BORROWED MONEY

Federal Home Loan Bank Advances, Repurchase agreements and Guaranteed Debt Securities. FHLB-NY advances weighted average interest rates by remaining period to maturity at March 31 are as follows:



$ in thousands	2014			2013
Maturing Year Ended March 31,	Weighted Average Rate	Amount		Weighted Average Rate	Amount
2014	—%	$	—	0.44%	$	33,000
2015	0.40	27,000		3.19	25,000
2016	—	—		—	—
2017 and after ⁽¹⁾	1.50	25,000		—	—
	0.93%	$	52,000	1.63%	$	58,000

⁽¹⁾ Effective rate is 2.13% which includes the net impact of the amortization of the termination fee on restructured borrowing.

Federal Home Loan Bank Advances. As a member of the FHLB-NY, the Bank may have outstanding FHLB-NY borrowings in a combination of term advances and overnight funds of up to 25% of its total assets, or approximately $160 million at March 31, 2014. Borrowings are secured by the Bank's investment in FHLB-NY stock and by a blanket security agreement. This agreement requires the Bank to maintain as collateral certain qualifying assets (principally mortgage loans and securities) not otherwise pledged. At March 31, 2014, advances were secured by pledges of the Bank's investment in the capital stock of the FHLB-NY totaling $3.1 million and a blanket assignment of the Bank's pledged qualifying mortgage loans of $81.5 million and mortgage-backed and investment securities with a market value of $33.6 million. The Bank has sufficient collateral at the FHLB-NY to be able to borrow an additional $50.4 million from the FHLB-NY at March 31, 2014. The accrued interest payable on FHLB advances amounted to $32 thousand and the interest expense was $603 thousand for the year ended March 31, 2014. At March 31, 2013, the accrued interest payable on FHLB advances amounted to $69 thousand and the interest expense was $797 thousand for the year ended March 31, 2013. The Bank completed a debt restructuring during the first quarter of fiscal year 2014 that allowed it to prepay a $25 million long-term borrowing and secure a new borrowing at a significantly lower rate. The termination fees and penalties associated with the borrowing would be prepaid to the FHLB and amortized over five years.

Repurchase agreements. Repurchase agreements (“REPO”) are contracts for the sale of securities owned or borrowed by the Bank with an agreement to repurchase those securities at an agreed-upon price and date. The Bank terminated its REPOs prior to March 31, 2012.

Subordinated Debt Securities. On September 17, 2003, Carver Statutory Trust I issued 13,000 shares, liquidation amount $1,000 per share, of floating rate capital securities. Gross proceeds from the sale of these trust preferred debt securities of $13 million, and proceeds from the sale of the trust's common securities of $0.4 million, were used to purchase approximately $13.4 million aggregate principal amount of the Company's floating rate junior subordinated debt securities due 2033. The trust preferred debt securities are redeemable at par quarterly at the option of the Company beginning on or after September 17, 2008, and have a mandatory redemption date of September 17, 2033. Cash distributions on the trust preferred debt securities are cumulative and payable at a floating rate per annum resetting quarterly with a margin of 3.05% over the three-month LIBOR. Under the Orders, the Company is prohibited from paying dividends without prior regulatory approval. Therefore the Company has deferred the debenture interest payments.

On September 30, 2009, the Bank raised $5.0 million in a private placement of subordinated debt maturing December 30, 2018. The interest rate was set at 7% per annum for the first seven years as long as there is no default event, including Carver maintaining its certification as a Community Development Entity (“CDE”) and remaining in compliance with NMTC requirements, and 12% per annum after. During the second quarter of fiscal year 2012, the interest rate was reduced to 2%. This subordinated debt has been approved by the regulators to qualify as Tier II capital for the Bank's regulatory capital calculations.

The accrued interest payable on subordinated debt securities was $1.2 million and the interest expense was $552 thousand for the year ended March 31, 2014. The accrued interest payable on subordinated debt securities was $749 thousand and the interest expense was $572 thousand for the year ended March 31, 2013.

The following table sets forth certain information regarding Carver Federal's borrowings as of and for the years ended March 31:



$ in thousands	2014			2013			2012
Amounts outstanding at the end of year:
FHLB advances	$	52,000		$	58,000		$	25,026
Subordinated debt securities	$	18,403		$	18,403		$	18,403

Rate paid at year end:
FHLB advances	0.93		%	1.63		%	3.19		%
Subordinated debt securities	2.99		%	2.99		%	2.99		%

Maximum amount of borrowing outstanding at any month end:
FHLB advances	$	77,000		$	69,011		$	65,034
Guaranteed debt securities	$	—		$	—		$	14,068
Subordinated debt securities	$	18,403		$	18,403		$	18,403

Approximate average amounts outstanding for year:
FHLB advances	$	32,825		$	31,531		$	39,305
Guaranteed debt securities	$	—		$	—		$	8,206
Subordinated debt securities	$	18,403		$	18,403		$	18,403

Approximate weighted average rate paid during year:
FHLB advances	1.84		%	2.53		%	2.89		%
Guaranteed debt securities	—		%	—		%	1.69		%
Subordinated debt securities	2.99		%	3.11		%	3.43		%