-----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, ADNlZ88Q5LwZWrGjXeYD2FWBNP/SHNBUl/U4/hxXly3dmVW/H7FFK/4RvX0nAwfC S7yXvt6iYs/ux2o1G7ZHlQ== 0000950123-01-508477.txt : 20020410 0000950123-01-508477.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950123-01-508477 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13007 FILM NUMBER: 1788658 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 10-Q 1 y55010e10-q.txt CARVER BANCORP, INC. 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, 2001 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) Registrants 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 2,306,286 - ---------------------------------------- ------------------------------- Class Outstanding at November 1, 2001 CONTENTS
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition as of September 30, 2001 (unaudited) and March 31, 2001........... 1 Consolidated Statements of Income for the Three Months and Six Months Ended September 30, 2001 and 2000 (unaudited).... 2 Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2001 and 2000 (unaudited)..................... 3 Notes to Consolidated Financial Statements.................... 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................ 6 Item 3. Quantitative and Qualitative Disclosures About Market Risk........................................ 16 PART II. OTHER INFORMATION Item 1. Legal Proceedings.................................... 16 Item 2. Changes in Securities and Proceeds................... 16 Item 3. Defaults upon Senior Securities...................... 16 Item 4. Submission of Matters to a Vote of Security Holders.. 16 Item 5. Other Information.................................... 16 Item 6. Exhibits and Reports on Form 8-K..................... 17 SIGNATURES................................................................ 18
PART I FINANCIAL INFORMATION ITEM 1. Financial Statements CARVER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands, except share data)
SEPEMBER 30, MARCH 31, 2001 2001 ------------ --------- (Unaudited) ASSETS Cash and due from banks......................................................... $ 11,321 $ 8,058 Federal funds sold.............................................................. 12,000 23,700 -------- -------- Total cash and cash equivalents.............................................. 23,321 31,758 -------- -------- Investment securities available for sale, net (including pledged as collateral of $26,655 at September 30, 2001)............................. 34,425 19,926 Investment securities held to maturity, net (including pledged as collateral of $14,330 at March 31, 2001).................................... -- 24,996 Mortgage-backed securities available for sale, net (including pledged as collateral of $29,010 at September 30, 2001)............................ 29,010 -- Mortgage-backed securities held to maturity, net (including pledged as collateral of $18,817 at September 30, 2001, and $12,068 at March 31, 2001). 19,005 42,866 Loans receivable................................................................ 317,031 286,988 Less allowance for loan losses............................................. (3,842) (3,551) -------- -------- Loans receivable, net...................................................... 313,189 283,437 -------- -------- Property & equipment, net....................................................... 10,275 10,421 Federal Home Loan Bank of New York stock, at cost............................... 5,751 5,755 Accrued interest receivable..................................................... 3,149 2,541 Excess of cost over net assets acquired, net.................................... 497 603 Other assets.................................................................... 2,818 2,197 -------- -------- Total assets.................................................................... $441,440 $424,500 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits........................................................................ $321,432 $279,424 Advances from Federal Home Loan Bank of New York................................ 75,788 100,299 Securities sold under agreement to repurchase................................... -- 4,930 Other borrowed money............................................................ 480 371 Other liabilities............................................................... 8,662 7,380 -------- -------- Total liabilities.......................................................... 406,362 392,404 -------- -------- Stockholders' equity: Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; 100,000 shares issued and outstanding...................................... 1 1 Common stock, $.01 par value per share; 5,000,000 shares authorized; 2,314,275 shares issued; 2,296,286 and 2,306,286 shares issued and outstanding at September 30, 2001 and March 31, 2001, respectively......... 23 23 Additional paid-in capital...................................................... 23,759 23,769 Retained earnings............................................................... 10,349 8,793 Treasury stock, at cost (17,989 and 7,989 shares at September 30, 2001 and March 31, 2001, respectively................................................ (160) (61) Common stock acquired by Employee Stock Ownership Plan.......................... (244) (334) Common stock acquired by Management Recognition Plan............................ (95) (95) Unrecognized gain on mortgage-backed and other securities available for sale, net of taxes............................................................... 1,445 -- -------- ---------- Total stockholders' equity................................................. 35,078 32,096 -------- ---------- Total liabilities and stockholders' equity...................................... $441,440 $424,500 ======== ==========
See accompanying notes to consolidated financial statements. 1 CARVER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except share data)
THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------ ---------------------- 2001 2000 2001 2000 --------- --------- ------- -------- Interest Income: Loans............................................................. $5,660 $5,275 $11,145 $10,573 Mortgage-backed securities........................................ 631 763 1,297 1,587 Investment securities............................................. 608 774 1,290 1,525 Federal funds sold................................................ 125 270 341 479 --------- --------- ------- -------- Total interest income.......................................... 7,024 7,082 14,073 14,164 --------- --------- ------- -------- Interest expense: Deposits.......................................................... 2,145 2,120 4,310 4,148 Advances and other borrowed money................................. 1,088 1,377 2,310 2,742 --------- --------- ------- -------- Total interest expense......................................... 3,233 3,497 6,620 6,890 --------- --------- ------- -------- Net interest income..................................................... 3,791 3,585 7,453 7,274 Provision for loan losses............................................... 225 450 450 893 --------- --------- ------- -------- Net interest income after provision for loan losses..................... 3,566 3,135 7,003 6,381 --------- --------- ------- -------- Non-interest income: Loan fees and service charges..................................... 75 83 167 189 Income from sale of branches...................................... 