8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):

February 14, 2008

__________

CARVER BANCORP, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE

(STATE OR OTHER JURISDICTION OF INCORPORATION)

1-13007	13-3904174
(COMMISSION FILE NUMBER)	(I.R.S. EMPLOYER IDENTIFICATION NO.)

75 West 125th Street

New York, NY  10027-4512

 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(718) 230-2900

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operation and Financial Condition.

On February 14, 2008, Carver Bancorp, Inc. (the “Company”) issued a press release reporting financial results for the third quarter of its fiscal year ending March 31, 2008.  A copy of the press release is attached as Exhibit 99.1 to this report and incorporated herein by reference.  The Company does not intend for this Item 2.02 or Exhibit 99.1 to be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or to be incorporated by reference into filings under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is filed as part of this report.

99.1 Press release entitled "Carver Bancorp, Inc. Announces Third Quarter 2008 Results", dated February 14, 2008.

SIGNATURE

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 hereunto duly authorized.

		CARVER BANCORP, INC.
Date: February 14, 2008	By:	/s/ Roy Swan
		Roy Swan
		Executive Vice President and
		Chief Financial Officer

EX-99.1

Exhibit 99.1

Contact:	David Lilly / Joseph Kuo	Roy Swan
	Kekst and Company	Carver Bancorp, Inc.
	(212) 521-4800	(212) 360-8820

CARVER BANCORP, INC. ANNOUNCES THIRD QUARTER 2008 RESULTS

Reports Third Quarter Net Income of $1.6 Million and Diluted EPS of $0.62

New York, New York, February 14, 2008– Carver Bancorp, Inc. (the “Company”) (NASDAQ: CARV), the holding company for Carver Federal Savings Bank (“Carver Federal”or the “Bank”), today announced its results of operations for the three- and nine-month periods ended December 31, 2007, the third quarter of the fiscal year ending March 31, 2008 (“fiscal 2008”).

The Company reported net income of $1.6 million and diluted earnings per share of $0.62 for the third quarter of fiscal 2008, compared to net income of $1.4 million and diluted income per share of $0.54 for the third quarter of fiscal 2007.  For the nine month period ended December 31, 2007, the Company reported net income of $3.5 million, or $1.36 per diluted share, compared to net income of $1.3 million, or $0.50 per diluted share, for the prior year period.  

Deborah C. Wright, the Company’s Chairman and CEO, stated: “I’m pleased to report that our business remains solid despite the most challenging banking environment in decades, namely the persistent flat-to-inverted yield curve, credit issues impacting many parts of our nation, and the threat of a recession.  During this challenging quarter, our net interest margin improved slightly with steady progress in our lending and retail units. We were spared the brunt of the turbulent credit environment, given our limited exposure to loan and investment products of concern to the financial markets.”

“The Bank’s non-interest income benefited from a significant New Markets Tax Credit transaction generating a $1.7 million payment during the quarter, along with increased lending and retail fee generation. With this transaction, our $59 million award recieved in June 2006 has been fully invested. The financial benefit going forward, through calendar 2014, will be realized largely through federal tax credits and nominal fee income. We remain well outside our objectives for non-interest expense which remain high due to several consulting projects, including SOX 404 implementation, and costs recognized following termination of a potential strategic transaction.

“Although our local markets have not yet experienced the fallout taking place in other regions across our nation, we are intensely focused on any signs of weakening conditions. We believe our small business and real estate lending teams are well positioned to source attractive opportunities, and we remain committed to solid asset quality and accretive asset growth as top priorities,” Ms. Wright concluded.

Ms. Wright also announced that on February 13, 2008, the Company’s Board of Directors declared a cash dividend on its common stock of ten cents ($0.10) per share for the quarter ended December 31, 2007.  The dividend will be payable on March 13, 2008 to stockholders of record at the close of business on February 28, 2008.

Income Statement Highlights

Third Quarter Results

The Company reported net income for the quarter ended December 31, 2007 of $1.6 million compared to net income of $1.4 million for the prior year period, an increase of $0.2 million. These results primarily reflect an increase in non-interest income of $2.2 million and an increase in net interest income of $0.2 million, offset by increases in non-interest expense of $2.1 million and provision for loan losses of $0.1 million.

