-----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, L5VKxUJerqPm81IbL8dfeJVfUlqwqYyc16GbJH6+Y2ZoYe9iAg7/X5q8q7C2H2nm F7qb/LUlyXg8HFk+cHWlmA== 0000950123-98-010160.txt : 19981123 0000950123-98-010160.hdr.sgml : 19981123 ACCESSION NUMBER: 0000950123-98-010160 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981120 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: SEC FILE NUMBER: 001-13007 FILM NUMBER: 98756152 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 CARVER BANCORP, INC. 1 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, 1998. OR [ ] 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 --- --- Class Outstanding at November 13, 1998 ----- -------------------------------- Common Stock, par value $.01 2,314,275 1 2 CONTENTS PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition as of September 30, 1998 and March 31, 1998 (unaudited)................. 3 Consolidated Statements of Income for the Three and Six Months Ended September 30, 1998 and 1997 (unaudited)..................... 4 Consolidated Statements of Cash Flows for the Six Months Ended September 30, 1998 and 1997 (unaudited)..................... 5 Notes to Consolidated Financial Statements (unaudited)............ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................... 7 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 Use of 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........................................... 17 Item 6. Exhibits and Reports on Form 8-K............................ 17 SIGNATURES 2 3 CARVER BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
AS OF AS OF SEPTEMBER 30, MARCH 31, 1998 1998 ------------- ---------- ASSETS Cash and due from banks........................ $ 8,403,535 $ 12,120,071 Federal funds sold............................. 14,800,000 3,000,000 ------------ ------------ Total cash and cash equivalents.............. 23,203,535 15,120,071 ------------ ------------ Securities available for sale.................. 41,045,211 28,407,505 MBS securities held to maturity, net (estimated fair values of $77,685,943 and $90,197,873 at September 30, 1998 and March 31, 1998)............................... 78,274,561 91,115,861 Loans receivable, net: 257,620,195 274,954,337 REO............................................ 82,198 82,198 Property & Equipment........................... 12,197,359 11,545,627 FHLB stock..................................... 5,754,600 5,754,600 Accrued interest............................... 2,078,153 2,762,843 Excess of cost over net assets acquired........ 1,143,397 1,246,116 Other assets................................... 8,775,484 6,469,053 ------------ ------------ Total assets................................. $430,174,693 $437,458,211 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits....................................... $277,796,144 $274,894,232 Repos.......................................... 54,970,000 87,020,000 Advances....................................... 51,723,062 36,741,686 Other borrowings............................... 1,092,792 1,183,858 ------------ ------------ Total Borrowings............................. 107,785,854 124,945,544 ------------ ------------ Advance payments for taxes..................... 659,995 659,995 Other liabilities.............................. 7,755,866 1,424,096 ------------ ------------ Total liabilities............................ 393,997,859 401,923,867 ------------ ------------ Stockholders' Equity: Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; none issued...... 0 0 Common stock, $0.01 par value per share; 5,000,000 shares authorized; 2,314,275 shares issued and outstanding................. 23,144 23,144 Additional paid in capital..................... 21,439,783 21,418,897 Retained Earnings.............................. 15,916,594 15,289,631 Dividends declared and paid.................... (115,714) 0 ESOP stock..................................... (1,092,792) (1,183,858) Unrealized gain (loss) on securities AFS....... 5,819 (13,470) ------------ ------------ Total stockholders' equity................... 36,176,834 35,534,344 ------------ ------------ Total liabilities & stockholders' equity..... $430,174,693 $437,458,211 ============ ============
3 4 CARVER BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1998 1997 1998 1997 ---------- ---------- ----------- ----------- Interest Income Loan receivable...................................... $5,205,367 $4,532,374 $10,559,623 $ 8,902,151 Mortgage-backed securities........................... 1,338,548 2,190,048 3,185,114 4,415,676 Debt and equity securities........................... 0 401,073 0 535,666 Other interest earning assets........................ 457,149 22,877 841,210 89,753 ---------- ---------- ----------- ----------- Total interest income........................... 7,001,064 7,146,372 14,585,947 13,943,246 ---------- ---------- ----------- ----------- Interest expense Deposits............................................. 2,070,885 2,171,630 4,212,653 4,294,289 Advances and other borrowed money.................... 1,562,363 1,655,906 3,307,768 3,353,483 ---------- ---------- ----------- ----------- Total interest expense.......................... 3,633,248 3,827,536 7,520,421 7,647,772 ---------- ---------- ----------- ----------- Net interest income....................................... 3,367,816 3,318,836 7,065,526 6,295,474 ---------- ---------- ----------- ----------- Provisions for loan losses................................ 299,985 170,837 750,000 338,193 ---------- ---------- ----------- ----------- Net int. income after provision for loan loss............. 3,067,831 3,147,999 6,315,526 5,957,281 ---------- ---------- ----------- ----------- Non-interest income Loan fees and service charges........................ 60,916 28,970 109,111 66,186 Gain or (loss) on sale of securities................. 4,941 0 4,941 0 Other income......................................... 506,509 323,781 1,032,982 602,927 ---------- ---------- ----------- ----------- Total non-interest income....................... 