-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bo028LJJQpMyYgTkyJjlMVFHSvEpGzyeexMPaIN1cmXOwopdtfDMMFU2LaLsarnr XdpnZyOeMbyCQyj96DEULg== 0000882377-99-000602.txt : 19991123 0000882377-99-000602.hdr.sgml : 19991123 ACCESSION NUMBER: 0000882377-99-000602 CONFORMED SUBMISSION TYPE: S-2/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19991122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARVER BANCORP INC CENTRAL INDEX KEY: 0001016178 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 133904174 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-2/A SEC ACT: SEC FILE NUMBER: 333-89443 FILM NUMBER: 99762343 BUSINESS ADDRESS: STREET 1: 75 W 125TH ST CITY: NEW YORK STATE: NY ZIP: 10027-4512 BUSINESS PHONE: 2128764747 MAIL ADDRESS: STREET 1: 75 W 125TH ST CITY: NEW YORK STATE: NY ZIP: 10027-4512 S-2/A 1 CARVER BANCORP, INC. Registration No. 333-89443 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------------- 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 (212) 876-4747 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) -------------------------------- DEBORAH C. WRIGHT PRESIDENT AND CHIEF EXECUTIVE OFFICER 75 WEST 125TH STREET NEW YORK, NEW YORK 10027 (212) 876-4747 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------------------- With a copy to: KOFI APPENTENG THACHER PROFFITT & WOOD TWO WORLD TRADE CENTER NEW YORK, NEW YORK 10048-0087 (212) 912-7418 -------------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: from time to time after the effective date of this Registration Statement. -------------------------------- If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If the registrant elects to deliver its latest annual report to security holders, or a complete and legible facsimile thereof, pursuant to Item 11 (a) (1) of this form, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| --------------------------------
CALCULATION OF REGISTRATION FEE =========================================================================================================================== Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of to be Registered Registered Offering Price Per Share Aggregate Offering Price Registration Fee - --------------------------------------------------------------------------------------------------------------------------- Common Stock, par value $.01 per share 462,000 Shares N/A $3,696,000 $1,030 ===========================================================================================================================
=========================================================================================================================== Total Registration Fee Amount Previously Paid Amount Due with Filing - --------------------------------------------------------------------------------------------------------------------------- $1,030 $1,030 $0.00 ===========================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee; based on the average of the high and low prices of the Common Stock on October 15, 1999, as reported on the American Stock Exchange THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ PROSPECTUS [LOGO - CARVER BANCORP, INC.] ============================================ SHARES PROGRAM ============================================ Carver Bancorp, Inc. is pleased to offer you the opportunity to participate in the Carver Shares Program, a direct stock purchase program that provides a convenient way to invest in our common stock. The shares of our common stock offered in this prospectus will be sold at the prevailing market price at the time of purchase. ------------------------------------------------ This prospectus relates to 462,000 shares of Carver common stock, par value $0.01 per share, to be offered for purchase under the Shares Program. The shares of common stock are not savings accounts or savings deposits, are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency, are not guaranteed by Carver Bancorp Inc. or Carver Federal Savings Bank and are subject to investment risk. Our shares are traded on the American Stock Exchange. Our ticker symbol is "CNY." On November 19, 1999, the closing price of our common stock on the American Stock Exchange was $10 3/4. Carver will pay the costs of mailings and other administration costs of the Shares Program. Program participants will pay commissions and related service charges related to shares purchased or sold through the Shares Program. This Prospectus is not an offer to sell securities and it is not soliciting an offer to buy securities in any state or country where the offer or sale is not permitted. To the extent required by applicable law in certain jurisdictions, shares offered through the Shares Program are offered only through a registered broker-dealer in those jurisdictions. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORS HAS APPROVED THE COMMON STOCK DISCUSSED IN THIS PROSPECTUS, NOR HAVE THEY DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is November 19, 1999 ============================================ TABLE OF CONTENTS ============================================ A Summary of the Shares Program................................................1 Information about Carver Bancorp, Inc..........................................3 Information About The Shares Program...........................................3 Federal Income Tax Consequences...............................................11 Description of Carver's Common Stock..........................................11 Use of Proceeds...............................................................13 Legal Matters.................................................................13 Experts .....................................................................13 Indemnification...............................................................13 Factors That May Affect Future Results........................................14 Documents Incorporated by Reference...........................................14 Where You Can Find Additional Information.....................................15 ============================================ A SUMMARY OF THE SHARES PROGRAM ============================================ ENROLLMENT Anyone may apply for enrollment in the Shares Program by completing, signing and returning an enrollment form, together with a check or money order of not less than $200 or more than $10,000. You may enroll by mail, by calling the Program Administrator at 1-800-278-4353 or 1-718-921-8283 to obtain an enrollment form or by downloading an enrollment form at the www.investpower.com internet site. Investors are responsible for the fees described in this prospectus. - -------------------------------------------------------------------------------- Participation in the Shares Program is entirely voluntary and we give no advice regarding your decision to join the Program. - -------------------------------------------------------------------------------- PROGRAM ACCOUNT When enrolled in the Shares Program, an account will be opened in your name and shares purchased will be held by the Program Administrator in book-entry form, which means the Program Administrator will maintain an account in which the number of shares you hold will be allocated to you. You will receive periodic statements instead of receiving stock certificates. You may request stock certificates for shares held by the Program Administrator in your account at any time, upon request and without charge. ADDITIONAL PURCHASES You may purchase additional shares of our common stock through the Shares Program. You may buy from $100 to $10,000 worth of common stock per transaction, as often as once per week. There will be a $2.50 fee for each purchase made by mailing a check or money order to the Program Administrator. You are also allowed to make automatic monthly purchases for a constant dollar value by instructing the Program Administrator to electronically debit and transfer funds from your bank, for a fee of $1.00 per transaction. You will also be responsible for a $.10 fee for each share purchased. SELLING SHARES FROM YOUR ACCOUNT You may instruct the Program Administrator to sell shares held by the Program Administrator in your account on the open market at the prevailing market price on the stock exchange. You will be charged a fee of $7.50 plus $.10 per share for each transaction. -1- SAFEKEEPING OF CERTIFICATES You may mail any stock certificates you have for our common stock to the Program Administrator at any time. The shares represented by the certificates will be maintained in book-entry form and held in your Shares Program account. You may request stock certificates at any time for the shares held in your account. There is a one-time fee of $7.50 for depositing your certificates, unless you instruct the Program Administrator to sell the shares represented by the certificates, in which case only the sales fee and commissions will be applied. TRANSFERRING SHARES You may at any time transfer or provide a gift to another person of your shares in the Shares Program without charge. STATEMENTS AND FORMS Each program account will receive a quarterly statement that reflects all investment account activity. Each time a purchase is made for you, you will also receive a confirmation advisory reflecting your purchase price and your new share balance. Each form you receive will contain a tear-off stub form that can be used for any future Shares Program transactions you may desire. In addition, you can conveniently submit your transaction instruction through the Program Administrator's automated telephone system and internet site. CONTACTING THE PROGRAM ADMINISTRATOR FOR INFORMATION Our Transfer Agent and Program Administrator is American Stock Transfer & Trust Company. You can contact them in the following ways: TELEPHONE: 1-800-278-4353 or 1-718-921-8283 AUTOMATED TELEPHONE SYSTEM: 1-877-253-6846 INTERNET: www.investpower.com MAIL: American Stock Transfer & Trust Company 40 Wall Street, 46th Floor New York, NY 10005 - -------------------------------------------------------------------------------- Please read this prospectus, including the documents incorporated by reference into this prospectus, before making a decision about investing in our common stock through the Shares Program. If you do invest, please keep this prospectus with your permanent investment records, since it contains important information about the Shares Program. - -------------------------------------------------------------------------------- -2- ============================================ INFORMATION ABOUT CARVER BANCORP, INC. ============================================ Carver Bancorp, Inc., with over $400 million in assets, is the holding company for Carver Federal Savings Bank, a federally chartered savings bank. We refer to Carver Bancorp, Inc. as "Carver" and Carver Federal Savings Bank as "Carver Federal." The term "we" refers to Carver. Carver Federal was founded in 1948 to provide an African-American-operated institution where residents of under-served communities could invest their savings and obtain credit. Our principal business, conducted through our principal subsidiary Carver Federal, consists of attracting passbook and other savings accounts through branch offices and investing the funds deposited in these accounts in mortgage loans and other investments permitted to federal savings banks. Carver Federal operates seven full service branches in predominantly African-American neighborhoods in the New York City boroughs of: Brooklyn, Queens, Manhattan and in Nassau County, New York. Based on asset size as of September 30, 1999, Carver Federal is the largest African-American-operated financial institution in the United States. Our principal executive offices are located at 75 West 125th Street, New York, New York 10027 and our telephone number is (212) 876-4747. ============================================ INFORMATION ABOUT THE SHARES PROGRAM ============================================ The following questions and answers explain and set forth the terms of the Shares Program. 1. WHAT IS THE CARVER SHARES PROGRAM AND WHO CAN PARTICIPATE? o The Carver Shares Program is a convenient purchase program available for new investors that want to make an initial investment in our common stock and for existing investors that want to increase their holdings of our common stock. Our shareholders, employees, customers and members of the communities we serve, along with any other interested persons, can participate in the Shares Program. Participation is voluntary. -3- 2. HOW DO I ENROLL? o If you already own at least one share of our common stock, and it is registered in your name, simply fill out and sign the enclosed enrollment form and mail it to the Program Administrator using the pre-paid postage envelope. o If you do not currently own our common stock and are investing for the first time, fill out an enrollment form by calling 1-800-278-4353 or 1-718-921-8283, or download the application and enrollment form at www.investpower.com, the Program Administrator's internet site. The minimum initial purchase is $200 and the registration fee is $2.50. o If you own our common stock and it is held in a broker, bank, trust or other name than yours, request that that entity transfer at least one share of stock into your name. If you do not wish to transfer shares into your name, you can still enroll and buy shares as instructed above but you will have to pay the $2.50 initial registration fee. 3. HOW DO I PURCHASE ADDITIONAL SHARES? o You can easily purchase additional shares of our common stock at any time. Your payments, less applicable service charges and fees, are used to purchase shares of our common stock for your account. The Program Administrator will make purchases at least once every week. You will become the owner of the shares purchased for your account on the date the purchase is made. No interest will be paid to you on cash held by the Program Administrator pending the purchase of stock. o You can make an investment when joining the Shares Program by enclosing a check or money order with your enrollment form. Thereafter, payments should be mailed to the Program Administrator with the tear-off portion of either your quarterly account statement or the purchase transaction advisory mailed to you to confirm a purchase. o For first-time investors, the minimum initial investment is $200. For existing investors who have shares already registered in their name the minimum investment is $100. The maximum weekly investment for existing or new investors is $10,000 per week. The maximum annual investment is $100,000 per year. o You may authorize the Program Administrator to make automatic monthly purchases of a specified dollar amount of our common stock, paid for by automatic withdrawal from your bank account. You may sign up for this service when filling out the enrollment form or by accessing the Program Administrator's internet site, www.investpower.com, and following the simple instructions. Funds will generally be withdrawn from your bank account on the 10th day of -4- each month (or the next following business day if the 10th is not a business day). To terminate monthly purchases by automatic withdrawal, you must send the Program Administrator written, signed instructions. o If a check you send to the Program Administrator for share purchases is returned to the Administrator as "unpaid," the Program Administrator will resell any shares purchased and liquidate additional shares, if necessary, to reimburse the Program Administrator for any fees or loss incurred when reselling the shares. 