Interest income increased by $0.5 million, or 4.6%, to $12.3 million for the quarter ended December 31, 2007 compared to $11.8 million in the prior year period.  Interest income increased primarily as a result of an increase in interest on loans of $0.7 million, or 6.7%, to $11.4 million for the three months ended December 31, 2007 compared to $10.7 million for the prior year period.  These results were primarily driven by an increase in average loan balances and higher yields.  The average loan balance increased by $20.9 million to $642.6 million in the quarter ended December 31, 2007 compared to $621.7 million for the prior year period.  Yields on loans increased 22 basis points to 7.10% in the quarter ended December 31, 2007 compared to 6.88% for the prior year period.  The increases in the average balance of loans and yields primarily reflect an increase in originations of higher yielding construction loans.

Interest expense increased by $0.4 million, or 6.3%, to $6.0 million for the three months ended December 31, 2007 compared to $5.6 million for the prior year period.  The higher interest expense resulted primarily from a 17 basis point increase in the annualized average cost of interest-bearing liabilities to 3.62% for the three months ended December 31, 2007 compared to 3.45% for the prior year period.  Additionally, the average balance of interest-bearing liabilities increased $7.2 million, or 1.1%, to $657.0 million, compared to $649.8 million for the prior year period.  The increase in interest expense was primarily the result of interest paid on deposits due to an increase of $11.6 million, or 2.0%, in the average balance of interest-bearing deposits to $585.5 million for the three months ended December 31, 2007 compared to $573.9 million for the prior year period.  In addition, a 22 basis point increase in the rate paid on deposits to 3.43% compared to 3.21% for the prior year period contributed to the increase.

The Company provided $0.2 million in provision for loan losses for the three months ended December 31, 2007 compared to $0.1 million for the three month period ended December 31, 2006.  On December 31, 2007, non-performing loans totaled $4.1 million, or 0.61% of total loans receivable.  The level of non-performing loans to total loans remains within the range the Bank has experienced over the trailing twelve quarters. The Company’s future levels of non-performing loans will be influenced by economic conditions, including the impact of those conditions on the Company’s customers, interest rates and other internal and external factors existing at the time.  

Total non-interest income for the quarter ended December 31, 2007, increased by $2.2 million, or 229.0%, to $3.2 million, compared to $1.0 million in the prior year period.  The increase in non-interest income was primarily due to an increase of $1.9 million in other income to $2.0 million compared to $0.1 million for the prior year period.  Other non-interest income primarily consists of a $1.7 million fee generated by a New Markets Tax Credit (“NMTC”) transaction.  The Bank will receive additional non-interest income over the next eight years from the NMTC transaction.

Non-interest expense for the quarter ended December 31, 2007, increased $2.1 million, or 35.3%, to $8.0 million compared to $5.9 million for the prior year period.  The increase in non-interest expense was primarily due to an increase of $0.6 million in employee compensation and benefits to $3.4 million compared to $2.8 million, an increase of $0.2 million in net occupancy expense to $0.9 million compared to $0.7 million, and an increase of $0.3 million in equipment net to $0.8 million compared to $0.5 million and $1.0 million in other non-interest expense to $2.8 million compared to $1.8 million, respectively, for the prior year period.  The $0.6 million increase in employee compensation and benefits primarily reflects investments in new talent, primarily in the retail, lending and accounting departments.  The $1.0 million in other non-interest expense includes consulting assistance on projects, and costs recognized following termination of a potential strategic transaction.

For the quarter ended December 31, 2007, income tax benefit decreased $43,000, or 13.8%. The reduction in tax benefit reflects income before income taxes of $1.3 million for the quarter ended December 31, 2007 compared to $1.1 million in the prior year period.  The current period income tax expense of $0.3 million was offset by the benefit of the NMTC award totaling $0.6 million for the quarter ended December 31, 2007.  The Company is expected to receive benefits from the NMTC award on its $40.0 million investment over approximately seven years.

Nine-Month Results

Net income for the nine months ended December 31, 2007 was $3.5 million compared to net income of $1.3 million for the prior year period, an increase of $2.2 million.  These results primarily reflect an increase in net interest income of $3.1 million and an increase in non-interest income of $4.2 million, offset by increases in non-interest expense of $4.8 million, provision for loan losses of $0.1 million and a decline in income tax benefit of $0.2 million.

2

Interest income for the nine month period ended December 31, 2007, increased $6.1 million, or 20.1%, to $36.4 million, compared to $30.3 million for the prior year period.  The increase in interest income is primarily due to an increase in total average balances of interest-earning assets of $57.2 million, which includes an increase in average loan balances of $92.3 million offset by a decrease in average balances of mortgage-backed securities of $34.5 million.  Interest-earning assets yields increased 64 basis points, which includes increases in loan yields of 44 basis points and mortgage-backed securities yields of 98 basis points.