0 758 987 1,013 Loss from sale of loans........................................... 0 0 (101) 0 Other............................................................. 401 423 843 743 --------- --------- ------- -------- Total non-interest income...................................... 476 1,264 1,896 1,945 --------- --------- ------- -------- Non-interest expense: Salaries and employee benefits.................................... 1,423 1,641 2,804 3,079 Net occupancy expenses............................................ 358 367 651 794 Equipment......................................................... 314 370 639 669 Other............................................................. 1,343 1,562 2,763 3,152 --------- --------- ------- -------- Total non-interest expense..................................... 3,438 3,940 6,857 7,694 --------- --------- ------- -------- Income before income taxes.............................................. 604 459 2,042 632 State and local income taxes............................................ 115 178 388 202 --------- --------- ------- -------- Net income.............................................................. 489 281 1,654 430 Dividends applicable to preferred stock................................. 49 49 98 98 --------- --------- ------- -------- Net income available to common stockholders............................. $ 440 $ 232 $ 1,556 $ 332 ========= ========= ======= ======== Net income per common share-basic....................................... $ 0.19 $ 0.10 $ 0.68 $ 0.15 ========= ========= ======= ======== Net income per common share-diluted..................................... $ 0.19 $ 0.10 $ 0.66 $ 0.15 ========= ========= ======= ========
See accompanying notes to consolidated financial statements. 2 CARVER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
SIX MONTHS ENDED SEPTEMBER 30, -------------------------- 2001 2000 -------- ------- Cash flows from operating activities: Net income.................................................................... $ 1,654 $ 430 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment....................... 569 451 Amortization of intangibles................................................... 106 107 Other accretion and amortization.............................................. (8,072) (487) Provision for loan losses..................................................... 450 893 Gain on sale of branch........................................................ (987) (1,013) Impairment of foreclosed real estate.......................................... 20 -- Charge-off of branch improvements and related items, net...................... -- 221 Allocation of ESOP stock...................................................... 80 86 (Increase) Decrease in accrued interest receivable, net....................... (608) 77 Increase in other assets...................................................... (1,070) (794) Increase in other liabilities................................................. 954 87 -------- -------- Net cash provided (used) by operating activities.............................. (6,904) 58 -------- -------- Cash flows from investing activities: Purchases of securities available for sale.................................... (54,847) (86,538) Proceeds from maturities of securities available for sale..................... 75,000 111,895 Purchase of mortgage back security............................................ (10,271) -- Principal repayment of mortgage backed securities held to maturity............ 5,394 5,429 Sale of Federal Home Loan Bank of New York Stock.............................. 4 -- Net increase in loans receivable.............................................. (30,285) (10,253) Additions to premises and equipment........................................... (767) (125) Proceeds from sale of fixed assets............................................ 570 -- Proceeds from sale of real estate owned....................................... 429 87 -------- -------- Net cash provided by (used in) investing activities........................... (14,773) 20,495 -------- -------- Cash flows from financing activities: Cash paid to fund sale of deposits............................................ (15,802) (21,464) Net increase in deposits...................................................... 58,571 7,784 Net decrease in securities sold under agreements to repurchase................ (4,930) (10,520) Repayment of advances from Federal Home Loan Bank of New York................. (282,311) (46,367) Advances from Federal Home Loan Bank of New York.............................. 257,800 73,000 Increase (repayment) of other borrowed money.................................. 109 (91) Purchase of treasury stock.................................................... (99) -- Dividends paid................................................................ (98) (84) -------- -------- Net cash provided by (used in) financing activities........................... 13,240 2,258 -------- -------- Net (decrease) increase in cash and equivalents............................... (8,437) 22,811 Cash and equivalents -- beginning.............................................. 31,758 22,202 -------- -------- Cash and equivalents -- ending................................................. $ 23,321 $ 45,013 ======== ======== Supplemental disclosure of cash flow information: Cash paid for: Interest...................................................................... $ 7,198 $ 6,860 ======== ======== Federal, state and city income taxes.......................................... $ -- $ 45 ======== ========
See accompanying notes to consolidated financial statements. 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 unaudited consolidated financial statements presented herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Holding Company's Annual Report on Form 10-K for the year ended March 31, 2001 (the "2001 10-K"). The consolidated results of operations and other data for the three-months ended September 30, 2001 are not necessarily indicative of results that may be expected for the entire fiscal year ending March 31, 2002 ("fiscal 2002"). 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) NET INCOME PER COMMON SHARE Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share includes any additional common shares as if all potentially dilutive common shares were issued (e.g., convertible preferred stock). For the purpose of these calculations, unreleased ESOP shares are not considered to be outstanding. For each of the three-month and six-month periods ended September 30, 2001 and 2000, preferred dividends of $49,000 and $98,000, respectively were deducted from net income to arrive at the amount of net income available to common stockholders. Additionally, for both the three-month periods ended September 30, 2001 and 2000 and the six-month period ended September 30, 2000, 208,333 shares of common stock potentially issuable from the conversion of preferred stock are antidulitive, and therefore basic earnings per share was the same as fully diluted earnings per share. (3) TRANSFER OF INVESTMENT AND MORTGAGE-BACKED SECURITIES In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." As permitted by SFAS No. 133, on April 1, 2001, Carver transferred investment securities and mortgage-backed securities with a book value of approximately $45.7 million from the classification of held to maturity to available for sale. (4) COMPREHENSIVE INCOME A reconciliation of net income to comprehensive income for the periods indicated follows.
THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- ----------------------- 2001 2000 2001 2000 ------- ------ ------ ------ (In thousands) (In thousands) Net income.............................. $ 489 $ 281 $ 1,654 $ 430 Increase in unrealized gain on mortgage- backed and other securities available for sale, net of taxes. 630 -- 1,445 -- ------- ------ ------- ----- Comprehensive income.................... $ 1,119 $ 281 $ 3,099 $ 430 ======= ====== ======= =====
(5) RECENT ACCOUNTING PRONOUNCEMENT In September 2000, the FASB issued SFAS No.140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities"--a replacement of SFAS 125. SFAS 140 revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain additional disclosures. The collateral provisions and disclosure requirements of SFAS 140 are effective for fiscal years ending after December 15, 2000, whereas the other provisions of SFAS 140 are to be applied prospectively to transfers and servicing of financial assets and extinguishments of liabilities occuring after March 31, 2001. The adoption of SFAS 140 is not expected to have a material impact on the Company's financial condition or results of operations. In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." The SFAS No. 141 requires that the purchase method of accounting be 4 used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS No. 142 requires the goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed Of." The Holding Company has not recognized any impairment of unamortized goodwill. (6) RECLASSIFICATIONS Certain amounts in the consolidated financial statements presented for the prior period have been reclassified to conform to the current year presentation. 5 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 and the Bank 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 success in implementing its initiatives, including its new branch opening, its ability to achieve cost-savings associated with the Bank's branch closings, 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. The Company and the Bank assume no obligation to update these forward-looking statements to reflect the actual results, changes in assumptions or changes in other factors affecting such forward-looking statements. 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 five full service branches in the New York City boroughs of Brooklyn, Queens and Manhattan. COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2001 AND MARCH 31, 2001 ASSETS At September 30, 2001, the Company's total assets were $441.4 million, an increase of $16.9 million, or 4.0%, from $424.5 million at March 31, 2001. The increase primarily reflects growth of $29.8 million in loans off-set by a decline in federal funds sold, investment securities and mortgage-backed securities of $13.8 million. Loans receivable (exclusive of the allowance for loan losses) amounted to $317.0 million at September 30, 2001 compared to $287.0 million at March 31, 2001. The net increase in loans receivable during the first half of fiscal year ending March 31, 2002 ("fiscal 2002") includes loan originations of $29.9 million and aggregate loan purchases of $45.2 million, including the purchase of a seasoned multi-family loan portfolio totaling $25.4 million during the latter part of the second quarter of fiscal 2002 consisting of loans on properties located in the New York metropolitan area. The increase in loans was partially offset by loan repayments during the period. During the first six months of the fiscal year ended March 31, 2001 ("fiscal 2001"), loan originations were $13.9 million and aggregate loan purchases were $17.1 million. The following table sets forth a summary of the Company's loans receivable, net, at the dates indicated (dollars in thousands).
AT SEPTEMBER 30, 2001 AT MARCH 31, 2001 --------------------- -------------------- AMOUNT PERCENT AMOUNT PERCENT ------ ------- ------ ------- Real estate loans: One- to four-family...................... $151,901 47.79% $157,582 54.64% Multi-family............................. 91,225 28.70% 83,620 29.00% Commercial real estate................... 66,326 20.87% 36,113 12.52% Construction................................. 5,615 1.77% 7,101 2.46% Consumer and business loans.................. 2,791 0.87% 3,966 1.38% -------- ------- -------- ------- Total gross loans ........................... 317,858 100.00% 288,382 100.00% ======= ======= Add: Premium on loans........................ 1,163 705 Less: Loans in process........................ (1,279) (1,280) Deferred fees and loan discounts........ (711) (819) --------- -------- Loans receivable............................. 317,031 286,988 Allowance for loan losses.................... (3,842) (3,551) -------- -------- Loans receivable, net........................ $313,189 $283,437 ======== ========
6 Total securities amounted to $82.4 million at September 30, 2001, down from $87.8 million at March 31, 2001. As of April 1, 2001, the Bank transferred $45.7 million of mortgage-backed and other securities from held to maturity to available for sale. An unrecognized gain of $1.8 million as of September 30, 2001 is included in the carrying value of the mortgage-backed and other securities available for sale as permitted by Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." The decrease in total securities, adjusted for the available for sale adjustment in mortgage-backed and other securities, primarily represent maturities and repayments that occurred during the first six months of the fiscal year, which exceeded purchases. The net funds received from these activities were used primarily to fund the increase in loans. During the quarter ended June 30, 2001, the Bank sold its automobile loan portfolio with a book value of $490,000 for $191,000 less than the carrying value. This portfolio was sold because of its high amount of delinquencies and losses, as well as the associated costs of servicing the portfolio. An amount equal to $90,000 (which represented the estimated inherent principal losses) was charged to the allowance for loan losses, while the remaining $101,000 (which represented other costs such as anticipated forgone interest and the cost to service the loans) was charged as a loss on the sale of loans on the Statements of Income. LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities At September 30, 2001, total liabilities increased by $14.0 million, or 3.6%, to $406.4 million compared to $392.4 million at March 31, 2001. The increase in liabilities primarily reflects an increase of $42.0 million, or 15.0%, in deposits. The following table sets forth a summary of the Company's deposits at the dates indicated (dollars in thousands).
