The following discussion and analysis should be read in conjunction with the
Company's Consolidated Financial Statements and Notes to Consolidated Financial
Statements presented elsewhere in this report.


Carver concluded fiscal 2021 with a net loss of $3.9 million compared to net
loss of $5.4 million for the prior year period. The change in our results of
operations was primarily driven by increases in non-interest income and
non-interest expense. The business climate continues to present significant
challenges as banks continue to absorb heightened regulatory costs and compete
for limited loan demand. Carver continues to focus on diversifying its loan
portfolio with C&I lending to local small businesses and strives to generate new
loan production and to purchase loans at suitable prices. In addition, the Bank
launched a program introducing new deposit products and expanded its digital
online services into nine states across the Northeast and Washington D.C.

COVID-19 continues to have a significant, negative effect on families and
businesses in New York and throughout the United States. While New York State
went through a phased reopening upon expiration of an earlier executive order to
shelter in place, maintain social distancing and close all non-essential
businesses statewide, there remains a significant amount of uncertainty as
certain geographic areas continue to experience surges in COVID-19 cases and
governments at all levels continue to react to changes in circumstances. The
prolonged pandemic, or any other epidemic of this sort that ultimately harms the
global economy, the U.S. economy or the markets in which we operate could
adversely affect Carver's operations. The long-term effects of COVID-19 on the
Company's business cannot be ascertained as there remains significant
uncertainty regarding the breadth and duration of business disruptions related
to the virus. At this time, it is unknown if the easing of restrictions on
individuals and businesses will continue and if and when businesses and their
employees will be able to fully resume normal activities. In addition, new
information may emerge regarding the severity of COVID-19 or the effectiveness

the vaccines developed, causing federal, state and local governments to take
additional actions to contain COVID-19 or to treat its impact. Even after formal
restrictions have been lifted, changes in the behavior of customers, businesses
and their employees - including social distancing - as a result of the pandemic,
are unknown. The Company is closely monitoring its asset quality, liquidity, and
capital positions. Management is actively working to minimize the current and
future impact of this unprecedented situation, and is making adjustments to
operations where appropriate or necessary to help slow the spread of the virus.
In addition, as a result of further actions that may be taken to contain or
reduce the impact of the COVID-19 pandemic, the Company may experience changes
in the value of collateral securing outstanding loans, reductions in the credit
quality of borrowers and the inability of borrowers to repay loans in accordance
with their terms. The Company is actively managing the credit risk in its loan
portfolio, including reviewing the industries that the Company believes are most
likely to be impacted by emerging COVID-19 events. These and similar factors and
events may have substantial negative effects on the business, financial
condition, and results of operations of the Company and its customers.

Critical accounting policies

Various elements of accounting policies, by their nature, are inherently subject
to estimation techniques, valuation assumptions and other subjective
assessments. Carver's policy with respect to the methodologies used to determine
the allowance for loan and lease losses, securities impairment, and assessment
of the recoverability of the deferred tax asset are the most critical accounting
policies. These policies are important to the presentation of Carver's financial
condition and results of operations, and involve a high degree of complexity,
requiring management to make difficult and subjective judgments, which often
require assumptions or estimates about highly uncertain matters. Such
assumptions and estimates are susceptible to significant changes in today's
economic environment. Changes in these judgments, assumptions or estimates could
result in material differences in the Company's results of operations or
financial condition.

Allowance for loan and rental losses

The adequacy of the Bank's ALLL is determined in accordance with the Interagency
Policy Statement on the Allowance for Loan and Lease Losses (the "Interagency
Policy Statement") released by the OCC on December 13, 2006, and in accordance
with ASC Subtopics 450-20 "Loss Contingencies" and 310-10 "Accounting by
Creditors for Impairment of a Loan."  Compliance with the Interagency Policy
Statement includes management's review of the Bank's loan portfolio, including
the identification and review of individual problem situations that may affect a
borrower's ability to repay.  In addition, management reviews the overall
portfolio quality through an analysis of delinquency and non-performing loan
data, estimates of the value of underlying collateral, current charge-offs and
other factors that may affect the portfolio, including a review of regulatory
examinations, an assessment of current and expected economic conditions and
changes in the size and composition of the loan portfolio.

The ALLL reflects management's evaluation of the loans presenting identified
loss potential, as well as the risk inherent in various components of the
portfolio.  There is significant judgment applied in estimating the ALLL.  These
assumptions and estimates are susceptible to significant changes based on the
current environment. Further, any change in the size of the loan portfolio or
any of its components could necessitate an increase in the ALLL even though
there may not be a decline in credit quality or an increase in potential problem
loans. As such, there can never be assurance that the ALLL accurately reflects
the actual loss potential inherent in a loan portfolio.

General reserve allowance

Carver's maintenance of a general reserve allowance in accordance with ASC
Subtopic 450-20 includes the Bank's evaluating the risk to loss potential of
homogeneous pools of loans based upon historical loss factors and a review of
nine different environmental factors that are then applied to each pool.  The
main pools of loans ("Loan Type") are:

•One-to-four family
•Commercial Real Estate
•Business Loans
•Consumer (including Overdraft Accounts)

The Bank next applies to each pool a risk factor that determines the level of
general reserves for that specific pool.  The Bank estimates its historical
charge-offs via a lookback analysis. The actual historical loss experience by
major loan category is expressed as a percentage of the outstanding balance of
all loans within the category. As the loss experience for a particular loan
category increases or decreases, the level of reserves required for that
particular loan category also increases or decreases. The Bank's historical
charge-off rate reflects the period over which the charge-offs were confirmed
and recognized, not the period over which the earlier losses occurred. That is,
the charge-off rate measures the confirmation of losses over a

period that occurs after the earlier actual losses. During the period between
the loss-causing events and the eventual confirmations of losses, conditions may
have changed. There is always a time lag between the period over which average
charge-off rates are calculated and the date of the financial statements. During
that period, conditions may have changed. Another factor influencing the General
Reserve is the Bank's loss emergence period ("LEP") assumptions which represent
the Bank's estimate of the average amount of time from the point at which a loss
is incurred to the point at which the loss is confirmed, either through the
identification of the loss or a charge-off. Based upon adequate management
information systems and effective methodologies for estimating losses,
management has established a LEP floor of one year on all pools.  In some pools,
such as in its Commercial Real Estate, Multifamily and Business pools, the Bank
demonstrates a LEP in excess of 12 months. The Bank also recognizes losses in
accordance with regulatory charge-off criteria.