Interest expense for the nine month period ended December 31, 2007, increased by $3.0 million, or 21.8%, to $16.9 million, compared to $13.9 million for the prior year period.   The increase in interest expense resulted primarily from a 36 basis point increase in the annualized average cost of interest-bearing liabilities to 3.49% compared to 3.13% for the prior year period and the growth in the average balance of interest-bearing liabilities of $56.2 million, or 9.5%, to $644.7 million compared to $588.5 million for the prior year period.

The Company provided $0.2 million in provision for loan losses for the nine months ended December 31, 2007 compared to $0.1 million for the prior year period.  The level of non-performing loans to total loans remains within the range the Bank has experienced over the trailing twelve quarters.

Non-interest income for the nine month period ended December 31, 2007, increased $4.2 million, or 266.4%, to $5.8 million compared to $1.6 million for the prior year period.  The increase in non-interest income was primarily due to an increase of $2.0 million in other income to $2.3 million compared to $0.3 million for prior year period and an increase of $0.5 million in loan fees and service charges to $1.2 million compared to $0.7 million for the prior year period.  Other income primarily consists of a $1.7 million fee generated by a New Markets Tax Credit transaction.  In addition, the prior year period included a $1.3 million charge associated with the balance sheet repositioning initiative implemented to improve margins.

Non-interest expense for the nine month period ended December 31, 2007, increased $4.8 million, or 28.5%, to $21.7 million compared to $16.9 million for the prior year period.  The increase in non-interest expense was primarily due to increases of $2.3 million in employee compensation and benefits to $9.7 million compared to $7.4 million, an increase of $0.8 million in net occupancy expense to $2.7 million compared to $1.9 million, and an increase of $2.6 million in other expenses to $7.3 million compared to $4.7 million, respectively, for the prior year period.  The increase in employee compensation and benefits is primarily due to the CCB acquisition and investments in new talent, primarily in the retail, lending and accounting departments.  The $2.6 million increase in other expense includes consulting assistance on several projects, and costs recognized following termination of a potential strategic transaction.  The prior year period expense included $1.3 million in merger related expenses.

Income tax benefit decreased $0.1 million for the nine month period ended December 31, 2007, resulting in a tax benefit of $0.2 million compared to a tax benefit of $0.3 million for the prior year period.  The reduction in tax benefit reflects the income before income taxes of $3.3 million for the nine month period ended December 31, 2007 compared to $1.0 million for the prior year period.  The income tax expense of $1.2 million for the nine month period ended December 31, 2007 was offset by the benefit of the NMTC award totaling $1.4 million.

Financial Condition Highlights

At December 31, 2007, total assets increased $62.7 million, or 8.5%, to $802.7 million compared to $740.0 million at March 31, 2007.  The increase in total assets was primarily the result of increases in loans receivable and loans held-for-sale of $52.8 million, other assets of $21.5 million and cash and cash equivalents of $1.1 million, partially offset by decreases in investment securities of $13.0 million and Federal Home Loan Bank of New York stock of $1.0 million.

Total loans receivable, including loans held-for-sale, increased $52.8 million, or 8.7%, to $662.0 million at December 31, 2007 compared to $609.2 million at March 31, 2007.  The increase resulted primarily from an increase in construction loans of $27.7 million and an increase in commercial loans of $21.2 million.  Other assets increased $21.5 million, or 150.1%, to $35.8 million at December 31, 2007 compared to $14.3 million at March 31, 2007.  On December 31, 2007, Carver Community Development Corp., one of the Company's subsidiaries, recieved an equity investment of $19.0 million related to a New Markets Tax Credit transaction. On consolidation, this is reflected as a $19.0 million increase in both other assets and minority interest. Additionally, the increase in cash and cash equivalents was primarily a result of a $1.7 million increase in Federal funds sold which was partially offset by decreases in interest earning deposits of $0.3 million and cash and due from banks of $0.2 million.  Total securities decreased $13.0 million, or 19.5%, to $54.1 million at December 31, 2007 compared to $67.1 million at March 31, 2007 due to collection of normal principal repayments and maturities.

