data:**
              
              **September
                  30,**
              
              
              **September
                  30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Return
                  on average assets (1)
              
              
              0.40
              %
              
              
              -0.56
              %
              
              
              0.51
              %
              
              
              -0.03
              %Return
                  on average equity (2)
              
              
              6.03
              
              
              
              -7.46
              
              
              
              7.62
              
              
              
              -0.42Net
                  interest margin (3)
              
              
              3.66
              
              
              
              3.46
              
              
              
              3.76
              
              
              
              3.37Interest
                  rate spread (4)
              
              
              3.38
              
              
              
              3.20
              
              
              
              3.46
              
              
              
              3.12Efficiency
                  ratio (5)
              
              
              90.90
              
              
              
              128.07
              
              
              
              87.23
              
              
              
              101.11Operating
                  expenses to average assets (6)
              
              
              3.78
              
              
              
              3.87
              
              
              
              3.64
              
              
              
              3.40Average
                  equity toaverage assets
                  (7)
              
              
              6.59
              
              
              
              7.98
              
              
              
              6.63
              
              
              
              7.45Average
                  interest-earning assets to average interest-bearing
                  liabilities
              
              
              1.09
              x
              
              
              1.09
              x
              
              
              1.09
              x
              
              
              1.09
              x
  (1)
        Net
        income, annualized, divided by average total assets.
 (2)
        Net
        income, annualized, divided by average total equity.
 (3)
        Net
        interest income, annualized, divided by average interest-earning
        assets.
 (4)
        Combined weighted average interest rate earned less combined weighted average
        interest rate cost.
 (5)
        Operating expenses divided by sum of net interest income plus non-interest
        income.
 (6)
        Non-interest expenses less loss on real estate owned, annualized, divided
        by
        average total assets.
 (7)
        Total
        average equity divided by total average assets for the period.
  **Interest
        Income**
  Interest
        income increased by $2.7 million, or 28.9%, to $12.1 million for the quarter
        ended September 30, 2007, compared to $9.4 million in the prior year
        period.  Interest income increased primarily as a result of an
        increase in average loan balances and interest yields due to loan balances
        acquired from CCB and the mix of loan originations.  The increase in
        interest income was offset by a decline in average balances
        of mortgage-backed securities pursuant to the Bank’s asset/liability
        strategy.  The yield earned on the securities portfolio increased as a
        result of the current rate environment. Overall, the increase in interest
        income resulted from an increase of 67 basis points in the annualized average
        yield on total interest-earning assets to 6.85% for the three months ended
        September 30, 2007 compared to 6.18% for the prior year period, reflecting
        increases in yields on loans and total securities of 44 basis points and
        127
        basis points, respectively.  The yield on federal funds remained
        relatively flat with an increase of 1 basis point.
  For
        the
        six month period ending September 30, 2007, interest income increased $5.5
        million, or 30.0%, to $24.0 million, compared to $18.5 million for the prior
        year period.  The increase in interest income was primarily due to
        higher yields and average balances of interest-earning assets of 83 basis
        points
        and $88.0 million, respectively. These results were primarily driven by
        increases in average loan balances of $128.2 million and yields on loans
        of 58
        basis points, offset by lower income from total securities and federal funds
        sold of $0.8 million and $0.1 million, respectively, driven by lower average
        balances.
  18
  Interest
        income on loans increased by $2.9 million, or 34.5%, to $11.2 million for
        the
        three months ended September 30, 2007 compared to $8.3 million for the prior
        year period.  These results were primarily driven by an increase in
        average loan balances and higher yields.  The average loan balance
        increased by $131.8 million to $639.3 million in the quarter ended September
        30,
        2007 compared to $507.5 million for the prior year period.  Yields on loans
        increased 44 basis points to 7.00% in the quarter ended September 30, 2007
        compared to 6.56% for the prior year period.  The increase in the
        average balance of loans reflects the acquisition of the CCB loan portfolio
        and
        the Bank’s loan originations.  The increase in the average rate earned
        on loans was primarily due to the acquisition of the higher yielding CCB
        small