4. HOW ARE MY SHARES PURCHASED? o The Program Administrator will consolidate payments from all participants and apply them to purchase shares on the American Stock Exchange or directly from Carver. All share purchases will be made at the prevailing market price. If the purchase is made directly from Carver Bancorp, the prevailing price shall be the average of the closing price of our common stock for the five (5) trading days preceding the purchase date. The Program Administrator may also purchase shares on another stock exchange, in the over-the-counter market or in negotiated transactions at prevailing prices. The Program Administrator will first purchase shares on the stock exchange, in the over-the-counter market or in negotiated transactions. If the number of shares available through these sources is insufficient to satisfy the number of shares to be purchased for participants, then the Program Administrator shall purchase shares from Carver. The price per share cannot be determined prior to purchase. Purchases are made at least once a week and, depending on investment volume, may be made more frequently. 5. WHAT IS THE PRICE I WILL PAY FOR SHARES? o Since the Program Administrator aggregates purchases, the share price you pay for any purchase will be the average price paid for all shares purchased by the Program Administrator for plan participants whose payments were aggregated into a single purchase by the Program Administrator. The share price is calculated in the same way for initial investors and current investors who send payments. - -------------------------------------------------------------------------------- You should be aware that the price of shares of the common stock may rise during the period between your request for purchase, its receipt by the Program Administrator and the ultimate purchase. - -------------------------------------------------------------------------------- Purchase Fee Summary -------------------- Initial registration fee for new investors .....$2.50 plus $.10 per share Purchases by check or money order ..............$2.50 plus $.10 per share Monthly purchase by automatic withdrawal .......$1.00 plus $.10 per share -5- o The Program Administrator may not increase the fees charged under the Shares Program without mailing a notice of the increase to participants at least thirty (30) days before the increases go into effect. 6. HOW DO I KEEP TRACK OF TRANSACTIONS IN MY ACCOUNT? o The Program Administrator will mail you quarterly statements reflecting your account balance and all activity for the year to date. In addition, whenever there is a purchase for your account an advisory will be mailed to serve as confirmation of the purchase. o You can reach the Program Administrator by dialing 1-877-253-6846 and following the instructions of the automated telephone system. You can also speak to a customer service representative by calling the same number during normal business hours, eastern standard time. Be sure to keep your program statement for your permanent records. 7. WHAT IS SAFEKEEPING OF CERTIFICATES? o If you already have certificates for our common stock and wish to make sure they do not get lost or stolen, you may elect to deposit the certificates into your Shares Program account for safekeeping with the Program Administrator. The Program Administrator will credit these shares to your Shares Program account in book-entry form. You may request issuance of a certificate from the Program Administrator at any time. o If you are not already participating in the Shares Program, you must complete and sign an enrollment form to accompany certificates sent in for safekeeping in the Shares Program. o To deposit certificates with the Program Administrator, insure the certificates for 2% of their total value to protect against loss in transit and send them via registered mail to the Program Administrator. o The usual fee of $7.50 for this service will be waived if you choose to deposit your certificates and sell them at the same time through the Shares Program. 8. HOW DO I WITHDRAW STOCK THAT IS IN MY SHARES PROGRAM ACCOUNT? o You may request that the Program Administrator issue a certificate(s) for some or all of the shares held in your Shares Program account. You may make this request by using the form enclosed in your Shares Program statement, through the Program Administrator's automated telephone system, or through the Program Administrator's internet site. The Program Administrator will issue a certificate in the exact amount shown on your program statement unless otherwise instructed in writing. Certificates will be sent by first class mail, generally within a few days -6- after receiving your request, and there is no charge for this service if you are still participating in the Program. 9. HOW DO I TRANSFER SHARES TO ANOTHER PERSON? o Transfers can be made in book-entry form or certificates can be issued and sent to the new owner by first class mail. You can transfer shares to a person who already has a Shares Program account, or you can set up a new account if the person does not have one. To complete a transfer you should: (i) call the Program Administrator to request a Shares Program brochure and enrollment form. Complete the form providing the full registration name, address and social security number of the new participant; and (ii) send the completed enrollment form along with a written request indicating the number of shares (full and fractional, if any) which should be transferred to the new participant to the Program Administrator. The owners of the Shares Program account must sign the instructions and their signatures must be guaranteed by a bank, broker or financial institution that is a member of the Signature Guarantee Medallion Program. You can check with your financial institution to see if it is a member of the Medallion Program. 10. CAN I SELL SHARES IN MY ACCOUNT? o You may instruct the Program Administrator to sell any or all the shares held in your Shares Program account by calling the toll-free telephone number supplied in this prospectus and accessing the Program Administrator's automated telephone system with your instructions. You may also complete and sign the tear-off portion of your account statement and mail the instructions to the Program Administrator. If there is more than one individual owner of the Shares Program account, all the owners must sign the tear-off portion of the account statement. o As with purchases, the Program Administrator aggregates all requests to sell shares and then sells the total number of shares on the open market through a broker. Sales will be made no less than once a week and may be made daily or as soon as practicable depending on participant demand. The selling price will not be known until the sale is completed. The proceeds of the sale, less an administrative fee of $7.50 plus $.10 per share, will be sent to you by check three business days following the sale. -7- o You may not rescind sale instructions sent to the Program Administrator. - -------------------------------------------------------------------------------- You should be aware that the price for your shares may fall during the period between a request for sale, its receipt by the Program Administrator and the ultimate sale on the open market. - -------------------------------------------------------------------------------- 11. HOW DO I CLOSE MY ACCOUNT? o You may withdraw from the Shares Program at any time using the tear-off stub at the bottom of your statement. Upon termination, a certificate for the full number of shares held in your Shares Program account will be issued and any fractional shares held in the Shares Program account will be sold. You will receive a check for the net proceeds, less a fee of $7.50 plus $.10 per share. If the stock sold is insufficient to cover the processing fee of $7.50, a check will not be issued nor will you be billed for any additional fees. o Alternatively, you may direct the Program Administrator to sell any or all of the shares in your account in accordance with the instructions outlined in the answer to Question 10 above. -8- ============================================ OTHER TERMS ============================================ The following additional terms also govern the Shares Program. STOCK DISTRIBUTIONS If Carver declares a stock split or stock dividend, the Program Administrator will credit your account with the appropriate number of shares on the payment date. In the event of a stock subscription or other offering of rights to shareholders, you will be entitled to such rights based on the number of shares credited to your account. VOTING For any shareholder meeting, you will receive a proxy that covers all the shares you hold in your Shares Program account. The proxy allows you to indicate how you want your shares to be voted. Your shares will be voted as you indicate. If no instructions are indicated on a properly completed, signed and returned proxy card, all shares credited to your account will be voted in accordance with the recommendations of our management. If you do not return the properly completed and signed proxy card, none of your shares will be voted unless you vote in person at the applicable shareholder meeting. RESPONSIBILITIES OF THE PROGRAM ADMINISTRATOR By participating in the Shares Program, you agree that the Program Administrator will not be liable for any act performed in good faith or for any good faith omission to act, including, without limitations, any claim of liability arising out of (1) failure to terminate a participant's account, sell common stock in the Shares Program, or invest optional payments without receipt of proper documentation and instructions; or (2) with respect to the prices at which Carver common stock is purchased or sold for the participant's account and the time such purchases or sales are made, including price fluctuations in market value after purchases or sales. OUR RESPONSIBILITIES By participating in the Shares Program, you agree that we will not be liable for any act we perform in good faith, for any good faith omission to act or for any act of the Program Administrator, including, without limitations, any claim of liability arising out of (1) the Program Administrator's failure to terminate a participant's account, sell common stock in the Shares Program, or invest optional payments without receipt of proper documentation and instructions; or (2) with respect to the prices at which our common stock is purchased or sold for the participant's account and the time such purchases or sales are made, including price fluctuations in market value after purchases or sales. -9- - -------------------------------------------------------------------------------- Participants should recognize that neither Carver, Carver Federal nor the Program Administrator can guarantee a profit or protect against a loss on common stock purchased under the Shares Program. - -------------------------------------------------------------------------------- CHANGES IN THE SHARES PROGRAM We may change the terms of the Shares Program, including applicable fees, or terminate the Shares Program at any time. We may also suspend or terminate the right of any person to participate in the Shares Program at any time for any reason including, but not limited to, arbitrage-related activities, transactional profit activities and excessive re-enrollments. You will receive a notice before any material changes are made to the Shares Program. PLEDGE OR ASSIGNMENT OF SHARES Shares credited to your account under the Shares Program may not be pledged or assigned and any such purported pledge or assignment will be void. ADDITIONAL TERMS We will reimburse the Program Administrator for the mailing of this prospectus and enrollment forms as well as telephone expenses associated with inquiries about the Shares Program. Carver will also pay fees and expenses normally associated with transfer agent functions. If the total number of shares in a participant's account is less than one (1) share, any remaining fractions will be sold and the account closed. The proceeds of the sale, less applicable fees, will be sent to the participant. The Program Administrator reserves the right to modify the Shares Program with our consent, including the right to terminate the Shares Program upon notice to Shares Program participants. In addition, the Program Administrator reserves the right to interpret and regulate the Shares Program as it deems necessary or desirable in connection with its operation. The Shares Program shall be governed by and construed in accordance with the laws of the State of New York. The signing and mailing of the enrollment form shall constitute an offer by the participant to establish an agency relationship with American Stock Transfer & Trust Company to be governed by the terms and conditions of the Shares Program. We may terminate the Program Administrator's services under the Shares Program and substitute another agent as Program Administrator upon thirty (30) days prior written notice to you and the Program Administrator. The Program Administrator may resign upon giving us ninety (90) days prior written notice. -10- ============================================ FEDERAL INCOME TAX CONSEQUENCES ============================================ All commissions/fees that you pay when you buy shares through the Shares Program become part of your "cost basis," which you will use in determining your taxable gain or loss at the time you sell your shares. The total amount of dividends will be reported to you and to the Internal Revenue Service shortly after the close of each year. You will generally realize gain or loss upon the receipt of cash for fractional shares held in the Shares Program. You will also realize gain or loss when shares are sold. The amount of gain or loss will be the difference between the amount that you receive for the shares of common stock sold and your tax basis in the shares (generally, the amount you paid for the shares). In order to determine the tax basis for shares in your account, you should retain all account transaction statements. As required by law, all shares of common stock that are sold through the Program Administrator will be reported to the Internal Revenue Service. Any gain or loss, whether you sell through the Program Administrator or through a broker of your own choosing, should be reported when you file your income tax return. Be sure to keep your account statements for income tax purposes. If you have questions about the tax basis of any transactions, please consult your tax advisor. ============================================ DESCRIPTION OF CARVER'S COMMON STOCK ============================================ GENERAL Carver is authorized to issue ten million (10,000,000) shares of common stock having a par value of $0.01 per share and two million (2,000,000) shares of preferred stock having a par value of $0.01 per share. Each share of Carver's common stock has the same relative rights and is identical in all respects with every other share of common stock. - -------------------------------------------------------------------------------- The shares of common stock: o are not deposit accounts and are subject to investment risk; o are not insured or guaranteed by the FDIC, or any other government agency; and o are not guaranteed by Carver or Carver Federal. - -------------------------------------------------------------------------------- -11- VOTING RIGHTS Each shareholder is entitled to one vote for each share of common stock held. There are no cumulative voting rights. Shareholders are entitled to vote on all matters requiring shareholder approval under Delaware law and our Certificate of Incorporation and Bylaws, including the election of members of the Board