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Carver Bancorp, Inc. Reports Fiscal Year 2014 and Fourth Quarter Results

NEW YORK, June 11, 2014 (GLOBE NEWSWIRE) -- Carver Bancorp, Inc. (the "Company") (Nasdaq:CARV), the holding company for Carver Federal Savings Bank ("Carver" or the "Bank"), today announced financial results for its fourth quarter and fiscal year ended March 31, 2014 ("Fiscal 2014").

The Company reported a net loss of $418 thousand or basic and diluted loss per share of $0.11 for the fourth quarter of its fiscal year ending March 31, 2014, compared to net income of $687 thousand or basic and diluted earnings per share of $0.19, for the prior year period. The Company reported net income of $231 thousand or basic and diluted earnings per share of $0.06 for fiscal year 2014, compared to net income of $662 thousand, or basic and diluted earnings per share of $0.18 for fiscal year 2013.

Deborah C. Wright, the Company's Chairman and CEO said: "As the economy continues to improve, growing demand for our traditional and innovative banking products and services is driving Carver's recovery. We realized our second consecutive profitable year since the economic downturn and continue to see improvement in our loan portfolio, with non-performing assets declining 21% from the prior quarter and 59% year-over-year. For the full year, net interest margin remained strong at 3.35%, funding costs were stable and the Tier I leverage ratio was flat at 10.44%. During the quarter we chose to sell certain non-performing loans and make strategic investments to upgrade our technology platform to better serve our customers and attract new business. While these actions impacted our quarterly results, we believe they are prudent business decisions that will benefit the Company going forward.

"The recent upgrade to our core technology platform provides our customers with peer competitive, state-of-the-art mobile banking options and expanded products and services including the ability to open new accounts online. The new platform also seamlessly integrates the Carver Community Cash product line with our other online banking services. Carver Community Cash, which serves the underbanked community, continues to perform well and helps to seed growth in the more traditional deposit-based channel."

Ms. Wright concluded: "This year we are celebrating our 65th year as a community bank focused on serving urban customers in New York City. On behalf of our Board of Directors and the entire Carver team, I would like to thank our customers, stockholders and partners for their ongoing commitment to Carver."

Statement of Operations Highlights

Fourth Quarter Results

The Company reported a net loss of $418 thousand for the three months ended March 31, 2014, compared to net income of $687 thousand in the prior year period. The primary driver of the change was a net increase in the loan loss provision in the current quarter, driven by the transfer of loans to held-for-sale ("HFS"), partially offset by an improvement in non performing loans. This impact was partially offset by higher non-interest income and lower non-interest expense in the current period.

Net Interest Income

Interest income increased $143 thousand, or 2.6%, to $5.7 million in the fourth quarter, compared to $5.6 million for the prior year quarter, primarily attributable to a $23.1 million, or 6.1% increase in average loans over the prior year period. The average yield on mortgage-backed securities increased 81 basis points to 2.32% from 1.51% as higher yielding securities were added to the portfolio in the current fiscal year.

Interest expense decreased $108 thousand, or 9.9%, to $986 thousand in the fourth quarter, compared to $1.1 million for the prior year quarter, following lower rates paid on money market accounts and certificates of deposits, and restructuring of certain long-term borrowings in the first quarter of the current fiscal year. The average rate on interest-bearing liabilities decreased 10 basis points to 0.82% for the quarter ended March 31, 2014.

Provision for Loan Losses

The Company recorded a $300 thousand provision for loan losses for the fourth quarter compared to a $3.7 million recovery of loan losses for the prior year quarter. For the three months ended March 31, 2014, net charge-offs of $1.5 million were recognized, compared to net recoveries of $219 thousand in the prior year period. Charge-offs and recoveries in both periods were primarily related to loans moved to held-for-sale ("HFS") and impaired loans.

Non-interest Income

Non-interest income increased $755 thousand, or 66.6%, to $1.9 million in the fourth quarter, compared to $1.1 million for the prior year quarter. Most of the increase resulted from higher loan fees in the current period, compared to losses on real estate owned which negatively impacted non-interest income in the prior year period.