Because actual loss experience may not adequately predict the level of losses
inherent in a portfolio, the Bank reviews nine qualitative factors to determine
if reserves should be adjusted based upon any of those factors.  As the risk
ratings worsen, some of the qualitative factors tend to increase.  The nine
qualitative factors the Bank considers and may utilize are:

1.Changes in lending policies and procedures, including changes in underwriting
standards and collection, charge-off, and recovery practices not considered
elsewhere in estimating credit losses (Policy & Procedures).
2.Changes in relevant economic and business conditions and developments that
affect the collectability of the portfolio, including the condition of various
market segments (Economy).
3.Changes in the nature or volume of the loan portfolio and in the terms of
loans (Nature & Volume).
4.Changes in the experience, ability, and depth of lending management and other
relevant staff (Management).
5.Changes in the volume and severity of past due loans, the volume of nonaccrual
loans, and the volume and severity of adversely classified loans (Problem
6.Changes in the quality of the loan review system (Loan Review).
7.Changes in the value of underlying collateral for collateral dependent loans
(Collateral Values).
8.The existence and effect of any concentrations of credit and changes in the
level of such concentrations (Concentrations).
9.The effect of other external forces such as competition and legal and
regulatory requirements on the level of estimated credit losses in the existing
portfolio (External Forces).

Specific Reserve Allowance

Carver also maintains a specific reserve allowance for criticized and classified
loans individually reviewed for impairment in accordance with ASC Subtopic
310-10 guidelines. The amount assigned to the specific reserve allowance is
individually determined based upon the loan. The ASC Subtopic 310-10 guidelines
require the use of one of three approved methods to estimate the amount to be
reserved and/or charged off for such credits. The three methods are as follows:

1.The present value of expected future cash flows discounted at the loan's
effective interest rate,
2.The loan's observable market price; or
3.The fair value of the collateral if the loan is collateral dependent.

The Bank may choose the appropriate ASC Subtopic 310-10 measurement on a
loan-by-loan basis for an individually impaired loan, except for an impaired
collateral dependent loan.  Guidance requires impairment of a collateral
dependent loan to be measured using the fair value of collateral method. A loan
is considered "collateral dependent" when the repayment of the debt will be
provided solely by the underlying collateral, and there are no other available
and reliable sources of repayment.

All substandard and doubtful loans and any other loans that the Chief Credit
Officer deems appropriate for review, are identified and reviewed for individual
evaluation for impairment in accordance with ASC Subtopic 310-10. Carver also
performs impairment analysis for all TDRs.  If it is determined that it is
probable the Bank will be unable to collect all amounts due according with the
contractual terms of the loan agreement, the loan is categorized as impaired.
Loans determined to be impaired are evaluated to determine the amount of
impairment based on one of the three measurement methods noted above.  In
accordance with guidance, if there is no impairment amount, no reserve is
established for the loan.

Debt in difficulty Restructured loans

TDRs are those loans whose terms have been modified because of deterioration in
the financial condition of the borrower and a concession is made. Modifications
could include extension of the terms of the loan, reduced interest rates,
capitalization of interest and forgiveness of accrued interest and/or principal.
Once an obligation has been restructured because of such credit problems, it
continues to be considered restructured until paid in full. For cash flow
dependent loans, the Bank records a specific valuation allowance reserve equal
to the difference between the present value of estimated future cash flows

under the restructured terms discounted at the loan's original effective
interest rate, and the loan's original carrying value. For a collateral
dependent loan, the Bank records an impairment charge when the current estimated
fair value of the property that collateralizes the impaired loan, if any, is
less than the recorded investment in the loan. TDR loans remain on nonaccrual
status until they have performed in accordance with the restructured terms for a
period of at least six months.

Interagency statement on loan modifications and reporting for financial institutions working with clients affected by coronavirus

On March 22, 2020, the federal banking agencies issued an interagency statement
to provide additional guidance to financial institutions who are working with
borrowers affected by COVID-19. The statement provided that agencies will not
criticize institutions for working with borrowers and will not direct supervised
institutions to automatically categorize all COVID-19 related loan modifications
as troubled debt restructurings ("TDRs"). The agencies have confirmed with staff
of the Financial Accounting Standards Board that short-term modifications made
on a good faith basis in response to COVID-19 to borrowers who were current
prior to any relief, are not TDRs. This includes short-term (e.g., six months)
modifications such as payment deferrals, fee waivers, extensions of repayment
terms, or other delays in payment that are insignificant. Borrowers considered
current are those that are less than 30 days past due on their contractual
payments at the time a modification program is implemented.

The statement further provided that working with borrowers that are current on
existing loans, either individually or as part of a program for creditworthy
borrowers who are experiencing short-term financial or operational problems as a
result of COVID-19, generally would not be considered TDRs. For modification
programs designed to provide temporary relief for current borrowers affected by
COVID-19, financial institutions may presume that borrowers that are current on
payments are not experiencing financial difficulties at the time of the
modification for purposes of determining TDR status, and thus no further TDR
analysis is required for each loan modification in the program.

The statement says that agency reviewers will use judgment when reviewing loan modifications, including TORs, and will not automatically risk negatively risking rate credits that are affected by COVID-19, including those considered as RDTs.

In addition, the statement noted that efforts to work with borrowers of
one-to-four family residential mortgages, where the loans are prudently
underwritten, and not past due or carried on nonaccrual status, will not result
in the loans being considered restructured or modified for the purposes of their
risk-based capital rules. With regard to loans not otherwise reportable as past
due, financial institutions are not expected to designate loans with deferrals
granted due to COVID-19 as past due because of the deferral.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”)

The CARES Act, which became law on March 27, 2020, provide emergency economic
relief to combat the coronavirus ("COVID-19") and stimulate the economy. The law
had several provisions relevant to financial institutions, including:

•Allowing institutions not to characterize loan modifications relating to the
COVID-19 pandemic as a troubled debt restructuring and also allowing them to
suspend the corresponding impairment determination for accounting purposes.

•The ability of a borrower of a federally backed mortgage loan (VA, FHA, USDA,
Freddie Mac and Fannie Mae) experiencing financial hardship due, directly or
indirectly, to the COVID-19 pandemic to request forbearance from paying their
mortgage by submitting a request to the borrower's servicer affirming their
financial hardship during the COVID-19 emergency. Such a forbearance will be
granted for up to 180 days, which can be extended for an additional 180-day
period upon the request of the borrower. During that time, no fees, penalties or
interest beyond the amounts scheduled or calculated as if the borrower made all
contractual payments on time and in full under the mortgage contract will accrue
on the borrower's account. Except for vacant or abandoned property, the servicer
of a federally backed mortgage is prohibited from taking any foreclosure action,
including any eviction or sale action, for not less than the 60-day period
beginning March 18, 2020.