        business loan portfolio and higher yielding construction loans.
  For
        the
        six month period ending September 30, 2007, interest income on loans increased
        $6.0 million, or 36.8%, to $22.2 million compared to $16.2 million for the
        prior
        year period.  This increase was driven by an increase of $128.2
        million in average loan balance due primarily to the acquisition of
        CCB.  In addition, yields increased 58 basis points reflecting the
        current mix of the Bank’s growth in higher yielding construction loans and
        higher yielding small business loans.
  Interest
        income on securities decreased by $0.1 million, or 13.4%, to $0.9 million
        for
        the three month period ended September 30, 2007 compared to $1.0 million
        for the
        prior year period.  The decrease in interest income on securities for
        the quarter was primarily the result of a $43.8 million, or 55.0%, reduction
        in
        the average balance of mortgage-backed securities to $35.8 million for the
        three
        month period ended September 30, 2007 compared to $79.6 million for the prior
        year period.  This was offset by an increase in investment securities
        of $12.4 million, or 77.0%, to $28.5 million for the three month period ended
        September 30, 2007 compared to $16.1 million for the prior year
        period.  The effect of the decrease in the balance of mortgage-backed
        securities was partially offset by a 106 basis point increase in the annualized
        average yield on securities to 5.29% compared to 4.23% in the prior year
        period
        as adjustable rate securities in the portfolio are repricing to higher coupon
        rates.  The yield on investment securities increased by 145 basis
        points to 5.63%, compared to 4.18% in the prior year period.
  For
        the
        six month period ending September 30, 2007, interest income on securities
        decreased $0.3 million, or 13.8%, to $1.8 million from $2.1 million for the
        prior year period.  The decrease in interest income on securities for
        the six month period ended September 30, 2007 was primarily the result of
        a
        $48.2 million, or 56.3%, reduction in the average balances of mortgage-backed
        securities to $37.5 million, compared to $85.7 million for the prior year
        period.  This was offset by an increase in investment securities of
        $13.0 million, or 76.7%, to $29.8 million for the six month period ended
        September 30, 2007 compared to $16.8 million for the prior year
        period.  The effect of the decrease in the balance of mortgage-backed
        securities was partially offset by a 107 basis point increase in the annualized
        average yield on securities to 5.21% compared to 4.14% in the prior year
        period
        because adjustable rate securities in the portfolio are repricing to higher
        coupon rates.  The yield on investment securities increased by 160
        basis points to 5.73% compared to 4.13% in the prior year period.
  **Interest
        Expense**
  Interest
        expense increased by $1.4 million, or 34.9%, to $5.6 million for the three
        months ended September 30, 2007, compared to $4.2 million for the prior year
        period.  The higher interest expense resulted primarily from a 49
        basis point increase in the annualized average cost of interest-bearing
        liabilities to 3.47% for the three months ended September 30, 2007, compared
        to
        2.98% for the prior year period.  Additionally, the average balance of
        interest-bearing liabilities increased $94.0 million, or 16.9%, to $649.5
        million, compared to $555.5 million for the prior year period.
  For
        the
        six month period ended September 30, 2007, interest expense increased by
        $2.6
        million, or 32.4%, to $10.9 million, compared to $8.3 million for the prior
        year
        period.    The increase in interest expense resulted
        primarily from a 48 basis point increase in the annualized average cost of
        interest-bearing liabilities to 3.43%, compared to 2.95% for the prior year
        period.  In addition, the increase in interest expense is due to
        growth in the average balance of interest-bearing liabilities of $80.9 million,
        or 14.5%, to $638.6 million, compared to $557.7 million for the prior year
        period.
  Interest
        expense on deposits increased $1.6 million, or 51.0%, to $4.6 million for
        the
        three months ended September 30, 2007, compared to $3.0 million for the prior
        year period.  The increase in interest expense on deposits was
        primarily due to an increase of $101.6 million, or 21.8%, in the average
        balance
        of interest-bearing deposits to $567.5 million for the three months ended
        September 30, 2007, compared to $465.9 million for the prior year
        period.  The higher balance primarily results from the acquisition of
        CCB, which increased the Company’s deposit portfolio by $144.1 million on the
        acquisition date of September 29, 2006.  Additionally, a 65 basis
        point increase in the rate paid on deposits to 3.23% compared to 2.58% for
        the
        prior year period contributed to the increase.  Customer deposits have
        historically provided Carver Federal with a relatively low cost funding source
        from which its net interest income and net interest margin have
        benefited.  In addition, the Bank’s relationship with various
        government entities has been a source of relatively stable and low cost
        funding.  As of September 30, 2007, the Bank held $137.6 million in
        government deposits.
  For
        the
        six month period ended September 30, 2007, total interest expense on deposits
        increased $2.9 million, or 47.8%, to $8.9 million from $6.0 million for the
        prior year period.  The increase in interest expense on deposits was
        primarily due to an increase of $91.9 million, or 19.6%, in the average balance
        of interest-bearing deposits to $559.9 million for the six months ended