of Directors. Directors are divided into three equal (or nearly equal) groups. At each annual meeting of our shareholders, only one of the group of directors are up for election by the shareholders. Elected directors serve for three (3) years. DIVIDENDS We can pay dividends out of statutory surplus or from net profits if, as and when declared by our Board of Directors. Payment of dividends is subject to limitations which are imposed by law. If we issue preferred stock, the holders of the preferred stock may have a priority over the holders of the common stock with respect to dividends. LIQUIDATION If we are liquidated or dissolved, shareholders of common stock are entitled to receive all of our assets which remain after our debts and liabilities are paid, subject to the rights of depositors to the liquidation account created in connection with Carver Federal's initial public offering. If we issue preferred stock, the holders of our preferred stock may have a priority over the holders of common stock in the event of our liquidation or dissolution. As of the date of this prospectus, we have not issued any preferred stock. PREEMPTIVE RIGHTS; REDEMPTION; NON-ASSESSABILITY Our common stock has no preemptive rights. This means that our shareholders do not have a right to buy their proportional share of any additional shares we issue. There are no provisions for redemption, conversion rights, sinking funds, or liability for further calls or assessments on the common stock. This means that we cannot ask you for more money for your shares, we cannot force you to sell your shares back to us and your shares cannot be exchanged for a different security. It also means that we do not set aside any money to buy your shares from you. OUR CERTIFICATE OF INCORPORATION AND BYLAWS Our Certificate of Incorporation and Bylaws contain a number of provisions, relating to corporate governance and certain rights of stockholders, that might discourage future takeover attempts. As a result, stockholders who might desire to participate in such transactions may not have an opportunity to do so. In addition, such provisions will also render the removal of our Board of Directors or management more difficult. These provisions include: limitations on voting rights, staggered terms for members of our Board of Directors, limitations on the removal of directors and on business combinations with principal shareholders, and certain procedural requirements for nomination of directors by shareholders and shareholder proposals. See "Where You Can Find Additional Information" to find out how to obtain a copy of our Certificate of Incorporation and Bylaws. -12- ============================================ USE OF PROCEEDS ============================================ Carver will not know the number of shares of our common stock that will ultimately be purchased through the Shares Program, the extent to which the shares will be purchased directly from us rather than in the open market, or the prices at which the shares will be purchased. The proceeds from purchases directly from Carver, if any, under the Shares Program will be used for general corporate purposes. We are unable to estimate the amount of the proceeds that will be devoted to any specific purpose. ============================================ LEGAL MATTERS ============================================ Thacher Proffitt & Wood, New York, New York, has passed upon the validity of the issuance of the common stock being offered under the Shares Program. ============================================ EXPERTS ============================================ We have incorporated our consolidated financial statements in this prospectus by reference to our Annual Report on Form 10-K for the fiscal year ended March 31, 1999, as amended, in reliance on the report of Mitchell & Titus LLP, independent accountants. Mitchell & Titus, LLP gave this report on its authority as experts in auditing and accounting. ============================================ INDEMNIFICATION ============================================ The General Corporation Law of Delaware contains provisions permitting indemnification of our officers and directors which may be sufficiently broad to indemnify them for liabilities arising under the Securities Act of 1933, as amended. Moreover, our Certificate of Incorporation contains provisions on indemnification of officers and directors. We also have a directors' and officers' liability and corporate reimbursement insurance policy protecting our directors and officers against liability arising from any claim for breach of duty, neglect, error, misstatement, misleading statement, omission or any other wrongful act (subject to certain -13- exceptions) committed by reason of the director or officer acting in such capacity. In addition, the Program Administrator has agreed to indemnify Carver (including its officers, directors and employees) for any liability arising from the Program Administrator's failure in its administration of the Shares Program in accordance with this prospectus. ============================================ FACTORS THAT MAY AFFECT FUTURE RESULTS ============================================ Please keep in mind that the information delivered to you with this prospectus, as well as the annual, quarterly and special reports and other information filed by us with the Securities and Exchange Commission, contain forward-looking statements which involve various uncertainties. These uncertainties could cause our actual results to be materially different from the forward-looking statements. When reading any of these documents, you should consider all of the risks and uncertainties that are discussed, and you should not rely solely on forward-looking statements made by us. Factors that could cause actual results to be materially different from forward-looking statements include: (1) interest rate, market and monetary fluctuations, (2) monetary and fiscal policies and laws, (3) inflation, (4) default rates on loans, (5) changes in regulation affecting our business, (6) actions taken by the regulatory bodies that regulate Carver Federal, (7) general and local economic conditions, (8) increasing competition, (9) new products innovations, and (10) our ability to manage these and other risks. ============================================ DOCUMENTS INCORPORATED BY REFERENCE ============================================ The SEC allows us to "incorporate by reference" in this prospectus other information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus; however, to the extent that there are any inconsistencies between information presented in this prospectus and the information contained in incorporated documents filed with the SEC before the date of this prospectus, the information in this prospectus shall be deemed to supersede the earlier information. Specifically we incorporate by reference the following documents: our Annual Report on Form 10-K, as amended, for the fiscal year ended March 31, 1999, and our Quarterly Reports on Form 10-Q for the quarters ended June 30, 1999 and September 30, 1999. We are delivering, with this prospectus, a copy of our latest Annual Report on Form 10-K (without exhibits) and our Quarterly Report on Form 10-Q for the latest quarter after the date of the Form 10-K (without exhibits). -14- - -------------------------------------------------------------------------------- You should rely only on the information contained in this prospectus or the documents incorporated by reference. We have not authorized anyone to provide you with information that is different. Neither the delivery of this prospectus nor any sale made through this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus, or that the information contained or incorporated by reference in this prospectus is correct as of any time subsequent to the date of this prospectus. - -------------------------------------------------------------------------------- ============================================ WHERE YOU CAN FIND ADDITIONAL INFORMATION ============================================ We have filed a registration statement on Form S-2 regarding this offering with the Securities Exchange Commission ("SEC"). This prospectus, which is a part of the registration statement, does not contain all of the information included in the registration statement, and you should refer to the registration statement and its exhibits to read the information. You may read and copy the registration statement, the related exhibits and the other materials we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the SEC's New York Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file with the SEC; the site's address is www.sec.gov. You may also request a copy of these filings at no cost, by writing or telephoning as follows: American Stock Transfer & Trust Company, Attention: Carver Shares Program, 40 Wall Street - 46th Floor, New York, NY 10005, 1-800-278-4353 or 1-718-921-8283. -15- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. SEC registration fee(1)....................................... $ 1,030 Printing, postage and mailing................................. $ 15,000 Legal fees and expenses....................................... $ 40,000 Blue sky fees and expenses (including fees of counsel)........ $ 12,500 Accounting fees and expenses ................................. $ 1,000 Miscellaneous................................................. $ 2,000 --------------- TOTAL......................................................... $ 71,530 =============== - --------------------------- (1) Actual expenses based upon the registration of 462,000 shares at average of high and low prices on October 15, 1999 of $8 per share. All other expenses are estimated. Item 15. Indemnification of Directors and Officers. Section 145 of the Delaware General Corporation Law ("DGCL") INTER ALIA, empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Similar indemnity is authorized for such person against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of any such threatened, pending or completed action or suit if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the shareholders or disinterested directors or by independent legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct. Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him, and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145. Article IX of the Company's Certificate of Incorporation provides that a director shall not be personally liable to the Company or its stockholders for damages for breach of his fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is expressly prohibited by the DGCL. Article X of the Company's Certificate of Incorporation requires the Company, among other things, to indemnify to the fullest extent permitted by the DGCL, any person who is or was or has agreed to become a director or officer of the II-1 Company, who was or is made a party to, or is threatened to be made a party to, or has become a witness in, any threatened, pending or completed action, suit or proceeding, including actions or suits by or in the right of the Company, by reason of such agreement or service or the fact that such person is, was or has agreed to serve as a director, officer, employee or agent of another corporation or organization at the written request of the Company. Article X also empowers the Company to purchase and maintain insurance to protect itself and its directors and officers, and those who were or have agreed to become directors or officers, against any liability, regardless of whether or not the Company would have the power to indemnify those persons against such liability under the law or the provisions set forth in the Certificate of Incorporation. The Company is also authorized by its Certificate of Incorporation to enter into individual indemnification contracts with directors and officers. The Company currently maintains directors' and officers' liability insurance consistent with the provisions of the Certificate of Incorporation. The Company has and expects to continue to enter into employment agreements that require the Company to maintain a directors' and officer's liability policy for the benefit of such persons or that the Company will indemnify such officers to the fullest extent provided by law. Item 16. Exhibits. The exhibits filed as a part of this Registration Statement are as follows: LIST OF EXHIBITS. 4.1 Specimen Stock Certificate of Carver Bancorp, Inc. (1) 5.1* Opinion of Thacher Proffitt & Wood regarding: legality 13.1* Carver Bancorp, Inc.'s Annual Report on Form 10-K for the Year Ended March 31, 1999 13.2* Carver Bancorp, Inc.'s Annual Report on Form 10-K/A for the Year Ended March 31, 1999 13.3 Carver Bancorp, Inc.'s Quarterly Report on Form 10-Q for the Period Ended September 30, 1999 23.1 Consent of Independent Auditors 23.2* Consent of Thacher Proffitt & Wood (included in Exhibit 5.1) 99.1 Form of Enrollment Application 99.2* Form of Cover Letter --------------------------- (1) Incorporated herein by reference to Registration Statement No. 333-0559 on Form S-4 (the "Form S-4") of Carver Bancorp, Inc., filed with the Securities and Exchange Commission during July 1997, as amended. * Previously filed. II-2 Item 17. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, present a fundamental change in the information set forth in the registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material changes to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (5) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (6) That, for the purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. II-3 Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-2 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on November 19, 1999. CARVER BANCORP, INC. By: /s/ Deborah C. Wright ------------------------------------- Deborah C. Wright President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name Title Date ---- ----- ---- /s/ Deborah C. Wright President, Chief Executive Officer and November 19, 1999 - ----------------------------------------- Director Deborah C. Wright /s/ Walter T. Bond Acting Chief Financial Officer and November 19, 1999 - ----------------------------------------- Chief Investment Officer Walter T. Bond * Director November 19, 1999 - ----------------------------------------- David N. Dinkins * Director November 19, 1999 - ----------------------------------------- Linda H. Dunham * Director November 19, 1999 - ----------------------------------------- Herman Johnson * Director November 19, 1999 - ----------------------------------------- David R. Jones * Director November 19, 1999 - ----------------------------------------- Pazel G. Jackson * Director November 19, 1999 - ----------------------------------------- Robert J. Franz
* By:/s/ Walter T. Bond --------------------- Attorney in Fact (power of attorney filed on October 20, 1999). EX-13.3 2 Q/R TO SECURITY HOLDERS EXHIBIT NO. 13.3 QUARTERLY REPORT ON FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 1999 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999 / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-21487 CARVER BANCORP, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) 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 thirty days. Yes /X/ No / / COMMON STOCK, PAR VALUE $.01 2,314,275 - ---------------------------------------- ---------------------------------- CLASS OUTSTANDING AT NOVEMBER 15, 1999
CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition as of September 30, 1999 and March 31, 1999 (unaudited)......................................1 Consolidated Statements of Income for the Three and Six Month Periods Ended September 30, 1999 and 1998 (unaudited)..................................2 Consolidated Statements of Cash Flows for the Three and Six Month Periods Ended September 30, 1999 and 1998 (unaudited)..................................3 Notes to Consolidated Financial Statements (unaudited).................................4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................................................5 Item 3. Quantitative and Qualitative Disclosures About Market Risk.....................................18
PART II. OTHER INFORMATION Item 1. Legal Proceedings..............................................................................19 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...............................................................20 SIGNATURES.......................................................................................................21
CARVER BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) As of As of September 30, March 31, 1999 1999 ------------------- ---------------- ASSETS Cash and due from banks................................................ $ 8,025,414 $ 11,120,748 Other interest earning assets.......................................... 11,900,000 10,200,000 ------------- ------------- Total cash and cash equivalents...................................... 19,925,414 21,320,748 ------------- ------------- Investment securities held to maturity................................. 24,995,563 - Securities available for sale.......................................... 29,825,053 29,918,137 Mortgage-backed securities held to maturity, net (estimated fair values of 56,453,619 and $65,693,568 at September 30, 1999 and March 31, 1999). 58,434,643 66,584,447 Loans receivable....................................................... 256,236,208 274,541,950 Less allowance for loan losses....................................... (3,552,826) (4,020,099) ------------- ------------- Loans receivable, net................................................ 252,683,382 270,521,851 ------------- ------------- Real estate owned, net................................................. 468,400 184,599 Property and equipment, net............................................ 11,602,921 11,844,983 ------------- Federal Home Loan Bank of New York stock, at cost...................... 5,754,600 5,754,600 Accrued interest receivable, net....................................... 2,764,738 2,860,693 Excess of cost over net assets acquired, net........................... 923,316 1,029,853 Other assets........................................................... 5,853,865 6,422,933 ------------- ------------- Total assets......................................................... $ 413,231,895 $ 416,482,844 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits............................................................. $ 279,022,695 $ 276,999,074 Securities sold under agreement to repurchase........................ 31,337,000 35,337,000 Advances from Federal Home Loan Bank of New York..................... 65,698,549 65,708,466 Other borrowed money................................................. 896,234 992,619 Other liabilities.................................................... 3,553,388 6,270,419 ------------- ------------- Total liabilities................................................. 380,507,866 385,307,578 ------------- ------------- Stockholders' Equity: Preferred stock, $0.01 par value per share; 2,000,000 shares authorized; none issued........................................... - - Common stock, $0.01 par value per share; 10,000,000 shares authorized; 2,314,275 shares issued and outstanding............... 23,144 23,144 Additional paid-in capital........................................... 21,414,390 21,423,574 Retained earnings-substantially restricted........................... 12,182,730 10,721,168 Common stock acquired by Employee Stock Ownership Plan............... (896,235) (992,620) Comprehensive Income, net of income tax.............................. - - Total stockholders' equity........................................ 32,724,029 31,175,266 ------------- ------------- Total liabilities and stockholders' equity...................... $ 413,231,895 $ 416,482,844 ============= =============
1
CARVER BANCORP INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Six Months Ended September 30, September 30, ----------------------------------- ------------------------- 1999 1998 1999 1998 ---------------- ---------------- ----------------- -------------- Interest Income: Loans receivable, net................. $ 4,678,078 $ 5,205,367 $ 9,738,605 $ 10,559,623 Mortgage-backed securities............ 921,569 1,338,548 1,902,783 3,185,114 Investment securities................. 910,150 329,398 1,591,116 495,422 Other interest earning assets......... 184,643 127,751 327,058 345,788 -------------- -------------- -------------- ------------ Total interest income.............. 6,694,440 7,001,064 13,559,562 14,585,947 -------------- -------------- -------------- ------------ Interest expense: Deposits.............................. 2,175,181 2,070,885 4,352,742 4,212,653 Advances and other borrowed money..... 1,387,651 1,562,363 2,790,612 3,307,768 -------------- -------------- -------------- -------------- Total interest expense............. 3,562,832 3,633,248 7,143,354 7,520,421 -------------- -------------- -------------- -------------- Net interest income..................... 3,131,608 3,367,816 6,416,208 7,065,526 Provision for loan losses............... 230,000 299,885 380,000 750,000 -------------- -------------- -------------- -------------- Net interest income after provision for loan losses....................... 2,901,608 3,067,831 6,036,208 6,315,526 -------------- -------------- -------------- -------------- Non interest income: Loan fees and service charges......... 6,461 60,916 17,246 109,111 Other income.......................... 506,256 511,450 970,603 1,037,923 -------------- -------------- -------------- -------------- Total non-interest income.......... 512,717 572,366 987,849 1,147,034 -------------- -------------- -------------- -------------- Non-interest expense: Salaries and employee benefits........ 1,180,296 1,363,524 2,484,436 2,603,768 Net occupancy expenses................ 318,028 305,986 664,577 593,962 Equipment............................. 378,364 322,415 773,842 769,426 Other................................. 862,972 1,344,850 1,639,641 2,638,465 -------------- -------------- -------------- -------------- Total non-interest expenses........ 2,739,660 3,336,775 5,562,496 6,605,621 -------------- -------------- -------------- -------------- Income before income taxes.............. 674,665 303,422 1,461,561 856,939 Income taxes............................ 314,934 110,211 686,934 345,676 Income taxes (benefit).................. (314,934) - (686,934) - ------------ ------------ ------------ ------------ Net income.............................. $ 674,665 $ 193,211 $ 1,461,561 $ 511,263 ============ ============ ============ ============ Net income per common share............. $ 0.30 $ 0.09 $ 0.66 $ 0.23 ============ ============ ============ ============ Weighted average number of common shares outstanding............. 2,223,218 2,203,562 2,220,784 2,201,306 ============ ============ ============ ============
2
CARVER BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended September 30, Cash flows from operating activities: 1999 1998 ------------------- ----------- Net income............................................................. $ 1,461,561 $ 511,263 Adjustments: Depreciation and amortization of premises and equipment................ 502,895 574,199 Amortization of intangibles............................................ 106,536 102,720 Other amortization and accretion, net.................................. 365,526 474,546 Provision for loan losses.............................................. 380,000 750,000 Deferred income taxes.................................................. 123,000 125,714 Allocation of ESOP stock............................................... 81,775 91,085 Changes in accrued interest receivable, net............................ 167,049 (684,690) (Increase) decrease in other assets.................................... 569,068 (2,306,431) Increase (decrease) in other liabilities............................... (2,717,031) 6,331,770 ------------- ------------- Net cash provided by operating activities.............................. 1,040,379 5,970,156 ------------- ------------- Cash flows from investing activities: Principal repayments on available for sale securities.................. - 3,693,066 Purchases of discount notes............................................ (299,065,655) (74,615,222) Proceeds from matured discount notes................................... 300,000,000 35,000,000 Purchase of investment securities held to maturity..................... (25,000,000) - Proceeds from sale/call of securities held for sale.................... - 23,841,581 Proceeds from maturities and calls of investment securities held to maturity............................................................... - 305,986 Principal repayment of mortgage backed securities held to maturity..... 8,125,990 11,606,467 Net change in loans receivable......................................... 15,807,465 17,061,818 Additions to premises and equipment.................................... (220,832) (1,225,931) ------------- ------------- Net cash (used in) provided by investing activities.................... (353,032) 16,486,800 ------------- ------------- Cash flows from financing activities: Net increase (decrease) in deposits.................................... 2,023,621 2,901,912 Net increase (decrease) in short term borrowing (repos)................ (4,000,000) (32,050,000) Repayment of FHLB advances............................................. (9,917) - Advances from Federal Home Loan Bank of New York....................... - 14,981,376 Repayment of other borrowed money...................................... (96,385) (91,066) Dividends paid......................................................... - (115,714) ------------- ------------- Net cash provided by (used in) financing activities.................... (2,082,681) (14,373,492) ------------- ------------- Net increase (decrease) in cash and equivalents........................ (1,395,334) 8,083,464 Cash and equivalents - beginning....................................... 21,320,748 15,120,071 ------------- ------------- Cash and equivalents - ending.......................................... $ 19,925,414 $ 23,203,535 ============= ============= Unrealized gain (loss) on securities available for sale................ - 10,979 Deferred income taxes.................................................. - 5,160 ============= ============= Supplemental disclosure of cash flow information: Cash paid for: Interest............................................................... $ 7,143,353 $ 7,520,421 ============= ============= Federal, state and city income taxes................................... - 123,100
3 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Carver Bancorp, Inc. (the "Holding Company" or "Bancorp"), have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for fair presentation have been included. The consolidated results of operations and other data for the three month and six month periods ended September 30, 1999 are not necessarily indicative of results that may be expected for the entire fiscal year ending March 31, 2000 ("fiscal year 2000"). The unaudited consolidated financial statements include the accounts of the Holding Company and its wholly owned subsidiaries Carver Federal Savings Bank (the "Bank" or "Carver Federal") and Alhambra Holding Corp., a Delaware corporation ("Alhambra Holding") and the Bank's wholly owned subsidiaries, C.F.S.B. Realty Corp. and C.F.S.B. Credit Corp. Carver Federal and the Holding Company are referred to herein collectively as "Carver" or the "Company". All significant inter company accounts and transactions have been eliminated in consolidation. (2) EARNINGS PER SHARE CALCULATION Net income per share for the three month and six month periods ended September 30, 1999 and 1998 are calculated based on the weighted average number of shares outstanding during the period. (3) ALHAMBRA HOLDING CORP. Other assets in the Unaudited Consolidated Statements of Financial Condition includes an investment of $1.4 million in Alhambra Holding. During the third quarter of the fiscal year ended March 31, 1999 ("fiscal year 1999"), Carver established Alhambra Holding to hold 80% of the common stock and 100% of the preferred stock of Alhambra Realty Corp. ("Alhambra Realty"). Alhambra Realty was established to hold title to a certain piece of commercial real property located in the City of New York, borough of Manhattan. Carver acquired a majority interest in Alhambra Realty through Alhambra Holding in connection with a workout with an existing borrower of the Bank whose loan was secured by partially occupied commercial real property. Carver is currently examining its options with respect to Alhambra Realty and the property it owns, which include, but are not limited to, conducting a sale of the property or developing the property and leasing the unoccupied space. 4 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXPLANATORY NOTE This Quarterly Report on Form 10-Q contains forward-looking statements consisting of estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which could cause the actual results to differ materially from these estimates. These factors include, without limitation, the Company's ability to improve both its loan operations, including the origination and purchase of loans which meet its underwriting guidelines, and deposit gathering capabilities, changes in general, economic and market, legislative and regulatory conditions and the development of an adverse interest rate environment that adversely affects the interest rate spread or other income anticipated from the Company's operations and investments. GENERAL Carver Bancorp, Inc., (the "Holding Company" or "Bancorp"), a Delaware corporation, is the holding company for Carver Federal Savings Bank (the "Bank" or "Carver Federal"), a federally chartered savings bank. Collectively, the Holding Company and the Bank are referred to herein as the "Company" or "Carver." At this time, the Holding Company conducts business as a unitary savings and loan holding company and the principal business of the Holding Company consists of the operation of its wholly-owned subsidiary, the Bank, which operates seven full service branches in the New York City boroughs of Brooklyn, Queens and Manhattan, and in Nassau County, New York. On January 28, 1998, the Company announced that the Bank had entered into a definitive agreement to sell its branch office located in Roosevelt, New York, to City National Bank of New Jersey ("City National"). The Roosevelt Office is located in Nassau County, New York and had deposits of approximately $8.6 million at September 30, 1999. Due to certain regulatory issues, the transaction, which was expected to close by March 31, 1999, has not yet been consummated. During May, 1999, the Company and City National held a meeting to discuss the issues preventing the transaction from closing and mutually agreed to pursue the consummation of the transaction under similar terms and conditions as the original agreement. At September 30, 1999, the Company and City National were actively working to complete the details required to close the transaction. MANAGEMENT RESTRUCTURING On November 4, 1999, the Company announced a management restructuring with