UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                        ---------------------------------

                                    FORM 10-Q

(Mark One)

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

                For the quarterly period ended December 31, 2002

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

                         Commission File Number: 0-21487

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

                   Delaware                                   13-3904174
        (State or Other Jurisdiction of                    (I.R.S. Employer
        Incorporation or Organization)                    Identification No.)

   75 West 125th Street, New York, New York                      10027
   (Address of Principal Executive Offices)                   (Zip Code)

       Registrant's Telephone Number, Including Area Code: (212) 876-4747

      Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes |X| No |_|

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

                                 Yes |_| No |X|

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

     Common Stock, par value $.01                           2,296,393
               Class                             Outstanding at January 31, 2003

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page

<S>                                                                                                             <C>
PART I. FINANCIAL INFORMATION

        Item 1. Financial Statements

                         Consolidated Statements of Financial Condition as of
                         December 31, 2002 (unaudited) and March 31, 2002.........................................1

                         Consolidated Statements of Income for the Three Months and Nine Months
                         Ended December 31, 2002 and 2001 (unaudited).............................................2

                         Consolidated Statement of Changes in Stockholders' Equity and
                         Comprehensive Income for the Nine Months Ended December 31, 2002 (unaudited).............3

                         Consolidated Statements of Cash Flows for the Nine Months
                         Ended December 31, 2002 and 2001 (unaudited).............................................4

                         Notes to Consolidated Financial Statements (unaudited)...................................5

        Item 2. Management's Discussion and Analysis of Financial Condition
                and Results of Operations.........................................................................7

        Item 3. Quantitative and Qualitative Disclosure About Market Risk........................................18

        Item 4. Controls and Procedures..........................................................................18

PART II.  OTHER INFORMATION

        Item 1.  Legal Proceedings...............................................................................18

        Item 2.  Changes in Securities and Use of Proceeds.......................................................19

        Item 3.  Defaults Upon Senior Securities.................................................................19

        Item 4.  Submission of Matters to a Vote of Security Holders.............................................19

        Item 5.  Other Information...............................................................................19

        Item 6.  Exhibits and Reports on Form 8-K................................................................19

SIGNATURES.......................................................................................................20

CERTIFICATIONS...................................................................................................21

EXHIBITS.........................................................................................................23
</TABLE>

<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements

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

<TABLE>
<CAPTION>
                                                                                                         December 31,     March 31,
                                                                                                             2002           2002
                                                                                                         ------------     ---------
ASSETS                                                                                                   (Unaudited)
Cash and cash equivalents:
<S>                                                                                                       <C>             <C>
  Cash and due from banks                                                                                 $  13,054       $  13,751
  Federal Funds sold                                                                                         11,400          21,100
                                                                                                          ---------       ---------
       Total cash and cash equivalents                                                                       24,454          34,851
                                                                                                          ---------       ---------
Securities:
  Available-for-sale, at fair value (including pledged as collateral of
    $95,836 at December 31, 2002 and $76,720 at March 31, 2002)                                             111,310          89,821
  Held-to-maturity, at amortized cost (including pledged as collateral of
    $38,644 at December 31, 2002 and $15,549 at March 31, 2002; fair value
    of $39,460 at December 31, 2002 and $15,716 at March 31, 2002)                                           39,193          15,643
                                                                                                          ---------       ---------
       Total securities                                                                                     150,503         105,464
                                                                                                          ---------       ---------
Loans receivable:
  Real estate mortgage loans                                                                                289,981         291,510
  Consumer and commercial business loans                                                                      2,221           2,328
  Allowance for loan losses                                                                                  (4,133)         (4,128)
                                                                                                          ---------       ---------
       Total loans receivable, net                                                                          288,069         289,710
                                                                                                          ---------       ---------
Office properties and equipment, net                                                                         10,269          10,251
Federal Home Loan Bank of New York ("FHLB-NY") stock, at cost                                                 5,002           3,763
Accrued interest receivable                                                                                   2,763           2,804
Identifiable intangible assets, net                                                                             231             391
Other assets                                                                                                  3,098           3,072
                                                                                                          ---------       ---------
       Total assets                                                                                       $ 484,389       $ 450,306
                                                                                                          =========       =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits                                                                                                $ 334,666       $ 324,954
  Advances from the FHLB-NY and other borrowed money                                                        100,297          75,651
  Other liabilities                                                                                           9,568          12,959
                                                                                                          ---------       ---------
       Total liabilities                                                                                    444,531         413,564
                                                                                                          ---------       ---------
Stockholders' equity:
  Preferred stock (par value $0.01 per share; 1,000,000
     shares authorized; 100,000 issued and outstanding)                                                           1               1
  Common stock (par value $0.01 per share: 5,000,000 shares authorized; 2,316,358 shares issued;
   2,295,731 and 2,300,869 shares outstanding at December 31, 2002 and March 31, 2002 respectively)              23              23
  Additional paid-in capital                                                                                 23,776          23,756
  Retained earnings                                                                                          15,755          13,194
  Unallocated common stock  held by employee stock ownership plan ("ESOP")                                      (15)           (152)
  Unamortized awards of common stock under  management recognition plan ("MRP")                                 (15)            (58)
  Treasury stock, at cost (20,627 shares at December 31, 2002 and 15,489 shares at March 31, 2002)             (202)           (138)
  Accumulated other comprehensive income                                                                        535             116
                                                                                                          ---------       ---------
       Total stockholders' equity                                                                            39,858          36,742
                                                                                                          ---------       ---------
  Total liabilities and stockholders' equity                                                              $ 484,389       $ 450,306
                                                                                                          =========       =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       1
<PAGE>

                    CARVER BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                                              Three Months Ended             Nine Months Ended
                                                                                  December 31,                  December 31,
                                                                                  ------------                  ------------
                                                                              2002           2001            2002            2001
                                                                              ----           ----            ----            ----
<S>                                                                          <C>            <C>            <C>             <C>
Interest Income:
   Loans                                                                     $5,157         $5,801         $15,794         $ 16,946
   Mortgage-backed securities                                                 1,132            678           2,995            1,975
   Investment securities                                                        409            635           1,198            1,925
   Federal funds sold                                                            79             48             266              389
                                                                             ------         ------         -------         --------
     Total interest income                                                    6,777          7,162          20,253           21,235
                                                                             ------         ------         -------         --------

Interest expense:
   Deposits                                                                   1,373          2,112           4,443            6,422
   Advances and other borrowed money                                            846            847           2,324            3,157
                                                                             ------         ------         -------         --------
     Total interest expense                                                   2,219          2,959           6,767            9,579
                                                                             ------         ------         -------         --------
     Net interest income                                                      4,558          4,203          13,486           11,656
Provision for loan losses                                                        --            225              --              675
                                                                             ------         ------         -------         --------
     Net interest income after provision for loan losses                      4,558          3,978          13,486           10,981
                                                                             ------         ------         -------         --------

Non-interest income: (1)
   Depository fees and charges                                                  483            406           1,344            1,136
   Loan fees and service charges                                                266            171           1,069              438
   Gain on sale of investments                                                   --          1,399              --            1,399
   Income from sale of branches                                                  --             --              --              987
   Loss from sale of loans                                                       --             --              --             (101)
   Other                                                                          2              1               7               13
                                                                             ------         ------         -------         --------
      Total non-interest income                                                 751          1,977           2,420            3,872
                                                                             ------         ------         -------         --------

Non-interest expense: (1)
   Compensation and benefits                                                  1,542          1,831           4,805            4,852
   Net occupancy expense                                                        296            310             953              961
   Equipment                                                                    403            404           1,175            1,159
   Other                                                                      1,314          1,291           3,898            3,721
                                                                             ------         ------         -------         --------
      Total non-interest expense                                              3,555          3,836          10,831           10,693
                                                                             ------         ------         -------         --------
      Income before income taxes                                              1,754          2,119           5,075            4,160
Income taxes                                                                    807            402           2,318              790
                                                                             ------         ------         -------         --------
      Net income                                                             $  947         $1,717         $ 2,757         $  3,370
                                                                             ======         ======         =======         ========

Dividends applicable to preferred stock                                      $   49         $   49         $   148         $    148
                                                                             ------         ------         -------         --------

      Net income available to common stockholders                            $  898         $1,668         $ 2,609         $  3,222
                                                                             ======         ======         =======         ========

Earnings per common share:
       Basic                                                                 $ 0.39         $ 0.73         $  1.14         $   1.41
                                                                             ======         ======         =======         ========
       Diluted                                                               $ 0.38         $ 0.69         $  1.09         $   1.35
                                                                             ======         ======         =======         ========
</TABLE>

(1)   Reclassifications have been made to prior year periods to conform with
      current periods.