572,366 352,751 1,147,034 669,113 ---------- ---------- ----------- ----------- Non-interest expense Salaries and benefits................................ 1,363,524 1,169,043 2,603,768 2,277,038 Net Occupancy........................................ 305,986 289,986 593,962 542,425 Equipment............................................ 322,415 303,200 596,247 542,350 Loss on foreclosure RE............................... 6,584 0 10,748 Advertising.......................................... 40,911 59,375 77,149 118,750 FDIC................................................. 42,133 41,503 107,441 41,503 Amortization of intangibles.......................... 51,357 53,268 99,570 106,536 Legal expense........................................ 40,825 60,000 100,875 115,000 Bank charges......................................... 95,705 68,747 184,532 195,339 Security service..................................... 127,142 87,543 191,338 142,118 Other................................................ 946,777 762,983 2,050,739 1,371,783 ---------- ---------- ----------- ----------- Total non-interest expense...................... 3,336,775 2,902,232 6,605,621 5,463,590 ---------- ---------- ----------- ----------- Income (Loss) before taxes................................ 303,422 598,518 856,939 1,162,804 ---------- ---------- ----------- ----------- Income taxes (Benefit).................................... 110,211 269,100 345,676 523,261 ---------- ---------- ----------- ----------- Net income (Loss)......................................... $ 193,211 $ 329,418 $ 511,263 $ 639,543 ========== ========== =========== =========== Net income (Loss) per common share........................ $ 0.09 $ 0.15 $ 0.23 $ 0.29 ========== ========== =========== =========== Weighted average number of common share outstanding....... 2,203,562 2,185,348 2,201,306 2,183,092 ========== ========== =========== ===========
4 5 CARVER BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended September 30, ---------------------------- 1998 1997 ------------ ------------ Cash flows from operating activities: Net income $ 511,263 $ 639,542 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of premises and equipment 574,199 280,694 Amortization of intangibles 102,720 106,536 Other amortization and accretion, net 474,546 549,929 Provision for loan losses 750,000 338,193 Deferred income taxes 125,714 (476,662) Allocation of ESOP 91,065 103,604 Changes in: Accrued interest receivable, net (684,690) (41,607) (Increase)Decrease in other assets (2,306,431) 26,075 (Increase)Decrease in other liabilities 6,331,770 1,049,489 ------------ ------------ Net cash provided by operating activities 5,970,156 2,575,793 ------------ ------------ Cash flows from investing activities: Principal repayments of investment held to maturity 0 (7,000,000) Principal repayments on available for sale 3,693,066 2,771,597 Purchases of discount notes (74,615,222) (5,000,000) Proceeds from matured discount notes 35,000,000 0 Proceeds from sale/call securities held for sale 23,841,581 51,008,308 Proceeds from maturities and calls of investment securities held to maturity 1,125,021 97,238 Principal repayment on mortgage-backed securities held to maturity 11,606,467 8,977,335 Purchase of loans (6,297,813) (42,472,741) Net change in loans receivable 23,359,631 1,126,600 Additions to premises and equipment (1,225,931) (525,052) ------------ ------------ Net cash (used in) provided by investing activities 16,486,800 9,130,785 ------------ ------------ Cash flows from financing activities: Net increase (decrease) in deposits 2,901,912 3,363,364 Increase (Decrease) in short term borrowings (32,050,000) (3,300,000) Repayment of advances from Federal Home Loan Bank of New York 0 (47,000,000) Repayment of long term borrowings 0 0 Advances from Federal Home Loan Bank of New York 14,981,376 37,000,000 Repayment of other borrowed money (91,066) (91,066) Dividends paid (115,714) (115,000) ------------ ------------ Net cash provided by (used in) financing activities (14,373,492) (10,142,702) ------------ ------------ Net increase (decrease) in cash and cash equivalents 8,083,464 1,563,876 Cash and cash equivalents -- beginning 15,120,071 4,230,757 ------------ ------------ Cash and cash equivalents -- ending $ 23,203,535 $ 5,794,632 ============ ============ Supplemental disclosure of non-cash activities: Unrealized Gain (loss) on securities available for sale: Unrealized Gain (loss) $ 10,979 $ 272,370 Deferred income taxes 5,160 128,014 ------------ ------------ $ 5,819 $ 144,356 ============ ============ Supplemental disclosure of cash flow information: Cash paid for: Interest $ 7,520,421 $ 7,650,000 ============ ============ Federal, state and city income taxes $ 123,100 $ 0 ============ ============
5 6 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 only normal recurring adjustments) necessary for fair presentation have been included. The consolidated results of operations and other data for the three and six month periods ended September 30, 1998 are not necessarily indicative of results that may be expected for the entire fiscal year ending March 31, 1999. The unaudited consolidated financial statements include the accounts of the Holding Company and its wholly owned subsidiary Carver Federal Savings Bank (the "Bank" or "Carver Federal") and the Bank's wholly owned subsidiaries, C.F.S.B. Realty Corp. and C.F.S.B. Credit Corp. All significant intercompany accounts and transactions have been eliminated in consolidation. (2) EARNINGS PER SHARE CALCULATION Net income per share for the three and six month periods ended September 30, 1998 and 1997 are calculated based on weighted average number of shares outstanding during the period. (3) RECENT ACCOUNTING PRONOUNCEMENTS In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and Other Post-retirement Benefits," which provides improved disclosures about pensions and other post-retirement benefits. The disclosures will provide information that is more comparable, understandable and concise, and that would better serve users' needs. This statement is effective for fiscal years beginning after December 15, 1997. The adoption of this statement is not anticipated to have a material impact on Carver's financial position or results of operations. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments and for hedging activities." This statement also requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and those instruments at fair value. This statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The adoption of this statement is not anticipated to have a material impact on the financial position or results of operations. (4) BRANCH SALE AGREEMENT On January 28, 1998, the Holding 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. The Roosevelt Office is located in Nassau County, New York and has deposits of approximately $10.0 million. Due to certain regulatory issues, it is unlikely that the transaction, which was expected to close by March 31, 1998, will be consummated. 6 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 2 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, 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." On October 17, 1996, the Bank completed its reorganization into a holding company structure (the "Reorganization") and became the wholly owned subsidiary of the Holding Company. 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, Manhattan, and in Nassau County, New York. See Branch Sale Agreement. FINANCIAL CONDITION ASSETS At September 30, 1998, total assets decreased $7.3 million or 1.66% to $430.2 million compared to $437.5 million at March 31, 1998. The decrease in total assets was primarily attributable to decreases in mortgage-backed securities ("MBSs") held to maturity and loans receivable net, offset in part by increases in securities held as available for sale and cash and equivalents. Total cash and equivalents increased by $8.1 million or 53.46% to $23.2 million at September 30, 1998 compared to $15.1 million at March 31, 1998. The increase in cash and equivalents primarily reflects receipts on MBSs and loans which the Company invested in federal funds sold. The Company's portfolio of MBSs held to maturity decreased by $12.8 million or 14.09% to $78.3 million and loans receivable decreased by $17.3 million or 6.30% to $257.6 million at September 30, 1998. The decrease primarily reflects principal repayments on MBSs held to maturity and loans receivable. Securities held as available for sale increased by $12.6 million or 44.49% to $41.0 million at September 30, 1998. The increase primarily reflects the purchase of approximately $40.0 million in money market securities funded primarily with proceeds from the sale of approximately $23.8 million of MBSs held as available for sale in addition to repayments on MBSs and loans. The Company's loans receivable decreased $17.3 million or 6.30% to $257.6 million at September 30, 1998 compared to $275.0 million at March 31, 1998. The decrease primarily reflects the receipt of principal repayments on mortgage loans, including the repayment of the Bank's largest commercial mortgage loan of $4.5 million, offset in part by loan originations and purchases. LIABILITIES AND STOCKHOLDERS' EQUITY At September 30, 1998, total deposits increased by $2.9 million or 1.06% to $277.8 million compared to $274.9 million at March 31, 1998. The increase in total deposits was attributable to an increase of $5.2 million in certificates of deposit primarily due to a $3.7 million deposit by a corporation and $1.1 million increase in money market accounts offset in part by decreased savings and NOW accounts. At September 30, 1998, total borrowings decreased by $17.2 million or 13.73% to $107.8 million compared to $125.0 million at March 31, 1998. The decrease in total borrowings reflects a decrease in reverse repurchase agreements ("repos") of $32.1 million or 36.83% to $55.0 million offset in part by an increase in Federal Home Loan Bank of New York, ("FHLB") advances of $15.0 million, or 40.77%, to $51.7 million. The Company decreased its borrowings under repos to take 7 8 advantage of the longer borrowing terms available on FHLB advances as compared to repos. The decrease in total borrowings primarily reflects a reduction in the need for borrowed funds due to repayments on MBSs and loans coupled with an increase in deposits. At September 30, 1998, stockholders' equity increased by $642,000 or 1.78%, to $36.2 million compared to $35.5 million at March 31, 1998. The increase in stockholders' equity was primarily attributable to an increase in retained earnings offset in part by dividends declared and paid. Under Statement of Financial Accounting Standards ("SFAS") No. 115, unrealized gains or losses on securities available for sale are recorded net of deferred income tax as a reduction to stockholders' equity. At September 30, 1998, such unrealized gains were approximately $5,819 compared to an unrealized loss of approximately $13,400 at March 31, 1998. In accordance with SFAS No. 115, such losses will not be reflected as a charge to earnings until the underlying securities are sold, and then only to the extent of the amount of loss, if any, actually realized at the time of sale. ITEM 3 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 mortgage-backed securities prepayments are strongly influenced by changes in general interest rates, economic conditions and competition. The primary investment activity of the Company is the origination and purchase of loans and, to a lesser extent, the purchase of investment securities and MBSs. During the three month period ended September 30, 1998, the Company purchased $6.3 million of mortgage loans, $40.0 million of investment securities, and sold $23.8 million in 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, 1998, the Company's cash and cash equivalents totaled $23.2 million compared to $15.1 million at March 31, 1997. 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, 1998, 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, 1998 and March 31, 1998. At September 30, 1998, the Company exceeded all fully phased-in regulatory capital requirements. The table below presents certain information relating to the Company's capital compliance at September 30, 1998 and March 31, 1998.