the arrival of key members of a new senior management team from major money center banks. The new officers are: o Benny A. Joseph, II, Senior Vice President and Chief Lending Officer, is charged with boosting loan volume, strengthening credit policy, and restructuring the Bank's lending department; he comes to Carver from Fleet Financial Corporation. o Margaret D. Peterson, who assumes a newly-created role, Senior Vice President and Chief Administrative Officer, integrating Human Resources, Information Technology, Facilities and Vendor Management, is charged with enhancing the Bank's control over expenses. Ms. Peterson comes to Carver from Deutsche Bank. o Daphne E. Heslop, Senior Vice President and Chief Auditor, is charged with enhancing the Bank's management by reinforcing a rigorous control environment. Ms. Heslop joins Carver from Roosevelt Savings Bank. o Judith Taylor, formerly of Chemical Bank and the Resolution Trust Corporation, has been selected as Acting Senior Vice President and Chief of Retail Banking. She brings over 30 years of experience to Carver and is charged with strengthening branch operations and improving customer service. Her permanent replacement is expected to be identified by year-end. 5 The Company also announced that searches are underway for other members of the Bank's senior management team, including Chief Financial Officer and General Counsel. DIRECT STOCK PURCHASE PLAN On October 20, 1999, the Holding Company filed a registration statement on Form S-2 with the SEC for the purpose of registering shares to be sold under the Holding Company's Shares Program, whereby customers, employees, investors and members of the communities served by Carver Federal may invest in the Holding Company's Common Stock without going through a broker. The program is structured to offer Carver shares through a plan administrator, which will execute orders by purchasing the Company's shares in the open market. If shares are not available in the open market the plan administrator may purchase shares from the Holding Company. FINANCIAL CONDITION ASSETS. Total assets decreased $3.3 million, or 0.78% to $413.2 million at September 30, 1999, compared to $416.5 million at March 31, 1999. The decrease in total assets primarily reflects decreases in loans receivable net, mortgage-backed securities ("MBSs") held to maturity, and cash and cash equivalents, offset in part by an increase in investment securities held to maturity ("HTM"). Total cash and cash equivalents decreased by $1.4 million, or 6.54% to $19.9 million at September 30, 1999, compared to $21.3 million at March 31, 1999. Investment securities HTM were $25.0 million at September 30, 1999, whereas at March 31, 1999 the Company did not carry any investment securities as HTM. The increase in investment securities HTM reflects the reinvestment of principal and interest received during the first quarter on MBSs and loans receivable. At September 30, 1999, securities held as available for sale ("AFS") totaled $29.8 million compared to $29.9 million at March 31, 1999. MBSs HTM decreased by $8.1 million, or 12.24% to $58.4 million at September 30, 1999, compared to $66.6 million at March 31, 1999. The decrease in MBSs HTM primarily reflects principal repayments. Loans receivable net decreased by $17.8 million, or 6.59% to $252.7 million at September 30, 1999, compared to $270.5 million at March 31, 1999. The decrease in loans receivable net primarily reflects increased loan prepayments. The prepayments primarily reflect the refinancing of loans due to lower market interest rates. During the second quarter, the Company purchased approximately $22.5 million in multi-family loans secured by properties located in the New York Metropolitan area to augment loan originations and began to rebuild its loan department. During the second quarter, the Company started the rebuilding process by hiring a new chief lending officer. The Company expects to enhance origination, processing, underwriting, and loan portfolio management capabilities to complete the rebuilding process. The Company also expects to continue the purchase of loans during the rebuilding period. LIABILITIES AND STOCKHOLDERS' EQUITY Total deposits increased by $2.0 million, or 0.73% to $279.0 million at September 30, 1999, compared to $277.0 million at March 31, 1999. The increase in total deposits was primarily attributable to increases of: $1.4 million in NOW accounts, $795,000 in certificates of deposit, and $837,000 in regular savings and club accounts, offset in part by a decrease of $1.1 million in money market accounts. These increases primarily reflect interest credited. The Company plans to modernize its retail banking services by introducing telephone banking and gathering more detailed information regarding its customer base in order to improve customer service. The Company believes that these steps will strengthen its deposit gathering capabilities. Total borrowings decreased by $4.1 million, or 4.02% to $97.9 million at September 30, 1999, compared to $102.0 million at March 31, 1999. The decrease in total borrowings primarily reflects a decrease in reverse repurchase agreements ("repos") of $4.0 million, or 11.32% to $31.3 million. The decrease reflects the Company's ability to fund loan originations and loan purchases with repayments on MBSs and loans receivable together with the increase in deposits. 6 Stockholders' equity increased by $1.5 million, or 4.97% to $32.7 million at September 30, 1999, compared to $31.2 million at March 31, 1999. The increase in stockholders' equity primarily reflects an increase in retained earnings for the six month period. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of funds are deposits and principal and interest payments on loans, MBSs and investment securities. While maturities and scheduled amortization of loans, MBSs and investment securities are predictable sources of funds, deposit flows and loan and prepayments on MBSs are strongly influenced by changes in general interest rates, economic conditions and competition. For the six month period ended September 30, 1999 the primary investment activity of the Company is the purchase of loans and the purchase of investment securities and mortgage-backed securities. During the six month period ended September 30, 1999, the Company purchased approximately $22.5 million of mortgage loans and $25.0 million of investment securities. During the six month period ended September 30, 1999, the Company sold no investment securities, mortgage loans or MBSs. The Company's most liquid assets are federal funds sold and cash and due from banks. In addition to the liquidity provided by federal funds sold and cash and due from banks, the Company derives liquidity from its line of credit with the FHLB, which equals 30% of total assets. The levels of the Company's cash and cash equivalents are dependent on the Company's operating, financing, lending and investing activities during any given period. At September 30, 1999, the Company's cash and cash equivalents totaled $19.9 million compared to $21.3 million at March 31, 1999. This reduction in cash and cash equivalents is not expected to have a material impact on our operations. The Office of Thrift Supervision, the Bank's primary federal regulator, requires that the Bank meet minimum tangible, core and risk-based capital requirements. At September 30, 1999, the Bank exceeded all fully phased-in regulatory capital requirements. The table below presents certain information relating to the Bank's capital compliance at September 30, 1999 and March 31, 1999. The Office of Thrift Supervision (the "OTS") requires that the Bank meet minimum tangible, leverage (core) and risk-based capital requirements. As of September 30, 1999, the Bank exceeded all of its regulatory capital requirements. The Bank's required, actual and excess capital levels as of September 30, 1999 are as follows: Amount % of Assets --------- ------------ (dollars in thousands) Tangible capital: Capital level................ $ 27,861 6.77% Less requirement............. 6,170 1.50 --------- --------- Excess....................... $ 21,691 5.27% ========= ========= Core capital: Capital level................ $ 27,895 6.78% Less requirement............. 16,452 4.00 --------- --------- Excess....................... $ 11,443 2.78% ========= ========= Risk-based capital: Capital level................ $ 30,265 15.41% Less requirement............. 15,710 8.00 Excess....................... $ 14,555 7.41% ========= ========= ANALYSIS OF CORE EARNINGS The Company's profitability is primarily dependent upon net interest income, which represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income 7 is dependent on the difference between the average balances and rates earned on interest-earning assets and the average balances and rates paid on interest-bearing liabilities. Net income is further affected by provisions for loan losses, non-interest income, non-interest expense and income taxes. The earnings of the Company are significantly affected by general economic and competitive conditions, particularly changes in market interest rates, and to a lesser extent by government policies and actions of regulatory authorities. During the three and six month periods ended September 30, 1999 the Company placed primary emphasis on its whole loan portfolio through the purchase of whole loans. It is expected that the Company's future earnings will be derived primarily from direct lending and purchase activities rather than investing in securities. The following tables set forth certain information relating to Carver's average interest-earning assets and average interest-bearing liabilities and reflects the average yield on assets and the average cost of liabilities for the quarters indicated. Such yields and costs are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods shown. Average balances are derived from average month-end balances, except for federal funds, which are derived from daily balances. Management does not believe that the use of average monthly balances instead of average daily balances on all other accounts has caused any material difference in information presented. The average balance of loans includes loans on which the Company has discontinued accruing interest. The yield and cost include fees which are considered adjustments to yields. 8
Three Months Ended September 30, ------------------------------------------------------------------------------------ 1999 1998 ----------------------------------------- ----------------------------------------- Average Quarterly Annualized Average Quarterly Annualized Balance Interest Avg. Yield/Cost Balance Interest Avg. Yield/Cost ------- -------- --------------- ------- -------- --------------- (Dollars in thousands) ASSETS INTEREST EARNING ASSETS Loans (1)................................... $ 249,412 $ 4,678 7.50% $ 268,317 $ 5,205 7.76% Investment securities (2)................... 65,644 910 5.55 24,895 329 5.29 Mortgage-backed securities.................. 60,088 921 6.13 83,373 1,339 6.42 Other interest earning assets............... 9,600 185 7.71 6,425 128 7.97 ------------ -------- ----- ---------- -------- ------- Total interest earning assets............ 384,744 6,694 6.96% 383,010 7,001 7.31% -------- -------- Non-interest earning assets................. 33,255 35,589 ------------ ---------- Total Assets............................. $ 417,999 $ 418,599 ============ ========== LIABILITIES INTEREST BEARING LIABILITIES Deposits DDA......................................... $ 11,702 $ - -% $ 10,693 $ - -% NOW......................................... 16,603 76 1.83 17,556 73 1.66 Savings and clubs........................... 145,762 919 2.52 145,917 885 2.43 Money market accounts....................... 20,646 158 3.06 22,332 171 3.06 Certificates of deposit..................... 86,396 1,022 4.73 76,768 941 4.90 ------------ -------- ----- ---------- -------- ------- Total Deposits........................... 281,109 2,175 3.09 273,266 2,070 3.03 Borrowed money................................. 99,969 1,388 5.55 102,140 1,562 6.12 ------------ -------- ----- ---------- -------- ------- Total interest-bearing liabilities............. 381,078 3,563 3.74% 375,406 3,632 3.87% -------- -------- Non-interest-bearing liabilities............... 4,605 7,150 ------------ ---------- Total liabilities.............................. 385,683 382,556 Stockholders' equity........................... 32,316 36,043 ------------ ---------- Total liabilities and stockholders' equity..... $ 417,999 $ 418,599 ============ ========== Net interest income............................ $ 3,131 $ 3,369 ======== ======== Interest rate spread........................... 3.22% 3.44% ===== ======= Net interest margin............................ 3.26% 3.52% ===== ======= Ratio of average interest earning assets to interest-bearing liabilities................... 101.0x 100.1x ===== =======
- -------------------- (1) Includes non-accrual loans. (2) Includes FHLB stock and fair value of investments available for sale of $29.8 million at September 30, 1999. 9
Six Months Ended September 30, ----------------------------------------------------------------------------------- 1999 1998 --------------------------------------------------- ------------------------------ Average Annualized Average Annualized Balance Interest Yield/Cost Balance Interest Yield/Cost ------------- ----------- ----------- ---------- ------------ ---------------- (Dollars in thousands) ASSETS INTEREST EARNING ASSETS Loans (1).................................... $ 255,246 $ 9,739 7.63% $ 270,919 $ 10,559 7.79% Investment securities (2).................... 58,769 1,591 5.41 16,709 495 5.92 Mortgage-backed securities................... 62,148 1,902 6.12 97,691 3,185 6.50 Other interest earning assets................ 10,613 327 6.16 9,943 346 6.96 --------- ------- ------ ---------- -------- ------- Total interest earning assets.............. 386,776 $13,559 7.01% 395,532 $ 14,585 7.37% ------- -------- Non-interest earning assets.................. 32,050 31,510 --------- ---------- Total Assets............................... $ 418,826 $ 427,042 ========= ========== LIABILITIES INTEREST BEARING LIABILITIES: Deposits DDA $ 11,688 $ - -% $ 10,706 $ - -% NOW 16,753 154 1.84 18,149 160 1.76 Savings and clubs............................ 146,285 1,844 2.52 146,092 1,811 2.48 Money market accounts........................ 21,123 318 3.01 22,021 323 2.93 Certificates of deposit...................... 86,180 2,037 4.73 81,604 1,918 4.70 --------- ------- ------ ---------- -------- ------- Total Deposits............................. 282,029 4,353 3.09 278,572 4,212 3.02 Borrowed money................................. 100,995 2,791 5.53 106,540 3,307 6.21 ---------- ------- ------ ---------- -------- ------- Total interest-bearing liabilities............. 383,024 7,144 3.73% 385,112 7,519 3.90% ------- -------- Non-interest-bearing liabilities............... 3,825 6,049 ---------- ---------- Total liabilities.............................. 386,849 391,161 Stockholders' equity........................... 31,977 35,881 ---------- ---------- Total liabilities and stockholders' equity..... $ 418,826 $ 427,042 ========== ========== Net interest income............................ $ 6,415 $ 7,056 ======= ======== Interest rate spread........................... 3.28% 3.47% ====== ======= Net interest margin............................ 3.32% 3.57% ====== ======= Ratio of average interest earning assets to interest-bearing liabilities................ 101.0x 101.1x ====== =======