BALANCE AT PERCENTAGE BALANCE AT PERCENTAGE SEPTEMBER 30, OF TOTAL MARCH 31, OF TOTAL 2001 DEPOSITS 2001 DEPOSITS ------------- ---------- ---------- ---------- Savings and club accounts................ $124,069 38.60% $132,645 47.47% Money market savings accounts............ 16,116 5.01% 15,718 5.63% NOW and demand accounts.................. 27,342 8.51% 26,166 9.36% Certificates of deposit.................. 153,905 47.88% 104,895 37.54% -------- ------- -------- ------- Total deposits........................... $321,432 100.00% $279,424 100.00% ======== ======= ======== =======
The increase in deposits is primarily attributable to a deposit of $50 million from the State of New York, which was used in part to pay down higher cost borrowed funds, offset in part by a decrease in deposits due to the sale of the East New York branch during the three months ended June 30, 2001. The branch had $18.4 million in deposits at March 31, 2001. Excluding the branch sale and the New York State deposit, deposits would have increased by $10.4 million. The deposits sold were replaced in part by certificates of deposit. The increase in deposits was offset by a decrease of $29.3 million in borrowed funds, which totaled $76.2 million at September 30, 2001, compared to $105.6 million at March 31, 2001. Stockholders' Equity Stockholders' equity increased $3.0 million to $35.1 million at September 30, 2001, compared to $32.1 million at March 31, 2001. The increase in stockholders' equity was primarily attributable to retained earnings of $1.6 million, all of which relates to net income less preferred stock dividends for the six months ended September 30, 2001, and unrealized gains, net of taxes, of $1.4 million relating to the transfer of certain investment and 7 mortgage-backed securities from the accounting classification of held to maturity to available for sale. Investment and mortgage-backed securities accounted for as held to maturity are carried at cost, while such securities designated as available for sale are carried at market with an adjustment to stockholders' equity, net of taxes. LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity management process focuses on ensuring that sufficient funds exist to meet withdrawals by depositors, loan funding commitments and other financial obligations and expenditures. The Company's primary sources of funds are deposits, borrowed funds and principal and interest payments on loans, mortgage-backed securities and investment securities. While maturities and scheduled amortization of loans, mortgage-backed securities and investment securities are predictable sources of funds, deposit flows, loan and mortgage-backed securities prepayments are strongly influenced by changes in general interest rates, economic conditions and competition. The Consolidated Statements of Cash Flows present the change in cash from operating, investing and financing activities. During the six months ended September 30, 2001, cash and cash equivalents decreased by $8.4 million. Net cash used by operating activities was $6.9 million, representing primarily net income adjusted for depreciation and amortization, other accretion and amortization, the provision for loan losses, the net gain from the sale of deposits, and the net changes in other assets and liabilities. Net cash used in investing activities was $14.7 million, representing primarily the net cash provided by the maturity of securities and principal repayments of mortgage-backed securities held to maturity, offset in part by investment purchases and a net increase in loans. Net cash provided by financing activities was $13.2 million, representing primarily a net increase in deposits and borrowed funds, offset in part by cash paid to fund the sale of deposits. Until recently, banks were required by the Office of Thrift Supervision (the "OTS") regulations to maintain a minimum average daily balance of liquid assets as a percentage of net withdrawable deposit accounts plus short-term borrowings. The minimum required liquidity ratio was 4.0%. At September 30, 2001, the Bank's liquidity ratio was 5.48%. The OTS has since eliminated this minimum requirement. The levels of the Bank's short-term liquid assets are dependent on the Bank's operating, financing and investing activities during any given period. The OTS, the Bank's primary federal regulator, requires that the Bank meet minimum capital requirements. At September 30, 2001, the Bank exceeded all regulatory minimum capital requirements. The table below presents certain information relating to the Bank's capital compliance at September 30, 2001. (dollars in thousands).
AMOUNT % OF ASSETS ------ ----------- Total capital (to risk-weighted assets): Capital level............................ $ 36,634 15.85% Less requirement......................... 18,496 8.00 -------- ------------- Excess................................... $ 18,138 7.85% ======== ============= Tier 1 capital (to risk-weighted assets): Capital level............................ $ 33,732 14.59% Less requirement......................... 9,248 4.00 -------- ------------- Excess................................... $ 24,484 10.59% ======== ============= Tier 1 leverage capital (to adjusted assets): Capital level............................ $ 33,732 7.65% Less requirement......................... 17,645 4.00 -------- ------------- Excess................................... $ 16,087 3.65% ======== =============
ASSET QUALITY At September 30, 2001, non-performing loans totaled $2.3 million, or 0.71% of loans receivable, compared to non-performing loans of $2.5 million, or 0.88% of loans receivable, at March 31, 2001. At September 30, 2001, 8 the allowance for loan losses was $3.8 million, compared to $3.6 million at March 31, 2001. At September 30, 2001, the ratio of the allowance for loan losses to non-performing loans was 170.2%, compared to 141.0% at March 31, 2001. At September 30, 2001, the ratio of the allowance for loan losses to loans receivable was 1.21%, compared to 1.24% at March 31, 2001. 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. ANALYSIS OF EARNINGS The Company's profitability is primarily dependent upon net interest income, which represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income is dependent on the difference between the average balances and rates earned on interest-earning assets and the average balances and rates paid on interest-bearing liabilities. Provisions for loan losses, non-interest income, non-interest expense and income taxes further affect net income. The earnings of the Company are significantly affected by general economic and competitive conditions, particularly changes in market interest rates, and to a lesser extent by government policies and actions of regulatory authorities. The following tables set forth, for the periods indicated, certain information relating to Carver's average interest-earning assets, average interest-bearing liabilities, net interest income, interest rate spread and interest rate margin. They reflect the average yield on assets and the average cost of liabilities. Such yields and costs are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods shown. Average balances are derived from daily or month-end balances as available. Management does not believe that the use of average monthly balances instead of average daily balances 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. 9