Non-interest Expense

Non-interest expense decreased $1.5 million to $6.9 million during the fourth quarter, compared to $8.4 million in the prior year quarter. The decrease is primarily due to the release of reserves for losses associated with repurchase of mortgage loans sold by the Bank to Fannie Mae.

Income Taxes

Income tax expense was $8 thousand for the fourth quarter compared to $64 thousand in the prior year period.

Fiscal Year 2014 Results

The Company reported net income of $231 thousand for fiscal 2014 compared to net income of $662 thousand for the prior year period. The change was driven by a higher recovery of loan losses in the prior year period, partially offset by higher net interest income and lower non-interest expense in the current year.

Net Interest Income

Interest income decreased $537 thousand, or 2.3%, to $23.2 million compared to $23.8 million in the prior year period, with the decrease primarily attributed to a $21.8 million, or 5.4%, decrease in average loans. The average yield on loans increased 12 basis points to 5.38% from 5.26% following a 59.0% reduction in non-performing loans. The decline in average loan balances did, however, decrease total interest income on loans. The average yield on mortgage-backed securities increased 16 basis points to 2.07% from 1.91% in the prior year period, as higher yielding securities were added to the portfolio in the current fiscal year.

Interest expense decreased $927 thousand, or 19.0%, to $4.0 million, compared to $4.9 million in the prior year, due to lower rates paid on money market accounts and certificates of deposits, and restructuring of certain long-term borrowings in the first quarter of the fiscal year. The average yield on interest-bearing liabilities decreased 17 basis points to 0.82%.

Provision for Loan Losses

The Company recorded a $426 thousand recovery of loan losses for the fiscal year, compared to $3.3 million for the prior year period. For the year ended March 31, 2014, net charge-offs of $3.3 million were recognized compared to $5.5 million in the prior year. Charge-offs in both periods were primarily related to loans that moved to HFS and impaired loans.

Non-interest Income

Non-interest income decreased $243 thousand, or 3.4%, to $6.8 million compared to $7.0 million in the prior year. The decrease is attributable to higher gains on sale of loans of $931 thousand and a $625 thousand New Markets Tax Credit ("NMTC") fee in the prior year period, offset by $378 thousand in higher gains on sale of securities and a $277 thousand increase in loan fees and service charges in the current year.

Non-interest Expense

Non-interest expense decreased $2.9 million or 10.0% to $26.3 million compared to $29.2 million in the prior year period. The decrease is attributed to lower expenses in most categories including a $1.8 million release of reserves for losses associated with the repurchase of mortgage loans sold by the Bank to Fannie Mae, and a $201 thousand decrease in net equipment expense.

Income Taxes

Income tax expense was $102 thousand for the fiscal year compared to $328 thousand in the prior year period due to lower pre-tax net income in the current period.

Financial Condition Highlights

At March 31, 2014, total assets increased $1.5 million, or 0.2%, to $639.8 million, compared to $638.3 million at March 31, 2013. The overall change was due to increases in the loan portfolio, net of the allowance for loan losses, of $23.6 million, and cash and cash equivalents of $17.9 million. These increases were offset by decreases of $26.6 million in the investment portfolio and HFS loans of $8.1 million.

Total investment securities decreased $26.6 million, or 21.3%, to $98.5 million at March 31, 2014, compared to $125.1 million at March 31, 2013. This change reflects a decrease of $26.6 million in available-for-sale securities, as the Company sold its lowest yielding securities.

Net loans receivable increased $19.9 million, or 5.4%, to $390.0 million at March 31, 2014, compared to $370.1 million at March 31, 2013. The majority of the increase resulted from loan originations, purchases, and advances of $124 million, offset by $90 million of principal repayments and loan payoffs across all loan classifications. An additional $15.2 million in loans were transferred from held-for-investment to HFS and $2.5 million represented principal charge-offs as loans were moved to HFS.

HFS loans decreased $8.1 million, or 61.8%, to $5.0 million at March 31, 2014, as the Company continued to take aggressive steps to complete resolution of troubled loans. During fiscal 2014, $12.7 million in loans, net of charge-offs, were transferred into the HFS portfolio from the held-for-investment portfolio. This increase was offset by $20.6 million in loan sales and paydowns.