3

At December 31, 2007, total liabilities increased by $41.3 million, or 6.0%, to $729.6 million compared to $688.3 million at March 31, 2007.  The increase in total liabilities was primarily the result of $27.3 million of additional customer deposits, a net increase of $11.1 million in advances and borrowed money and $2.8 million of other liabilities.  The increase in customer deposit balances was largely the result of an increase in certificates of deposit of $45.9 million which were offset by decreases of $10.5 million in savings deposits, $3.9 million in checking deposits, and $3.7 million in money market deposit accounts.  The increase in advances and borrowed money was primarily the result of an increase in repurchase obligations of $30.0 million at December 31, 2007 compared to zero repurchase obligations at March 31, 2007, offset by a reduction of $18.9 million in FHLB advances.  Other liabilities increased primarily due to an increase of $3.6 million in lending liabilities and $0.2 million in accrued interest payable, offset by a $1.2 million reduction in other obligations.  Minority interest of $19.0 million relates to the NMTC transaction, as described above.

At December 31, 2007, total stockholders’ equity increased $2.5 million, or 4.9%, to $54.1 million compared to $51.6 million at March 31, 2007.  The increase in total stockholders’ equity was primarily attributable to net income for the nine months ended December 31, 2007 totaling $3.5 million, partially offset by dividends paid of $0.7 million, the repurchase of common stock totaling $0.3 million in accordance with our stock repurchase program and a decrease of $0.1 million in accumulated other comprehensive income related to the mark-to-market of Carver Federal’s available-for-sale securities.

Stock Repurchase Program

During the quarter ended December 31, 2007, the Company purchased an additional 6,500 shares of its common stock under its stock repurchase program.  To date, the Company has purchased a total of 152,674 shares out of a total 231,635 shares approved under the program, at an average price per share of $16.44.  The number of shares yet to be repurchased is 78,961 shares.

Asset Quality

At December 31, 2007, non-performing assets totaled $4.2 million, or 0.52% of total assets, compared to $4.5 million, or 0.62% of total assets at March 31, 2007.  The ratio of the allowance for loan losses to non-performing loans was 137.5% at December 31, 2007 compared to 119.9% at March 31, 2007.  The ratio of the allowance for loan losses to total loans was 0.84% at December 31, 2007 compared to 0.89% at March 31, 2007.

About Carver Bancorp, Inc.

Carver Bancorp, Inc. is the holding company for Carver Federal Savings Bank, a federally chartered stock savings bank.  Carver Federal Savings Bank, the largest African- and Caribbean-American run bank in the United States, operates ten full-service branches in the New York City boroughs of Brooklyn, Queens and Manhattan.  For further information, please visit the Company’s website at www.carverbank.com.

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors, risks and uncertainties.  More information about these factors, risks and uncertainties is contained in our filings with the Securities and Exchange Commission.

# # #

4

CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except per share data)
	December 31,			March 31,
	2007			2007
	(Unaudited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	14,394		$	14,619
Federal funds sold		3,000			1,300
Interest earning deposits		1,148			1,431
Total cash and cash equivalents		18,542			17,350
Securities:
Available-for-sale, at fair value (including pledged as collateral of $36,275 and $34,649 at December 31 and March 31, 2007, respectively)		36,463			47,980
Held-to-maturity, at amortized cost (including pledged as collateral of $17,124 and $18,581 at December 31 and March 31, 2007, respectively; fair value of $17,470 and $19,005 at December 31 and March 31, 2007, respectively)		17,595			19,137
Total securities		54,058			67,117
Loans held-for-sale		25,369			23,226
Gross loans receivable:
Real estate mortgage loans		577,064			533,667
Consumer and commercial loans		59,569			52,293
Allowance for loan losses		(5,573	)		(5,409	)
Total loans receivable, net		631,060			580,551
Office properties and equipment, net		15,170			14,626
Federal Home Loan Bank of New York stock, at cost		2,237			3,239
Bank owned life insurance		9,058			8,795
Accrued interest receivable		4,508			4,335
Goodwill		6,370			5,716
Core deposit intangibles, net		570			684
Other assets		35,797			14,313
Total assets	$	802,739		$	739,952
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	642,443		$	615,122
Advances from the FHLB-NY and other borrowed money		72,217			61,093
Other liabilities		14,932			12,110
Total liabilities		729,592			688,325
Minority Interest		19,000			-
Stockholders' equity:
Common stock (par value $0.01 per share: 10,000,000 shares; authorized; 2,532,227 shares issued; 2,488,258 and 2,507,985 shares outstanding at December 31 and March 31, 2007, respectively		25			25
Additional paid-in capital		24,084			23,996
Retained earnings		30,245			27,436
Unamortized awards of common stock under ESOP and MRP		-			(4	)
Treasury stock, at cost (43,969 and 16,706 shares atDecember 31 and March 31, 2007, respectively)		(565	)		(277	)
Accumulated other comprehensive income		358			451
Total stockholders' equity		54,147			51,627
Total liabilities and stockholders' equity	$	802,739		$	739,952