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------------- 2001 2000 ------------------------------------------------------------------------------- AVERAGE ANNUALIZED AVERAGE ANNUALIZED BALANCE INTEREST AVG. YIELD/COST BALANCE INTEREST AVG. YIELD/COST ------- -------- --------------- ------- -------- --------------- (Dollars in thousands) ASSETS INTEREST EARNING ASSETS Loans receivable (1)........................ $299,943 $ 5,660 7.55% $276,599 $ 5,275 7.63% Investment securities (2)................... 32,262 608 7.54 40,970 774 7.56 Mortgage-backed securities.................. 43,651 631 5.78 50,208 763 6.09 Federal funds sold.......................... 15,854 125 3.15 18,925 270 5.69 -------- ------- ------- -------- ------ ----- Total interest earning assets.......... 391,710 7,024 7.17% 386,702 7,082 7.33% -------- ------- ------ ----- Non-interest earning assets................. 23,027 28,299 -------- -------- Total Assets........................... $414,737 $415,001 ======== ======== LIABILITIES INTEREST BEARING LIABILITIES Deposits DDA......................................... $ 7,012 $ 0 0% $ 11,844 $ 0 0% NOW......................................... 21,252 74 1.40 16,269 65 1.60 Savings and clubs........................... 124,645 639 2.05 140,981 796 2.26 Money market accounts....................... 16,250 88 2.18 18,478 102 2.21 Certificates of deposit..................... 121,265 1,344 4.43 90,779 1,157 5.10 -------- ------- ------- -------- ------ ----- Total Deposits......................... 290,424 2,145 2.95 278,351 2,120 3.05 Borrowed money................................. 83,247 1,088 5.23 97,555 1,377 5.64 -------- ------- ------- -------- ------ ----- Total deposits and interest-bearing liabilities 373,671 3,233 3.46% 375,906 3,497 3.72% ------- ------ Non-interest-bearing liabilities............... 7,231 6,346 -------- -------- Total liabilities.............................. 380,902 382,252 Stockholders' equity........................... 33,835 32,749 -------- -------- Total liabilities and stockholders' equity..... $414,737 $415,001 ======== ======== Net interest income............................ $ 3,791 $ 3,585 ======= ======= Interest rate spread........................... 3.71% 3.61% ====== ===== Net interest margin............................ 3.87% 3.71% ====== ===== Ratio of average interest earning assets to deposits and interest-bearing liabilities...... 1.05x 1.03x ====== =====
_____________ (1) Includes non-accrual loans. (2) Includes FHLB stock. 10
SIX MONTHS ENDED SEPTEMBER 30, --------------------------------------------------------------------------------- 2001 2000 ---------------------------------------- ---------------------------------------- AVERAGE ANNUALIZED AVERAGE ANNUALIZED BALANCE INTEREST AVG. YIELD/COST BALANCE INTEREST AVG. YIELD/COST ---------- -------- --------------- ------- -------- --------------- (DOLLARS IN THOUSANDS) Assets Interest Earning Assets Loans receivable (1)........................... $ 288,855 $11,145 7.72% $ 277,001 $ 10,573 7.63% Investment securities (2)...................... 38,975 1,290 6.62 43,474 1,525 7.02 Mortgage-backed securities..................... 42,599 1,297 6.09 51,763 1,587 6.14 Federal funds sold............................. 17,958 341 3.80 16,275 479 5.87 --------- ------- ----- --------- ------- ----- Total interest earning assets.................. 388,387 14,073 7.25% 388,513 14,164 7.29% ------- ------- Non-interest earning assets.................... 23,673 28,376 --------- --------- Total assets................................... $ 412,060 $ 416,889 ========= ========= LIABILITIES INTEREST BEARING LIABILITIES Deposits DDA............................................ $ 7,512 $ 0 0% $ 12,086 $ 0 0% NOW............................................ 20,718 133 1.29 17,076 141 1.65 Savings and clubs.............................. 128,332 1,336 2.08 142,799 1,629 2.28 Money market accounts.......................... 16,333 173 2.12 18,924 225 2.38 Certificates of Deposit........................ 114,237 2,668 4.67 88,901 2,153 4.84 Total Deposits................................. 287,132 4,310 3.00 279,786 4,148 2.97 Borrowed money................................. 84,275 2,310 5.48 97,697 2,742 5.61 ------ ----- ---- ------ ----- ---- Total deposits and interest-bearing liabilities 371,407 6,620 3.57% 377,483 6,890 3.65% --------- ----- ----- Non-interest-bearing liabilities............... 7,564 6,646 --------- --------- Total liabilities.............................. 378,971 384,129 Stockholders' equity........................... 33,089 32,760 --------- --------- Total liabilities and stockholders' equity..... $ 412,060 $ 416,889 ========= ========= Net interest income............................ $ 7,453 $ 7,274 ======= ======= Interest rate spread........................... 3.68% 3.64% ===== ===== Net interest margin............................ 3.84% 3.74% ===== ===== Ratio of average interest earning assets to deposits and interest-bearing liabilities..... 1.05x 1.03x ===== =====
(1) Includes non-accrual loans. (2) Includes FHLB stock. 11 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 GENERAL For the second quarter of fiscal 2002, the Company reported net income of $440,000 available to common stockholders, or $0.19 per diluted common share, compared to $232,000, or $0.10 per diluted common share, for the same period last year. For each period the Company applied a tax loss carryforward resulting from prior period losses and therefore no federal taxes have been applied to earnings for each period. The Company reported income of $604,000 before income taxes for the second quarter of fiscal 2002, compared to a net loss of $299,000 before income taxes for the comparable prior year period, excluding the gain of $758,000 from the sale of the Bank's Chelsea branch. The sale of this and other branches was part of the Bank's restructuring plan, which included the sale of non-strategic branches. The growth in income for the fiscal 2002 period, as compared to the prior year period, was achieved as a result of greater operating efficiencies that the Company