Total liabilities increased $6.8 million, or 1.2%, to $588.3 million at March 31, 2014, compared to $581.5 million at March 31, 2013, following an increase in deposits of $13.7 million, partially offset by a decrease in borrowings of $6.0 million.

Deposits increased $13.7 million, or 2.8%, to $509.4 million at March 31, 2014, compared to $495.7 million at March 31, 2013, primarily due to increases in money market deposits and certificates of deposit during the period, partially offset by lower checking deposits.

Advances from the Federal Home Loan Bank of New York ("FHLB-NY") and other borrowed money decreased $6.0 million, or 7.9%, to $70.4 million at March 31, 2014, compared to $76.4 million at March 31, 2013, as growth in deposits replaced maturing short-term borrowings.

Total equity decreased $5.2 million, or 9.2%, to $51.5 million at March 31, 2014, compared to $56.7 million at March 31, 2013. The majority of the decrease was due to a $5.8 million change in unrealized losses on investments following an increase in interest rates during the fiscal year, partially offset by a $502 thousand change in unrealized loss on pension liability from termination of the Company's pension fund and net income earned for the fiscal year.

Asset Quality

At March 31, 2014, non-performing assets totaled $18.9 million, or 3.0% of total assets, compared to $24.0 million or 3.8% of total assets at December 31, 2013 and $46.1 million or 7.2% of total assets at March 31, 2013. Non-performing assets at March 31, 2014 were comprised of $8.2 million of loans 90 days or more past due and non-accruing, $3.0 million of loans classified as a troubled debt restructuring, $1.3 million of loans that are either performing or less than 90 days past due that have been classified as impaired, $1.4 million of Real Estate Owned, and $5.0 million of loans classified as HFS.

The allowance for loan losses was $7.2 million at March 31, 2014, which represents a ratio of the allowance for loan losses to non-performing loans of 57.6% compared to 35.9% at March 31, 2013. The ratio of the allowance for loan losses to total loans was 1.9% at March 31, 2014, a decrease from 3.0% at March 31, 2013.

About Carver Bancorp, Inc.

Carver Bancorp, Inc. is the holding company for Carver Federal Savings Bank, a federally chartered stock savings bank, founded in 1948 to serve African-American communities whose residents, businesses, and institutions had limited access to mainstream financial services. Carver, 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, Manhattan, and Queens. 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.

CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, March 31,
$ in thousands, except per share data 2014 2013
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 115,239 $ 98,083
Money market investments 7,315 6,563
Total cash and cash equivalents 122,554 104,646
Restricted cash 6,354 10,666
Investment securities:
Available-for-sale, at fair value 89,461 116,051
Held-to-maturity, at amortized cost (fair value of $8,970 and $9,629 at March 31, 2014 and March 31, 2013, respectively) 9,029 9,043
Total investments 98,490 125,094
Loans held-for-sale ("HFS") 5,011 13,107
Loans receivable:
Real estate mortgage loans 362,888 334,594
Commercial business loans 26,930 35,281
Consumer loans 138 247
Loans, net 389,956 370,122
Allowance for loan losses (7,233) (10,989)
Total loans receivable, net 382,723 359,133
Premises and equipment, net 7,830 8,597
Federal Home Loan Bank of New York ("FHLB-NY") stock, at cost 3,101 3,503
Accrued interest receivable 2,557 2,247
Other assets 11,218 11,284
Total assets $ 639,838 $ 638,277
LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Savings $ 98,051 $ 98,066
Non-interest bearing checking 53,232 58,239
Interest-bearing checking 24,271 25,927
Money market 127,655 113,259
Certificates of deposit 206,157 200,225
Total deposits 509,366 495,716
Advances from the FHLB-New York and other borrowed money 70,403 76,403
Other liabilities 8,549 9,423
Total liabilities 588,318 581,542
EQUITY
Non-controlling interest (369)
STOCKHOLDERS' EQUITY
Preferred stock (par value $0.01 per share: 45,118 Series D shares, with a liquidation preference of $1,000 per share, issued and outstanding) 45,118 45,118
Common stock (par value $0.01 per share: 10,000,000 shares authorized; 3,697,836 and 3,697,364 shares issued; 3,695,892 and 3,695,420 shares outstanding at March 31, 2014 and March 31, 2013, respectively) 61 61
Additional paid-in capital 56,114 55,708
Accumulated deficit (44,219) (44,439)
Non-controlling interest 141
Treasury stock, at cost (1,944 shares at March 31, 2014 and March 31, 2013) (417) (417)
Accumulated other comprehensive (loss) income (4,768) 563
Total stockholders' equity 51,889 56,735
Total equity 51,520 56,735
Total liabilities and equity $ 639,838 $ 638,277
CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Fiscal Year Ended
March 31, March 31,
$ in thousands, except per share data 2014 2013 2014 2013
Interest income:
Loans $ 5,145 $ 4,999 $ 20,734 $ 21,398
Mortgage-backed securities 238 187 1,034 971
Investment securities 312 355 1,321 1,211
Money market investments 38 49 159 205
Total interest income 5,733 5,590 23,248 23,785
Interest expense:
Deposits 719 758 2,797 3,508
Advances and other borrowed money 267 336 1,154 1,370
Total interest expense 986 1,094 3,951 4,878
Net interest income 4,747 4,496 19,297 18,907
Provision for (recovery of) loan losses 300 (3,713) (426) (3,327)
Net interest income after provision for loan losses 4,447 8,209 19,723 22,234
Non-interest income:
Depository fees and charges 810 828 3,452 3,480
Loan fees and service charges 234 127 970 693
Gain on sale of securities, net 45 114 552 174
Gain on sale of loans, net 551 537 1,319 2,250
Gain (loss) on real estate owned 23 (520) (257) (808)
New Markets Tax Credit ("NMTC") fees 625
Lower of cost or market adjustment on loans held-for-sale (32) (231) (32)
Other 226 80 1,001 667
Total non-interest income 1,889 1,134 6,806 7,049
Non-interest expense:
Employee compensation and benefits 2,755 2,883 11,086 11,126
Net occupancy expense 1,054 941 3,688 3,625
Equipment, net 300 295 983 1,184
Data processing 247 335 1,072 1,176
Consulting fees 176 114 506 357
Federal deposit insurance premiums 307 254 1,236 1,248
Other 2,053 3,589 7,735 10,522
Total non-interest expense 6,892 8,411 26,306 29,238
(Loss) / income before income taxes (556) 932 223 45
Income tax expense 8 64 102 328
Consolidated net (loss) / income (564) 868 121 (283)
Less: Net (loss) / income attributable to non-controlling interest (146) 181 (110) (945)
Net (loss) / income attributable to Carver Bancorp, Inc. $ (418) $ 687 $ 231 $ 662
(Loss) / Earnings per common share:
Basic $ (0.11) $ 0.19 $ 0.06 $ 0.18
Diluted $ (0.11) $ 0.19 $ 0.06 $ 0.18
CARVER BANCORP, INC. AND SUBSIDIARIES
Non Performing Asset Table
$ in thousands March
2014
December
2013
September
2013
June
2013
March
2013
Loans accounted for on a nonaccrual basis (1):
Gross loans receivable:
One-to-four family $ 2,301 $ 3,736 $ 4,343 $ 6,666 $ 7,642
Multifamily 2,240 1,363 758 659 423
Commercial real estate 7,024 8,702 10,503 8,091 14,788
Construction 75 693 1,230
Business 993 1,120 2,457 3,350 6,505
Consumer 1 1 4 38
Total non-performing loans $ 12,559 $ 14,922 $ 18,140 $ 19,459 $ 30,626
Other non-performing assets (2):
Real estate owned 1,369 $ 1,423 $ 970 $ 946 2,386
Loans held-for-sale 5,011 7,678 7,854 9,709 13,107
Total other non-performing assets 6,380 9,101 8,824 10,655 15,493
Total non-performing assets (3): $ 18,939 $ 24,023 $ 26,964 $ 30,114 $ 46,119
Non-performing loans to total loans 3.22 % 3.80 % 4.55 % 5.47 % 8.27 %
Non-performing assets to total assets 2.96 % 3.76 % 4.25 % 4.75 % 7.23 %
(1) Nonaccrual status denotes any loan where the delinquency exceeds 90 days past due and in the opinion of management the collection of contractual interest and/or principal is doubtful. Payments received on a nonaccrual loan are either applied to the outstanding principal balance or recorded as interest income, depending on assessment of the ability to collect on the loan.
(2) Other non-performing assets generally represent loans that the Bank is in the process of selling and has designated held-for-sale or property acquired by the Bank in settlement of loans less costs to sell (i.e., through foreclosure, repossession or as an in-substance foreclosure). These assets are recorded at the lower of their cost or fair value.
(3) Troubled debt restructured loans performing in accordance with their modified terms for less than six months and those not performing in accordance with their modified terms are considered nonaccrual and are included in the nonaccrual category in the table above. At March 31, 2014 there were $6.3 million TDR loans that have performed in accordance with their modified terms for a period of at least six months. These loans are generally considered performing loans and are not presented in the table above.
CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
For the Three Months Ended March 31,
2014 2013
Average Average Average Average
$ in thousands Balance Interest Yield/Cost Balance Interest Yield/Cost
Interest-Earning Assets:
Loans (1) $ 402,063 $ 5,145 5.12 % $ 378,993 $ 4,999 5.28 %
Mortgage-backed securities 41,110 238 2.32 % 49,552 187 1.51 %
Investment securities 51,984 240 1.85 % 61,912 275 1.78 %
Restricted cash deposit 6,464 0.03 % 10,645 1 0.03 %
Equity securities (2) 2,114 19 3.65 % 2,750 23 3.39 %
Other investments and federal funds sold 84,025 91 0.44 % 89,188 105 0.48 %
Total interest-earning assets 587,760 5,733 3.90 % 593,040 5,590 3.77 %
Non-interest-earning assets 14,329 12,849
Total assets $ 602,089 $ 605,889
Interest-Bearing Liabilities:
Deposits:
Interest-bearing checking $ 24,114 $ 9 0.15 % $ 25,310 $ 10 0.16 %
Savings and clubs 96,183 63 0.27 % 96,617 62 0.26 %
Money market 119,907 137 0.46 % 113,918 142 0.51 %
Certificates of deposit 199,818 503 1.02 % 201,036 537 1.08 %
Mortgagors deposits 1,779 7 1.60 % 1,733 7 1.64 %
Total deposits 441,801 719 0.66 % 438,614 758 0.70 %
Borrowed money 44,859 267 2.41 % 44,836 336 3.04 %
Total interest-bearing liabilities 486,660 986 0.82 % 483,450 1,094 0.92 %
Non-interest-bearing liabilities:
Demand 54,340 58,957
Other liabilities 8,360 8,607
Total liabilities 549,360 551,014
Non-controlling interest (225) (434)
Stockholders' equity 52,954 55,309
Total liabilities & stockholders' equity $ 602,089 $ 605,889
Net interest income $ 4,747 $ 4,496
Average interest rate spread 3.08 % 2.85 %
Net interest margin 3.23 % 3.03 %
(1) Includes nonaccrual loans and deferred fees
(2) Includes FHLB-NY stock
CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
For the Fiscal Year Ended March 31,
2014 2013
Average Average Average Average
$ in thousands Balance Interest Yield/Cost Balance Interest Yield/Cost