See accompanying notes to consolidated financial statements.


                                       2
<PAGE>

                      CARVER BANCORP, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                  ADDITIONAL
                                       PREFERRED     COMMON        PAID-IN        RETAINED
                                         STOCK       STOCK         CAPITAL        EARNINGS
                                       ---------     -----        ----------      --------
<S>                                      <C>         <C>           <C>            <C>
Balance-March 31, 2002                   $   1       $   23        $23,756        $ 13,194

Comprehensive income:
    Net Income for the period
    ended December 31, 2002                 --           --             --           2,757
    Change in net unrealized gain on
    securities, net of taxes                --           --             --              --
Dividends paid                              --           --             --            (196)
Treasury stock activity                     --           --             --              --
Allocation of ESOP stock                    --           --             20              --
Allocation of shares for MRP                --           --             --              --
                                         -----       ------        -------        --------
Balance-December 31, 2002                $   1       $   23        $23,776        $ 15,755
                                         =====       ======        =======        ========

<CAPTION>
                                                    ACCUMULATED        COMMON      COMMON      TOTAL
                                                       OTHER            STOCK      STOCK       STOCK-
                                       TREASURY    COMPREHENSIVE      ACQUIRED    ACQUIRED    HOLDERS'
                                         STOCK        INCOME           BY ESOP     BY MRP      EQUITY
                                       --------    -------------      --------    --------    --------
<S>                                      <C>           <C>             <C>         <C>        <C>
Balance-March 31, 2002                   ($138)        $116            ($152)      ($58)      $ 36,742

Comprehensive income:
    Net Income for the period
    ended December 31, 2002                 --           --               --         --          2,757
    Change in net unrealized gain on
    securities, net of taxes                --          419               --         --            419
Dividends paid                              --           --               --         --           (196)
Treasury stock activity                    (64)          --               --         --            (64)
Allocation of ESOP stock                    --           --              137         --            157
Allocation of shares for MRP                --           --               --         43             43
                                         -----         ----            -----       ----       --------
Balance-December 31, 2002                ($202)        $535            ($ 15)      ($15)      $ 39,858
                                         =====         ====            =====       ====       ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                      CARVER BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                              Nine Months Ended December 31,
                                                                              ------------------------------
                                                                                  2002             2001
                                                                                  ----             ----
<S>                                                                              <C>            <C>
Cash flows from operating activities:
  Net income                                                                     $  2,757       $   3,370
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Provision for loan losses                                                         --             675
     ESOP and MRP expense                                                             213             124
     Depreciation and amortization expense                                            904             867
     Amortization of intangibles                                                      160             159
     Other amortization (accretion)                                                   618            (229)
     Gain on sale of branches                                                          --            (987)
     Gain on sale of securities                                                        --          (1,399)
     Impairment of foreclosed real estate                                              --              20
     Net gain on foreclosed real estate                                                --             (77)
     Changes in assets and liabilities:
       Decrease (Increase) in accrued interest receivable                              41            (328)
       Increase in other assets                                                       (26)           (399)
       (Decrease) increase in other liabilities                                    (3,590)          2,103
       Increase in accrued interest payable                                           240              --
                                                                                 --------       ---------
          Net cash provided by operating activities                                 1,317           3,899
                                                                                 --------       ---------
Cash flows from investing activities:
  Purchases of securities:
     Available-for-sale                                                           (64,786)        (92,922)
     Held-to-maturity                                                              (4,152)        (34,035)
  Proceeds from principal payments, maturities and calls of securities:
     Available-for-sale                                                            19,475         107,675
     Held-to-maturity                                                               3,963           8,336
  Disbursements for loan originations                                             (37,508)        (46,200)
  Loans purchased from third parties                                              (34,591)        (45,200)
  Principal collections on loans                                                   72,113          68,108
  (Purchase) sale of FHLB-NY stock                                                 (1,239)              4
  Proceeds from loans sold                                                          1,913              --
  Proceeds from sale of fixed assets                                                   --             570
  Proceeds from sale of other real estate owned                                        --             533
  Additions to premises and equipment                                                (965)         (1,166)
                                                                                 --------       ---------
          Net cash used in investing activities                                   (45,777)        (34,297)
                                                                                 --------       ---------
Cash flows from financing activities:
  Net increase in deposits                                                          9,712          63,029
  Repayment of  securities repurchase agreements                                       --          (4,930)
  Advances from FHLB-NY and other borrowed money                                   40,300         291,348
  Repayment of FHLB-NY advances and other borrowed money                          (15,654)       (313,317)
  Purchase of treasury stock                                                          (99)            (99)
  Cash paid to fund sale of deposits                                                   --         (15,802)
  Dividends paid                                                                     (196)           (196)
                                                                                 --------       ---------
          Net cash provided by financing activities                                34,063          20,033
                                                                                 --------       ---------
Net decrease in cash and cash equivalents                                         (10,397)        (10,365)
Cash and cash equivalents at beginning of the period                               34,851          31,758
                                                                                 --------       ---------
Cash and cash equivalents at end of  the period                                  $ 24,454       $  21,393
                                                                                 ========       =========

Supplemental information:
Noncash Transfers-
  Change in unrealized gain on valuation of held-to-maturity
       investments, net                                                          $    467       $      --

Cash paid for-
  Interest paid                                                                     6,538          10,194
  Income taxes paid                                                                 2,686             290
                                                                                 ========       =========
</TABLE>

See accompanying notes to consolidated financial statements


                                       4
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   BASIS OF PRESENTATION

      The accompanying unaudited consolidated financial statements of Carver
Bancorp, Inc. (the "Holding Company" or "Bancorp"), have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and
Exchange Commission ("SEC"). Accordingly, they do not include all of the
information and footnotes required by GAAP for complete consolidated financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) necessary for fair presentation have been included. The
unaudited consolidated financial statements presented herein should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Holding Company's Annual Report on Form 10-K/A, for the year
ended March 31, 2002 ("2002 10-K/A"). The consolidated results of operations and
other data for the nine-month period ended December 31, 2002 are not necessarily
indicative of results that may be expected for the entire fiscal year ending
March 31, 2003 ("fiscal 2003"). The unaudited consolidated financial statements
include the accounts of the Holding Company and its wholly owned subsidiaries,
Carver Federal Savings Bank (the "Bank" or "Carver Federal") and Alhambra
Holding Corp., a Delaware corporation which is inactive, and the Bank's wholly
owned subsidiaries, CFSB Realty Corp. and CFSB Credit Corp. The Holding Company
and its consolidated subsidiaries are referred to herein collectively as
"Carver" or the "Company." All significant inter-company accounts and
transactions have been eliminated in consolidation. Certain information and note
disclosures normally included in financial statements prepared in accordance
with GAAP have been condensed or omitted pursuant to the rules and regulations
of the SEC. Certain reclassifications have been made to prior period amounts to
conform to the current period presentation.