________________________ (1) Includes non-accrual loans. (2) Includes FHLB stock and fair value of investments available for sale of $29.8 million at September 30, 1999. 10 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 GENERAL The Company reported net income for the three month period ended September 30, 1999 of $675,000 compared to net income of $193,000, for the same period last year. Net income reflects a tax loss carry forward benefit. Excluding the effect of the tax benefit, the Company had net income of $360,000. The increase in net income primarily reflects decreases in non-interest expense, the provision for loan losses and income taxes, offset in part by decreases in net interest income and non-interest income. INTEREST INCOME Interest income decreased by $307,000, or 4.38% to $6.7 million for the three month period ended September 30, 1999 compared to $7.0 million for the same period last year. The decrease in interest income primarily reflects a 35 basis point decrease in the average yield on interest-earning assets to 6.96% compared to 7.31% for the same period last year, offset in part by a $1.7 million increase in the average balance of interest earning assets to $384.7 million. The decrease in the average yield for three month period is primarily attributable to a shift in assets from loans and MBSs to lower yielding investment securities and lower market interest rates. Interest income on loans receivable net decreased by $527,000, or 10.13% to $4.7 million for the three month period ended September 30, 1999 compared to $5.2 million for the same period last year. The decrease in interest income on loans receivable net primarily reflects an $18.9 million, or 7.05% decrease in the average balance of loans receivable net to $249.4 million for the three month period ended September 30, 1999 compared to $268.3 million for the same period last year coupled with a 26 basis point decrease in the average yield on the loan portfolio to 7.50%. The decrease in the average balance of the loan portfolio primarily reflects an increase in loan prepayments and to a lesser extent, a decrease in loan originations. The decrease in the average yield on loans receivable net primarily reflects the prepayment of higher yielding loans and lower market interest rates. Interest income on MBSs decreased $417,000, or 31.15%, to $922,000 for three month period ended September 30, 1999 compared to $1.3 million for the same period last year. The decrease in interest income on MBSs primarily reflects a decrease of approximately $23.3 million or 27.93% in the average balance of mortgage-backed securities to $60.1 million compared to $83.4 million for the same period last year coupled with a 29 basis point decrease in the average yield to 6.13%. The decrease in the average balance of MBSs primarily reflects a shift during the second quarter of fiscal 1999 of approximately $24.0 million from MBSs to loans and to a lesser extent principal repayments on MBSs. Interest income on investment securities increased by $581,000, or 176.31%, to $910,000 for the three month period ended September 30, 1999 compared to $329,000 for the same period last year. The increase in interest income on investment securities consisting of short and intermediate term agency securities primarily reflects a $40.7 million or 163.68% increase in the average balance of such securities to $65.6 million for the three month period ended September 30, 1999 compared to $24.9 million for the same period last year coupled with a 26 basis point increase in the average yield to 5.55%. The increase in the average balance of investment securities reflects an investment of approximately $25.0 million of loan repayments into intermediate term securities during the first quarter of fiscal year 2000. The increase in the average yield on investment securities primarily reflects the higher yield earned by shifting assets from short term securities to intermediate term securities. Interest income on other interest-earning assets increased by $57,000, or 44.53%, to $185,000 for the three month period ended September 30, 1999 compared to $128,000 for the same period last year. The increase in interest income on other interest earning assets primarily reflects a $3.2 million or 49.42% increase in the average balance of such securities to $9.6 million for the three month period ended September 30, 1999 compared to $6.4 million for the same period last year, offset in part by a 26 basis point decrease the average yield to 7.71%. The increase in the average balance of other interest earning assets primarily reflects an increase in short term investments held during the second quarter of fiscal 2000. The decrease in the average yield on other interest earning assets primarily reflects a decrease in the yield on short term investments. 11 INTEREST EXPENSE Interest expense decreased by $70,000, or 1.94% to $3.6 million for the three month period ended September 30, 1999 compared to $3.6 million for the same period last year. The decrease in interest expense primarily reflects a 13 basis point decrease in the average cost of interest-bearing liabilities to 3.74% for the three month period ended September 30, 1999 compared to 3.87% for the same period, offset in part by a $5.7 million increase in the average balance of interest bearing liabilities to $381.1 million. Interest expense on deposits increased by $104,000 or 5.04% to $2.2 million for the three month period ended September 30, 1999 compared to $2.1 million for the same period last year. The increase in the cost of deposits primarily reflects $7.8 million increase in the average balance of deposits to $281.1 million compared to $273.3 million for the same period last year coupled with a 6 basis point increase in the cost of deposits to 3.09%. The increase in the cost of deposits also reflects an increase of $9.6 million or 12.54% to $86.4 million in the average balance of certificates of deposits, which typically are higher in cost relative to other deposit types and a 9 basis point increase in the average cost of savings and club accounts to 2.52%. The increase in the cost of savings and club accounts reflects a decrease in interest forfeited by account holders of these deposits. Interest expense on borrowings decreased by $175,000 or 11.18% to $1.4 million for the three month period ended September 30, 1999 compared to $1.6 for the same period last year. The decrease primarily reflects a 57 basis point decrease in the average cost of borrowings to 5.55% compared to 6.12% for the same period last year coupled with a $2.2 million decrease in the average balance of borrowings to $100.0 million. The decrease in the average balance of borrowings primarily reflects the Company's ability to fund investments and loan purchases with deposits and principal and interest receipts. The decrease in the cost of borrowings primarily reflects the replacement of higher cost borrowings with lower cost borrowings during fiscal year 1999. NET INTEREST INCOME BEFORE PROVISIONS FOR LOAN LOSSES Net interest income decreased $236,000 or 7.01%, to $3.1 million for the three month period ended September 30, 1999 compared to $3.4 million for the three month period ended September 30, 1998. The decrease in net interest income is primarily attributable to a decrease in the average yield of average interest earning assets, offset in part by a decrease in the average cost of average interest bearing liabilities. The Company's interest rate spread decreased by 22 basis points to 3.22% for the three month period ended September 30, 1999 compared to 3.44% for the three month period ended September 30, 1998. The Company's net interest margin decreased by 26 basis point to 3.26% for the three month period ended September 30, 1999 compared to 3.52% for the same period last year. The decrease in interest rate spread and net interest margin primarily reflects a 35 basis point decrease in the average yield on interest earning assets to 6.96%, offset in part by a 13 basis point decrease in the average cost of interest bearing liabilities to 3.74%. The decrease in interest rate spread and net interest margin is primarily attributable to a decrease in the average yield on loans, MBSs and other interest earning assets, offset in part by a decrease in the cost of borrowed money. The Company's ratio of average interest-earning assets to average interest-bearing liabilities was 101.0x for the three month period ended September 30, 1999 compared to 100.1x for the same period last year. PROVISION FOR LOAN LOSSES The Company provided $230,000 for loan losses for the three month period ended September 30, 1999 compared to $300,000 for the same period last year. The decrease in the provision for loan losses for the three month period ended September 30, 1999 reflects a decrease in non-performing assets. During the second quarter, the Bank charged off approximately $268,000 in previously reserved non-performing consumer loans and $392,000 in previously reserved uncollected interest. At September 30, 1999, non-performing loans totaled $4.1 million, or 1.63% of total loans compared to $4.4 million or 1.77% at June 30, 1999. At September 30, 1999, the Bank's allowance for loan losses was $3.6 million compared to $3.8 million at June 30, 1999, resulting in a ratio of allowance to non-performing loans of 82.26% at September 30, 1999 compared to 85.63% at June 30, 1999 and a ratio of allowances for loan losses to total loans of 1.41% and 1.50%, respectively. 12 Management believes that the allowance for loan losses is adequate. While management estimates loan losses using the best available information, no assurance can be made that future adjustments to the allowance will not be necessary based on changes in economic and real estate market conditions, further information obtained regarding known problem loans, identification of additional problem loans, and other factors, both within and outside of management's control. NON-INTEREST INCOME Non-interest income decreased $60,000 or 10.42% to $513,000 for the three month period ended September 30, 1999 compared to $572,000 for the same period last year. The decrease in non-interest income primarily reflects a $54,000 or 89.39% decreases in loan origination fees. The decrease in loan origination fees primarily reflects a decrease in loan originations for the three month period. NON-INTEREST EXPENSE Non-interest expense decreased by $597,000, or 17.89% to $2.7 million for the three month period ended September 30, 1999 compared to $3.3 million for the same period last year. The decrease in non-interest expense primarily reflects decreases of $183,000 or 13.44% in salaries and employee benefits expense, $15,000 or 37.59% in advertising expense, $56,000 or 17.35% in equipment expense and $482,000 or 35.83% in other variable expenses. Other expenses for the three month period ended September 30, 1998 reflected a one time charge of $250,000 incurred in connection with the settlement of litigation. INCOME TAX EXPENSE In connection with a loss from operations incurred during the three month period ended December 31, 1998, the Company has reflected a tax benefit reflecting the carry forward of the loss for the income taxes paid. The Company utilized a net operating loss deduction to offset income tax expense for the three month period ended September 30, 1999 compared to an expense of $110,000 for the three month period ended September 30, 1998. The Company's effective tax rate for the three month period ended September 30, 1999 was 0.0% compared to 36.32% for the three month period ended September 30, 1998. 13 COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 GENERAL The Company reported net income for the six month period ended September 30, 1999 of $1.5 million compared to net income of $511,000, for the same period last year. Net income reflects a tax loss carry forward benefit. Excluding the effect of the tax benefit, the Company had net income of $775,000. The increase in net income primarily reflects decreases in non-interest expense, provision for loan losses, and income taxes, offset in part by decreases in net interest income and non-interest income. INTEREST INCOME Interest income decreased by $1.0 million, or 7.04% to $13.6 million for the six month period ended September 30, 1999 compared to $14.6 million for the six month period ended September 30, 1998. The decrease in interest income for the six month period ended September 30, 1999 primarily reflects a 36 basis point decrease in the average yield of interest earning assets to 7.01% compared to 7.37% for the same period last year and an $8.8 million or 2.21% decrease in the average balance of interest earning assets to $386.8 million compared to $395.5 million. The decrease in the average yield for six month period is primarily attributable to a shift in assets from loans and MBSs to lower yielding investment securities. Interest income on loans receivable net decreased by $821,000 or 7.78% to $9.7 million for the six month period ended September 30, 1999 compared to $10.6 million for the same period last year. The decrease in interest income on loans receivable net primarily reflects a $15.7 million or 5.78% decrease in the average balance of loan receivables to $255.2 million for the six month period ended September 30, 1999 compared to $270.9 million for the same period last year, coupled with a decrease of 16 basis points in the average yield on the loan portfolio. The decrease in the average balances of the loan portfolio primarily reflects the impact of increased loan prepayments and to a lesser extent, a decrease in loan originations. The decrease in the average yield primarily reflects prepayment of higher yielding loans and lower market interest rates. Interest income on MBSs decreased $1.3 million, or 40.26%, to $1.9 million for the six month period ended September 30, 1999 compared to $3.2 million for the same period last year. The decrease in interest income on MBSs primarily reflects a decrease of $35.8 million or 36.56% in the average balance of mortgage-backed securities to $62.1 million for the six month period ended September 30, 1999 compared to $98.0 million for the same period last year coupled with a decrease of 38 basis points in the average yield on MBSs to 6.12% compared to 6.50%. The decrease in the average balance of MBSs reflects in significant part the shift of approximately $24.0 million from MBSs to loans and to a lesser extent principal repayments on MBSs. Interest income on investment securities increased by $1.1 million or 221.16%, to $1.6 million for the six month period ended September 30, 1999 compared to $495,000 for the same period last year. The increase in interest income on investment securities consisting of short term and intermediate term agency securities primarily reflects a $42.0 million or 251.72% increase in the average balance of investment securities to $58.8 million for the six month period ended September 30, 1999 compared to $16.7 million for the same period last year, offset in part by a 51 basis point decrease in the average yield. The increase in the average balance of investment securities reflects an investment of approximately $25.0 million of loan repayments into intermediate term securities during the first quarter of fiscal year 2000. The decrease in the average yield primarily reflects lower market interest rates. Interest income on other interest-earning assets decreased by $19,000 or 5.42%, to $327,000 for the six month period ended September 30, 1999 compared to $346,000 for the same period last year. The decrease in interest income on other interest earning assets primarily reflects an 80 basis point decrease in the average yield to 6.16%. The decrease in the average yield primarily reflects lower market interest rates. 