generated in the quarter and its continued growth of loan originations. The Company's results were also enhanced by the favorable interest rate environment. INTEREST INCOME Interest income of $7.0 million for the three months ended September 30, 2001 was substantially unchanged from the same period last year. The yield on average interest-earning assets was 7.17% for the second quarter of fiscal 2002, compared to 7.33% for the prior year period. The yield for fiscal 2002 benefited from the continuation of the Company's strategy to increase the aggregate percentage of multifamily and commercial real estate loans receivable (which generally have higher yields than one-to four family residential loans) to total loans receivable, as well as from lower levels of mortgage-backed securities (which generally yield below that recognized in the loan portfolio). However such benefits were offset by the effects of a declining interest rate environment during the second quarter of fiscal 2002 compared to the prior year period which impacted interest income as described below. Interest income on loans receivable increased by $385,000, or 7.3%, to $5.7 million for the three months ended September 30, 2001, compared to $5.3 million for the comparable prior year period. The increase primarily reflected an improvement in the average balance of loans to $299.9 million for the three months ended September 30, 2001, compared to $276.6 million for the three months ended September 30, 2000. The increase in the average balance of loans receivable resulted primarily from the origination and purchase of loans which were somewhat offset by repayments. Interest income on investment securities decreased by $166,000, or 21.5%, to $608,000 for the three months ended September 30, 2001, compared to $774,000 for the prior year period. The decrease was primarily due to the decline in the average balance of investment securities. Interest income on mortgage-backed securities decreased by $132,000, or 17.3%, to $631,000 for the three months ended September 30, 2001, compared to $763,000 for the prior year period. The decrease was primarily due to the decline in average balances of mortgage-backed securities due to accelerated prepayments. Interest income on federal funds sold decreased by $145,000, or 53.5%, to $125,000 for the three months ended September 30, 2001 compared to $269,000 for the prior year period. The lower interest income for the three months ended September 30, 2001 resulted primarily from a lower level of average balances, coupled with a decrease in average return to 3.15% from 5.69% for the prior year period. INTEREST EXPENSE Interest expense of $3.2 million for the three months ended September 30, 2001 decreased $264,000, or 7.5%, compared to $3.5 million for the same period last year. The decrease in interest expense was due primarily to a decline in the average cost of deposits and interest-bearing liabilities to 3.46% for the three months ended 12 September 30, 2001 from 3.72% for the same period last year. This decline reflects the lower interest rate environment in fiscal 2002. Interest expense on interest-bearing deposits of $2.1 million for the three months ended September 30, 2001 was substantially unchanged from the same period last year. The increase in the average balance of deposits to $290.4 million from $278.4 million was offset by a decline in the rate paid on interest-bearing deposits to 2.95% from 3.05%. A decline in the average balance of comparatively low cost deposits (demand deposits, NOW accounts, money market accounts, and saving and club accounts) was offset by an increase in the average balance of comparatively higher cost certificates of deposit which was used to partially fund loan originations and loan purchases. The decline in the balance of low cost deposits was primarily the result of the sale of deposits in the sale of non-strategic branches. Interest expense on borrowed money decreased $287,000, or 20.9%, to $1.1 million for the three months ended September 30, 2001, compared to $1.4 million for the prior year period. This decrease in interest expense was primarily due to a decline in the average balance of borrowed money to $83.2 million from $97.6 million, coupled with a decline in the rate paid for these funds to 5.23% from 5.64%. NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES Net interest income before the provision for loan losses amounted to $3.8 million for the three months ended September 30, 2001, an increase of $206,000, or 5.8%. While net interest income benefited from a general interest rate decline, this benefit was partially offset by a accelerated prepayments of mortgagebacked securities and the sale of lower cost deposits in non-strategic branches which were replaced by comparatively higher cost certificates of deposit. Net interest margin grew to 3.87% for the second quarter of fiscal 2002 from 3.71% for the second quarter of fiscal 2001. The Company's annualized interest rate spread increased by ten basis points to 3.71% for the three months ended September 30, 2001 compared to the prior year period. PROVISION FOR LOAN LOSSES The provision for loan losses, which is predicated upon the Company's assessment of the adequacy of its allowance for loan losses, amounted to $225,000 for the three months ended September 30, 2001, compared to $450,000 for the same period last year. The 50.0% decrease in the provision for loan losses is primarily attributable to a reduction in charge-offs. During the second quarter of fiscal 2002, Carver recorded net recoveries of $5,000 compared to net loan charge-offs of $224,000 for the same period last year. NON-INTEREST INCOME Non-interest income was $476,000 for the three-month period ended September 30, 2001, substantially unchanged from the same period last year, excluding non-recurring gains and losses. The three months ended September 30, 2000 included a non-recurring gain of $758,000 relating to the sale of the Chelsea branch. Excluding the non-recurring gain, non-interest income represented 11.2% of total revenue (net interest income plus non-interest income, excluding the non-recurring gains) for the second quarter of fiscal 2002, compared with 12.4% for the prior year period. NON-INTEREST EXPENSE Non-interest expense decreased $502,000, or 12.7%, to $3.4 million for the quarter ended September 30, 2001, compared to $3.9 million for the same period last year. The decrease in non-interest expense is primarily attributable to efficiencies from the Company's management and branch restructuring and reduced professional fees and lower FDIC premium. INCOME TAX EXPENSE For each period presented, the Company applied a federal tax loss carryforward resulting from prior period losses and therefore no federal income taxes