        September 30, 2007, compared to $468.0 million for the prior year
        period.  This increase resulted primarily from the acquisition of CCB,
        which increased the deposit portfolio by $144.1 million on the acquisition
        date
        of September 29, 2006.  Additionally, a 62 basis point increase in the
        rate paid on deposits to 3.19% compared to 2.57% for the prior year period
        contributed to the increase.
  19
  Interest
        expense on advances and other borrowed money decreased $0.1 million, or 7.7%,
        to
        $1.0 million for the three months ended September 30, 2007 compared to $1.1
        million for the prior year period.  In the three months ended
        September 30, 2007, the average balance of total borrowed money outstanding
        declined, primarily as a result of a $7.5 million decrease in the average
        balance of outstanding borrowings to $82.0 million compared to $89.5 million
        in
        the prior year period.  Partially offsetting the decrease in interest
        expense was a 10 basis point increase in the cost of borrowed money to 5.16%
        compared to 5.06% for the prior year period.  The increase in cost is
        mainly related to the cost of debt service of the $13.0 million in floating
        rate
        junior subordinated notes issued by the Company in connection with issuance
        of
        trust preferred securities by Carver Statutory Trust I in September
        2003.  Cash distributions on the trust preferred debt securities are
        cumulative and payable at a floating rate per annum (reset quarterly) equal
        to
        3.05% over the 3-month LIBOR, with a rate at September 30, 2007 of
        8.74%.
  For
        the
        six month period ended September 30, 2007, interest expense on advances and
        other borrowed money declined $0.2 million, or 9.1%, to $2.0 million, compared
        to $2.2 million for the prior year period.  In the six months ended
        September 30, 2007, the average balance of total borrowed money outstanding
        declined, primarily as a result of a $11.0 million decrease in the average
        balance of outstanding borrowings to $78.7 million compared to $89.7 million
        in
        the prior year period.  Partially offsetting the decrease in interest
        expense was a 21 basis point increase in the cost of borrowed money to 5.17%
        compared to 4.96% in the prior year period.
  **Net
        Interest Income Before Provision for Loan Losses**
  Net
        interest income before the provision for loan losses increased by $1.3 million,
        or 24.0%, to $6.5 million for the three months ended September 30, 2007,
        compared to $5.2 million for the prior year period.  The Company’s
        annualized net interest margin, represented by annualized net interest income
        divided by average total interest-earning assets, increased 20 basis points
        to
        3.66% for the three months ended September 30, 2007, compared to 3.46% in
        the
        prior year period.
  For
        the
        six month period ending September 30, 2007, net interest income before the
        provision for loan losses increased by $2.9 million, or 28.0%, to $13.1 million,
        compared to $10.2 million for the prior year period.  Net interest
        margin for the six month period ending September 30, 2007, increased 39 basis
        points to 3.76% compared to 3.37% for the prior year period.
  **Provision
        for Loan Losses and Asset Quality**
  The
        Company considers the overall allowance for loan losses to be adequate, and
        the
        Company did not provide for additional loan losses for the three- and six-month
        periods ended September 30, 2007 and 2006.  At September 30, 2007 and
        March 31, 2007, the Bank’s allowance for loan losses was $5.3 million and $5.4
        million, respectively.  The ratio of the allowance for loan losses to
        non-performing loans was 146.2% at September 30, 2007 compared to 119.9% at
        March 31, 2007.  The ratio of the allowance for loan losses to total
        loans was 0.84% at September 30, 2007 compared to 0.89% at March 31,
        2007.
  On
        September 30, 2007, non-performing assets totaled $3.7 million, or 0.58%
        of
        total loans receivable compared to $4.5 million, or 0.74% of total loans
        receivable at March 31, 2007.  Non-performing assets include loans 90
        days past due, non-accrual loans and other real estate owned.  The
        level of non-performing assets to total loans remains within the range the
        Bank
        has experienced over the trailing eleven
        quarters.
  On
        July
        10, 2007, the OTS and other bank regulatory authorities (the “Agencies”)
        published the final Interagency Statement on Subprime Lending (the “Statement”)
        to address emerging issues and questions relating to certain subprime mortgage
        lending practices.  In particular, the Agencies expressed
        concern regarding certain adjustable rate mortgage products with certain
        characteristics typically offered in the marketplace to subprime
        borrowers.  Those characteristics included, but were not limited to,
        utilizing low initial payments based on a fixed introductory rate that expires
        after a short period and then adjusts to a variable index rate plus a margin
        for
        the remaining term of the loan and underwriting loans based upon limited
        or no
        documentation of borrowers’ income.  The Statement does not precisely
        define what constitutes subprime lending.  We do not expect the
        Statement to have a material impact on the Company.
  20
  **Non-Interest
        Income**
  Total
        non-interest income for the quarter ended September 30, 2007 increased $1.8
        million to $1.5 million, compared to a loss of $0.3 million for the prior
        year
        period.  The increase in non-interest income resulted mainly from an
        increase of $0.3 million in loan fees and service charges to $0.5 million