•The ability of a borrower of a multifamily federally backed mortgage loan that
was current as of February 1, 2020, to submit a request for forbearance to the
borrower's servicer affirming that the borrower is experiencing financial
hardship during the COVID-19 emergency. A forbearance will be granted for up to
30 days, which can be extended for up to two additional 30-day periods upon the
request of the borrower. During the time of the forbearance, the multifamily
borrower cannot evict or initiate the eviction of a tenant or charge any late
fees, penalties or other charges

to a tenant for late payment of rent. Additionally, a multifamily borrower that
receives a forbearance may not require a tenant to vacate a dwelling unit before
a date that is 30 days after the date on which the borrower provides the tenant
notice to vacate and may not issue a notice to vacate until after the expiration
of the forbearance.

Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (the “CRRSA Act”)

On December 27, 2020, the Coronavirus Response and Relief Supplemental
Appropriations Act of 2021 ("CRRSA Act") was signed into law, which also
contains provisions that could directly impact financial institutions including
extending the time that insured depository institutions and depository
institution holding companies have to comply with the current expected credit
losses (CECL) account standing and extending the authority granted to banks
under the CARES Act to elect to temporarily suspend the requirements under U.S.
GAAP applicable to troubled debt restructurings for loan modifications related
to the COVID-19 pandemic for any loan that was not more than 30 days past due as
of December 31, 2019. The act directs financial regulators to support community
development financial institutions and minority depository institutions and
directs Congress to re-appropriate $429 billion in unobligated CARES Act funds.
The PPP, which was originally established under the CARES Act, was also extended
under the CRRSA Act.

Securities Impairment

The Bank's available-for-sale securities portfolio is carried at estimated fair
value, with any unrealized gains and losses, net of taxes, reported as
accumulated other comprehensive (loss) income. Securities that the Bank has the
intent and ability to hold to maturity are classified as held-to-maturity and
are carried at amortized cost. The fair values of securities in the Bank's
portfolio are based on published or securities dealers' market values and are
affected by changes in interest rates. On a quarterly basis, the Bank reviews
and evaluates the securities portfolio to determine if the decline in the fair
value of any security below its cost basis is other-than-temporary. The Bank
generally views changes in fair value caused by changes in interest rates as
temporary, which is consistent with its experience. The amount of an
other-than-temporary impairment, when there are credit and non-credit losses on
a debt security which management does not intend to sell, and for which it is
more likely than not that the Bank will not be required to sell the security
prior to the recovery of the non-credit impairment, the portion of the total
impairment that is attributable to the credit loss would be recognized in
earnings, and the remaining difference between the debt security's amortized
cost basis and its fair value would be included in other comprehensive (loss)
income. This guidance also requires additional disclosures about investments in
an unrealized loss position and the methodology and significant inputs used in
determining the recognition of other-than-temporary impairment. The Bank does
not have any securities that are classified as having other-than-temporary
impairment in its investment portfolio at March 31, 2021.

Deferred tax assets

The Company records income taxes in accordance with ASC 740 Topic "Income
Taxes," as amended, using the asset and liability method. Income tax expense
(benefit) consists of income taxes currently payable/(receivable) and deferred
income taxes. Temporary differences between the basis of assets and liabilities
for financial reporting and tax purposes are measured as of the balance sheet
date. Deferred tax liabilities or recognizable deferred tax assets are
calculated on such differences, using current statutory rates, which result in
future taxable or deductible amounts. The effect on deferred taxes of a change
in tax rates is recognized in income in the period that includes the enactment
date. Where applicable, deferred tax assets are reduced by a valuation allowance
for any portion determined not likely to be realized. Management is continually
reviewing the operation of the Company with a view to the future. Based on
management's current analysis and the appropriate accounting literature,
management is of the opinion that a full valuation allowance is appropriate.
This valuation allowance could subsequently be adjusted, by a charge or credit
to income tax expense, as changes in facts and circumstances warrant.

On June 29, 2011, the Company raised $55 million of equity, which resulted in a
$51.4 million increase in equity after considering the effect of various
expenses associated with the capital raise. The capital raise triggered a change
in control under Section 382 of the Internal Revenue Code.  Generally, Section
382 limits the utilization of an entity's net operating loss carryforwards,
general business credits, and recognized built-in losses upon a change in
ownership. The Company is currently subject to an annual limitation of
approximately $870 thousand. A valuation allowance for net deferred tax asset of
$23.7 million has been recorded. The valuation allowance was initially recorded
during fiscal 2011, and has remained through March 31, 2021, as management
concluded and continues to conclude that it is "more likely than not" that the
Company will not be able to fully realize the benefit of its deferred tax
assets. However, tax legislation passed during the Company's fiscal year 2018
now permits a corporation to receive refunds for AMT credits even if there is no
taxable income. As a result, at March 31, 2018, the valuation allowance was
reduced by $340 thousand, the amount of the Company's AMT credits. The amount of
the AMT credits recorded as a deferred tax asset was $0 at March 31, 2020. The
AMT credit was $143 thousand as

of March 31, 2020, all of which was requested for reimbursement to the Company in the recently filed fiscal 2020 federal income tax return.

Asset / Liability Management

The Company's primary earnings source is net interest income, which is affected
by changes in the level of interest rates, the relationship between the rates on
interest-earning assets and interest-bearing liabilities, the impact of interest
rate fluctuations on asset prepayments, the level and composition of deposits
and assets, and the credit quality of earning assets. Management's
asset/liability objectives are to maintain a strong, stable net interest margin,
to utilize the Company's capital effectively without taking undue risks, to
maintain adequate liquidity and to manage its exposure to changes in interest

The economic environment is uncertain regarding future interest rate trends.
Management monitors the Company's cumulative gap position, which is the
difference between the sensitivity to rate changes on the Company's
interest-earning assets and interest-bearing liabilities. In addition, the
Company uses various tools to monitor and manage interest rate risk, such as a
model that projects net interest income based on increasing or decreasing
interest rates.