have been applied to income for the three-month period ended September 30, 2001 nor the comparable prior year period. The taxes of $115,000 and $178,000 for the three-months ended September 30, 2001, and 2000, respectively, represent New York State and New York City income taxes only. 13 NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES While net interest income benefited from a general interest rate decline, this benefit was partially offset by accelerated prepayments of mortgage-backed securities and the sale of lower cost deposits in non-strategic branches, which were replaced by comparatively higher costs and Certificates of Deposit. COMPARISON OF OPERATING RESULTS FOR THE SIX MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000 GENERAL For the six months ended September 30, 2001 the Company reported net income of $1.6 million available to common stockholders, or $0.66 per diluted common share, compared to $332,000, or $0.15 per diluted common share, for the corresponding period last year. For each period the Company applied a tax loss carryforward resulting from prior period losses and therefore no federal taxes have been applied to earnings for either period. Net income for the six-month period ended September 30, 2001 includes non-recurring income of approximately $1.0 million, which represents the net gain realized on the sale of the Bank's East New York branch and a loss of $101,000 on the sale of automobile loans. The comparable prior year period included realized gains on the sale of the Bank's Roosevelt and Chelsea branches of approximately $1.0 million. Excluding the non-recurring income, the Company would have recorded a pre-tax loss of approximately $381,000 for the six-month period ended September 30, 2000, compared to a pre-tax profit of $1.2 million for the six months ended September 30, 2001. INTEREST INCOME Interest income of $14.1 million for the six-month period ended September 30, 2001 was substantially unchanged compared to the prior year period. The yield on average interest-earning assets was 7.25% for the first six months of fiscal 2002 compared to 7.29% for the first six months of fiscal 2001. Interest income on loans receivable increased by $572,000, or 5.41%, to $11.1 million for the six months ended September 30, 2001, compared to $10.6 million for the prior year period. The increase reflected an $11.9 million, or 4.3%, increase in the average balance of loans receivable to $288.9 million for the six months ended September 30, 2001, compared to $277.0 million for the six months ended September 30, 2000. The increase in the average balance of loans receivable resulted primarily from the origination and purchase of loans. Interest income on investment securities decreased by $235,000, or 15.4%, to $1.3 million for the six months ended September 30, 2001, compared to $1.5 million for the prior year period. The decrease was primarily due to the decline in the yield to 6.62% for the six months ended September 30, 2001 from 7.02% for the prior year period, combined with a decline in the average balance of investment securities to $39.0 million for the six months ended September 30, 2001 from $43.5 million in the prior year period. The decrease in the average balance of investment securities was primarily attributable to the reallocation of funds from maturing investment securities to the origination and purchase of loans. Interest income on mortgage-backed securities decreased by $290,000, or 18.3%, to $1.3 million for the six months ended September 30, 2001, compared to $1.6 million for the prior year period. The decrease was primarily due to the decline in average balances of mortgage-backed securities to $42.6 million from $51.8 million for the prior year period due to accelerated prepayments of mortgage-backed securities as a result of the lower interest rate environment in fiscal 2002. The Bank reallocated the funds from such principal and interest prepayments on mortgage-backed securities to the origination and purchase of loans. Interest income on federal funds sold decreased by $138,000, or 28.8%, to $341,000 for the six months ended September 30, 2001, compared to $479,000 for the prior year period. The decrease primarily reflected a decline in the yield to 3.80% for the six months ended September 30, 2001, compared to 5.87% million for the prior year period. 14 INTEREST EXPENSE Interest expense decreased $270,000, or 3.9%, to $6.6 million for the six months ended September 30, 2001, compared to $6.9 million for the prior year period. The decrease in interest expense was due primarily to an eight basis point decline in the annualized cost of deposits and interest-bearing liabilities to 3.57%, compared to 3.65% for the same period last year, coupled with a decline in the average balance of deposits and interest-bearing liabilities to $371.4 million from $377.5 million. Interest expense on interest-bearing deposits increased $162,000, or 3.9%, to $4.3 million for the six months ended September 30, 2001, compared to $4.1 million for the prior year period. Although the Company benefited from the lower interest rate environment in terms of lower rates on interest-bearing deposits, interest expense on interest-bearing deposits increased primarily due to an increase in the average balance of interest-bearing deposits to $287.1 million for the first six months of fiscal 2002 from $279.8 million in the prior year period. The decline in the average balance of comparatively low cost deposits (demand deposits, NOW accounts, money market accounts and savings and club accounts) was offset by an increase in the average balance of comparatively higher cost certificates of deposit. The average balance of certificates of deposit was $114.3 million, or 39.8% of average total deposits for the first six months of fiscal 2002, up from $88.9 million, or 31.8% of average total deposits, for the first six months of fiscal 2001. Interest expense on borrowed money decreased $432,000, or 15.6%, for the six months ended September 30, 2001, compared to the prior year period. The decrease in interest expense was due to a decline in the average balance of borrowed money to $84.3 million from $97.7 million and a decrease in the rate paid for these funds to 5.48% from 5.61%. NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES Net interest income before provision for loan losses amounted to $7.5 million for the six months ended September 30, 2001, an increase of $179,000, or 2.5%, compared to $7.3 million for the comparable prior year period. While net interest income benefited from a general interest rate decline, this benefit was partially offset by accelerated prepayments of mortgage-backed securities and the sale of lower cost deposits in non-strategic branches, which