Commitment and Contingencies

12 Months Ended

Mar. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies Disclosure [Text Block]

COMMITMENTS AND CONTINGENCIES

Credit Related Commitments.  The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments primarily include commitments to extend credit and to sell loans and involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the statements of financial condition. The contract amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments.

The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies making commitments as it does for on-balance-sheet instruments.

The Bank had outstanding commitments at March 31 as follows:

$ in thousands	2012		2011
Commitments to fund mortgage loans	$	2,131	$	7,310
Commitments to fund commercial and consumer loans	2,044		1,300
Lines of credit	3,173		3,890
Letters of credit	244		154
Commitment to fund private equity investment	206		—
	$	7,798	$	12,654

At March 31, 2012, of the $2.1 million in outstanding commitments to originate mortgage loans, $0.6 million represented construction loans at variable interest rates and, $1.5 million represented commitments to originate one-to-four family residential loans at a weighted average rate of 4.7%.

The balance of commitments on commercial and consumer loans at March 31, 2012 is primarily undisbursed funds from approved unsecured commercial lines of credit.  All such lines carry adjustable rates mainly tied to prime.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based on management's credit evaluation of the counter-party.

Lease Commitments.  Rentals under long term operating leases for certain branches aggregated approximately $1.7 million, $1.7 million and $1.6 million for fiscal year 2012, 2011 and 2010, respectively. As of March 31, 2012, minimum rental commitments under all non-cancelable leases with initial or remaining terms of more than one year and expiring through 2018 follow:

$ in thousands
Year Ending March 31,	Minimum Rental		Sublet Income		Net
2012	$	1,717	$	145	$	1,572
2013	1,715		145		1570
2014	1692		145		1547
2015	1350		—		1,350
2016	1,223		—		1,223
Thereafter	3,056		—		3,056
	$	10,753	$	435	$	10,318

The Bank also has, in the normal course of business, commitments for services and supplies.

Legal Proceedings.

From time to time, the Company and the Bank are parties to various legal proceedings incident to their business.  Certain claims, suits, complaints and investigations (collectively “proceeding”) involving the Company and the Bank, arising in the ordinary course of business, have been filed or are pending.  The Company is unable at this time to determine the ultimate outcome of each proceeding, but believes, after discussions with legal counsel representing the Company and the Bank in these proceedings, that it has meritorious defenses to each proceeding and the Company and the Bank is taking appropriate measures to defend its  interests.  Carver Federal is a defendant in one lawsuit brought by a purported fifty percent loan participant on a multifamily loan, alleging grossly negligence and breach of contract in the manner in which Carver Federal serviced the loan.  Plaintiff asserts damages in excess of $500,000.  Carver Federal brought a counter claim against the plaintiff and a third party complaint against the original loan participant seeking recovery of funds Carver Federal advanced on their behalf, such as real estate taxes, in connection with servicing of the multifamily loan.  In another matter, in September 2010, the New York State Department of Labor ("DOL") Unemployment Insurance Division, based on claims for unemployment benefits made by two individuals formerly engaged as independent contractors by Carver Federal, determined that these two individuals were employees and not independent contractors for Unemployment Insurance purposes.  Carver Federal requested a hearing before the Unemployment Insurance Appeal Board (“Appeal Board”).  On July 18, 2011, an Appeal Board's Administrative Judge sustained the DOL's determination.  Carver Federal continues to believe it has a meritorious case and has recently filed an appeal with the Appeals Board.  In accordance with ASC Topic 450 Carver has accrued $415,000 for these lawsuits.