Discussion of sensitivity analysis to market risk and interest rates

As a financial institution, the Bank's primary component of market risk is
interest rate volatility. Fluctuations in interest rates will ultimately impact
both the level of income and expense recorded on a large portion of the
Company's assets and liabilities, and the market value of all interest-earning
assets, other than those which are short-term in maturity. Based upon the
Company's nature of operations, it is not subject to foreign currency exchange
or commodity price risk. The Company does not own any trading assets.

The Company seeks to manage its interest rate risk by monitoring and controlling
the variation in repricing intervals between its assets and liabilities. To a
lesser extent, it also monitors its interest rate sensitivity by analyzing the
estimated changes in market value of its assets and liabilities assuming various
interest rate scenarios. As discussed more fully below, there are a variety of
factors that influence the repricing characteristics of any given asset or

The matching of assets and liabilities may be analyzed by examining the extent
to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity gap. An asset or liability
is said to be interest rate sensitive within a specific period if it will mature
or reprice within that period. The interest rate sensitivity gap is defined as
the difference between the amount of interest-earning assets maturing or
repricing within a specific period of time and the amount of interest-bearing
liabilities maturing or repricing within that same time period. A gap is
considered positive when the amount of interest rate sensitive assets exceeds
the amount of interest rate sensitive liabilities and is considered negative
when the amount of interest rate sensitive liabilities exceeds the amount of
interest rate sensitive assets. Generally, during a period of falling interest
rates, a negative gap could result in an increase in net interest income, while
a positive gap could adversely affect net interest income. Conversely, during a
period of rising interest rates a negative gap could adversely affect net
interest income, while a positive gap could result in an increase in net
interest income. As illustrated below, the Company had a positive one-year gap
equal to 17.64% of total rate sensitive assets at March 31, 2021. As a result,
the Company's net interest income may be positively affected by rising interest
rates and may be negatively affected by falling interest rates.

The following table sets forth information regarding the projected maturities,
prepayments and repricing of the major rate-sensitive asset and liability
categories of the Company as of March 31, 2021. Maturity repricing dates have
been projected by applying estimated prepayment rates based on the current rate
environment.  The repricing and other assumptions are not necessarily
representative of the Company's actual results. Classifications of items in the
table below are different from those presented in other tables and the financial
statements and accompanying notes included herein and do not reflect
non-performing loans:
$ in thousands                 <3 Mos.           3-12 Mos.           1-3 Yrs.           3-5 Yrs.          5-10 Yrs.          10+ Yrs.               Bearing               Total
Rate Sensitive Assets:
Loans                        $  42,284          $ 113,443          $ 152,620          $  98,442          $ 60,115          $   12,783          $            -          $ 479,687
Short-term investments          72,305                  -                  -                  -                 -                   -                       -             72,305
Long-term investments            2,217              8,546             23,948             11,097            26,094              17,662                       -             89,564
Other assets                         -                  -                  -                  -                 -                   -                  35,192             35,192
 Total assets                $ 116,806          $ 121,989          $ 176,568          $ 109,539          $ 86,209          $   30,445          $       35,192          $ 676,748

Rate Sensitive Liabilities:
Non-maturity deposits        $   3,143          $   9,649          $  24,403          $  22,911          $ 51,337          $  303,358          $            -          $ 414,801

Term deposits                   54,922             57,908             29,691             10,104                99                   -                       -            152,724
Borrowings                           -                  -             23,705             13,403                 -                   -                       -             37,108
Other liabilities                    -                  -                  -                  -                 -                   -                  19,814             19,814
Equity                               -                  -                  -                  -                 -                   -                  52,301             52,301

Total liabilities and equity $ 58,065 $ 67,557 $ 77,799 $ 46,418 $ 51,436 $ 303,358 $

72 115 $ 676,748

Interest sensitivity gap     $  58,741          $  54,432          $  98,769          $  63,121          $ 34,773          $ (272,913)         $      (36,923)         $       -

Cumulative interest
sensitivity gap              $  58,741          $ 113,173          $ 211,942            $275,063          $309,836         $   36,923          $            -          $       -

Ratio of cumulative gap to
total rate sensitive assets       9.16  %           17.64  %           33.04  %           42.87  %          48.29  %             5.76  %                    -                  -

  The table above assumes that fixed maturity deposits are not withdrawn prior
to maturity and that transaction accounts will decay as disclosed in the table

Certain shortcomings are inherent in the method of analysis presented in the
table above. Although certain assets and liabilities may have similar maturities
or periods of repricing, they may react in different degrees to changes in the
market interest rates. The interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
rates on other types of assets and liabilities may lag behind changes in market
interest rates. Certain assets, such as adjustable-rate mortgages, generally
have features that restrict changes in interest rates on a short-term basis and
over the life of the asset. In the event of a change in interest rates,
prepayments and early withdrawal levels would likely deviate significantly from
those assumed in calculating the table. Additionally, credit risk may increase
as many borrowers may experience an inability to service their debt in the event
of a rise in interest rate. Virtually all of the adjustable-rate loans in the
Company's portfolio contain conditions that restrict the periodic change in
interest rate.

Economic Value of Equity ("EVE") Analysis. As part of its efforts to maximize
net interest income while managing risks associated with changing interest
rates, management also uses the EVE methodology. EVE is the present value of
expected net cash flows from existing assets less the present value of expected
cash flows from existing liabilities plus the present value of net expected cash
inflows from existing financial derivatives and off-balance sheet contracts. At
March 31, 2021, the Company did not report any holdings in financial derivative

Under this methodology, interest rate risk exposure is assessed by reviewing the
estimated changes in EVE that would hypothetically occur if interest rates
rapidly rise or fall along the yield curve. Projected values of EVE at both
higher and lower interest rate risk scenarios are compared to base case values
(no change in rates) to determine the sensitivity to changing interest rates.