        compared to $0.2 million for the prior year period.  In addition, the
        prior year period included a $1.3 million charge associated with the balance
        sheet repositioning.
  For
        the
        six month period ended September 30, 2007, non-interest income increased
        $2.0
        million to $2.6 million compared to $0.6 million for the prior year period,
        which included a $1.3 million charge related to the balance sheet
        repositioning.  Additionally for the six month period, there was a
        $0.4 million increase in loan fees and service charges to $0.9 million compared
        to $0.5 million.
  **Non-Interest
        Expense**
  For
        the
        quarter ended September 30, 2007, total non-interest expense increased $1.0
        million, or 15.3%, to $7.2 million compared to $6.2 million for the prior
        year
        period.  The increase in non-interest expense was primarily due to an
        increase of $0.8 million in employee compensation and benefits to $3.1 million
        compared to $2.3 million, $0.3 million in net occupancy expense to $0.9 million
        compared to $0.6 million, and $1.1 million in other non-interest expense
        to $2.6
        million compared to $1.5 million, respectively, for the prior year
        period.  Other non-interest expense includes investments
        in new talent, cost in preparation for implementation of Sarbanes-Oxley Act
        Section 404 at the end of this fiscal year, and other consulting
        assistance.The increases were offset by a decrease of $1.3 million
        in merger related expenses compared to the prior year period.
  During
        the six month period ended September 30, 2007, non-interest expense increased
        $2.7 million, or 24.8%, to $13.7 million compared to $11.0 million for the
        prior
        year period*.*The increase in non-interest expense was
        primarily due to increases of $1.7 million in employee compensation and benefits
        to $6.3 million compared to $4.6 million, $0.6 million in net occupancy expense
        to $1.8 million compared to $1.2 million, and $1.6 million in other expenses
        to
        $4.5 million compared to $2.9 million, respectively, for the prior year period,
        offset by a decrease of $1.3 million in merger related expenses in the prior
        year period.
  **Income
        Tax Expense**
  For
        the
        quarter ended September 30, 2007, the income tax benefit decreased $0.4 million,
        or 90.5%, resulting in a tax benefit of $44,000 compared to a tax benefit
        of
        $0.5 million for the prior year period.  The reduction in tax benefit
        reflects taxable income of $0.7 million for the
        quarter ended
        September 30, 2007 compared to a loss of $1.4 million for the prior year
        period.  The current period income tax expense of $0.3 million was
        offset by the benefit of the NMTC award totaling $0.4 million for the
        quarter ended September 30, 2007.  As previously
        disclosed, the Company is expected to receive benefits from the NMTC award
        over
        approximately 7 years.
  For
        the
        six month period ended September 30, 2007, income taxes increased $0.1 million,
        resulting in a tax expense of $0.1 million compared to a tax benefit of $19,000
        for the prior year period.  The reduction in tax benefit reflects the
        taxable income of $2.0 million for the six month period ended September 30,
        2007
        compared to a loss of $0.1 million for the prior year period.  The
        income tax expense of $0.8 million for the six month period ended September
        30,
        2007 was offset by the benefit of the NMTC award totaling $0.7
        million.
  **ITEM
                  3.**
              **Quantitative
                  and Qualitative Disclosure about Market
                  Risk**
  Quantitative
        and qualitative disclosure about market risk is presented at March 31, 2007
        in
        Item 7A of the Company’s 2007 Form 10-K and is incorporated herein by
        reference.  The Company believes that there has been no material
        change in the Company’s market risk at September 30, 2007 compared to March 31,
        2007.
  **ITEM4.**
              **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, 2007, 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
        the Company’s management as appropriate to allow timely decisions regarding
        required disclosure.
  21
  There
        were no changes in the Company’s internal control over financial reporting that
        occurred during the period covered by this report that have materially affected,
        or are reasonably likely to materially affect, the Company’s internal control
        over financial reporting.
  **PART
                  II.**
              **OTHER
                  INFORMATION**
  **ITEM1.**
              **Legal
                  Proceedings**
  Disclosure
        regarding legal proceedings to which the Company is a party is presented
        in Note
        13 to the Company’s audited Consolidated Financial Statements in the 2007 Form
        10-K and is incorporated herein by reference.  There have been no
        material changes with regard to such legal proceedings since the filing of
        the
        2007 Form 10-K.
  **ITEM
                  1A.**
              **Risk
                  Factors**
  For
        a
        summary of risk factors relevant to the Company’s operations, see Part I, Item
        1A, “Risk Factors,” in the Company’s 2007 Form 10-K.  There has been
        no material change in risk factors relevant to the Company’s operations since
        March 31, 2007.
  **ITEM2.**
              **Issuer
                  Purchases of Equity
                  Securities**
  During
        the quarter ended September 30, 2007, the Company purchased an additional
        29,400
        shares of its common stock under its stock repurchase program.  As of
        September 30, 2007, the Company has purchased a total of 146,174 shares at
        an
        average price per share of $16.54.
  **Period**
              