5

CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
	Three Months Ended					Nine Months Ended
	December 31,					December 31,
	2007		2006			2007		2006
Interest Income:
Loans	$	11,403	$	10,685		$	33,579	$	26,893
Mortgage-backed securities		518		556			1,494		2,331
Investment securities		328		476			1,183		824
Federal funds sold		68		53			109		222
Total interest income		12,317		11,770			36,365		30,270
Interest expense:
Deposits		5,069		4,639			13,970		10,659
Advances and other borrowed money		932		1,004			2,962		3,237
Total interest expense		6,001		5,643			16,932		13,896
Net interest income before provision for loan losses		6,316		6,127			19,433		16,374
Provision for loan losses		222		120			222		120
Net interest income after provision for loan losses		6,094		6,007			19,211		16,254
Non-interest income:
Depository fees and charges		666		680			1,981		1,891
Loan fees and service charges		327		206			1,218		696
Write-down of loans held for sale		-		-			-		(702	)
Gain (loss) on sale of securities		102		21			181		(624	)
Gain on sale of loans		75		53			103		141
Loss on sale of real estate owned		-		(108	)		-		(108	)
Other		2,008		114			2,284		280
Total non-interest income		3,178		966			5,767		1,574
Non-interest expense:
Employee compensation and benefits		3,413		2,829			9,731		7,427
Net occupancy expense		908		715			2,673		1,908
Equipment, net		827		531			1,931		1,521
Merger related expenses		-		-			-		1,258
Other		2,815		1,809			7,327		4,747
Total non-interest expense		7,963		5,884			21,662		16,861
Income before income tax benefit		1,309		1,089			3,316		967
Income tax benefit		268		311			168		330
Net income	$	1,577	$	1,400		$	3,484	$	1,297
Earnings per common share:
Basic	$	0.63	$	0.56		$	1.40	$	0.52
Diluted	$	0.62	$	0.54		$	1.36	$	0.50

6

CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED SELECTED KEY RATIOS
(Unaudited)
	Three Months Ended						Nine Months Ended
	December 31,						December 31,
Selected Statistical Data:	2007			2006			2007			2006
Return on average assets (1)		0.82	%		0.73	%		0.61	%		0.25	%
Return on average equity (2)		12.27			11.86			8.36			3.61
Net interest margin (3)		3.59			3.47			3.71			3.40
Interest rate spread (4)		3.33			3.17			3.42			3.14
Efficiency ratio (5)		83.87			82.96			85.96			93.94
Operating expenses to average assets (6)		4.14			3.08			3.78			3.28
Average equity to average assets (7)		6.68			6.57			7.27			6.57
Average interest-earning assets to average interest-bearing liabilities		1.08	x		1.10	x		1.09	x		1.09	x
Net income per share - basic	$	0.63		$	0.56		$	1.40		$	0.52
Net income per share - diluted	$	0.62		$	0.54		$	1.36		$	0.50
Average shares outstanding - basic		2,489,101			2,515,644			2,494,801			2,510,980
Average shares outstanding - diluted		2,549,924			2,572,130			2,564,926			2,570,801
Cash dividends	$	0.10		$	0.09		$	0.29		$	0.26
Dividend payout ratio (8)		15.85	%		16.18	%		20.75	%		50.63	%
Capital Ratios:
Tier I leverage capital ratio (9)		7.77	%		7.63	%		7.77	%		7.63	%
Tier I risk-based capital ratio (9)		9.57			9.34			9.57			9.34
Total risk-based capital ratio (9)		10.45			10.19			10.45			10.19
	December 31,						March 31,
	2007			2006			2007			2006
Asset Quality Ratios:
Non performing assets to total assets (10)		0.52	%		0.49	%		0.62	%		0.42	%
Non performing loans to total loans receivable		0.61			0.62			0.74			0.55
Allowance for loan losses to total loans receivable		0.84			0.89			0.89			0.81
Allowance for loan losses to non-performing loans		137.51			142.60			119.93			147.10

(1) Net income, annualized, divided by average total assets.