Presented below, as of March 31, 2021, is an analysis of the Company's interest
rate risk as measured by changes in EVE for instantaneous parallel shifts of
+400/-200 basis points change in market interest rates. Such limits have been
established with consideration of the impact of various rate changes and the
Compamy's current capital position.
$ in thousands                       Economic Value of Equity
 Change in Rate              $ Amount               $ Change        % Change
    +400 bps                         109,000        40,000            58.0  %
    +300 bps                         104,000        35,000            50.7  %
    +200 bps                          96,000        27,000            39.1  %
    +100 bps                          85,000        16,000            23.2  %
       0 bps                          69,000
    -100 bps                          43,000       (26,000)          (37.7) %
    -200 bps                           8,000       (61,000)          (88.4) %

Certain shortcomings are inherent in the methodology used in the above interest
rate risk measurements. Modeling changes in EVE require the making of certain
assumptions, which may or may not reflect the manner in which actual yields and
costs respond to changes in market interest rates.  In this regard, the models
presented assume that the composition of our interest sensitive assets and
liabilities existing at the beginning of a period remains constant over the
period being measured and also assumes that a particular change in interest
rates is reflected uniformly across the yield curve regardless of the duration
to maturity or repricing of specific assets and liabilities. Accordingly,
although the EVE table provides an indication of the Company's interest rate
risk exposure at a particular point in time, such measurements are not intended
to and do not provide a precise forecast of the effect of changes in market
interest rates on the Company's net interest income and may differ from actual

Average balance, interest and yields and average rates

The following table sets forth certain information relating to Carver Federal's
average interest-earning assets and average interest-bearing liabilities, and
their related average yields and costs for the years ended March 31, 2021, 2020,
and 2019. The table also presents information for the fiscal years indicated
with respect to the difference between the weighted average yield earned on
interest-earning assets and the weighted average rate paid on interest-bearing
liabilities, or "interest rate spread," which savings institutions have
traditionally used as an indicator of profitability. Another indicator of an
institution's profitability is its "net interest margin," which is its net
interest income divided by the average balance of interest-earning assets.  Net
interest income is affected by the interest rate spread and by the relative
amounts of interest-earning assets and interest-bearing liabilities. When
interest-earning assets approximate or exceed interest-bearing liabilities, any
positive interest rate spread will generate net interest income:
                                                            2021                                                        2020                                                        2019
                                                                              Average                                                     Average                                                     Average
                                      Average                                 Yield/               Average                                Yield/               Average                                Yield/
$ in thousands                        Balance            Interest              Cost                Balance           Interest              Cost                Balance           Interest              Cost
Interest-Earning Assets:
Loans (1)                          $   456,112          $ 18,552                  4.07  %       $  423,454          $ 18,959                  4.48  %       $  442,218          $ 19,470                  4.40  %
Mortgage-backed securities              41,513               708                  1.71  %           49,407             1,230                  2.49  %           52,002             1,265                  2.43  %
Investment securities                   50,727               953                  1.88  %           37,717               868                  2.30  %           51,505             1,252                  2.43  %

Other investments                       90,857                94                  0.10  %           32,364               570                  1.76  %           63,555             1,243                  1.96  %
Total interest-earning assets          639,209            20,307                  3.18  %          542,942            21,627                  3.99  %          609,280            23,230                  3.81  %
Non-interest-earning assets             27,704                                                      30,207                                                      10,135
Total assets                       $   666,913                                                  $  573,149                                                  $  619,415

Interest-Bearing Liabilities:
Interest-bearing checking          $    37,313          $     30                  0.08  %       $   23,765          $     29                  0.12  %       $   25,159          $     30                  0.12  %
Savings and clubs                      107,820               235                  0.22  %           97,453               256                  0.26  %          100,838               265                  0.26  %
Money market                           125,867               525                  0.42  %          100,796               533                  0.53  %           98,061               466                  0.48  %
Certificates of deposit                192,637             2,974                  1.54  %          188,285             3,799                  2.02  %          250,260             4,427                  1.77  %
Mortgagors deposits                      2,257                 6                  0.27  %            2,219                23                  1.04  %            2,142                44                  2.05  %
Total deposits                         465,894             3,770                  0.81  %          412,518             4,640                  1.12  %          476,460             5,232                  1.10  %
Borrowed money                          38,005               650                  1.71  %           21,600               991                  4.59  %           17,521               909                  5.19  %
Total interest-bearing liabilities     503,899             4,420                  0.88  %          434,118             5,631                  1.30  %          493,981             6,141                  1.24  %

Non-interest bearing debts:

  Demand deposits                       85,890                                                      58,548                                                      59,525
  Other liabilities                     29,818                                                      28,874                                                      19,989
Total liabilities                      619,607                                                     521,540                                                     573,495

Stockholders' equity                    47,306                                                      51,609                                                      45,920
Total liabilities & equity         $   666,913                                                  $  573,149                                                  $  619,415
Net interest income                                     $ 15,887                                                    $ 15,996                                                    $ 17,089

Average interest rate spread                                                      2.30  %                                                     2.69  %                                                     2.57  %

Net interest margin                                                               2.49  %                                                     2.95  %                                                     2.80  %

Ratio of average interest-earning assets to
interest-bearing liabilities                                                    126.85  %                                                   125.07  %                                                   123.34  %

(1) Includes nonaccrual loans.
(2) Includes FHLB-NY stock.

Rate/Volume Analysis

The following table sets forth information regarding the extent to which changes
in interest rates and changes in volume of interest related assets and
liabilities have affected the Company's interest income and expense during the
fiscal years ended March 31, 2021, 2020, and 2019 (in thousands). For each
category of interest-earning assets and interest-bearing liabilities,
information is provided for changes attributable to: (1) changes in volume
(changes in volume multiplied by prior rate); (2) changes in rate (change in
rate multiplied by old volume). Changes in rate/volume variance are allocated
proportionately between changes in rate and changes in volume.
                                                         2021 vs. 2020                                              2020 vs. 2019
                                                  Increase (Decrease) due to                                  Increase (Decrease) due to
$ in thousands                            Volume                Rate              Total               Volume                Rate             Total
Interest-Earning Assets:
Loans                                $    1,463              $ (1,870)         $   (407)         $    (827)              $   316          $   (511)
Mortgage-backed securities                 (196)                 (326)             (522)               (63)                   28               (35)
Investment securities                       299                  (214)               85               (335)                  (49)             (384)

Other investments                         1,031                (1,507)             (476)              (611)                  (62)             (673)
Total interest-earning assets             2,597                (3,917)           (1,320)            (1,836)                  233            (1,603)

Interest-Bearing Liabilities:
Interest-bearing checking                    17                   (16)                1                 (1)                    -                (1)
Savings and clubs                            27                   (48)              (21)                (9)                    -                (9)
Money market savings                        132                  (140)               (8)                13                    54                67
Certificates of deposit                      88                  (913)     
       (825)            (1,096)                  468              (628)
Mortgagors deposits                           -                   (17)              (17)                 2                   (23)              (21)
Total deposits                              264                (1,134)             (870)            (1,091)                  499              (592)
Borrowed money                              753                (1,094)             (341)               211                  (129)               82
Total interest-bearing liabilities        1,017                (2,228)           (1,211)              (880)                  370              (510)

Net change in net interest income    $    1,580              $ (1,689)         $   (109)         $    (956)              $  (137)         $ (1,093)

Comparison of financial position to March 31, 2021 and 2020


At March 31, 2021, total assets were $676.7 million, reflecting an increase of
$97.9 million, or 16.9%, from total assets of $578.8 million at March 31, 2020.
The increase was attributable to a $28.1 million increase in cash and cash
equivalents, and increases of $54.6 million and $18.3 million in the Bank's net
loan and investment portfolios, respectively.