(2)   NET INCOME PER COMMON SHARE

      Basic earnings per common share is computed by dividing income available
to common stockholders by the weighted-average number of common shares
outstanding. Diluted earnings per common share includes any additional common
shares as if all potentially dilutive common shares were issued (e.g.,
convertible preferred stock and stock options with an exercise price that is
less than the average market price of the common shares for the periods stated).
For the purpose of these calculations, unreleased ESOP shares are not considered
to be outstanding. For each of the nine-month periods ended December 31, 2002
and 2001, preferred dividends of $148,000 were deducted from net income to
arrive at the amount of net income available to common stockholders.
Additionally, for both the nine-month periods ended December 31, 2002 and 2001,
208,333 shares of common stock potentially issuable from the conversion of
preferred stock and 24,068 shares of common stock at December 31, 2002
potentially issuable from the exercise stock options with an exercise price that
is less than the average market price of the common shares for the nine-months
ended December 31, 2002 were considered in determining the diluted net income
per common share.

(3)   RECENT ACCOUNTING PRONOUNCEMENTS

Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtness of Others

      In November 2002, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtness of Others" ("FIN 45"),
which addresses the disclosure to be made by a guarantor in its interim and
annual financial statements about its obligations under guarantees. FIN 45 also
requires the recognition of a liability by a guarantor at the inception of
certain guarantees.

      FIN 45 requires the guarantor to recognize a liability for the
non-contingent component of the guarantee; this is the obligation to stand ready
to perform in the event that specified triggering events or conditions occur.
The initial measurement of this liability is the fair value of the guarantee at
inception. The recognition of the liability is required even if it is not


                                       5
<PAGE>

probable that payments will be required under the guarantee or if the guarantee
was issued with a premium payment or as part of a transaction with multiple
elements.

      The Company will adopt the disclosure requirements of FIN 45 and will
apply the recognition and measurement provisions for all guarantees entered into
or modified after March 31, 2003. As of December 31, 2002 the Company maintains
one letter of credit in the amount of $1.9 million and therefore management does
not anticipate that the adoption of this interpretation will have a significant
effect on the Company's earnings or financial position.

Acquisitions of Certain Financial Institutions

      In October 2002, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 147, "Acquisitions of Certain Financial Institutions."
SFAS No. 147 amends SFAS No. 72, "Accounting for Certain Acquisitions of Banking
or Thrift Institutions," SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", and FASB Interpretation No. 9, "Applying APB
Opinions Nos. 16 and 17 When a Savings and Loan Association or a Similar
Institution is Acquired in a Business Combination Accounted for by the Purchase
Method." SFAS No. 147 removes acquisitions of financial institutions, other than
transactions between two or more mutual enterprises, from the scope of SFAS No.
72 and FASB Interpretation No. 9. SFAS No. 147 also amends SFAS No. 144 to
include long-term customer-relationship intangible assets such as depositor- and
borrower-relationship intangible assets and credit cardholder intangible assets.
The provisions of SFAS No. 147 are effective October 1, 2002. Management does
not anticipate that the adoption of this statement will have a significant
effect on the Company's earnings or financial position.

Accounting for Costs Associated with Exit or Disposal Activities

      In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." The Statement requires companies
to recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by this standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing or other exit or disposal activity.
Previous accounting guidance was provided by Emerging Issues Task Force ("EITF")
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 replaces EITF Issue No. 94-3. SFAS No. 146 is to
be applied prospectively to exit or disposal activities initiated after December
31, 2002.

Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections

      In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." The Statement updates, clarifies and simplifies existing
accounting pronouncements. SFAS No. 145 rescinds SFAS No. 4, "Reporting Gains
and Losses from Extinguishment of Debt," which required all gains and losses
from extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, the criteria
in Accounting Principles Board Opinion ("APB") No. 30, "Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions," will now be used to classify those gains and
losses. SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements," amended SFAS No. 4 and is no longer necessary because SFAS No. 4
has been rescinded. SFAS No. 145 amends SFAS No. 13, "Accounting for Leases," to
require that certain lease modifications that have economic effects similar to
sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. This amendment is consistent with the FASB's goal
of requiring similar accounting treatment for transactions that have similar
economic effects. SFAS No. 145 also makes technical corrections to existing
pronouncements. While those corrections are not substantive in nature, in some
instances they may change accounting practice. The provisions of SFAS No. 145
are effective for fiscal years beginning after May 15, 2002. Early application
of SFAS No. 145 is encouraged. Management does not anticipate that the adoption
of this statement will have a significant effect on the Company's earnings or
financial position.

Accounting for the Impairment or Disposal of Long-Lived Assets


                                       6
<PAGE>

      In August 2001, the FASB issued SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets and resolves accounting and implementation issues related to previous
pronouncements. More specifically, it: (a) eliminates the allocation of goodwill
to long-lived assets to be tested for impairment; and (b) details both a
probability-weighted and primary asset approach to estimate cash flows in
testing for impairment of a long-lived asset. SFAS 144 is effective for
financial statements issued for fiscal years beginning after December 15, 2001.
Management does not anticipate that the adoption of this statement will have a
significant effect on the Company's earnings or financial position.

Accounting for Asset Retirement Obligations

      In June 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations" ("SFAS 143"). SFAS 143 addresses financial accounting
and reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. SFAS 143 is
effective for financial statements issued for fiscal years beginning after June
15, 2002. Management does not anticipate that the adoption of this statement
will have a significant effect on the Company's earnings or financial position.

Goodwill and Other Intangible Assets

      In June 2001, the FASB issued SFAS No. 142 "Goodwill and Other Intangible
Assets" ("SFAS 142"). SFAS 142 addresses the initial recognition and measurement
of intangible assets acquired individually or with a group of other assets not
constituting a business combination. In accordance with the provisions of SFAS
142, all goodwill and identifiable intangible assets identified as having an
indefinite useful life, including those acquired before its effective date, will
no longer be amortized but will be assessed for impairment at least annually by
applying a fair-value based test as defined in the Statement. SFAS 142 requires
that acquired intangible assets having an estimated useful life be separately
recognized and amortized over their estimated useful lives. Intangible assets
that remain subject to amortization shall continue to be reviewed for impairment
in accordance with previous pronouncements.

      Additionally, SFAS 142 requires that an initial impairment assessment on
all goodwill recognized in the consolidated financial statements be completed
within six months of the statement's adoption to determine if a transition
impairment charge needs to be recognized. Management has performed the initial
impairment assessment as of March 31, 2002 and determined that no impairment
charge is warranted. The consolidated balance sheets and consolidated statements
of income presented herein disclose the identifiable intangible assets that were
originally recognized separate from goodwill. Effective April 1, 2002, goodwill
will no longer be amortized; however, identifiable intangible assets will
continue to be amortized over the estimated useful lives. Amortization of
identifiable intangible assets is estimated to be $213,000 in fiscal 2003.

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

Explanatory Note

      This Quarterly Report on Form 10-Q contains forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements may be identified by the use of such words as
"believe," "expect," "anticipate," "intend," "should," "could," "planned,"
"estimated," "potential" and similar terms and phrases. Such forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those currently anticipated due to a number of
factors. Factors which could result in material variations include, but are not
limited to, the Company's success in implementing its initiatives, including
expanding its product line, successfully opening new ATM centers, successfully
rebranding its image and achieving greater operating efficiencies; changes in
interest rates which could affect net interest margins and net interest income;
competitive factors which could affect net interest income and non-interest
income; general economic conditions which could affect the volume of loan
origination, deposit flows, real estate values, the levels of non-interest
income and the amount of loan losses as well as other factors discussed in
documents filed by the Company with the SEC from time to time. The Company
undertakes no obligation to update any such forward-looking statements at any
time.

      As used in this Form 10-Q, "we," "us" and "our" refer to Carver Bancorp,
Inc. and/or its consolidated subsidiaries, depending on the context.

