Carver Bancorp, Inc. Reports First Quarter Fiscal Year 2014 Results

Carver Bancorp, Inc. Reports First Quarter Fiscal Year 2014 Results

NEW YORK, Aug. 9, 2013 (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 first
fiscal quarter of 2014 ended June 30, 2013 ("Fiscal 2014").

The Company reported net income of $410 thousand or basic and diluted earnings
per share of $0.11 for the first quarter of fiscal 2014, compared to a net
loss of $361 thousand or a basic loss per share of $0.10, for the prior year
period.

Deborah C. Wright, Carver Bancorp Chairman and CEO said, "We are pleased to
report our third consecutive quarter of positive earnings results. Our loan
performance continued to improve, with non-performing assets declining 33%
from the prior year's quarter and 57% year-over-year, while delinquencies
declined 29% over the prior quarter. Our net interest margin increased to
3.19%, reflecting both a low interest rate environment at the start of the
quarter and strengthening rates in the back half. While loan balances remain
below our desired levels due to above average prepayment activity, our
pipeline remains strong. The uptick in interest rates, along with our
retention efforts, should help to mitigate refinancing activities going
forward. Our capital ratios remain strong with our Tier I leverage ratio
increasing to 10.43%."

Ms. Wright concluded, "We remain prudently optimistic for the balance of
Fiscal 2014 despite the economic challenges our communities continue to face.
We have great confidence in the strength of our management team and our
strategic plan to grow the Carver franchise through innovative products and
technologies such as Carver Community Cash, and we remain committed to the
communities we serve."

Statement of Operations Highlights

First Quarter Results

The Company reported net income for the three months ended June 30, 2013 of
$410 thousand compared to a net loss of $361 thousand for the prior year
period. Primary drivers of improvement over the prior year period were
reductions in non-interest expenses and increases in the gains on sales of
securities and loans, which were partially offset by an increase in the
provision for loan losses.

Net Interest Income

Interest income decreased $581 thousand, or 9.4%, to $5.6 million compared to
the prior year quarter, primarily attributable to a $64.7 million, or 15.0%,
decrease in average loans. Although the average yield on loans increased 19
basis points to 5.38% from 5.19%, following a reduction in non-performing
loans, the decrease in average loans reduced total interest income on loans.
Decreases in interest income are likely to continue until average loan
balances increase, given lower yields available on alternative
interest-earning assets. The average yield on mortgage-backed securities fell
31 basis points to 1.81% from 2.12% as the securities added to the portfolio
carried lower yields than the securities that were sold or paid down.

Interest expense decreased $310 thousand, or 23.5%, to $1.0 million, compared
to $1.3 million for the prior year quarter, following lower rates paid on
money market accounts and certificates of deposits. The average rate on
interest-bearing liabilities decreased 20 basis points to 0.85% for the
quarter ended June 30, 2013.

Provision for Loan Losses

The Company recorded a $831 thousand provision for loan losses compared to a
$224 thousand provision for the prior year quarter. Net charge-offs of $1.5
million were recognized compared to $1.4 million in the prior year period.
Charge-offs in both periods were primarily related to impaired loans and loans
moved to held-for-sale ("HFS"). The impact of the charge-offs to the provision
was partially offset by a reduction in the allowance for loan losses due to
stabilization in valuations of non-performing loans and a decrease in loss
experience.

Non-interest Income

Non-interest income increased $1.2 million, or 126.4%, to $2.1 million,
compared to $0.9 million for the prior year quarter. The increase was
primarily due to net gains realized on sale of HFS loans, gains on sale of
securities, and increases in the Bank's depository fees, including fees
generated by Carver Community Cash.

Non-interest Expense

Non-interest expense decreased $1.4 million to $5.3 million, compared to $6.6
million in the prior year quarter. The decrease was primarily due to lower
employee compensation expenses of $352 thousand following reduced staffing
levels, and decreases in other expenses including a $300 thousand charge-off
recovery related to the Company's former money carrier provider and a
reduction of $355 thousand in reserves for losses associated with repurchase
of mortgage loans sold by the Bank to Fannie Mae.

Income Taxes

The income tax expense was $73 thousand for the first quarter compared to $159
thousand in the prior year period.

Financial Condition Highlights

At June 30, 2013, total assets decreased $4.1 million, or 0.6%, to $634.2
million, compared to $638.3 million at March 31, 2013. The overall change was
primarily due to decreases in the loan portfolio, net of the allowance for
loan losses of $13.8 million, and in HFS loans of $3.4 million. These
decreases were offset by increases in other assets of $8.9 million and $4.8
million in the investment portfolio.