              **Total
                  number of shares purchased**
              
              
              **Average
                  price paid per share**
              
              
              **Total
                  number of shares as part of publicly announced
                  plan (1)**
              
              
              **Total
                  number of shares that may yet be
                  purchased (2)**July
                  1, 2007 to July 31, 2007
              
              
              1,200
              
              
              $
              15.80
              
              
              
              1,200
              
              
              
              113,661August
                  1, 2007 to August 31, 2007
              
              
              28,200
              
              
              $
              15.33
              
              
              
              28,200
              
              
              
              85,461September
                  1, 2007 to September 30, 2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              85,461
  (1)
        The
        Company’s stock purchase program was announced on August 2002 without an
        expiration date.
  (2)
        As
        part of the stock repurchase program, the Company approved the repurchase
        of up
        to 231,635 shares of its common stock.
  **ITEM
                  3.**
              **Defaults
                  Upon Senior Securities**
  Not
        applicable.
  22
  **ITEM4.**
              **Submission
                  of Matters to a Vote of Security
                  Holders**
  The
        Holding Company held its Annual Meeting on September 18, 2007 for the fiscal
        year ended March 31, 2007.
  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;
  2.
              the
                  ratification of the appointment of KPMG LLP as independent auditors
                  of the
                  Holding Company for the fiscal year ending March 31,
                  2008.
  The
        results of voting were as follows:
  Proposal
                  1:
              Election
                  of Directors:Holding
                  Company NomineesDavid
                  L. Hinds
              For
              
              
              2,159,016Withheld
              
              
              70,759Pazel
                  G. Jackson
              For
              
              
              2,159,016Withheld
              
              
              70,759Deborah
                  C. Wright
              For
              
              
              2,140,179Withheld
              
              
              89,596Proposal
                  2:
              Ratification
                  of Appointment of Independent Auditors
              For
              
              
              2,137,786Against
              
              
              27,529Abstain
              
              
              64,460
  In
        addition to the nominees elected at the Annual Meeting, the following persons’
terms of office as directors continued after the Annual Meeting: Carol Baldwin
        Moody, Dr. Samuel J. Daniel, Robert Holland, Jr., Edward Ruggiero and Robert
        R.
        Tarter.
  **ITEM
                  5.**
              **Other
                  Information**
  Not
        applicable.
  **ITEM
                  6.**
              **Exhibits**
  The
                  following exhibits are submitted with this report:Exhibit
                  3.1
              Certificate
                  of Incorporation of Carver Bancorp, Inc. (1)Exhibit
                  3.2
              Amended
                  and Restated Bylaws of Carver Bancorp, Inc. (2)Exhibit
                  11.
              Computation
                  of Earnings Per Share.Exhibit
                  31.1
              Certification
                  of Chief Executive Officer.Exhibit
                  31.2
              Certification
                  of Chief Financial Officer.Exhibit
                  32.1(*)
              Certification
                  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(*)
              Certification
                  of Chief Financial Officer furnished pursuant to Section 906 of
                  the
                  Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
                  1350.
  (1)
              Incorporated
                  herein by reference to Registration Statement No. 333-5559 on Form
                  S-4 of
                  the Registrant filed with the Securities and Exchange Commission
                  on June
                  7, 1996.
  (2)
              Incorporated
                  herein by reference to the Exhibits to the Registrant’s Annual Report on
                  Form   10-K for the fiscal year ended March 31,
                  2005.
  *
        This
        certification accompanies the Report pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for
        purposes of Section 18 of the Securities Exchange Act of 1934, as
        amended.
  23
  **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 21, 2007
              /s/
                  Deborah C. WrightDeborah
                  C. WrightChairman
                  and Chief Executive Officer(Principal
                  Executive Officer)Date:
                  November 21, 2007
              /s/
                  Roy SwanRoy
                  SwanExecutive
                  Vice President and Chief Financial Officer(Principal
                  Financial and Accounting Officer)
   24