Critical Accounting Policies


                                       7
<PAGE>

      Note 1 to our Audited Consolidated Financial Statements for the fiscal
year ended March 31, 2002 ("fiscal 2002") included in our 2002 10-K/A, as
supplemented by this report, contains a summary of our significant accounting
policies. We believe our policies with respect to the methodology for our
determination of the allowance for loan losses, the valuation of mortgage
servicing rights and asset impairment judgments, including the recoverability of
goodwill and other than temporary declines in the value of our securities,
involve a higher degree of complexity and require management to make difficult
and 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. These critical policies and
their application are periodically reviewed with our Finance and Audit Committee
and our Board of Directors.

General

      The Holding Company, a Delaware corporation, is the holding company for
Carver Federal, a federally chartered savings bank. At this time, the Holding
Company conducts business as a unitary savings and loan holding company and the
principal business of the Holding Company consists of the operation of its
wholly-owned subsidiary, the Bank, which operates five full-service banking
locations in the New York City boroughs of Brooklyn, Queens and Manhattan.

Comparison of Financial Condition at
December 31, 2002 and March 31, 2002

Assets

      Total assets increased by $34.1 million, or 7.6%, to $484.4 million at
December 31, 2002 compared to $450.3 million at March 31, 2002. The change was
primarily attributable to an increase of $45.0 million in securities partially
offset by a decrease of $10.4 million in cash and cash equivalents and $1.6
million in total loans receivable, net.

      The balance in cash and cash equivalents for the nine-month period
decreased $10.4 million from that of March 31, 2002. This was due to the
utilization of excess liquid assets created by higher than expected mortgage
loan and mortgage-backed security repayments. The Bank invested its lower
yielding excess liquid assets in the origination and purchase of mortgage loans
and the purchase of mortgage-backed securities.

      As of April 1, 2001, the Bank adopted SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") at which time it
transferred $45.7 million of mortgage-backed and investment securities from
held-to-maturity to available-for-sale. On November 30, 2002 the Bank
transferred $22.8 million of mortgage-backed securities from available-for-sale
to held-to-maturity as a result of managements intention to hold these
securities in portfolio until maturity. A related unrealized gain of $467,000 as
of December 31, 2002 continues to be reported as a separate component of
stockholders' equity and is amortized over the remaining lives of the securities
as an adjustment to yield.

      Due to the lower interest rate environment, mortgage loan payoffs in
excess of new loans resulted in a decrease of $1.6 million in total loans
receivable, net, during the first nine months of fiscal 2003. Loan repayments
were $72.1 million, offset in part by loan originations of $37.5 million and
loan purchases of $34.6 million during the nine-month period. Loan originations
and purchases were concentrated in multifamily and commercial real estate
mortgage loans, which accounted for $62.4 million of the $72.1 million
originated and purchased during the period. The remaining originations of $9.7
million were for construction loans and one- to four-family loans. The $45.0
million increase in investment securities primarily represents purchases of
$68.9 million partially offset by maturities of $11.0 million and principal
repayments of $12.4 million that occurred during the first nine months of fiscal
2003. Management will continue to evaluate the balance of earning assets
allocated to loan originations and purchases as well as additional purchases of
mortgage-backed securities while continuing to assess yields and economic risk.

      FHLB-NY stock increased $1.2 million due to the Bank borrowing additional
funds from the FHLB-NY. The FHLB-NY requires the Bank to purchase and maintain
shares of its stock based on the Bank's outstanding borrowing balance.

Liabilities and Stockholders' Equity


                                       8
<PAGE>

      Liabilities

      At December 31, 2002, total liabilities increased by $31.0 million, or
7.5%, to $444.5 million compared to $413.6 million at March 31, 2002. The
increase in liabilities primarily reflects an increase of $24.6 million in
advances from the FHLB-NY and other borrowed money, and an increase of $9.7
million in deposits offset in part by a decrease of $3.4 million in other
liabilities.

      The $9.7 million increase in deposit balances is primarily attributable to
increases of $6.8 million in certificates of deposit, $5.0 million of which was
an individual government deposit, $3.5 million in money market accounts, and
$956,000 in NOW accounts partially offset by a decrease of $1.6 million in
regular savings and club accounts.

      Stockholders' Equity

      Total stockholders' equity increased $3.1 million, or 8.5%, to $39.9
million at December 31, 2002 compared to $36.7 million at March 31, 2002. The
increase in stockholders' equity was primarily attributable to a $2.6 million
increase in retained earnings for the nine months ended December 31, 2002 and an
increase of $419,000 in accumulated other comprehensive income resulting from
the recognition of unrealized gains, net of taxes, relating to certain
investment and mortgage-backed securities. Investment and mortgage-backed
securities accounted for as held-to-maturity are carried at cost while such
securities designated as available-for-sale are carried at market with an
adjustment to stockholders' equity, net of taxes.

      During the second quarter ended September 30, 2002, the Holding Company
purchased 9,100 shares of its common stock in open market transactions at an
average price of $11.01 per share as part of its repurchase program announced on
August 6, 2002. During the quarter ended December 31, 2002 the Company did not
purchase any additional shares of its common stock. The Holding Company intends
to use repurchased shares to fund its stock-based benefit and compensation plans
and for any other purpose the Board of Directors of the Holding Company deems
advisable in compliance with applicable law.

Liquidity and Capital Resources

      Liquidity is a measure of the Bank's ability to generate adequate cash to
meet financial obligations. The principal cash requirements of a financial
institution are to cover downward fluctuations in deposit accounts and increases
in its loan and investment portfolio. The Company's primary sources of funds are
deposits, borrowed funds and principal and interest payments on loans,
mortgage-backed securities and investment securities. While maturities and
scheduled amortization of loans, mortgage-backed securities and investment
securities are predictable sources of funds, deposit flows and loan and
mortgage-backed securities prepayments are strongly influenced by changes in
general interest rates, economic conditions and competition. During fiscal 2002,
the Federal Open Market Committee reduced the federal funds rate on eight
separate occasions by a total of 325 basis points, resulting in a lower interest
rate environment in fiscal 2002 compared to the fiscal year ended March 31,
2001. During the first six months of fiscal 2003 the federal funds rate was
unchanged and in the third quarter of fiscal 2003 the federal funds rate was
reduced an additional 50 basis points. The increase in loan and securities
repayments was primarily the result of the increase in mortgage loan refinancing
activity caused by this lower interest rate environment.

      The Consolidated Statements of Cash Flows present the change in cash from
operating, investing and financing activities. During the nine months ended
December 31, 2002, total cash and cash equivalents decreased by $10.4 million.
Net cash provided by operating activities during this period was $1.3 million,
primarily representing a decrease in other liabilities, offset by depreciation
and amortization expense, other amortization or accretion and an increase in
accrued interest payable. Net cash used in investing activities was $45.8
million, primarily representing the net proceeds from principal payments,
maturities and calls of securities available-for-sale and held-to-maturity and
principal collections on loans, offset in part by disbursements made for the
origination and purchase of loans and the purchase of securities. Net cash
provided by financing activities was $34.1 million, primarily representing a net
increase of $24.6 million in advances from the FHLB-NY and an increase in
deposits of $9.7 million.

      The Bank is required to maintain sufficient liquidity to ensure its safe
and sound operation. Management believes the Bank's short-term assets have
sufficient liquidity to cover loan demand, potential fluctuations in deposit
accounts and to meet other anticipated cash requirements. The Bank monitors its
liquidity utilizing guidelines that are contained in a policy developed by
management of the Bank and approved by the Bank's Board of Directors.


                                       9
<PAGE>

The Bank's several liquidity measurements are evaluated on a frequent basis. The
Bank was in compliance with this policy as of December 31, 2002. The levels of
the Bank's short-term liquid assets are dependent on the Bank's operating,
financing and investing activities during any given period. The most significant
liquidity challenge the Bank faces is the variability in cash flows as a result
of mortgage refinance activity. As 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. When mortgage interest rates increase, the opposite effect tends to
occur. In addition, as mortgage interest rates decrease, customers generally
tend to prefer fixed rate mortgage loan products over variable rate products.
Since the Bank generally sells its fifteen-year and thirty-year fixed rate loan
production into the secondary mortgage market, the origination of such products
for sale does not significantly reduce the Bank's liquidity.