Total investment securities increased $4.8 million, or 3.9%, to $129.9 million
at June 30, 2013, compared to $125.1 million at March 31, 2013. This change
reflects an increase of $4.5 million in held-to-maturity securities, as the
Company continues to diversify its investment portfolio to increase
interest-earning assets.

Net loans receivable decreased $14.5 million, or 3.9%, to $355.7 million at
June 30, 2013, compared to $370.1 million at March 31, 2013. The majority of
the decrease resulted from $24.9 million of principal repayments and loan
payoffs across all loan classifications. An additional $5.4 million in loans
were transferred from held for investment to HFS and $1.4 million represented
principal charge-offs. Decreases were partially offset by loan originations
and advances of $17.0 million. Early payoffs of loans slowed during the second
half of the quarter as interest rates increased following the Federal Reserve
Chairman's Congressional testimony in May 2013.

HFS loans decreased $3.4 million, or 25.9%, to $9.7 million as the Company
continued to take aggressive steps to resolve troubled loans. During the
quarter, there were $8.8 million in sales and paydowns, offset by $5.4 million
in loans, net of charge-offs, that transferred into the HFS portfolio from the
held for investment portfolio.

Total liabilities remained flat at $581.4 million at June 30, 2013, compared
to $581.5 million at March 31, 2013, due to an increase in borrowings of $11.0
million, offset by reductions in deposits of $10.2 million.

Deposits decreased $10.2 million, or 2.1%, to $485.5 million at June 30, 2013,
compared to $495.7 million at March 31, 2013, due primarily to runoff of
certificates of deposit as the low interest rate environment led depositors to
seek alternative investment opportunities for maturing deposits.

Advances from the Federal Home Loan Bank of New York ("FHLB-NY") and other
borrowed money increased $11.0 million, or 14.4%, to $87.4 million at June 30,
2013, compared to $76.4 million at March 31, 2013, as the Company added
short-term borrowings during the quarter to offset the runoff in certificates
of deposit.

Total equity decreased $3.9 million, or 6.9%, to $52.8 million at June 30,
2013, compared to $56.7 million at March 31, 2013. The majority of the
decrease was due to $4.4 million unrealized losses on investments caused by
the spike in interest rates in the second half of the quarter.

Asset Quality

At June 30, 2013, non-performing assets totaled $30.1 million, or 4.7% of
total assets, compared to $46.1 million or 7.2% of total assets at March 31,
2013, and $71.8 million or 11.1% of total assets at June 30, 2012.
Non-performing assets at June 30, 2013 were comprised of $8.2 million of loans
90 days or more past due and non-accruing, $6.9 million of loans classified as
a troubled debt restructuring, $4.3 million of loans that were either
performing or less than 90 days past due that have been classified as
impaired, $0.9 million of Real Estate Owned, and $9.7 million of loans
classified as HFS.

The allowance for loan losses was $10.3 million at June 30, 2013, which
represents a ratio of the allowance for loan losses to non-performing loans of
53.0% compared to 35.9% at March 31, 2013. The ratio of the allowance for loan
losses to total loans was 2.9% at June 30, 2013, 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
                                                                   
                                                          June 30,  March 31,
$ in thousands except per share data                       2013      2013
ASSETS                                                              
Cash and cash equivalents:                                          
Cash and due from banks                                    $101,942  $98,083
Money market investments                                   5,911    6,563
Total cash and cash equivalents                            107,853  104,646
Restricted cash                                            6,556    10,666
Investment securities:                                              
Available-for-sale, at fair value                          116,377  116,051
Held-to-maturity, at amortized cost (fair value of $13,667
and $9,629 at June 30, 2013 and March 31, 2013,            13,537   9,043
respectively)
Total investments                                          129,914  125,094
                                                                   
Loans held-for-sale ("HFS")                                9,709    13,107
                                                                   
Loans receivable:                                                   
Real estate mortgage loans                                 322,118  334,594
Commercial business loans                                  33,330   35,281
Consumer loans                                             219      247
Loans, net                                                 355,667  370,122
Allowance for loan losses                                  (10,317) (10,989)
Total loans receivable, net                                345,350  359,133
Premises and equipment, net                                8,376    8,597
Federal Home Loan Bank of New York ("FHLB-NY") stock, at   3,866    3,503
cost
Accrued interest receivable                                2,418    2,247
Other assets                                               20,179   11,284
Total assets                                               $634,221  $638,277
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                                
LIABILITIES:                                                        
Deposits:                                                           
Savings                                                    $97,126   $98,066
Non-interest bearing checking                              56,118   58,239
NOW                                                        25,863   25,927
Money market                                               115,327  113,259
Certificates of deposit                                    191,033  200,225
Total deposits                                             485,467  495,716
Advances from the FHLB-New York and other borrowed money   87,403   76,403
Other liabilities                                          8,506    9,423
Total liabilities                                          581,376  581,542
                                                                   