14 INTEREST EXPENSE Interest expense decreased by $377,000, or 5.01% to $7.1 million for the six month period ended September 30, 1999 compared to $7.5 million for the same period last year. The decrease in interest expense primarily reflects a 17 basis point decrease in the cost of interest bearing liabilities to 3.73% coupled with a $2.1 million decrease in the average balance of interest bearing liabilities to $383.0 million. Interest expense on deposits increased by $140,000 or 3.33% to $4.4 million for the six month period ended September 30, 1999 compared to $4.2 million for the same period last year. The increase in interest expense on deposits primarily reflects a 7 basis point increase in the average cost of interest-bearing liabilities to 3.09% coupled with a $3.5 million or 1.24% increase in the average balance of deposits to $282.0 million. Interest expense on borrowings decreased by $517,000 or 15.63% to $2.8 million for the six month period ended September 30, 1999 compared to $3.3 million. The decrease in interest expense in borrowings primarily reflects a 68 basis point decrease in the average cost of borrowings to 5.53% coupled with a $5.5 million or 5.20% decrease in the average balance of borrowings to $101.0 million. The decrease in the average balance of borrowings primarily reflects the Company's ability to fund investments and loans with deposits and principal and interest receipts. The decrease in the cost of borrowings primarily reflects the replacement of higher cost borrowings with lower cost borrowings during fiscal year 1999. NET INTEREST INCOME BEFORE PROVISIONS FOR LOAN LOSSES Net interest income before provision for loan losses decreased by $649,000, or 9.19% to $6.4 million for the six month period ended September 30, 1999 compared to $7.1 million for the same period last year. The Company's interest rate spread decreased by 19 basis points to 3.28% for the six month period ended September 30, 1999 compared to 3.47% for the six month period ended September 30, 1998. The Company's net interest margin decreased by 25 basis point to 3.32% for the six month period ended September 30, 1999 compared to 3.57% for the same period last year. The decrease in interest rate spread and net interest margin primarily reflects a 36 basis point decrease in the average yield on interest earning assets to 7.01%, offset in part by a decrease of 17 basis points in the average cost on interest bearing liabilities to 3.73%. The decrease in interest rate spread and net interest margin is primarily attributable to a decrease in the average yield on loans, MBSs and other interest earning assets, offset in part by a decrease in the average cost of borrowed money. The Company's ratio of average interest-earning assets to average interest-bearing liabilities was 101.0x for the six month period ended September 30, 1999 compared to 101.1x for the same period last year. PROVISION FOR LOAN LOSSES The Company provided $380,000 for loan losses for the six month period ended September 30, 1999, compared to $750,000 for the same period last year. The Company establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level which is deemed to be appropriate based upon an assessment of prior loss experience, the Bank's underwriting standards regulatory guidelines, industry standards, past due loans, economic conditions, the volume and type of loans in the Bank's portfolio, a significant amount of which are purchased and are collateralized by properties located outside of the Bank's market area, and other factors related to the collectibility of the Bank's loan portfolio. The provision for loan losses for the six month period ended September 30, 1998 reflected increased non-performing mortgage and consumer loans consisting of automobile loans, credit card receivables, along with unsecured and secured personal loans. The Bank no longer makes unsecured personal loans or automobile loans. The decrease in the provision for loan losses for the six month period reflects a decrease in non-performing assets. At September 30, 1998, non-performing loans totalled $9.65 million or 3.69% of total loans. During the six month period, the Bank charged off approximately $578,000 in previously reserved non-performing consumer loans and $392,000 in previously reserved uncollected interest. At September 30, 1999, non-performing loans totaled $4.1 million or 1.63% of total loans compared to $4.8 million, or 1.66% at March 31, 1999. At September 30, 1999, the Bank's allowance for loan losses was $3.6 million compared to $4.0 million at March 31, 1999, resulting in a ratio of allowance to non-performing loans of 86.26% at September 30, 1999 compared to 85.60% at March 31, 1999, and a ratio of allowances for loan losses to total loans of 1.41% and 1.48%, respectively. Management believes that the allowance for loan losses is adequate. While management estimates loan losses using the best available information, no assurance can be made that future adjustments to the allowance will not be necessary based on changes in economic and real estate market conditions, further information obtained regarding known problem loans, identification of additional problem loans, and other factors, both within and outside of management's control. 15 NON-INTEREST INCOME Non-interest income decreased by $159,000 or 13.88% to $988,000 for the six month period ended September 30, 1999 compared to $1.1 million for the same period last year. The decrease in non-interest income reflects a decrease of $92,000 or 84.19% to $17,000 in loan origination fees and a decrease of $67,000 or 6.49% to $971,000 in other income. The decrease in loan origination fees primarily reflects a decrease in loan originations during the six month period. The decrease in other income primarily reflects a decrease in prepayment fees reflecting the prepayment of mortgage loans which did not contain prepayment penalties. NON-INTEREST EXPENSES Non-interest expense decreased by approximately $1.0 million, or 15.79% to $5.6 million for the six month period ended September 30, 1999 compared to $6.6 million for the same period last year. The decrease in non-interest expense primarily reflects decreases of $119,000 or 4.58% in salaries and employee benefits expense, $21,000 or 44.89% in advertising expense, $106,000 or 53.72% in equipment expense and $999,000 or 37.86% in other variable expenses, offset in part by a $71,000 or 11.89% increase in occupancy expense. Other expenses for the three month period ended September 30, 1998 reflected a one time charge of $250,000 incurred in connection with the settlement of litigation. INCOME TAX EXPENSE In connection with the loss from operations incurred during the three month period ended December 31, 1998, the Company has reflected a tax benefit reflecting the carry forward of the loss for the income taxes paid. The Company utilized a net operating loss deduction to offset income tax expense for the six month period ended September 30, 1999 compared to an expense of $346,000 for the six month period ended September 30, 1998. The Company's effective tax rate for the six month period ended September 30, 1999 was 0.0% compared to 40.34% for the six month period ended September 30, 1998. THE YEAR 2000 ISSUE The "Year 2000 Issue" centers on the inability of some computer systems to recognize the year 2000. Many existing computer programs and systems were originally programmed with six digit dates that provided only two digits to identify the calendar year in the date field, without considering the upcoming change in the century. With the impending millennium, these programs and computers may recognize "00" as the year 1900 rather than the year 2000. Like most financial service providers, the Company and its operations may be significantly and adversely affected by the Year 2000 Issue due to the nature of financial information. Software, hardware, and equipment both within and outside the Company's direct control and with which the Company electronically or operationally interfaces (e.g. including, but not limited to, third party vendors providing data processing, information system management, maintenance of computer systems, and credit bureau information) are likely to be affected. Furthermore, if computer systems are not adequately changed to identify the year 2000, many computer applications could fail or create erroneous results. As a result, many calculations which rely on date field information, such as interest, payment due dates and other operating functions, may generate results which could be significantly misstated, and the Company could experience an inability for a temporary, but unknown duration, to process transactions, send invoices or engage in similar normal business activities. In addition, under certain circumstances, failure to adequately address the Year 2000 Issue could adversely affect the viability of the Company's suppliers and creditors and the creditworthiness of its borrowers. Thus, if not adequately addressed, the Year 2000 Issue could result in a material adverse impact on the Company's products, services and competitive condition and therefore, its results of operations and could be deemed to imperil the safety and soundness of the Bank. There has been litigation filed against corporations regarding the Year 2000 Issue and their compliance efforts the law in this area will likely continue to develop well into the new millennium. Should the Company experience a Year 2000 failure, exposure of the Company could be significant and material. Legislation has been introduced in several jurisdictions regarding the Year 2000 Issue. However, no assurance can be given that legislation will be enacted in jurisdictions where the Company does business that will have the effect of limiting any potential liability. 16 The OTS, the Company's primary federal bank regulatory agency, along with the other federal bank regulatory agencies has published substantive guidance on the Year 2000 Issue and had included Year 2000 compliance as a substantive area of examination for both regularly scheduled and special examinations. These publications, in addition to providing guidance as to examination criteria, have outlined requirements for creation and implementation of a compliance plan and target dates for testing and implementation of corrective action, as discussed below. As a result of the oversight by and authority vested in the federal bank regulatory agencies, a financial institution that does not become Year 2000 compliant could become subject to administrative remedies similar to those imposed on financial institutions otherwise found not to be operating in a safe and sound manner, including remedies available under prompt corrective action regulation. The Company has developed and is implementing a Year 2000 Project Plan (the "Plan") to address the Year 2000 Issue and its effects on the Company. The Plan includes five components which address issues involving awareness, assessment, renovation, validation and implementation. The Company has completed the awareness, assessment and renovation phases of the Plan. During the awareness, assessment and renovation phases of the Plan, the Company inventoried all material information systems and reviewed them for Year 2000 readiness. Among the systems reviewed were computer hardware and systems software, applications software and communications hardware and software as well as embedded or automated devices. As noted below, this review included both internal systems and those of third party vendors which provide systems such as retail deposit processing, loan origination processing, loan servicing and general ledger and accounting systems and software. Following awareness and assessment, the Company then renovated or replaced the systems that may have posed a Year 2000 related problem. Following renovation, the functionality of new systems were validated. At March 31, 1999, the validation phase and the implementation phase were complete, and the testing, contingency planning and the customer awareness program was completed by August 6, 1999. The Company believes that it is in compliance with federal banking regulatory guidelines, completing testing of its mission critical systems prior to September 1, 1998 and its customer systems prior to September 30, 1998. The Company has met federal banking regulatory guidelines stating that the Company must substantially complete testing of core mission critical internal systems by December 31, 1998. The Company completed testing of both internally and externally supplied systems by August 6, 1999. The Company has arranged to establish end-to-end Year 2000 tests with its business partners allowing the Company an additional opportunity to test and stress such systems. As part of the Plan, the Company has had formal communications with all of its significant suppliers to determine the extent to which the Company is vulnerable to those third parties' failure to remediate their own Year 2000 issues and has been following the progress of those vendors with their Year 2000 compliance status. The Company presently believes that with modifications to existing software and conversions to new software and hardware where necessary, the Year 2000 Issue will be mitigated without causing a material adverse impact on the operations of the Company. At this time, the Company believes that all of its hardware and software systems are Year 2000 compliant, tested and operational. Despite its best efforts to ensure Year 2000 compliance, it is possible that one or more of the Company's internal or external systems may fail to operate. At this time, while the Company believes that its systems are Year 2000 compliant, the probability of such likelihood cannot be determined. As a result, the Company expects to formulate contingency plans for its mission critical systems where possible. These systems included retail deposit processing, check clearing and wire transfer capabilities, loan origination processing, loan servicing, investment monitoring and accounting, general ledger and accounting systems and payroll processing. The Company maintains a disaster recovery program designed to deal with similar failures on an ongoing basis. All business units have completed their update and review of their existing recovery plans in addition to developing contingency plans to address the possible failure of one or more mission critical systems. These plans will be vigorously tested during the next 60 to 90 days. The Company has reviewed its customer base to determine whether they pose significant Year 2000 risks. The Company's customer base consists primarily of individuals who utilize the Company's services for personal, household or consumer uses. Individually such customers are not likely to pose significant Year 2000 risks directly. It is not possible at this time to gauge the indirect risks which could be faced if the employers of such customers encounter unresolved Year 2000 issues. 