      The Office of Thrift Supervision, the Bank's primary federal regulator,
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 December 31, 2002, the Bank exceeded
all regulatory minimum capital requirements and qualified as a well-capitalized
institution. The table below presents certain information relating to the Bank's
capital compliance at December 31, 2002.

                               REGULATORY CAPITAL
                             As of December 31, 2002

<TABLE>
<CAPTION>
                                                              Amount   % of Assets
                                                              ------   -----------
<S>                                                          <C>          <C>
Total capital (to risk-weighted assets):
Capital level                                                $42,282      13.98%
Less requirement                                              24,202       8.00
                                                             -------      -----
Excess                                                       $18,080       5.98%
                                                             =======      =====

Tier 1 capital (to risk-weighted assets):
Capital level                                                $38,496      12.72%
Less requirement                                              12,101       4.00
                                                             -------      -----
Excess                                                       $26,395       8.72%
                                                             =======      =====

Tier 1 Leverage capital (to adjusted total assets):
Capital level                                                $38,496       7.96%
Less requirement                                              19,353       4.00
                                                             -------      -----
Excess                                                       $19,143       3.96%
                                                             =======      =====
</TABLE>

Analysis of Earnings

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

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


                                       10
<PAGE>

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 has caused any material difference in
information presented. The average balance of loans includes loans on which the
Company has discontinued accruing interest. The yield and cost include fees,
which are considered adjustments to yields.


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                              Three months ended December 31,
                                                     -------------------------------------------------------------------------------
                                                                    2002                                       2001
                                                     ----------------------------------------    -----------------------------------
                                                      Average                Annualized  Avg.    Average             Annualized Avg.
                                                      Balance     Interest      Yield/Cost       Balance   Interest    Yield/Cost
                                                     --------     --------   ----------------   ---------  --------  ---------------
                                                                                 (Dollars in thousands)
<S>                                                  <C>           <C>             <C>           <C>        <C>          <C>
Loans receivable (1)                                 $278,626      $5,157          7.40%         $312,526   $5,801       7.42%
Investment securities (2)                              36,881         409          4.43%           39,621      635       6.41%
Mortgage-backed securities                            103,322       1,132          4.38%           49,274      678       5.50%
Federal funds                                          22,598          79          1.39%            8,939       48       2.15%
                                                     --------      ------          ----          --------   ------       ----
Total interest earning assets                         441,427       6,777          6.14%          410,360    7,162       6.98%
Non-interest earning assets                            29,823                                      28,392
                                                     --------                                    --------
Total assets                                         $471,250                                    $438,752
                                                     ========                                    ========

Liabilities and Equity
Deposits
NOW                                                  $ 17,019      $   24          0.56%         $ 17,051   $   58       1.36%
Savings and clubs                                     125,655         331          1.05%          123,120      513       1.67%
Money market accounts                                  16,357          45          1.10%           16,249       65       1.60%
Certificates of deposit                               157,972         973          2.46%          154,021    1,476       3.83%
                                                     --------      ------          ----          --------   ------       ----
Total deposits                                        317,003       1,373          1.73%          310,441    2,112       2.72%
Borrowed money                                         90,763         846          3.73%           72,449      847       4.68%
                                                     --------      ------          ----          --------   ------       ----
Total interest-bearing liabilities                    407,766       2,219          2.18%          382,890    2,959       3.09%
Non-interest-bearing liabilities                       25,052                                      21,356
                                                     --------                                    --------
Total liabilities                                     432,818                                     404,246
Stockholders' equity                                   38,432                                      34,507
                                                     --------                                    --------
Total liabilities and stockholders' equity           $471,250                                    $438,752
                                                     ========      ------                        ========   ------

Net interest income                                                $4,558                                   $4,203
                                                                   ======                                   ======
Interest rate spread                                                               3.96%                                 3.89%
                                                                                   ====                                  ====

Net interest margin                                                                4.13%                                 4.10%
                                                                                   ====                                  ====

Ratio of average interest-earning assets to
deposits and interest-bearing liabilities                            1.08x                                    1.07x
                                                                   ======                                   ======
</TABLE>

(1)   Includes non-accrual loans.

(2)   Includes FHLB-NY stock.


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                                    Nine months ended December 31,
                                                       -----------------------------------------------------------------------------
                                                                        2002                                     2001
                                                       --------------------------------------    -----------------------------------
                                                       Average                Annualized Avg.    Average             Annualized Avg.
Assets                                                 Balance     Interest     Yield/Cost       Balance   Interest    Yield/Cost
                                                       -------     --------   ---------------    -------   --------  ---------------
                                                                                   (Dollars in thousands)
<S>                                                   <C>          <C>             <C>          <C>        <C>           <C>
Loans receivable (1)                                  $280,695     $15,794         7.50%        $296,745   $16,946       7.61%
Investment securities (2)                               36,322       1,198         4.40%          39,190     1,925       6.55%
Mortgage-backed securities                              82,216       2,995         4.86%          44,824     1,975       5.87%
Federal funds                                           22,322         266         1.59%          14,952       389       3.47%
                                                      --------     -------         ----         --------   -------       ----
Total interest-earning assets                          421,555      20,253         6.41%         395,711    21,235       7.16%
Non-interest-earning assets                             30,259                                    25,246
                                                      --------                                  --------
Total assets                                          $451,814                                  $420,957
                                                      ========                                  ========

Liabilities and Equity
Deposits
NOW                                                    $18,213     $   106         0.78%         $16,690   $   191       1.53%
Savings and clubs                                      127,032       1,146         1.20%         126,595     1,848       1.95%
Money market accounts                                   15,607         140         1.20%          16,305       239       1.95%
Certificates of deposit                                154,122       3,051         2.64%         127,498     4,144       4.33%
                                                      --------     -------         ----         --------   -------       ----
Total deposits                                         314,974       4,443         1.88%         287,088     6,422       2.98%
Borrowed money                                          74,360       2,324         4.17%          80,333     3,157       5.24%
                                                      --------     -------         ----         --------   -------       ----
Total interest-bearing liabilities                     389,334       6,767         2.32%         367,421     9,579       3.48%
Non-interest-bearing liabilities                        24,573                                    19,838
                                                      --------                                  --------
Total liabilities                                      413,907                                   387,259
Stockholders' equity                                    37,907                                    33,698
                                                      --------                                  --------
Total liabilities and stockholders' equity            $451,814                                  $420,957
                                                      ========     -------                      ========   -------
Net interest income                                                $13,486                                 $11,656
                                                                   =======                                 =======
Interest rate spread                                                               4.09%                                 3.68%
                                                                                   ====                                  ====

Net interest margin                                                                4.27%                                 3.93%
                                                                                   ====                                  ====

Ratio of average interest-earning assets to
deposits and interest-bearing liabilities.                            1.08x                                   1.08x
                                                                   =======                                 =======
</TABLE>

(1)   Includes non-accrual loans.

(2)   Includes FHLB-NY stock.


                                       13
<PAGE>

Comparison of Operating Results for the
Three Months Ended December 31, 2002 and 2001

General

      Net income for the three-month period ended December 31, 2002 was $947,000
compared to net income of $1.7 million for the corresponding prior year period.
Net income available to common stockholders (after adjustment for dividends
payable on the Company's preferred stock) was $898,000, or $0.38 per diluted
common share, compared to $1.7 million, or $0.69 per diluted common share, for
the corresponding prior year period. Net income available to common stockholders
declined $770,000 primarily due to a $1.4 million gain on the sale of investment
securities recognized in fiscal 2002, and the Company's fiscal 2003 obligation
to begin to accrue for federal taxes. For most of fiscal 2002, the Company
utilized a tax loss carryforward and therefore no federal taxes were applied to
earnings for the comparable prior year period.