Total cash and cash equivalents increased $28.1 million, or 59.2%, from $47.5
million at March 31, 2020 to $75.6 million at March 31, 2021, primarily due to
an increase in total deposits of $67.8 million and a $23.6 million increase in
advances from the FHLB and other borrowings. These increases were partially
offset by investment purchases and loan originations and purchases.

  Total investment securities increased $18.3 million, or 24.1%, to $94.3
million at March 31, 2021, compared to $76.0 million at March 31, 2020. The Bank
sold $37.8 million of securities out of the available-for-sale portfolio,
recognizing gains of $1.2 million during the current fiscal year. The proceeds
were reinvested along with excess cash towards new securities purchases with a
higher yield as part of management's strategy to restructure the Bank's
investment portfolio and to improve its overall mix and duration.

  Gross portfolio loans increased $54.8 million to $483.5 million at March 31,
2021, compared to $428.7 million at March 31, 2020, primarily due to new loan
originations of $114.5 million, of which $41.9 million were part of the SBA's
Paycheck Protection Program ("PPP"), and $26.8 million were from loan pool
purchases. The new volume was partially offset by attrition and payoffs of $86.5
million, primarily in residential and non-owner occupied commercial real estate
mortgage loans.

Liabilities and Equity


Total liabilities increased $ 94.5 million, or 17.8%, to $ 624.4 million at
March 31, 2021, compared to $ 529.9 million at March 31, 2020, mainly due to the increase in total deposits and other borrowings related to the PPP.

  Deposits increased $67.8 million, or 13.9%, to $556.6 million at March 31,
2021, compared to $488.8 million at March 31, 2020, due primarily to PPP loan
funds deposited by the program borrowers into their accounts at the Bank and new

deposit account relationships established when the Bank launched a new product introduction program and expanded its online digital account openings in nine northeastern states and Washington DC

  Advances from the FHLB-NY and other borrowed money increased $23.6 million to
$37.2 million at March 31, 2021, compared to $13.6 million at March 31, 2020 as
the Bank secured advances on its PPP liquidity facility ("PPPLF") at the Federal
Reserve to fund PPP loans. At March 31, 2021, the Bank had no outstanding
borrowings from the FHLB-NY.


Total equity increased $3.4 million, or 7.0%, to $52.3 million at March 31,
2021, compared to $48.9 million at March 31, 2020. The increase was primarily
due to capital raised from several equity transactions that were completed
outside of the ordinary course of business during the fiscal year. These were
partially offset by an increase of $4.1 million in unrealized losses on
securities available-for-sale and a net loss of $3.9 million for the fiscal

Comparison of operating results for the years ended March 31, 2021 and 2020

Net loss

  The Company reported a net loss of $3.9 million for fiscal year 2021, compared
to net loss of $5.4 million for the prior year period. The change in our results
was primarily driven by an increase in non-interest income and recoveries of
loan losses compared to a provision for loan loss in the prior year, which were
partially offset by an increase in non-interest expense and decline in net
interest income compared to the prior fiscal year.

Net interest income

Net interest income decreased $ 0.1 million, or 0.6%, to $ 15.9 million for fiscal year 2021, compared to $ 16.0 million for the period of the previous year. The decrease is attributable to a $ 1.3 million decrease in interest income, partially offset by a $ 1.2 million decrease in interest expense for the period.

  Interest income decreased $1.3 million, or 6.0%, to $20.3 million, compared to
$21.6 million for the prior year period. Interest income on mortgage-backed
securities decreased $0.5 million due to a decline in average balances and rates
compared to the prior year. Interest income on money market investments
decreased $0.5 million as the $58.9 million increase in the average balance of
the Bank's interest-bearing account at the Federal Reserve Bank was offset by a
1.77% decrease in interest rates. Interest income on loans decreased $0.4
million, or 2.1%, comprised of a decrease of $1.9 million due to a 41
basis-point decline in the overall yield of the loan portfolio resulting
primarily from attrition of above market-rate purchased residential loans, which
also caused acceleration of premiums. This was partially offset by an increase
in interest income of $1.5 million due to a $32.7 million increase in average
loan balances.

  Interest expense decreased $1.2 million, or 21.4%, to $4.4 million compared to
$5.6 million for the prior year period. Interest expense on deposits decreased
$0.8 million, or 17.4%, primarily due to a decrease in the average rates of
certificates of deposit. Interest expense on borrowings decreased $0.3 million,
or 30.0%, from the prior fiscal year despite an increase in the average
borrowings as the Bank secured advances on the PPPLF at the Federal Reserve at a
lower cost to borrow of 35 basis points in order to support its PPP program.

Allowance for loan losses

  The Bank recorded a $0.1 million recovery of loan loss for fiscal year 2021,
compared to a $19 thousand provision for loan losses for the prior year period.
The prior year provision was primarily related to overdraft deposit chargeoffs.
For the year ended March 31, 2021, net recoveries of $294 thousand were
recognized, compared to net recoveries of $281 thousand in the prior year
period. Total chargeoffs of $78 thousand were recognized for fiscal year 2021,
compared to total chargeoffs of $183 thousand for the prior fiscal year. At
March 31, 2021, nonaccrual loans totaled $7.2 million, or 1.1% of total assets,
compared to $6.8 million, or 1.2% of total assets at March 31, 2020. The ALLL
was $5.1 million at March 31, 2021, which represents a ratio of the ALLL to
nonaccrual loans of 71.5%, compared to 73.0% at March 31, 2020. The ratio of the
allowance for loan losses to total loans receivable was 1.06% at March 31, 2021,
compared to 1.15% at March 31, 2020.

Income other than interest

  Non-interest income for the twelve months ended March 31, 2021 increased $2.5
million, or 67.6%, to $6.2 million compared to $3.7 million in the prior year
period. Other non-interest income for the current fiscal year included $1.2

fees earned from a new correspondent banking relationship and $0.5 million grant
income provided by UBS for the Company to extend working capital loans and
financial education to small businesses owned and operated by minorities. In
addition, non-interest income included $1.2 million gains recognized from the
sales of securities during the fiscal year, as management restructured the
Bank's investment portfolio. These increases were partially offset by lower
depository fees compared to the prior fiscal year due to the negative impact of
the COVID-19 pandemic on branch activities.