AT SEPTEMBER 30, 1998 AT MARCH 31, 1998 --------------------- ------------------ % OF % OF AMOUNT ASSETS AMOUNT ASSETS ------ ------ ------ ------ (DOLLARS IN THOUSANDS) Tangible Capital................... $ 30,929 7.17% $ 30,201 6.90% Core Capital....................... 30,976 7.18 30,249 6.93 Risk Based Capital................. 32,699 15.28 31,731 16.00
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 is dependent on the difference between the average balances and rates earned on interest-earning assets and the average balances and interest rates 8 9 paid on interest-bearing liabilities. Net income is further affected by provisions for loan losses, non-interest income, 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. In April of 1997, Carver completed a restructuring of its balance sheet and the Company is now placing primary emphasis on its whole loan portfolio through the origination of whole loans, as well as the purchase of whole loans. The Company continued to pursue this strategy for the three month period ended September 30, 1998. As a result of this effort since April 1997, the loan portfolio has substantially increased as a percentage of total assets. Therefore, it is expected that the Company's future earnings will be derived primarily from direct lending and purchase activities rather than investing in securities. During the second quarter of the fiscal year ending March 31, 1998 ("fiscal 1999") the Company began an evaluation of all lines of business and is utilizing an outside consultant to assist management in analyzing the impact of each business line on earnings. Further, in response to the Board of Directors, management is placing a moratorium on expansion into new areas and refocusing on the Company's core business, which is deposit gathering and mortgage lending. The following table sets 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. 9 10
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------------------- 1998 1997 ------------------------------------------ --------------------------------------- AVERAGE QUARTERLY ANNUALIZED AVERAGE QUARTERLY ANNUALIZED ASSETS BALANCE INTEREST AVG. YIELD/COST BALANCE INTEREST AVG. YIELD/COST --------- --------- --------------- --------- --------- --------------- (Dollars in Thousands) Interest Earning Assets Loan(1) $ 268,317 $ 5,205 7.76% $ 235,772 $ 4,532 7.69% Investment Securities(2) 24,895 329 5.29% 15,311 304 7.94% Mortgage-backed Securities(3) 83,373 1,339 6.42% 133,814 2,190 6.55% Other Interest Earning Assets 6,425 128 7.97% 5,500 120 8.73% --------- --------- --------------- --------- --------- --------------- Total Interest Earning Assets 383,010 7,001 7.31% 390,397 7,146 7.32% --------- --------- Non-interest Earning Assets 35,589 24,375 --------- --------- Total Assets $ 418,599 $ 414,772 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Interest Bearing Liabilities Deposits DDA $ 10,693 $ 0 0.00% $ 8,285 $ 0 0.00% NOW 17,556 73 1.66% 18,636 91 1.05% Savings and club 145,917 885 2.43% 145,217 905 2.49% Money market accounts 22,332 171 3.06% 21,852 175 3.20% Certificates of deposits 76,768 941 4.90% 76,656 1,001 5.22% --------- --------- --------------- --------- --------- --------------- Total Deposits 273,266 2,070 3.03% 270,646 2,172 3.21% Borrowed Money 102,140 1,562 6.12% 107,830 1,656 6.14% --------- --------- --------------- --------- --------- --------------- Total Interest Bearing Liabilities 375,406 3,632 3.87% 378,476 3,828 4.05% Non-interest Bearing Liabilities 7,150 --------- 1,568 --------- --------- --------- Total Liabilities 382,556 380,044 Stockholders' Equity 36,043 34,728 --------- --------- Total Liabilities and Stockholders' Equity $ 418,599 $ 414,772 ========= ========= Net Interest Income $ 3,369 $ 3,318 ========= ========= Interest Rate Spread 3.44% 3.27% =============== =============== Net Interest Margin 3.52% 3.40% =============== =============== Ratio of average interest earning assets to average interest bearing liabilities 100.12% 102.72% =============== ===============
(1) Includes non-accrual loans. (2) Includes FHLB stock and fair value of investments available for sale of $5.7 million at September 30, 1998. (3) Includes fair value of mortgage-backed securities available for sale of approximately $600,000 at September 30, 1998. 10 11
SIX MONTHS ENDED SEPTEMBER 30, ---------------------------------------------------------------------------------------------- 1998 1997 -------------------------------------------- ------------------------------------------- AVERAGE QUARTERLY ANNUALIZED AVERAGE QUARTERLY ANNUALIZED ASSETS BALANCE INTEREST AVG. YIELD/COST BALANCE INTEREST AVG. YIELD/COST - ------ ------- --------- --------------- ------- -------- --------------- (Dollars in Thousands) Interest Earning Assets Loan (1) $270,919 $10,559 7.79% $236,104 $ 8,902 7.54% Investment Securities (2) 16,709 450 5.39% 13,941 505 7.24% Mortgage-backed Securities (3) 97,961 3,185 6.50% 137,300 4,416 6.43% Other Interest Earning Assets 9,943 391 7.86% 4,450 120 5.39% -------- ------ ------ -------- ------- ------ Total Interest Earning Assets 395,532 14,585 7.37% 391,795 13,943 7.12% ------ ------- Non-interest Earning Assets 31,510 23,273 -------- -------- Total Assets $427,042 $415,068 ======== ======== LIABILITIES AND STOCKHOLDER'S EQUITY Interest Bearing Liabilities Deposits DDA $ 10,706 $ 0 0.00% $ 8,197 $ 0 0.00% NOW 18,149 160 1.76% 18,525 178 1.92% Savings and club 146,092 1,811 2.48% 144,951 1,805 2.49% Money market accounts 22,021 323 2.93% 21,627 347 3.21% Certificates of deposits 81,604 1,918 4.70% 76,468 1,964 5.14% -------- ------ ------ -------- ------ ------ Total Deposits 278,572 4,212 3.02% 269,768 4,294 3.18% ------ ------ Borrowed Money 106,540 3,307 6.21% 108,803 3,353 6.16% -------- ------ ------ -------- ------ ------ Total Interest Bearing Liabilities 385,112 7,519 3.90% 378,571 7,647 4.04% ------ ------ Non-interest Bearing Liabilities 6,049 1,914 -------- -------- Total Liabilities 391,161 380,485 Stockholders' Equity 35,881 34,583 -------- -------- Total Liabilities and Stockholders' Equity $427,042 $415,068 ======== ======== Net Interest Income $7,065 $6,295 ====== ====== Interest Rate Spread 3.47% 3.08% ====== ====== Net Interest Margin 3.57% 3.21% ====== ====== Ratio of average interest earning assets to average interest bearing liabilities 101.12% 102.97% ====== ======