Interest Income

      Interest income decreased by $385,000, or 5.4%, to $6.8 million for the
three months ended December 31, 2002 compared to $7.2 million in the
corresponding prior year period. Interest income decreased as a result of the
current lower interest rate environment compared to the corresponding prior year
period. The change in total interest income was attributable to a decrease of 84
basis points in the annualized average yield on interest-earning assets to 6.14%
for the three months ended December 31, 2002 compared to 6.98% for the
corresponding prior year period. This was partially offset by an increase in the
average balance of interest-earning assets of $31.1 million, or 7.6%, to $441.4
million for the three months ended December 31, 2002 compared with $410.4
million for the corresponding prior year period.

      Interest income on loans decreased by $644,000, or 11.1%, to $5.2 million
for the three months ended December 31, 2002 compared to $5.8 million for the
corresponding prior year period. The change was primarily due to a decrease in
average mortgage loan balances of $33.9 million, or 10.8%, to $278.6 million
from $312.5 million, partially offset by an escalation in the recognition of
deferred loan fee income of $72,000 resulting from higher than expected mortgage
loan prepayments. Management does not expect this level of deferred loan fee
income to continue.

      Interest income on mortgage-backed securities increased by $454,000, or
67.0%, to $1.1 million for the three months ended December 31, 2002 compared to
$678,000 for the corresponding prior year period. The change was primarily due
to an increase in the average balance of mortgage-backed securities of $54.0
million, or 109.7%, to $103.3 million compared to $49.3 million in the
corresponding prior year period, partially offset by a 112 basis point decrease
in the annualized average yield on mortgage-backed securities to 4.38% from
5.50% in the corresponding prior year period.

      Interest income on investment securities decreased by $226,000, or 35.6%,
to $409,000 for the three months ended December 31, 2002 compared to $635,000
for the corresponding prior year period. Due to the decline in the interest rate
environment there was a 199 basis point decrease in the annualized average yield
to 4.42% for the three months ended December 31, 2002 compared to 6.41% for the
corresponding prior year period. Further contributing to the decrease in
interest income on investment securities was a decline in the average balance of
investment securities of $2.7 million, or 6.9%, to $36.9 million for the three
months ended December 31, 2002 compared to $39.6 million for the corresponding
prior year period.

      Interest income on federal funds sold increased by $31,000, or 64.6%, to
$79,000 for the three months ended December 31, 2002 compared to $48,000 for the
corresponding prior year period. The increase was primarily attributable to an
increase in the average balance of federal funds of $13.7 million, or 152.8%, to
$22.6 million from $8.9 million for the corresponding prior year period. The
increase was partially offset by the annualized yield on federal funds sold
which declined 76 basis points to 1.39% for the three months ended December 31,
2002 compared to 2.15% for the corresponding prior year period due to a lower
short-term interest rate environment.

Interest Expense

      Total interest expense decreased by $740,000, or 25.0%, to $2.2 million
for the three months ended


                                       14
<PAGE>

December 31, 2002 compared to $3.0 million for the corresponding prior year
period. The change in interest expense is primarily due to the lower interest
rate environment cited above. The annualized average cost of liabilities
decreased 91 basis points to 2.18% from 3.09% for the corresponding prior year
period. The decrease in interest expense was partially offset by an increase in
the average balance of interest-bearing liabilities of $24.9 million, or 6.5%,
to $407.8 million from $382.9 million compared to the corresponding prior year
period.

      Interest expense on deposits decreased $739,000, or 35.0%, to $1.4 million
for the three months ended December 31, 2002 compared to $2.1 million for the
corresponding prior year period. The decrease in interest expense on deposits
was due primarily to a 99 basis point decline in the rate paid on deposits to
1.73% for the three months ended December 31, 2002 compared to 2.72% for the
corresponding prior year period. This was partially offset by a $6.6 million
increase in the average balance of interest-bearing deposits to $317.0 million
for the three months ended December 31, 2002 from $310.4 million for the
corresponding prior year period.

      Interest expense on advances and other borrowed money remained relatively
unchanged at $846,000, for the three months ended December 31, 2002 compared to
$847,000 for the corresponding prior year period. This was primarily due to a
decrease of 94 basis points in the cost of borrowings to 3.73% from 4.67% for
the corresponding prior year period partially offset by an $18.3 million, or
25.3%, increase in the average balance of borrowed money to $90.8 million from
$72.4 million.

Net Interest Income Before Provision for Loan Losses

      Net interest income before the provision for loan losses increased by
$355,000, or 8.4%, to $4.6 million for the three months ended December 31, 2002
compared to $4.2 million for the corresponding prior year period. Total interest
income decreased by $385,000 and total interest expense decreased by $740,000
for the three months ended December 31, 2002. The Company's annualized average
interest rate spread increased by 7 basis points to 3.96% for the three months
ended December 31, 2002 compared to 3.89% for the corresponding prior year
period.

Provision for Loan Losses and Asset Quality

      The Company did not provide for additional loan loss reserves for the
three months ended December 31, 2002 compared to $225,000 for the corresponding
prior year period. The provision for loan losses was not increased during the
three-month period as the Company considers the overall reserve for loan losses
to be adequate at December 31, 2002 as explained below. During the third quarter
of fiscal 2003, Carver recorded net loan charge-offs of $39,000 compared to
$104,000 for the corresponding prior year period. At December 31, 2002, the
Bank's allowance for loan losses at $4.1 million remained substantially
unchanged from March 31, 2002.

      At December 31, 2002, non-performing loans totaled $2.3 million, or 0.81%
of total loans, compared to $2.8 million, or 0.96% of total loans, at March 31,
2002, a decrease of $481,000 or 17.0%. The reduction in non-performing loans
improved the ratio of the allowance for loan losses to non-performing loans to
176.1% at December 31, 2002 compared to 146.0% at March 31, 2002. The ratio of
the allowance for loan losses to total loans was unchanged at 1.41% compared to
March 31, 2002.

      Management's judgment in determining the adequacy of the allowance for
loan losses is based on an evaluation of individual loans, the risk
characteristics and size of the loan portfolio, an assessment of current
economic and real estate market conditions, estimates of the current value of
underlying collateral, past loan loss experience, review of regulatory authority
examination reports and other relevant factors. Based on the process employed,
management believes that the allowance for loan losses is adequate under
prevailing economic conditions to absorb losses on existing loans that may
become uncollectible. While management estimates loan losses using the best
available information, no assurance can be made that future adjustments to the
allowance will not be necessary based on changes in economic and real estate
market conditions, further information obtained regarding known problem loans,
identification of additional problem loans and other factors, both within and
outside of management's control.

Non-Interest Income

      Total non-interest income, excluding a gain of $1.4 million on the sale of
investment securities in the third quarter of fiscal 2002, increased $173,000,
or 29.9%, to $751,000 for the three-month period ended December 31, 2002
compared to $578,000 for the corresponding prior year period. The change was
primarily attributable to a net


                                       15
<PAGE>

increase in depository fee income of $77,000 and an increase in loan fees and
service charges of $95,000. The increase in depository fees can be attributed to
increased ATM fees and a restructuring of banking fees during the second quarter
of fiscal 2003. Loan fees and service charges increased as a result of the
recognition of higher mortgage prepayment penalties, including $71,000 received
from one loan during the quarter, and a restructuring of the Bank's loan fees in
the second quarter of fiscal 2003. Non-interest income represented 14.1% of
operating income (net interest income plus non-interest income, excluding any
non-recurring gain and loss) for the third quarter of fiscal 2003 compared with
12.1% for the corresponding prior year period.