STOCKHOLDERS' EQUITY:                                               
Preferred stock (par value $0.01 per share: 45,118 Series
D shares, with a liquidation preference of $1,000 per      45,118   45,118
share, issued and outstanding)
Common stock (par value $0.01 per share: 10,000,000 shares
authorized; 3,697,661 and 3,697,364 issued; 3,695,717 and  61       61
3,695,420 shares outstanding at June 30, 2013 and March
31, 2013, respectively)
Additional paid-in capital                                 55,844   55,708
Accumulated deficit                                        (44,028) (44,439)
Non-controlling interest                                   101      141
Treasury stock, at cost (1,944 shares at June 30, 2013 and (417)    (417)
March 31, 2013)
Accumulated other comprehensive (loss)/income              (3,834)  563
Total stockholders' equity                                 52,845   56,735
Total liabilities and stockholders' equity                 $634,221  $638,277




CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                   
                                                           Three Months Ended
                                                           June 30,
$ in thousands except per share data                        2013     2012
Interest income:                                                    
Loans                                                       $4,915   $5,587
Mortgage-backed securities                                  263      294
Investment securities                                       348      200
Money market investments                                    43       69
Total interest income                                       5,569    6,150
                                                                   
Interest expense:                                                   
Deposits                                                    697      976
Advances and other borrowed money                           313      344
Total interest expense                                      1,010    1,320
                                                                   
Net interest income                                         4,559    4,830
Provision for loan losses                                   831      224
Net interest income after provision for loan losses         3,728    4,606
                                                                   
Non-interest income:                                                
Depository fees and charges                                 912      796
Loan fees and service charges                               299      200
Gain on sale of securities                                  278      —
Gain on sale of loans, net                                  490      36
Gain (loss) on sale of real estate owned                    (48)     (288)
Lower of cost or market adjustment on loans held-for-sale   (69)     —
Other                                                       266      196
Total non-interest income                                   2,128    940
                                                                   
Non-interest expense:                                               
Employee compensation and benefits                          2,368    2,720
Net occupancy expense                                       871      858
Equipment, net                                              175      288
Data processing                                             356      194
Consulting fees                                             120      66
Federal deposit insurance premiums                          309      343
Other                                                       1,081    2,164
Total non-interest expense                                  5,280    6,633
                                                                   
Income/(loss) before income taxes                           576      (1,087)
Income tax expense                                          73       159
Consolidated net income/(loss)                              503      (1,246)
Less: Net income/(loss) attributable to non-controlling     93       (885)
interest
Net income/(loss) attributable to Carver Bancorp, Inc.      $410     $(361)
                                                                   
Earnings/(loss) per common share:                                   
Basic                                                       $0.11    $(0.10)
Diluted                                                     $0.11    N/A




CARVER BANCORP, INC. AND SUBSIDIARIES
Non Performing Asset Table
                                                               
$ in thousands       June2013   March 2013   December   September  June2012
                                              2012       2012
Loans accounted for
on a non-accrual                                                
basis ^(1):
Gross loans                                                     
receivable:
One-to-four family   $6,666      $7,642       $7,249     $6,094     $7,363
Multi-family         659         423          483        1,724      1,790
Commercial real      8,091       14,788       18,872     14,145     16,487
estate
Construction         693         1,230        1,230      4,258      4,658
Business             3,350       6,505        7,718      8,717      9,337
Consumer             —           38           14         15         —
Total non-performing $19,459     $30,626      $35,566    $34,953    $39,635
loans
                                                               
Other non-performing                                            
assets ^ (2):
Real estate owned    $946        $2,386       $2,996     $2,119     $1,961
Loans held-for-sale  9,709       13,107       18,991     26,830     30,163
Total other
non-performing       10,655      15,493       21,987     28,949     32,124
assets
Total non-performing $30,114     $46,119      $57,553    $63,902    $71,759
assets ^(3):
                                                               
Non-performing loans 5.47%       8.27%        9.76%      9.20%      10.17%
to total loans
Non-performing
assets to total      4.75%       7.23%        8.98%      10.01%     11.13%
assets
                                                               