(2) Net income, annualized, divided by average total equity.

(3) Net interest income, annualized, divided by average interest-earning assets.

(4) Combined weighted average interest rate earned less combined weighted average interest rate cost.

(5) Operating expenses divided by sum of net interest income plus non-interest income.

(6) Non-interest expenses, annualized, divided by average total assets.

(7) Average equity divided by average assets for the period ended.

(8) Dividends paid on common stock during the period divided by net income for the period.

(9) These ratios reflect consolidated bank only.

(10) Non performing assets consist of non-accrual loans, loans accruing 90 days or more past due and real estate owned.

7

CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
(In thousands)
(Unaudited)
	For the Three Months Ended December 31,
	2007							2006
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest Earning Assets:
Loans (1)	$	642,600	$	11,403		7.10	%	$	621,657	$	10,685		6.88	%
Mortgage-backed securities		38,317		518		5.41	%		45,316		556		4.91	%
Investment securities (2)		21,439		328		6.07	%		40,710		476		4.68	%
Fed funds sold		6,020		68		4.48	%		3,928		53		5.35	%
Total interest-earning assets		708,376		12,317		6.95	%		711,611		11,770		6.62	%
Non-interest-earning assets		61,406							52,840
Total assets	$	769,782						$	764,451
Interest Bearing Liabilities:
Deposits:
Now demand	$	26,003		58		0.88	%	$	24,816		30		0.48	%
Savings and clubs		129,669		282		0.86	%		135,716		238		0.70	%
Money market		42,096		352		3.32	%		45,513		308		2.68	%
Certificates of deposit		385,035		4,364		4.50	%		364,969		4,056		4.41	%
Mortgagors deposits		2,745		13		1.88	%		2,862		7		0.97	%
Total deposits		585,548		5,069		3.43	%		573,876		4,639		3.21	%
Borrowed money		71,416		932		5.18	%		75,890		1,004		5.25	%
Total interest-bearing liabilities		656,964		6,001		3.62	%		649,766		5,643		3.45	%
Non-interest-bearing liabilities:
Demand		50,117							51,102
Other liabilities		11,276							16,359
Total liabilities		718,357							717,227
Stockholders' equity		51,425							47,224
Total liabilities & stockholders' equity	$	769,782						$	764,451
Net interest income			$	6,316						$	6,127
Average interest rate spread						3.33	%						3.17	%
Net interest margin						3.59	%						3.47	%
(1) Includes non-accrual loans
(2) Includes FHLB-NY stock

8

CARVER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED AVERAGE BALANCES
(In thousands)
(Unaudited)
	For the Nine Months Ended December 31,
	2007							2006
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest Earning Assets:
Loans (1)	$	633,335	$	33,579		7.07	%	$	541,039	$	26,893		6.63	%
Mortgage-backed securities		37,749		1,494		5.28	%		72,206		2,331		4.30	%
Investment securities (2)		27,023		1,183		5.81	%		24,872		824		4.42	%
Fed funds sold		3,049		109		4.74	%		5,842		222		5.04	%
Total interest-earning assets		701,156		36,365		6.91	%		643,959		30,270		6.27	%
Non-interest-earning assets		63,448							42,130
Total assets	$	764,604						$	686,089
Interest Bearing Liabilities:
Deposits:
Now demand	$	25,303		116		0.61	%	$	24,908		69		0.37	%
Savings and clubs		133,296		812		0.81	%		136,935		681		0.66	%
Money market		44,822		852		2.52	%		41,285		784		2.52	%
Certificates of deposit		362,265		12,157		4.45	%		298,163		9,103		4.05	%
Mortgagors deposits		2,786		33		1.57	%		2,200		22		1.33	%
Total deposits		568,472		13,970		3.26	%		503,491		10,659		2.81	%
Borrowed money		76,252		2,962		5.16	%		85,035		3,237		5.05	%
Total interest-bearing liabilities		644,724		16,932		3.49	%		588,526		13,896		3.13	%
Non-interest-bearing liabilities:
Demand		52,574							38,096
Other liabilities		11,753							11,560
Total liabilities		709,051							638,182
Stockholders' equity		55,553							47,907
Total liabilities & stockholders' equity	$	764,604						$	686,089
Net interest income			$	19,433						$	16,374
Average interest rate spread						3.42	%						3.14	%
Net interest margin						3.71	%						3.40	%
(1) Includes non-accrual loans
(2) Includes FHLB-NY stock

9