Non-Interest Expense

      Total non-interest expense decreased $281,000, or 7.3%, to $3.6 million
for the quarter ended December 31, 2002 compared to $3.8 million for the
corresponding prior year period. The decrease was primarily attributable to a
decline in compensation and benefits expense. Occupancy and other expenses
further contributed to the decline in non-interest expense, partially offset by
an increase in other non-interest expense consisting primarily of marketing and
advertising expenses. Compensation and employee benefits decreased $295,000 to
$1.5 million for the quarter ended December 31, 2002 compared to $1.8 million
for the corresponding prior year period. This decrease is primarily attributable
to compensation and benefits expenses recognized in the third quarter of fiscal
2002 for severance payments and annual compensation plans that to date have not
been incurred in this fiscal year partially offset by higher salary expenses.

Income Tax Expense

      In comparison to the corresponding prior year period, the Company has
fully utilized its tax loss carryforward resulting from prior period losses and
is now accruing for federal taxes. For the three-month period ended December 31,
2002, estimated Federal, New York State and New York City income tax expense was
$807,000.

      For the three-month period ended December 31, 2001, the Company applied a
federal tax loss carryforward resulting from prior period losses and therefore
no federal income taxes were payable for the period. The accrual for taxes of
$402,000 for the three-months ended December 31, 2001 represents an estimate of
New York State and New York City income taxes only.

Comparison of Operating Results for the
Nine Months Ended December 31, 2002 and 2001

General

      The Company reported net income for the nine-month period ended December
31, 2002 of $2.8 million compared to net income of $3.4 million for the
corresponding prior year period. Net income available to common stockholders
(after adjustment for dividends payable on the Company's preferred stock) was
$2.6 million, or $1.09 per diluted common share, compared to $3.2 million, or
$1.35 per diluted common share, for the corresponding prior year period. Income
for the nine-months ended December 31, 2001 includes non-recurring non-interest
income of approximately $2.3 million which includes a gain of $1.4 million
recognized from the sale of investment securities, $987,000 realized on the sale
of deposits of the Bank's East New York branch offset in part by a loss of
$101,000 from the sale of the Bank's automobile loan portfolio. Additionally,
for most of fiscal 2002, the Company was able to utilize its tax loss
carryforward, which eliminated the Company's federal tax liability.

Interest Income

      Interest income decreased by $982,000, or 4.6%, to $20.3 million for the
nine months ended December 31, 2002 compared to $21.2 million in the
corresponding prior year period. The decrease in interest income is due to a
lower interest rate environment during the nine-month period ended December 31,
2002 compared to the corresponding prior year period. The change in total
interest income was attributable to a decrease of 75 basis points in the
annualized average yield on interest-earning assets to 6.41% for the nine months
ended December 31, 2002 compared to 7.16% for the corresponding prior year
period. This was partially offset by an increase in the average balance of
interest-earning assets of $25.8 million, or 6.5%, to $421.6 million for the
nine months ended December 31, 2002 compared with $395.7 million for the
corresponding prior year period.


                                       16
<PAGE>

      Interest income on loans decreased by $1.2 million, or 6.8%, to $15.8
million for the nine months ended December 31, 2002 compared to $16.9 million
for the corresponding prior year period. The change was due to a decline in
average mortgage loan balances of $16.1 million, or 5.4%, to $280.7 million for
the nine months ending December 31, 2002 compared to $296.7 million for the
corresponding prior year period. Adding to the decline in interest income was a
decrease in the annualized average yield on mortgage loans to 7.50% compared to
7.61% for the nine months ended December 31, 2001. The decrease in interest
income was partially offset by an acceleration in the recognition of deferred
loan fees of $284,000 resulting from higher than anticipated mortgage loan
prepayments.

      Interest income on mortgage-backed securities increased by $1.0 million,
or 51.6%, to $3.0 million for the nine months ended December 31, 2002 compared
to $2.0 million for the corresponding prior year period. The change was
primarily due to an increase in the average balance of mortgage-backed
securities of $37.4 million, or 83.4%, to $82.2 million for the nine months
ended December 31, 2002 compared to $44.8 million for the corresponding prior
year period, partially offset by a decrease in the annualized average yield on
mortgage-backed securities of 101 basis points to 4.86% from 5.87% during the
same period.

      Interest income on investment securities decreased by $727,000, or 37.8%,
to $1.2 million for the nine months ended December 31, 2002 compared to $1.9
million for the corresponding prior year period. The decline was primarily due
to a 215 basis point decrease in the annualized average yield to 4.40% for the
nine months ended December 31, 2002 compared to 6.55% for the corresponding
prior year period. In addition, the balance of average investment securities
decreased by $2.9 million, or 7.3%, to $36.3 million for the nine months ended
December 31, 2002 compared to $39.2 million for the corresponding prior year
period.

      Interest income on federal funds sold decreased by $123,000, or 31.6%, to
$266,000 for the nine months ended December 31, 2002 compared to $389,000 for
the corresponding prior year period. The annualized yield on federal funds sold
declined 188 basis points to 1.59% for the nine months ended December 31, 2002
compared to 3.47% for the corresponding prior year period due to a lower
short-term interest rate environment. The decrease was partially offset by an
increase in the average balance of federal funds of $7.4 million, or 49.3%, to
$22.3 million from $15.0 million for the corresponding prior year period.

Interest Expense

      Total interest expense decreased by $2.8 million, or 29.4%, to $6.8
million for the nine months ended December 31, 2002 compared to $9.6 million for
the corresponding prior year period. The change in interest expense is primarily
due to the lower interest rate environment cited above. The annualized average
cost of interest-bearing liabilities decreased 116 basis points to 2.32% from
3.48% for the corresponding prior year period. The decrease in interest expense
was partially offset by an increase in the average balance of interest-bearing
liabilities of $21.9 million, or 6.0%, to $389.3 million from $367.4 million
compared to the corresponding prior year period.

      Interest expense on deposits decreased $2.0 million, or 30.8%, to $4.4
million for the nine months ended December 31, 2002 compared to $6.4 million for
the corresponding prior year period. The decrease in interest expense on
deposits was due primarily to a 110 basis point decline in the rate paid on
deposits to 1.88% for the nine months ended December 31, 2002 compared to 2.98%
for the corresponding prior year period. This was partially offset by a $27.9
million increase in the average balance of interest-bearing deposits to $315.0
million from $287.1 million for the corresponding prior year period.

      Interest expense on advances and other borrowed money decreased $833,000,
or 26.4%, to $2.3 million for the nine months ended December 31, 2002 compared
to $3.2 million for the corresponding prior year period. This decrease in
interest expense was primarily due to a $6.0 million, or 7.4%, decline in the
average balance of borrowed money to $74.4 million from $80.3 million coupled
with a decrease of 107 basis points in the cost of borrowings to 4.17% from
5.24% for the corresponding prior year period.

Net Interest Income Before Provision for Loan Losses

      Net interest income before the provision for loan losses increased by $1.8
million, or 15.7%, to $13.5 million for the nine months ended December 31, 2002
compared to $11.7 million for the corresponding prior year period. Total
interest income decreased by $982,000 while total interest expense decreased by
$2.8 million for the nine months ended December 31, 2002. The Company's
annualized average interest rate spread increased by 41


                                       17
<PAGE>

basis points to 4.09% for the nine months ended December 31, 2002 compared to
3.68% for the corresponding prior year period.

Provision for Loan Losses and Asset Quality

      The Company did not provide for additional loan losses for the nine months
ended December 31, 2002, compared to $675,000 for the corresponding prior year
period. The provision for loan losses was not increased during the nine-month
period due to the current credit quality of the loan portfolio and an overall
reserve that the Company believes to be adequate at December 31, 2002 as
explained below. During the first nine months of fiscal 2003, Carver applied net
loan recoveries of $5,000 to the allowance for loan losses compared to net loan
charge-offs of $262,000 for the corresponding prior year period. At December 31,
2002, the Bank's allowance for loan losses at $4.1 million remained
substantially unchanged from March 31, 2002.