(1) Includes non-accrual loans. (2) Includes FHLB stock and fair value of investments available for sale of $5.8 million at September 30, 1998. (3) Includes fair value of mortgage-backed securities available for sale of approximately $600,000 at September 30, 1998. 11 12 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 GENERAL The Company reported net income for the second quarter of fiscal 1999 of $193,000, compared to $330,000, for the same period last year. The decrease in net income was due to increases in the provision for loan losses and non-interest expense offset in part by an increase in non-interest income. INTEREST INCOME Interest income decreased by $145,000, or 2.03%, to $7.0 million for the three months ended September 30, 1998 compared to $7.1 million for the three months ended September 30, 1997. The decrease in interest income was primarily attributable to a $7.4 million or 1.89% decrease in the average balance of interest earning assets to $383.0 million for the three months ended September 30, 1998 compared to $390.4 million for the three month period ended September 30, 1997. Interest income from loans receivable increased by $673,000 or 14.85% to $5.2 million for the three months ended September 30, 1998 compared to $4.5 million for the three months ended September 30, 1997. This primarily resulted from an increase of $32.5 million or 13.80% in the average balance of loans receivable to $268.3 million for the three month period ended September 30, 1998 compared to $253.8 million for the three month period ended September 30, 1997 coupled with a seven basis point increase in the average yield on the loan portfolio. The increase in the average loan portfolio balances primarily reflects the originations and loan purchases made subsequent to the second quarter of the fiscal year ended March 31, 1998 ("fiscal 1998"). The increase in the average yield on the loan portfolio was primarily reflects an increase in the average balance of multi-family loans which generally have higher yields than the Company's other loans. Interest income from MBSs decreased $852,000, or 38.88%, to $1.3 million for three months ended September 30, 1998 compared to $2.2 million for the three months ended September 30, 1997. This decrease is primarily attributable to a decrease of approximately $50.4 million or 37.69% in the average balance of MBSs to $83.4 million compared to $133.8 million coupled with a 13 basis point decrease in the average yield on such securities. During the second quarter of fiscal 1999, the Company sold approximately $23.8 million of MBSs and reinvested the proceeds into money market securities. Interest income from investment securities and other interest-earning assets increased by $33,000 or 7.83%, to $457,000 for the three months ended September 30, 1998 compared to $424,000 for the same period last year. The increase in such income is primarily attributable to a $9.6 million or 62.60% increase in the average balance of such securities (primarily consisting of money market securities), to $31.3 million for the three months ended September 30, 1998 compared to $20.8 million for the three months ended September 30, 1997. INTEREST EXPENSE Interest expense decreased by $127,000 or 1.67% to $7.5 million for the three month period ended September 30, 1998 compared to $7.5 million for the same period last year. The decrease in interest expense was primarily attributable to a $3.1 million or 0.81% decrease in the average balance of interest bearing liabilities to $375.4 the three months ended September 30, 1998 compared to $378.5 million for the three month period ended September 30, 1997 coupled with an 18 basis point decrease in the average cost of interest-bearing liabilities to 3.87%. Interest expense on deposits decreased by $101,000 or 4.64% to $2.1 million and interest expense on borrowings decreased by $94,000 or 5.65% to $1.6 million for the three months ended September 30, 1998 compared to $2.2 and $1.7 million respectively for the corresponding period last year. The decrease in the interest expense on deposits was primarily attributable to an 18 basis point decrease in the average cost of deposits to 3.03% offset in part by a $2.6 million or 0.97% increase in the average balance of deposits to $273.3 the three month period ended September 30, 1998 compared to $270.6 million for the three month period ended September 30, 1997. The decrease in the average cost of deposits reflects an increase in the average balance of non-interest bearing DDA accounts coupled with a decrease in the average balance of higher cost NOW accounts offset in part by an increase the average balance of higher cost CDs. NET INTEREST INCOME BEFORE PROVISIONS FOR LOAN LOSSES Net interest income increased $49,000 or 1.48%, to $3.4 million for the three months ended September 30, 1998 compared to $3.3 million for the three months ended September 30, 1997. The increase in net interest income is primarily attributable to an 12 13 18 basis point decrease in the average cost of interest bearing liabilities offset in part by a decrease in the average balance and average yield of interest earning assets. The Company's interest rate spread increased by 17 basis points to 3.44% for the three months ended September 30, 1998 compared to 3.27% for the three months ended September 30, 1997. The Company's net interest margin increased by 12 basis point to 3.52% for the three months ended September 30, 1998 compared to 3.40% for the three months ended September 30, 1997. The increases in interest rate spread and net interest margin are primarily attributable to a decrease in the cost of interest bearing liabilities due to a decrease average cost of borrowed funds, coupled with an increase in the average yield on interest earning assets due to an increase in the average balance of loans receivable. The decrease in the average cost of borrowed funds primarily reflects the decline in market interest rates. The Company's ratio of average interest-earning assets to average interest-bearing liabilities was 100.12% for the three months ended September 30, 1998 compared to 102.72% for the same period last year. PROVISION FOR LOAN LOSSES The Company added $300,000 to its provision for loans losses for the three month period ended September 30, 1998, compared to $171,000 for the same period last year. The