were replaced by comparatively higher costs and certificates of deposit. The annualized net interest margin improved by ten basis points to 3.84% for the six months ended September 30, 2001 compared to the prior year period, while the Company's annualized interest rate spread increased by four basis points to 3.68% PROVISION FOR LOAN LOSSES The provision for loan losses amounted to $450,000 for the six-month period ended September 30, 2001 compared to $894,000 for the same period last year. The primary reasons for the 50% decrease in the provision was the reduction in net charge-offs to $158,000 for the six months ended September 30, 2001, compared to $614,000 for the same period last year. NON-INTEREST INCOME Non-interest income (excluding non-recurring gains and losses) was $1.0 million for the six-month period ended September 30, 2001, substantially unchanged from the same period last year. The six months ended September 30, 2001 included a gain of $987,000 relating to the sale of the East New York branch offset in part by a loss of $101,000 on the sale of the automobile loan portfolio. The six months ended September 30, 2000 included branch sale gains of $1.0 million. Excluding non-recurring gains and losses, non-interest income represented 11.9% of total revenues for the six-month periods ended September 30, 2001, compared to 11.4% for the same period last year. NON-INTEREST EXPENSE Non-interest expense decreased $837,000, or 10.9%, to $6.9 million for the six-month period ended September 30, 2001 compared to $7.7 million for the same period last year. The decrease in non-interest expense is primarily attributable to efficiencies from the Company's management and branch restructuring and reduced professional fees and lower FDIC premium. 15 INCOME TAX EXPENSE For each period presented, the Company applied a federal tax loss carryforward resulting from prior period losses and therefore no federal income taxes have been applied to income for the six-month period ended September 30, 2001 nor the comparable prior year period. The taxes of $388,000 and $202,000 for the six-month periods ended September 30, 2001 and 2000, respectively, represent New York State and New York City income taxes only. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Quantitative and qualitative disclosure about market risk is presented at March 31, 2001 in the Company's Annual Report of Form 10-K (the "2001 10-K"), as filed with the Securities and Exchange Commission ("SEC"). The Company believes that there have been no material changes in the Company's market risk at September 30, 2001 compared to March 31, 2001. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Disclosure regarding legal proceedings that the Company is a party to is presented on Carver's 2001 10-K, as filed with the SEC. Except as set forth below, there have been no material changes with regard to such legal proceedings since the filing of the 2001 10-K. Carver remains a defendant in the district court for the District of Columbia in an action by Ralph Williams against the National Credit Union Administration ("NCUA") and several other banks (Carver and such banks, the "Bank Defendants") alleging that the NCUA acted improperly when it placed Northwestern Conference Federal Credit Union ("Northwestern"), of which Williams was a former board member, into conservatorship and subsequent liquidation. While the bulk of plaintiff Williams' complaints relate to the action of the NCUA board, Williams alleges that the Bank Defendants "collaborated with the NCUA Board" in violating unspecified constitutional and privacy rights. Plaintiff Janice Pressley, former treasurer of Northwestern, later filed a pro se action (the "Pressley action") against the same defendants alleging substantially similar complaints. The Bank Defendants have moved to dismiss both complaints. On September 20, 2001, the court granted the motion to dismiss the Pressley Action. Certain other claims, suits, complaints and investigations involving the Company, arising in the ordinary course of business, have been filed or are pending. The Company is of the opinion, after discussion with legal counsel representing the Company in these proceedings, that the aggregate liability or loss, if any, arising from the ultimate disposition of these matters would not have a material adverse effect on the Company's consolidated financial position or results of operations. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None 16 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. Exhibit 11. Net income per share. (b) Reports on Form 8-K. None. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CARVER BANCORP, INC. Date: November 14, 2001 /s/ Deborah C. Wright ------------------------------------------- Deborah C. Wright President and Chief Executive Officer Date: November 14, 2001 /s/ William Schult ------------------------------------------- William Schult Vice President, Controller and Acting Chief Financial Officer
18 EX-11 3 y55010ex11.txt NET INCOME PER SHARE EXHIBIT 11 COMPUTATION OF NET INCOME PER SHARE FOR THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (In thousands, except share data)
THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Earnings per common share -- basic - ---------------------------------- Net income.............................. $ 489 $ 281 $ 1,654 $ 430 Preferred dividends..................... (49) (49) (98) (98) --------- --------- --------- --------- Net income -- basic..................... $ 440 $ 232 $ 1,556 $ 332 --------- --------- --------- --------- Weighted average common shares outstanding -- basic.................. 2,276,928 2,256,753 2,280,522 2,254,497 --------- --------- --------- --------- Earning per common share -- basic....... $ 0.19 $ 0.10 $ 0.68 $ 0.15 ========= ========= ========= ========= Earnings per common share -- diluted - ------------------------------------ Net income -- basic..................... $ 440 $ 232 $ 1,556 $ 332 Impact of potential conversion of convertible preferred stock to common stock....................... 49 49 98 98 --------- --------- --------- --------- Net income -- diluted................... $ 489 $ 281 $ 1,654 $ 430 ========= ========= ========= ========= Weighted average shares outstanding -- basic................. 2,276,928 2,256,753 2,280,522 2,254,497 Effect of dilutive securities -- convertible preferred stock........... 208,333 208,333 208,333 208,333 --------- --------- --------- --------- Weighted average shares outstanding -- diluted................ 2,485,261 2,465,086 2,488,855 2,462,830 ========= ========= ========= ========= Earning per common share -- diluted..... $ 0.19 $ 0.10 $ 0.66 $ 0.15 ========= ========= ========= =========
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