Non-interest charges

  Non-interest expense for the twelve months ended March 31, 2021 increased $1.0
million, or 4.0%, to $26.1 million compared to $25.1 million for the the prior
year period. Net equipment and data processing costs were higher compared to the
prior fiscal year due to new hardware/software contracts related to technology
upgrades required to facilitate the infrastructure for a remote work environment
due to the ongoing pandemic, and one-time conversion costs associated with the
Bank's upgrade to a new core banking system. In addition, FDIC premiums were
lower in the prior year since the Bank was eligible for the FDIC small bank
assessment credit.

Income taxes

  The Company did not have any federal, state and local income tax expense as of
March 31, 2021 and 2020. State and local capital tax expenses of $0.1 million
and $0.2 million for fiscal years 2021 and 2020, respectively, were included in
other non-interest expense on the statements of operations.

Liquidity and capital resources

Liquidity is a measure of the Bank's ability to generate adequate cash to meet
its financial obligations. The principal cash requirements of a financial
institution are to cover potential deposit outflows, fund increases in its loan
and investment portfolios and ongoing operating expenses. The Bank's primary
sources of funds are deposits, borrowed funds and principal and interest
payments on loans, mortgage-backed securities and investment securities. While
maturities and scheduled amortization of loans, mortgage-backed securities 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. Carver Federal
monitors its liquidity utilizing guidelines that are contained in a policy
developed by its management and approved by its Board of Directors. Carver
Federal's several liquidity measurements are evaluated on a frequent basis.

Management believes Carver Federal's short-term assets have sufficient liquidity
to cover loan demand, potential fluctuations in deposit accounts and to meet
other anticipated cash requirements, including interest payments on our
subordinated debt securities. Additionally, Carver Federal has other sources of
liquidity including the ability to borrow from the Federal Home Loan Bank of New
York ("FHLB-NY") utilizing unpledged mortgage-backed securities and certain
mortgage loans, the sale of available-for-sale securities and the sale of
certain mortgage loans. Net borrowings increased $23.6 million during fiscal
year 2021 as the Bank secured advances on the PPP liquidity facility ("PPPLF")
at the Federal Reserve at a rate of 35 basis points to fund PPP loans. The Bank
had no advances outstanding from the FHLB-NY at March 31, 2021. At March 31,
2021, based on available collateral held at the FHLB-NY, Carver Federal had the
ability to borrow an additional $42.7 million on a secured basis, utilizing
mortgage-related loans and securities as collateral. The bank has the ability to
pledge additional loans as collateral in order to borrow up to 30% of its total

The most liquid assets of the Bank are cash and short-term investments. The level of these assets depends on the Bank’s operating, investing and financing activities during a given period. AT March 31, 2021 and 2020, assets eligible for short-term liquidity, including cash and cash equivalents, amount to $ 75.6 million and $ 47.5 million, respectively.

The most significant potential liquidity challenge the Bank faces is variability
in its cash flows as a result of mortgage refinance activity. When mortgage
interest rates decline, customers' refinance activities tend to accelerate,
causing the cash flow from both the mortgage loan portfolio and the
mortgage-backed securities portfolio to accelerate. In contrast, when mortgage
interest rates increase, refinance activities tend to slow, causing a reduction
of liquidity. However, in a rising rate environment, customers generally tend to
prefer fixed rate mortgage loan products over variable rate products. Carver
Federal is also at risk to deposit outflows due to a competitive interest rate

The Consolidated Statements of Cash Flows present the change in cash from
operating, investing and financing activities. During fiscal year 2021, total
cash and cash equivalents increased $28.1 million to $75.6 million reflecting
cash provided by financing activities of $102.8 million and cash provided by
operating activities of $2.2 million, partially offset by cash used in investing
activities of $77.0 million. Net cash provided by financing activities of $102.8
million resulted from net

increases in deposits and borrowings of $67.7 million and $23.7 million,
respectively. The net increase in deposits was primarily due to PPP loan funds
deposited by the program borrowers into their accounts at the Bank and new
deposit account relationships established across the Northeast as the Bank
launched a program introducing new products and expanded its digital online
account openings into nine states and Washington D.C. The $23.7 million increase
in other borrowings was attributable to advances secured on the Bank's PPP
liquidity facility at the Federal Reserve to fund PPP loans. In addition, the
Company raised capital through the issuance of common and preferred shares. Net
cash used in investing activities of $77.0 million was attributable to
securities purchases and loan originations and purchases, net of principal
repayments and payoffs.

Potential mortgage representation and guarantee responsibilities

During the period 2004 through 2009, the Bank originated 1-4 family residential
mortgage loans and sold the loans to the FNMA. The loans were sold to FNMA with
the standard representations and warranties for loans sold to the GSE's.  The
Bank may be required to repurchase these loans in the event of breaches of these
representations and warranties. In the event of a repurchase, the Bank is
typically required to pay the unpaid principal balance as well as outstanding
interest and fees. The Bank then recovers the loan or, if the loan has been
foreclosed, the underlying collateral. The Bank is exposed to any losses on
repurchased loans after giving effect to any recoveries on the collateral.

Through fiscal 2011, none of the loans sold to FNMA were repurchased by the
Bank.  During the periods from fiscal 2012 through 2015, 20 loans that had been
sold to FNMA were repurchased by the Bank.  No loans have been repurchased by
the Bank subsequent to fiscal 2015. At March 31, 2021 the Bank continues to
service 100 loans with a principal balance of $16.4 million for FNMA that were
sold with standard representations and warranties.

Management has established a representation and warranty reserve for losses
associated with the repurchase of mortgage loans sold by the Bank to FNMA that
we consider to be both probable and reasonably estimable. These reserves are
reported in the consolidated statement of financial condition as a component of
other liabilities. The Bank has not received a request to repurchase any of
these loans since the second quarter of fiscal 2015, and there have not been any
additional requests from FNMA for loans to be reviewed. The reserves totaled
$181 thousand as of March 31, 2021. The table below summarizes changes in our
representation and warranty reserves in fiscal 2021:
$ in thousands                                                                     March 31, 2021
Representation and warranty repurchase reserve, as of March 31, 2020 (1)         $           226
Net adjustment to reserve for repurchase losses (2)                                          (45)

Representation and guarantee surrender reserve, from March 31, 2021 (1)

      $           181

(1) Reported in consolidated statements of financial condition as a component of
other liabilities.
(2) Component of other non-interest expense.
  Additional information related to the representation and warranty reserve,
including factors that may impact the adequacy of the reserves and the ultimate
amount of losses incurred is found in "Note 15 Commitments and Contingencies."