17 Monitoring and managing the Year 2000 Project Plan will result in additional direct and indirect costs to the Company. Direct costs include potential charges by third party software vendors for product enhancements, costs involved in testing for Year 2000 compliance, and costs for developing and implementing contingency plans for critical systems which fail. Indirect costs will principally consist of the time devoted by existing employees in monitoring software vendor progress, testing and developing and implementing any necessary contingency plans. Both direct and indirect costs of addressing the Year 2000 Issue will be charged to earnings as incurred. Such costs have not been material to date. The Company does not believe that such costs will have a material effect on results of operations, although there can be no assurance that such costs would not become material in the future. IMPACT OF NEW BANKING LEGISLATION New legislation intended to modernize the financial services industry by establishing a comprehensive framework to permit affiliations among commercial banks, insurance companies and other financial service providers was signed into law on November 12, 1999. Generally, this legislation (i) repeals the historical restrictions and eliminates many federal and state law barriers to affiliations among banks, securities firms, insurance companies and other financial service providers, (ii) provides a uniform framework for the activities of banks, savings institutions and their holding companies, (iii) broadens the activities that may be conducted by national banks and banking subsidiaries of bank holding companies, (iv) provides an enhanced framework for protecting the privacy of consumer information, (v) adopts a number of provisions related to the capitalization, membership, corporate governance and other measures designed to modernize the Federal Home Loan Bank System, (vi) modifies the laws governing the implementation of the Community Reinvestment Act and (vii) addresses a variety of other legal and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions, including the functional regulation of bank securities activities. In particular, this legislation limits the activities that new unitary savings and loan association holding companies may engage in. Unitary savings and loan holding companies that are "grandfathered," I.E., became unitary savings and loan holding companies pursuant to applications filed with the OTS before May 4, 1999, will retain their authority under current law to engage in nonfinancial activities. All other savings and loan holding companies will be limited to financially related activities permissible for bank holding companies, as defined under the new law. In addition, this legislation prohibits non-financial companies from acquiring savings and loan association holding companies. Bank holding companies will be permitted to engage in a wider variety of financial activities than are permitted under current law, particularly with respect to insurance and securities activities. In addition, in a change from current law, bank holding companies will be in a position to be owned, controlled or acquired by any company engaged in financially related activities. We do not believe that this legislation will have a material adverse affect on our operations in the near term. However, to the extent that the legislation permits banks, securities firms and insurance companies to affiliate, the financial services industry may experience further consolidation. This could result in a growing number of larger financial institutions that offer a wider variety of financial services than the Company currently offers and that can aggressively compete in the markets the Company currently serves. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Quantitative and qualitative disclosure about market risk is presented at March 31, 1999 in Item 7A to the Company's Annual Report of Form 10-K, filed with the Securities and Exchange Commission ("SEC") on June 29, 1999, as amended on Form 10-K/A filed with the SEC, on July 29, 1999. The Company believes that there have been no material changes in the Company's market risk at September 30, 1999 compared to March 31, 1999. 18 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS From time to time, Carver Federal is a party to various legal proceedings incident to its business. At March 31, 1999, except as set forth below, there were no legal proceedings to which the Bank or its subsidiaries was a party, or to which any of their property was subject, which were expected by management to result in a material loss. Currently, the Bank is defending actions brought by three unrelated individuals who are alleging that the Bank and others were responsible for the injuries they suffered during the construction of the Bank's headquarters building in 1995. The three actions were previously described in the Company's Form 10-Q for the period ended June 30, 1999. The Bank believes that each of these cases is without merit. An insurance company has accepted the defense and indemnification of all three claims on behalf of the Bank. In addition, on November 9, 1999, a shareholder of the Company, BBC, Capital Markets, Inc., filed a suit in the Court of Chancery of Delaware against the Holding Company to require the Holding Company to hold an annual meeting of stockholders. The action is encaptioned BBC CAPITAL MARKETS, INC. V. CARVER BANCORP, INC. The Holding Company has scheduled the stockholders meeting for Thursday, February 24, 2000. The Company believes that this case is without merit and intends to vigorously defend its interests. 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 ANNUAL MEETING. The Company announced that the annual meeting for the fiscal year ended March 31, 2000 will be held on February 24, 2000 (the "Annual Meeting"). The record date for the Annual Meeting will be January 11, 2000. PROPOSALS FOR THE ANNUAL MEETING. Any stockholder wishing to have a proposal considered for inclusion in the Company's proxy statement and form of proxy relating to the Annual Meeting of Stockholders must, in addition to other applicable requirements, set forth such proposal in writing and file it with the Corporate Secretary of the Company on or before November 24, 1999. 19 NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING. The Bylaws of the Company provide an advance notice procedure for a stockholder to properly bring business before an annual meeting or to nominate any person for election to the Company's Board of Directors. The stockholder must be a stockholder of record and have given timely notice thereof in writing to the Secretary of the Company. To be timely, with respect to an annual meeting of stockholders, a stockholder's notice must be delivered to or received by the Secretary not later ninety (90) days in advance of the annual meeting since such meeting is to be held on or after the anniversary of the previous year's annual meeting. A stockholder's notice to the Corporate Secretary shall set forth such information as required by the Bylaws of the Company. Nothing in this paragraph shall be deemed to require the Company to include in its proxy statement and proxy card relating to an annual meeting any shareholder proposal or nomination which does not meet all of the requirements for inclusion established by the SEC in effect at the time such proposal or nomination is received. See above, "Proposals For The Annual Meeting." ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. Exhibit 11. Net income per share Exhibit 27. Financial Data Schedule (b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CARVER BANCORP, INC. Date: November 16, 1999 /s/ Deborah C. Wright ---------------------------------------- Deborah C. Wright President and Chief Executive Officer Date: November 16, 1999 /s/ Walter T. Bond ---------------------------------------- Walter T. Bond Acting Chief Financial Officer and Chief Investment Officer EX-11 3 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 COMPUTATION OF NET INCOME PER SHARE FOR THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1999 For the Three Month Period ---------------------------------------- September 30, 1999 September 30, 1998 ------------------ ------------------- Net income............................. $ 674,665 $ 193,211 Weighted average shares outstanding.... 2,223,218 2,203,562 Earning per shares outstanding......... $ 0.30 $ 0.09 For the Three Month Period ---------------------------------------- September 30, 1999 September 30, 1998 ------------------ ------------------- Net income............................. $1,461,561 $ 511,263 Weighted average shares outstanding.... 2,220,784 2,201,306 Earning per shares outstanding......... $ 0.66 $ 0.23 EX-27 4 FDS -- CARVER BANCORP, INC.
9 This schedule contains summary financial information extracted from the balance sheet and the statement of earnings of Carver Bancorp, Inc. for the six month period at and ended September 30, 1999 and is qualified in its entirety by reference to such financial statements. 0001016178 CARVER BANCORP, INC. 6-MOS DEC-31-1999 SEP-30-1999 19,925,414 268,001,033 11,900,000 0 29,825,053 83,430,206 81,490,309 252,683,382 3,552,826 413,231,895 279,022,695 97,035,549 3,553,388 896,234 0 0 23,144 32,724,029 413,231,895 9,738,605 1,591,116 327,058 13,559,562 4,352,742 7,143,354 6,416,208 380,000 0 5,562,496 1,461,561 1,461,561 0 0 1,461,561 .66 .66 7.01 1,682 1,802 0 0 4,021 970 122 3,553 3,553 0 0
EX-23.1 5 CONSENTS OF EXPERTS AND COUNSEL EXHIBIT NO. 23.1 CONSENT OF INDEPENDENT AUDITORS [Letterhead of Mitchell & Titus, LLP] Carver Bancorp, Inc. 75 West 125th Street New York, New York 10027 We hereby consent to incorporation by reference in the Registration Statement, dated October 20, 1999, on Form S-2 of Carver Bancorp, Inc., of our report dated June 29, 1999 relating to the consolidated financial condition of Carver Bancorp, Inc. and subsidiaries as of March 31, 1999, and the related consolidated statements of income, changes in stockholders' equity and cash flows for the year ended March 31, 1999, which report is incorporated by reference in the March 31, 1999 Annual Report on Form 10-K of Carver Bancorp, Inc. and subsidiaries. /s/ Mitchell & Titus, LLP New York, New York October 20, 1999 EX-99.1 6 FORM OF ENROLLMENT APPLICATION EXHIBIT NO. 99.1 FORM OF ENROLLMENT APPLICATION A DIRECT PURCHASE PROGRAM FOR THE COMMON STOCK OF CARVER BANCORP, INC. ENROLLMENT APPLICATION I (We) hereby appoint American Stock Transfer & Trust Company as my (our) Agent under the terms and conditions of the Shares Program, as described in the Prospectus of the Program which accompanied this form, to receive cash payments and apply them to the purchase of shares of Carver Bancorp, Inc. Common Stock as indicated below. NO INTEREST WILL BE PAID ON THE FUNDS HELD PENDING INVESTMENT. ACCOUNT INFORMATION - ------------------- 1. SINGLE/JOINT: Joint account will be presumed to be joint tenants with right of survivorship unless restricted by applicable state law or otherwise indicated. The Social Security Number of the first-named tenant. 2 CUSTODIAL: A minor is the beneficial owner of the account with an adult custodian managing the account until the minor becomes of age, as specified in the Uniform Gift Transfer to Minors Act in the minor's state of residence. The minor's Social Security Number is required. 3 TRUST: Account is established in accordance with the provisions of a trust agreement. THIS FORM, WHEN COMPLETED AND SIGNED, SHOULD BE MAILED WITH YOUR CHECK IN THE ENVELOPE PROVIDED. IF YOU DO NOT HAVE THE ENVELOPE, MAIL YOUR CHECK AND THE FORM TO: CARVER BANCORP, INC. C/O AMERICAN STOCK TRANSFER & TRUST COMPANY ATTN: CARVER SHARES PROGRAM 40 WALL STREET, NEW YORK, NEW YORK 10005 Your preprinted name and address above is for mailing purposes only. Please complete one of the boxes below for the exact account registration. ACCOUNT LEGAL REGISTRATION (CHOOSE ONE): ---------------------------------------- SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER ______________________________ I hereby warrant, under penalty of perjury, that the number provided above is correct. - -------------------------------------------------------------------------------- |_| SINGLE/JOINT ACCOUNT |_| CUSTODIAL ACCOUNT _________________________ _______________________________ Name Custodian's Name _________________________ _______________________________ Joint Owner (if any) Minor's Name _________________________ _______________________________ Joint Owner (if any) Minor's State of Residence |_| TRUST ACCOUNT _________________________ Trust Name or Beneficiary _________________________ Trustee Name _________________________ Date of Trust - -------------------------------------------------------------------------------- ACCOUNT ADDRESS_________________________________________________________________ STREET CITY STATE ZIP CODE I acknowledge that the shares of Carver Bancorp, Inc. that I purchase through the shares program are not savings deposits or savings accounts, are not federally insured, and is not guaranteed by Carver Bancorp, Carver Federal Savings Bank of the federal government. If anyone asserts that investments through the Shares Program is federally insured or guaranteed, or is as safe as an insured deposit, I should call the Office of Thrift Supervision's Regional Director at (201) 413-7302. SIGNATURE(S)____________________________________________________________________ All Joint Owners Must Sign ATTACHED IS A CHECK FOR $________________ MINIMUM INITIAL INVESTMENT IS $200 MINIMUM INVESTMENT IS $100 FOR STOCKHOLDER OF RECORD AND CURRENT PLAN PARTICIPANTS MAXIMUM INITIAL INVESTMENT IS $10,000 (FOR AUTOMATIC MONTHLY DEDUCTIONS, SEE REVERSE) COMPLETE THIS PART ONLY IF YOU WANT AUTOMATIC MONTHLY DEDUCTIONS I(We) hereby authorize American Stock Transfer & Trust Company to make monthly automatic transfers of funds from the checking or savings account in the amount stated below. This monthly deductions will be used to purchase shares of Carver Bancorp, Inc. Common Stock for deposit into my (our) Carver Bancorp, Inc. account. Signature(s)_______________________________________ _______________________________________ Daytime Date____________ Phone Number ____________________ 1. Indicate the Type of Account: Checking or Savings. 2. Print the complete Bank Account Number. 3. Print the name on Bank Account as it appears on your statement. 4. Print the complete name of your financial institution, including the branch name and address. 5. Print the ABA Number (Bank Number) from your check or savings deposit slip. 6. Amount of automatic monthly deduction: indicate the monthly amount authorized to be transferred from your account. The minimum is $100 per payment and the maximum is $100,000 per calendar year from your checking savings account to purchase Carver Bancorp, Inc. Common Stock. PLEASE ENCLOSE A COPY OF A VOIDED check or savings deposit slip to verify banking information. FILL IN THE INFORMATION BELOW FOR STOCK PURCHASES USING AUTOMATIC MONTHLY DEDUCTIONS. Please Print All items 1. type of Account checking |_| savings |_| 2. __________________________________________________________________ bank account number 3. __________________________________________________________________ name of bank account 4. __________________________________________________________________ financial institution __________________________________________________________________ branch name __________________________________________________________________ branch street address __________________________________________________________________ branch city, state and zip code 5. _____________________________ ABA number (must be 9 digits) 6. $____________________________ Amount of automatic monthly deduction. -------------------------------------------------------------- Name on JOHN A. DOE __________19______ Bank Account MARY B. DOE 123 YOUR STREET ANYWHERE, U.S.A. 12345 PAY TO THE ORDER OF $ ----------------------------------------------- ------------ -------------------------------------------------------DOLLARS FIRST NATIONAL BANK Financial OF ANYWHERE Institution and 123 MAIN STREET Branch ANYWHERE, USA 12345 information FOR SAMPLE (NON NEGOTIABLE) ----------------------------- ---------------------------- :071000013: 123456789" -------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----