Interest-Earning Assets:
Loans (1) $ 385,259 $ 20,734 5.38 % $ 407,106 $ 21,398 5.26 %
Mortgage-backed securities 49,921 1,034 2.07 % 50,958 971 1.91 %
Investment securities 55,643 1,016 1.83 % 53,012 874 1.65 %
Restricted cash deposit 7,209 1 0.03 % 7,458 2 0.03 %
Equity securities (2) 2,280 88 3.86 % 2,596 93 3.58 %
Other investments and federal funds sold 75,945 375 0.49 % 86,122 447 0.52 %
Total interest-earning assets 576,257 23,248 4.03 % 607,252 23,785 3.92 %
Non-interest-earning assets 23,575 9,264
Total assets $ 599,832 $ 616,516
Interest-Bearing Liabilities:
Deposits:
Interest-bearing checking $ 25,184 $ 40 0.16 % $ 25,842 $ 42 0.16 %
Savings and clubs 96,424 256 0.27 % 98,785 259 0.26 %
Money market 116,535 536 0.46 % 111,148 739 0.66 %
Certificates of deposit 191,854 1,931 1.01 % 209,622 2,431 1.16 %
Mortgagors deposits 1,955 34 1.74 % 2,079 37 1.78 %
Total deposits 431,952 2,797 0.65 % 447,476 3,508 0.78 %
Borrowed money 51,264 1,154 2.25 % 44,099 1,370 3.11 %
Total interest-bearing liabilities 483,216 3,951 0.82 % 491,575 4,878 0.99 %
Non-interest-bearing liabilities:
Demand 55,405 61,293
Other liabilities 7,127 8,236
Total liabilities 545,748 561,104
Non-controlling interest (180) (55)
Stockholders' equity 54,264 55,467
Total liabilities & stockholders' equity $ 599,832 $ 616,516
Net interest income $ 19,297 $ 18,907
Average interest rate spread 3.21 % 2.93 %
Net interest margin 3.35 % 3.11 %
(1) Includes nonaccrual loans and deferred fees
(2) Includes FHLB-NY stock
CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED SELECTED KEY RATIOS
Three Months Ended Fiscal Year Ended
March 31, March 31,
Selected Statistical Data: 2014 2013 2014 2013
Return on average assets (1) (0.28)% 0.45 % 0.04 % 0.11 %
Return on average stockholders' equity (2) (2.99)% 4.93 % 0.41 % 1.18 %
Net interest margin (3) 3.23 % 3.03 % 3.35 % 3.11 %
Interest rate spread (4) 3.08 % 2.85 % 3.21 % 2.93 %
Efficiency ratio (5) (10) 103.86 % 149.40 % 100.78 % 112.64 %
Operating expenses to average assets (6) (10) 4.58 % 5.55 % 4.39 % 4.74 %
Average equity to average assets (7) (10) 8.80 % 9.13 % 9.05 % 9.00 %
Average interest-earning assets to average interest-bearing liabilities 1.21 x 1.23 x 1.19 x 1.24 x
Basic earnings (loss) per share $ (0.11) $ 0.19 $ 0.06 $ 0.18
Average shares outstanding 3,696,225 3,695,653 3,696,149 3,695,625
March 31,
2014 2013
Capital Ratios:
Tier 1 leverage ratio (8) 10.44 % 10.26 %
Tier 1 risk-based capital ratio (8) 17.64 % 16.99 %
Total risk-based capital ratio (8) 20.21 % 19.55 %
Asset Quality Ratios:
Non-performing assets to total assets (9) 2.96 % 7.23 %
Non-performing loans to total loans receivable (9) 3.22 % 8.27 %
Allowance for loan losses to total loans receivable 1.85 % 2.97 %
Allowance for loan losses to non-performing loans 57.59 % 35.88 %
(1) Net income/(loss), annualized, divided by average total assets.
(2) Net income/(loss), annualized, divided by average total stockholders' equity (excludes OCI and Minority interest).
(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) These ratios reflect consolidated bank only.
(9) Non-performing assets consist of nonaccrual loans, loans HFS and real estate owned, divided by average total assets.
(10) Non-GAAP Financial Measures: In addition to evaluating Carver Bancorp's results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements their evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency ratio. Management believes this non-GAAP financial measure provides information useful to investors in understanding the Company's underlying operating performance and trends, and facilitates comparisons with the performance of other banks and thrifts. Further, the efficiency ratio is used by management in its assessment of financial performance, including non-interest expense control.

CONTACT: Michael Herley/Ruth Pachman Kekst and Company (212) 521-4897/4891 michael-herley@kekst.com ruth-packman@kekst.com David L. Toner Carver Bancorp, Inc. First Senior Vice President and Chief Financial Officer (718) 676-8936 david.toner@carverbank.comSource:Carver Bancorp, Inc.