Off-balance sheet provisions and contractual obligations

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 and in
connection with its overall investment strategy. These instruments involve, to
varying degrees, elements of credit, interest rate and liquidity risk. In
accordance with GAAP, these instruments are not recorded in the consolidated
financial statements. Such instruments primarily include lending obligations,
including commitments to originate mortgage and consumer loans and to fund
unused lines of credit. The Bank also has contractual obligations related to
operating leases. See Note 15 of Notes to Consolidated Financial Statements for
the Bank's outstanding lending commitments and contractual obligations at
March 31, 2021.


The Bank has contractual obligations to March 31, 2021 as follows: $ in thousands

Payments due per period

                                                                 Less than            1 - 3             3 - 5           More than
       Contractual Obligations                  Total              1 year             years             years            5 years
Certificates of deposit                      $ 152,751          $ 114,045          $ 28,351          $ 10,259          $      96
Debt obligations:

Other borrowings                                23,895                 72            23,820                 3                  -
Guaranteed preferred beneficial
interest in junior subordinated
debentures                                      16,513                  -                 -                 -             16,513
Total debt obligations                          40,408                 72            23,820                 3             16,513
Operating lease obligations:
Lease obligations for rental
properties                                      18,564              2,748             5,293             4,907              5,616
Total contractual obligations                $ 211,723          $ 116,865   

$ 57,464 $ 15,169 $ 22,225

Entities with variable rights holders (“VIEs”)

The Company's subsidiary, Carver Statutory Trust I, is not consolidated with
Carver Bancorp Inc. for financial reporting purposes in accordance with the
FASB's ASC Topic 810 regarding the consolidation of variable interest entities.
Carver Statutory Trust I was formed in 2003 for the purpose of issuing $13
million aggregate liquidation amount of floating rate Capital Securities due
September 17, 2033 ("Capital Securities") and $0.4 million of common securities
(which are the only voting securities of Carver Statutory Trust I), which are
100% owned by Carver Bancorp Inc., and using the proceeds to acquire junior
subordinated debentures issued by Carver Bancorp, Inc. Carver Bancorp, Inc. has
fully and unconditionally guaranteed the Capital Securities along with all
obligations of Carver Statutory Trust I under the trust agreement relating to
the Capital Securities.

The Bank's subsidiary, CCDC, was formed to facilitate its participation in local
economic development and other community-based activities. In June 2006, CCDC
was selected by the U.S. Department of Treasury, in a highly competitive
process, to receive an award of $59 million in NMTC. CCDC won a second NMTC
award of $65 million in May 2009, and a third award of $25 million in August
2011. The NMTC awards provide a credit to Carver Federal against federal income
taxes when the Bank makes qualified investments. The credits are allocated over
seven years from the time of the qualified investment. Alternatively, the Bank
can utilize the awards in projects where another investor entity provides
funding and receives the tax benefits of the award in exchange for the Bank
receiving fee income.

CCDC provides funding to underlying projects. While providing funding to
investments in the NMTC eligible projects, CCDC retained a 0.01% interest in
other special purpose entities created to facilitate the investments, with the
investors owning the remaining 99.99%. CCDC also provides certain administrative
services to these entities and receives servicing fee income during the term of
the qualifying projects. The Bank has determined that it and CCDC do not have
the sole power to direct the activities of these special purpose entities that
significantly impact the entities' performance, and therefore are not the
primary beneficiaries of these entities. The Bank has a contingent obligation to
reimburse the investors for any loss or shortfall incurred as a result of the
NMTC project not being in compliance with certain regulations that would void
the investor's ability to otherwise utilize tax credits stemming from the award.
The NMTC compliance period was completed for all these entities, which were
dissolved upon exiting the NMTC projects.

The Bank's unconsolidated VIEs, in which the Company holds significant variable
interests or has continuing involvement through servicing a majority of assets
in a VIE are presented in the table below.
                                    Involvement with SPE (000s)                              Funded Exposure                        Unfunded Exposure                    Total
                   Recognized Gain      Total Rights         unconsolidated VIE    Total Involvement                          Equity                              Maximum exposure to
                   (Loss) (000's)       transferred                assets           with SPE asset    Debt Investments     Investments      Funding Commitments           loss
Carver Statutory
Trust I(1)        $           -    $                -       $           13,400    $        13,400    $         16,110    $         400    $                  -    $               -    $ 16,510


1 Carver Statutory Trust the investment in debt includes the deferred interest of $ 3.1 million, which was paid on June 16, 2021.

Regulatory capital position


The Bank must satisfy minimum capital standards established by the OCC. For a
description of the OCC capital regulation, see "Item 1-Regulation and
Supervision-Federal Banking Regulation-Capital Requirements." Regardless of
Basel III's minimum requirements, Carver, as a result of the Formal Agreement,
was issued an Individual Minimum Capital Ratio letter by the OCC, which requires
the Bank to maintain minimum regulatory capital levels of 9% for its Tier 1
leverage ratio and 12% for its total risk-based capital ratio.

 At March 31, 2021, the Bank had a common equity Tier 1 ratio, Tier 1 leverage
ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio of
14.41%, 10.01%, 14.41% and 15.56%, respectively. For additional information
regarding Carver Federal's Regulatory Capital and Ratios, refer to Note 12 of
Notes to Consolidated Financial Statements, "Stockholders' Equity."

Impact of inflation and price trends

The financial statements and accompanying notes appearing elsewhere herein have
been prepared in accordance with GAAP, which require the measurement of
financial position and operating results in terms of historical dollars without
considering the changes in the relative purchasing power of money over time due
to inflation. The impact of inflation is reflected in the increased cost of
Carver Federal's operations. Unlike most industrial companies, nearly all the
assets and liabilities of the Bank are monetary in nature. As a result, interest
rates have a greater impact on Carver Federal's performance than do the effects
of the general level of inflation. Interest rates do not necessarily move in the
same direction or to the same extent as the prices of goods and services.


See the analysis of sensitivity to market risk and to interest rates in point 7. Management’s analysis and analysis of the financial position and operating results.


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