increase in the provision for the second quarter ending March 31, 1999 ("fiscal 1999") reflects an increase during the quarter in non- performing mortgage loans and consumer loans which consist of automobile loans, credit card receivables, along with unsecured and secured personal loans. During the second quarter of fiscal 1999, the Bank charged off approximately $268,000 in non-performing consumer loans. At September 30, 1998, non performing assets acquired by the Company in settlement of such loans increased by approximately $410,000 to $492,000 compared to $82,000 at March 31, 1998. The increase is attributable to repossession of automobiles recorded at the lower of their market value or unpaid principal balance. At September 30, 1998, non-performing loans totaled $9.5 million or 3.69% of total loans compared to $5.3 million or 2.24% at September 30, 1997. At September 30, 1998, Carver's allowance for loan losses was $3.3 million compared to $2.6 million at September 30, 1997, resulting in a ratio of allowance for loan losses to non-performing loans of 33.68% at September 30, 1998 compared to 48.33% at September 30, 1997 and a ratio of allowances for loan losses to total loans of 1.26% and 1.08% respectively. NON-INTEREST INCOME Non-interest income increased by $220,000 or 62.26% to $572,000 for the second quarter of fiscal 1999 compared to $353,000 for the corresponding period last year. The increase in non-interest income for the second quarter of fiscal 1999 was primarily attributable to early prepayment fees on loans and increases in fees from bank service charges. NON-INTEREST EXPENSE Non-interest expense increased by approximately $435,000 or 14.97% to $3.3 million for the three month period ended September 30, 1998 compared to $2.9 million for the three month period ended September 30, 1997. The increase was in large part attributable to increases of $195,000 in salary and benefits expense and $19,000 or 6.34% in equipment expense incurred in connection with the creation of new data processing and loan servicing departments. Non-interest expense also reflects increases of $40,000 in security service due to improvements in surveillance equipment, $27,000 or 39.21% in bank charges and $184,000 or 24.09% in other expenses, offset in part by reductions in advertising, and legal expenses. In addition, the increase in non-interest expense reflects a $250,000 charge that was incurred in connection with a prospective settlement of a litigation. See Legal Proceedings, Part II, Item 1. INCOME TAX EXPENSE Income tax expense for the three months ended September 30, 1998 was $110,000 compared to $329,000 for the three months ended September 30, 1997. The Company's effective tax rate for the three months ended September 30, 1998 was 36.32% compared to 44.96% for the three months ended September 30, 1997. COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 GENERAL The Company reported net income for the six month period ended September 30, 1998 of $511,000, compared to $640,000, for the same period last year. The decrease in net income was primarily due to an increase in non-interest expense and in the provision for loan losses offset in part by increases in net interest income and non-interest income. 13 14 INTEREST INCOME Interest income increased by approximately $643,000 or 4.61% to $14.6 million for the six month period ended September 30, 1998 compared to $13.9 million for the six month period ended September 30, 1997. The increase in interest income was primarily attributable to a $3.7 million or 0.95% increase in the average balance of interest earning assets to $395.5 the three months ended September 30, 1998 compared to $391.8 million for the six month period ended September 30, 1997 coupled with a 26 basis point increase in the average yield on interest-earning assets to 7.37%. The increase in interest income for the six month period compared to the corresponding period last year was primarily attributable to a shift in assets from investment securities to higher yielding loans and other investments. Interest income from loans receivable increased by $1.7 million, or 18.62%, to $10.6 million for the six months ended September 30, 1998 compared to $8.9 million for the six months ended September 30, 1997. The increase was primarily attributable to a $34.8 million or 14.75% increase in the average balance of loans receivable to $270.9 million for the six month period ended September 30, 1998 compared to $236.1 million for the six month period ended September 30, 1997, coupled with an increase of 25 basis points in the average yield on the loan portfolio. The increase in the average loan portfolio balances primarily reflects the impact of loan originations and purchases. The increase in the average yield on the loan portfolio was primarily attributable to an increase in the average balance of multi-family loans which generally has higher yields than the Company's other loans. Interest income from MBSs decreased $1.2 million, or 27.87%, to $3.2 million for the six months ended September 30, 1998 compared to $4.4 million for the six months ended September 30, 1997. This decrease is primarily attributable to a decrease of $39.0 million or 28.65% in the average balance of MBSs to $98.0 million for the three month period ended September 30, 1998 compared to $137.3 million for the corresponding period last year offset in part by a 7 basis point increase in the average yield on MBSs. Interest income from investment securities and other interest-earning assets increased by $216,000 or 34.50%, to $841,000 for the six months ended September 30, 1998 compared to $625,000 for the six months ended September 30, 1997. The increase in income is primarily attributable to a $8.3 million or 44.56% increase in the average balance of investment securities to $26.6 million for the six months ended September 30, 1998 compared to $18.4 million for the six months ended September 30, 1997, offset in part by an 1.50% decrease in the average yield of investment securities. The decrease in the average yield on investment securities (primarily consisting of money market securities) is primarily attributable to the sale of MBSs carried as available for sale and reinvestment of such proceeds in lower yielding money market securities. INTEREST EXPENSE Interest expense increased by $127,000 or 1.67% to $7.5 million for