      At December 31, 2002, non-performing loans totaled $2.3 million, or 0.81%
of total loans, compared to non-performing loans of $2.8 million, or 0.96% of
total loans, at March 31, 2002, a decrease of $481,000 or 17.0%. The reduction
in non-performing loans improved the ratio of the allowance for loan losses to
non-performing loans to 176.1% at December 31, 2002 compared to 146.0% at March
31, 2002. The ratio of the allowance for loan losses to total loans at December
31, 2002 was unchanged at 1.41% compared to March 31, 2001.

      Management's judgment in determining the adequacy of the allowance for
loan losses is based on an evaluation of individual loans, the risk
characteristics and size of the loan portfolio, an assessment of current
economic and real estate market conditions, estimates of the current value of
underlying collateral, past loan loss experience, review of regulatory authority
examination reports and other relevant factors. Based on the process employed,
management believes that the allowance for loan losses is adequate under
prevailing economic conditions to absorb losses on existing loans that may
become uncollectible. While management estimates loan losses using the best
available information, no assurance can be made that future adjustments to the
allowance will not be necessary based on changes in economic and real estate
market conditions, further information obtained regarding known problem loans,
identification of additional problem loans and other factors, both within and
outside of management's control.

Non-Interest Income

      Total non-interest income decreased $1.5 million, or 37.5%, to $2.4
million for the nine-month period ended December 31, 2002 compared to $3.9
million for the corresponding prior year period. The change was primarily
attributable to a net decrease in non-recurring income of $2.3 million for the
nine-month period ended December 31, 2002, partially offset by a net increase in
depository and loan fees. The non-recurring income of $2.3 million for the nine
months ended December 31, 2001 represented a gain on the sale of investment
securities of $1.4 million, a gain of $987,000 on the sale of the Bank's East
New York branch offset in part by a loss of $101,000 on the sale of the Bank's
automobile loan portfolio.

      Non-interest income, excluding non-recurring items, increased $833,000, or
52.5%, to $2.4 million for the nine-month period ended December 31, 2002
compared to $1.6 million for the corresponding prior year period, primarily
attributable to an increase in loan fees and service charges that resulted from
the recognition of substantially higher mortgage prepayment penalties and
increases in loan origination, ATM and other depository fees as discussed in the
quarterly results. Mortgage prepayment penalty income was greater due to
significantly higher than usually experienced penalties of approximately
$361,000 received from three loans. Excluding the non-recurring gain and loss,
non-interest income represented 15.2% of operating income (net interest income
plus non-interest income, excluding the non-recurring gain and loss) for the
nine-month period ended December 31, 2002 compared with 12.6% for the
corresponding prior year period.

Non-Interest Expense

      Total non-interest expense increased $138,000, or 1.3%, to $10.8 million
for the nine months ended December 31, 2002 compared to $10.7 million for the
corresponding prior year period. The increase was primarily attributable to
other expenses, consisting primarily of consulting fees and marketing and
advertising expenses. Salaries and employee benefits decreased $47,000 to $4.8
million for the nine months ended December 31, 2002 compared to $4.9 million for
the corresponding period last year. The decrease in compensation and benefits is
primarily attributable to expenses recognized in the third quarter of fiscal
2002 for severance payments and annual


                                       18
<PAGE>

compensation plans that to date have not been incurred in this fiscal year.
Marketing and advertising expenses increased by $78,000 to $579,000 for the
nine-month period ended December 31, 2002 compared to $501,000 for the
corresponding prior year period. The increase in marketing and advertising
expenses is primarily attributable to the launch of the Company's new brand
image, as well as the introduction of its new online banking and debit card
products.

Income Tax Expense

      In comparison to the prior year period, the Company has fully utilized its
tax loss carryforward resulting from prior period losses and is now accruing for
federal taxes. For the nine-month period ended December 31, 2002, estimated
Federal, New York State and New York City income tax expense was $2.3 million.

      For the nine-month period ended December 31, 2001, the Company applied a
federal tax loss carryforward resulting from prior period losses and therefore
no federal income taxes were payable for the period. The accrual for taxes of
$790,000 for the nine months ended December 31, 2001 represents an estimate of
New York State and New York City income taxes only.

ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

      Quantitative and qualitative disclosure about market risk is presented at
March 31, 2002 in Item 7 of the Company's 2002 10-K/A, as filed with the SEC.
The Company believes that there have been no material changes in the Company's
market risk at December 31, 2002 compared to March 31, 2002.

ITEM 4. Controls and Procedures

      Evaluation of disclosure 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.
Within the 90 days prior to the date of this report, 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, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
on that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective
and timely in alerting them to material information relating to the Company
(including its consolidated subsidiaries) required to be included in the
Company's periodic SEC filings.

      Changes in internal controls. The Company made no significant changes in
its internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the Chief
Executive Officer and Chief Financial Officer.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

      Disclosure regarding legal proceedings that the Company is a party to is
presented in Note 13 to our audited consolidated financial statements in
Carver's 2002 10-K/A as filed with the SEC and Item 1 of Part II of Carver's
Form 10-Q for the quarterly period ended September 30, 2002. Except as set forth
below, there have been no material changes with regard to such legal proceedings
since the filing of the 2002 10-K/A and the Form 10-Q for the quarterly period
ended September 30, 2002.

      On or about December 28, 2000, plaintiff Thomas L. Clark ("Clark"), the
former President and CEO of Carver Federal, filed suit against Carver Federal
and certain individual defendants in the Supreme Court of the State of New York,
County of New York (the "Clark Action"), claiming that the defendants should
have been forced to obtain approval from the OTS to pay severance benefits that
Clark believed Carver owed him under an employment agreement. Clark sought
injunctive relief and asserted claims for breach of contract, equitable estoppel
and estoppel by contract. On or about March 30, 2001, the defendants moved to
dismiss the compliant in its entirety and, on


                                       19
<PAGE>

November 27, 2001, the court dismissed the breach of contract claim against the
individual defendants and the equitable estoppel and estoppel by contract claims
against all defendants. Carver Federal appealed the lower court's failure to
dismiss the breach of contract claim against Carver Federal. On September 26,
2002, the Appellate Division of the Supreme Court reversed the lower court and
granted Carver Federal's motion in its entirety. On September 30, 2002, a Notice
of Entry of the Appellate Division's decision was filed with the court and on
October 30, 2002 judgment was entered in favor of Carver Federal and the
individual defendants dismissing the Clark Action as to all defendants. Clark
cannot appeal the Appellate Division's decision or the judgment as of right.
Clark's time to move for permission to appeal has run.

ITEM 2. Changes in Securities and Use of Proceeds

      None.

ITEM 3. Defaults Upon Senior Securities

      None.

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

      None.

ITEM 5. Other Information

      None.

ITEM 6. Exhibits and Reports on Form 8-K

      (a)   Exhibits.

            Exhibit 11.    Net income per share.

      (b)   Reports on Form 8-K.

            None.


                                       20
<PAGE>

                                   SIGNATURES

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

                                         CARVER BANCORP, INC.


Date: February 14, 2003                  /s/ Deborah C. Wright
                                         ---------------------------------------
                                         Deborah C. Wright
                                         President and Chief Executive Officer


Date: February 14, 2003                  /s/ William C. Gray
                                         ---------------------------------------
                                         William C. Gray
                                         Senior Vice President and Chief
                                         Financial Officer


                                       21
<PAGE>

                                 CERTIFICATIONS

I, Deborah C. Wright, President and Chief Executive Officer of Carver Bancorp,
Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Carver Bancorp, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: February 14, 2003                           /s/ Deborah C. Wright
      -----------------                           -----------------------
                                                  Deborah C. Wright
                                                  President and
                                                  Chief Executive Officer


                                       22
<PAGE>

                                 CERTIFICATIONS

I, William C. Gray, Senior Vice President and Chief Financial Officer of Carver
Bancorp, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Carver Bancorp, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: February 14, 2003                                /s/ William C. Gray
      -----------------                                -------------------------
                                                       William C. Gray
                                                       Senior Vice President and
                                                       Chief Financial Officer


                                       23