^(1) Non-accrual status denotes any loan where the delinquency exceeds 90days
past due and in the opinion of management, the collection of contractual
interest and/or principal is doubtful.Payments received on a non-accrual 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 non-accrual and are included in the
non-accrual category in the table above.At June 30, 2013 there were $9.7
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 June 30,
                    2013                         2012
                    Average          Average    Average          Average
$ in thousands       Balance  Interest Yield/Cost Balance  Interest Yield/Cost
Interest Earning                                               
Assets:
Loans ^(1)           $365,706 $4,915   5.38%      $430,367 $5,587   5.19%
Mortgage-backed      57,968   263      1.81%      55,360   294      2.12%
securities
Investment           62,832   274      1.74%      31,883   110      1.38%
securities
Restricted Cash      9,266    1        0.03%      6,415    1        0.03%
Deposit
Equity securities    1,957    19       3.89%      2,566    23       3.61%
^(2)
Other investments
and federal funds    74,076   97       0.53%      99,794   135      0.54%
sold
Total
interest-earning     571,805  5,569    3.90%      626,385  6,150    3.93%
assets
Non-interest-earning 29,899                     6,277            
assets
Total assets         $601,704                   $632,662         
                                                              
Interest Bearing                                               
Liabilities:
Deposits:                                                      
Now demand           $26,423  $10      0.15%      $26,607  $10      0.15%
Savings and clubs    97,997   65       0.27%      101,305  67       0.27%
Money market         114,440  132      0.46%      109,330  203      0.75%
Certificates of      193,260  480      1.00%      220,255  685      1.25%
deposit
Mortgagors deposits  2,248    10       1.78%      2,460    11       1.80%
Total deposits       434,368  697      0.64%      459,957  976      0.85%
Borrowed money       45,001   313      2.79%      43,930   344      3.15%
Total
interest-bearing     479,369  1,010    0.85%      503,887  1,320    1.05%
liabilities
Non-interest-bearing                                           
liabilities:
Demand               56,472                     65,198           
Other liabilities    8,698                      6,852            
Total liabilities    544,539                    575,937          
Minority Interest    (256)                      667              
Stockholders' equity 57,421                     56,058           
Total liabilities &  $601,704                   $632,662         
stockholders' equity
Net interest income          $4,559                     $4,830   
                                                              
Average interest                     3.05%                      2.87%
rate spread
                                                              
Net interest margin                  3.19%                      3.08%
                                                              
^(1) Includes                                                  
non-accrual loans
^(2) Includes                                                  
FHLB-NY stock




CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED SELECTED KEY RATIOS
                                                           
                                          Three Months Ended
                                          June 30
Selected Statistical Data:                 2013              2012
Return on average assets ^(1)              0.27%             (0.23)%
Return on average equity ^ (2)             2.86%             (2.54)%
Net interest margin ^(3)                   3.19%             3.08%
Interest rate spread ^(4)                  3.05%             2.87%
Efficiency ratio ^ (5)(10)                 78.96%            114.96%
Operating expenses to average assets ^ (6) 3.51%             4.19%
Average equity to average assets ^ (7)     9.54%             8.97%
                                                           
Average interest-earning assets to average 1.19 x           1.24 x
interest-bearing liabilities
                                                           
Basic earnings (loss) per share            $0.11             $(0.10)
Average shares outstanding                 3,695,966         3,695,540
                                                           
                                          June 30
                                          2013              2012
Capital Ratios:                                             
Tier 1 leverage ratio ^ (8)                10.43%            9.72%
Tier I risk-based capital ratio ^(8)       17.42%            15.13%
Total risk-based capital ratio ^(8)        20.00%            17.63%
                                                           
Asset Quality Ratios:                                       
Non performing assets to total assets ^    4.75%             11.13%
(9)
Non performing loans to total loans        5.47%             10.17%
receivable ^(9)
Allowance for loan losses to total loans   2.90%             4.77%
receivable
Allowance for loan losses to               53.02%            46.95%
non-performing loans
                                                           
^(1) Net income/(loss), annualized,                         
divided by average total assets.
^(2) Net income/(loss), 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) These ratios reflect consolidated                      
bank only.
^(9) Non performing assets consist of                       
non-accrual loans, and real estate owned.
^(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
ratios.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: Ruth Pachman/Michael Herley
         Kekst and Company
         (212) 521-4800
        
         David L. Toner
         Carver Bancorp, Inc.
         (718) 676-8936
 
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