the six months ended September 30, 1998 compared to $7.6 million for the six months ended September 30, 1997. Interest expense on deposits decreased by $82,000 or 1.90% to $4.2 million for the six month period ended September 30, 1998 compared to $4.3 million for the six month period ended September 30, 1997. The decrease in interest expense was primarily attributable to a 14 basis point decrease in the average cost of interest-bearing liabilities to 3.90% offset in part by a $6.5 million or 1.73% increase in the average balance of interest bearing liabilities to $385.1 the six month period ended September 30, 1998 compared to $378.6 million for the six month period ended September 30, 1997. Interest expense on deposits decreased by $82,000 or 1.90% to $4.2 million and interest expense on borrowings decreased by $46,000 or 1.36% to $3.3 million for the six month period ended September 30, 1998 compared to $2.2 million and $1.7 million respectively for the same period last year. NET INTEREST INCOME BEFORE PROVISIONS FOR LOAN LOSSES Net interest income increased $770,000 or 12.23%, to $7.1 million for the six month period ended September 30, 1998 compared to $6.3 million for the six month period ended September 30, 1997. The increase in net interest income is attributable to a $642,000, or 4.61%, increase in interest income offset in part by a $127,000 or 1.67% decrease in interest expense. The Company's interest rate spread increased by 39.0 basis points to 3.47% for the six month period ended September 30, 1998 compared to 3.08% for the six month period ended September 30, 1997. The Company's net interest margin increased by 33 basis point to 3.54% for the six month period ended September 30, 1998 compared to 3.21% for the six month period ended September 30, 1997. The increase in interest rate spread and net interest margin is primarily attributable to an increase in the average balance and average yield on interest earning assets coupled with a decrease in the average cost on interest bearing liabilities. The Company's ratio of average interest-earning assets to average interest-bearing liabilities 14 15 decreased to 101.12% for the six month period ended September 30, 1998 from 102.97% for the six month period ended September 30, 1997. PROVISION FOR LOAN LOSSES The Company added $750,000 to its provision for loan losses for the six-month period ended September 30, 1998, compared to $338,000 for the same period last year. The increase in the provision for the six month period reflects an increase in non-performing mortgage and consumer loans which consist of automobile loans, credit card receivables, along with unsecured and secured personal loans. During the six month period, the Bank charged off approximately $521,000 in non-performing consumer loans. At September 30, 1998, non-performing loans totaled $9.5 million or 3.69% of total loans compared to $6.8 million or 2.51% at March 31, 1998. At September 30, 1998, Carver's allowance for loan losses was $3.3 million compared to $3.1 million at March 31, 1998, resulting in a ratio of allowance to non-performing loans of 33.68% at September 30, 1998 compared to 45.30% at March 31, 1998, and a ratio of allowances for loan losses to total loans of 1.26% and 1.11% respectively. NON-INTEREST INCOME Non-interest income increased by approximately $478,000 or 71.43% to $1.1 million for the six month period ended September 30, 1998 compared to $669,000 for the same period last year. The increase in non-interest income reflects early prepayment fees on loans and increases in fees from bank service charges. NON-INTEREST EXPENSES Non-interest expense increased by approximately $1.1 million to $6.6 million for the six month period ended September 30, 1998 compared to $5.5 million for the six month period ended September 30, 1997. The increase was in large part attributable to increases of $327,000 or 14.35% in salary and benefits expense and 189,000 or 19.62% in equipment incurred in connection with the creation of new data processing and loan servicing departments. Non-interest expense for the six month period ended September 30, 1998 reflects an increase of $69,000 or 158.88% in FDIC expense to $107,000. The Bank did not incur an expense for quarterly FDIC premium during the first quarter of fiscal 1998. Non-interest expense also reflects increases of $49,000 or 34.63% in security service and $533,000 or 55.44% in other expenses, offset in part by reductions in advertising expense, and legal expense. In addition, the increase in non-interest expense reflects a $250,000 charge that was incurred in connection with a prospective settlement of a litigation. See Legal Proceedings, Part II, Item 1. INCOME TAX EXPENSE Income tax expense for the six month period ended September 30, 1998 was $346,000 compared to $523,000 for the six month period ended September 30, 1997. The Company's effective tax rate for the six month period ended September 30, 1998 was 40.34% compared to 44.99% for the six month period ended September 30, 1997. YEAR 2000 COMPLIANCE The Year 2000 Problem centers on the inability of 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 will recognize "00" as the year 1900 rather than the year 2000. Like most financial providers, the Company and its operations may be significantly affected by the Year 2000 Problem due to the nature of financial information. Software, hardware, and equipment both within and outside the Company's direct control and with whom the Company electronically or operationally interfaces (e.g. 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 the date field information, such as interest, payment or due dates and other operating functions, will generate results which could be significantly misstated, and the Company could experience a temporary inability to process transactions, send invoices or engage in similar normal business activities. In addition, under certain circumstances, failure to adequately address the Year 2000 Problem 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 Problem could result in a significant adverse impact on the Company's products, services and competitive condition. The OTS and the other federal banking regulators have issued guidelines to be followed by insured depository institutions, such as the Bank, to assure resolution of any Year 2000 problems. Any institution's failure to address appropriately the Year 2000 Problem could result in supervisory action. The Company converted its deposits and a portion of its loan portfolio to a Year 2000 Complaint System in April of 1998. At September 30, 1998, the Company continued to test these systems and obtain software modifications deemed necessary for compliance in all other Systems. The Company has initiated formal communications with all of its significant suppliers to determine the extent to which the Company is vulnerable to those third parties' failure to resolve their own Year 2000 Problem. The Company presently believes that with modifications to existing software and conversions to new software, the Year 2000 Problem will be mitigated without causing a material adverse effect on the operations of the Company. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Problem could have an impact on the Company's operations. At this time, management believes that any such impact and any resulting costs will not be material. Monitoring and managing the Year 2000 Problem 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 software products for Year 2000 compliance and any resulting costs for developing and implementing contingency plans for critical software products which are not enhanced. Indirect costs will principally consist of the time devoted by existing employees in monitoring software vendor progress, testing enhanced software products and implementing any necessary contingency plans. Such costs have not been material to date. The Company believes that any such costs to be incurred in the future will not have a material effect on its results of operations. Both direct and indirect costs of addressing the Year 2000 Problem will be charged to earnings as incurred. REGULATORY CAPITAL POSITION The Bank must satisfy three minimum capital standards established by the OTS. For a description of the OTS capital regulation, see "Regulation and Supervision -- Regulation of Savings Associations -- Capital Requirements." The Bank presently exceeds all capital requirements as currently promulgated. At September 30, 1998, the Bank had tangible, core, and Tier 1 to risk-weighted assets, and risk-based capital ratios of 7.17%, 7.18%, 7.18% and 15.28% respectively. 15 16 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Quantitative and qualitative disclosure about market risk is presented at March 31, 1998 in Item 7A to the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on July 14, 1998, as amended on Form 10-K/A filed with the SEC on August 13, 1998. There have been no material changes in the Company's market risk at September 30, 1998 compared to March 31, 1998. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS From time to time, the Company is a party to various legal proceedings incident to its business. At September 30, 1997, except as set forth below, there were no legal proceedings to which the Company 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. The parties to the Class Action, encaptioned DOUGHERTY VS. CARVER FEDERAL SAVINGS BANK, previously reported in earlier Form 10-Qs, have entered into an agreement to settle the suit. The proposed settlement agreement awaits final approval of the United States District Court for the Southern District of New York (Honorable Michael B. Mukasey) which will hold a hearing regarding the settlement on February 16, 1999. 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 The Company held its Annual Meeting, (the"Meeting") on August 14, 1998. The purpose of the Meeting was to vote on the following proposals: 1. The election of three directors for terms of three years each; 2. The ratification of the appointment of Mitchell & Titus, LLP as independent auditors of the Company for the fiscal year ending March 31, 1999; and 3. The consideration of a stockholder proposal, opposed by the Board of Directors. With respect to Proposal 1, all of the directors nominated by the Company were elected at the Meeting. In addition, Proposal 2 was approved at the Meeting. However, Proposal 3 was not approved. The voting results for the proposals were as follows: 16 17 Proposal 1: Thomas L. Clark, Jr. For 1,806,893 Withheld 120,179 Pazel G. Jackson For 1,805,538 Withheld 121,534 Herman Johnson For 1,805,938 Withheld 121,134 Proposal 2: For 1,827,554 Against 69,988 Abstain 29,530 Proposal 3: For 304,062 Against 735,416 Abstain 30,650 Broker Non-Votes 856,944 In addition to the nominees elected at the Meeting, the following persons' terms of office as directors continued after the Meeting: David R. Jones, Linda H. Dunham, David N. Dinkins, and Robert J. Franz. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 11 - Computation of Earnings Per Share Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K None 17 18 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. Date: November 20, 1998 CARVER BANCORP, INC. /s/ Thomas L. Clark, Jr. ------------------------------------- Thomas L. Clark, Jr. President and Chief Executive Officer Date: November 20, 1998 /s/ Walter T. Bond ------------------------------------- Walter T. Bond Vice President and Acting Chief Financial Officer 18 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 COMPUTATION OF NET INCOME PER SHARE AS OF QUARTER ENDED SEPTEMBER 30, 1998
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1997 ------------------ ------------------ Net income/(Loss) $ 318,054 $ 329,419 Weighted average shares outstanding 2,203,562 2,185,348 Earning/(Loss) per shares outstanding $ 0.09 $ 0.15
FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 1998 SEPTEMBER 30, 1997 ------------------ ------------------ Net income/(Loss) $ 511,263 $ 639,543 Weighted average shares outstanding 2,201,306 2,183,092 Earning/(Loss) per shares outstanding $ 0.23 $ 0.29
19 EX-27 3 FINANCIAL DATA SCHEDULE
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, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS MAR-31-1999 SEP-30-1998 23,203,535 267,132,144 14,800,000 0 41,045,211 78,274,561 77,685,943 257,620,195 3,280,985 430,174,693 277,796,144 106,693,062 7,755,866 1,092,792 0 0 23,144 36,153,690 430,174,693 10,559,623 3,185,114 841,210 14,585,947 4,212,653 7,520,421 7,065,526 750,000 5,819 6,605,621 856,939 856,939 0 0 511,263 .23 .23 7.37 3,304,252 5,720,985 142,000 0 3,242,000 521,000 7,000 3,880,985 3,880,985 0 0
-----END PRIVACY-ENHANCED MESSAGE-----