##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2005.
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission
File Number 0-24948
 PVF Capital Corp.
  Ohio
    
    34-1659805(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 30000 Aurora Road, Solon, Ohio
    
    44139(Address of principal executive offices)
    
    (Zip Code)
  
   
   þ o
  þ o
  o þ
  Common Stock, $0.01 Par Value
    
    7,715,561(Class)
    
    (Outstanding at November 4, 2005)




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PVF CAPITAL CORP.
  PagePart I
    
    Financial InformationItem 1
    
    Financial StatementsConsolidated Statements of Financial Condition, September 30, 2005 (unaudited) and June 30, 2005.
    
    
    1Consolidated Statements of Operations for the three months ended September 30, 2005 and 2004 (unaudited).
    
    
    2Consolidated Statements of Cash Flows for the three months ended September 30, 2005 and 2004 (unaudited).
    
    
    3Notes to Consolidated Financial Statements (unaudited).
    
    
    4Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    7Liquidity and Capital Resources
    
    
    12Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    12Item 4
    
    Controls and Procedures
    
    
    13Part II
    
    Other Information
    
    
    14Exhibit 31.1 302 Certification for CEOExhibit 31.2 302 Certification for CFOExhibit 32 906 Certification for CEO and CFO




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PVF CAPITAL CORP.
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 September 30,2005
    
    
    June 30,unaudited
    
    
    
    2005ASSETSCash and cash equivalents:Cash and amounts due from depository institutions
    
    $
    7,729,491
    
    
    $
    4,034,353Interest bearing deposits
    
    
    1,223,039
    
    
    
    2,180,723Federal funds sold
    
    
    10,605,000
    
    
    
    4,875,000Total cash and cash equivalents
    
    
    19,557,530
    
    
    
    11,090,076Securities held to maturity (fair values of $56,921,875
and $57,345,425, respectively)
    
    
    57,500,000
    
    
    
    57,500,000Mortgage-backed securities held to maturity (fair values
of $29,276,468 and $31,487,772, respectively)
    
    
    29,777,496
    
    
    
    31,720,033Loans receivable held for sale, net
    
    
    12,725,749
    
    
    
    9,059,647Loans receivable, net of allowance of
$4,228,486 and $4,312,274
    
    
    677,634,825
    
    
    
    660,494,144Office properties and equipment, net
    
    
    13,439,524
    
    
    
    13,413,231Real estate owned, net
    
    
    1,319,251
    
    
    
    1,319,251Federal Home Loan Bank stock
    
    
    11,455,400
    
    
    
    11,316,400Prepaid expenses and other assets
    
    
    27,919,378
    
    
    
    27,985,916Total Assets
    
    $
    851,329,153
    
    
    $
    823,898,698LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesDeposits
    
    $
    599,813,693
    
    
    $
    591,226,478Short-term advances from the Federal Home Loan Bank
    
    
    30,000,000
    
    
    
    15,000,000Long-term advances from the Federal Home Loan Bank
    
    
    120,008,073
    
    
    
    120,012,018Notes payable
    
    
    1,077,950
    
    
    
    1,400,780Subordinated debentures
    
    
    10,000,000
    
    
    
    10,000,000Advances from borrowers for taxes and insurance
    
    
    5,161,920
    
    
    
    3,184,981Accrued expenses and other liabilities
    
    
    18,120,654
    
    
    
    16,621,262Total Liabilities
    
    
    784,182,290
    
    
    
    757,445,519Stockholders EquitySerial preferred stock, none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 15,000,000 shares authorized;
8,175,779 shares issued
    
    
    81,758
    
    
    
    81,758Additional paid-in-capital
    
    
    68,323,034
    
    
    
    68,288,834Retained earnings
    
    
    2,442,908
    
    
    
    1,663,992Treasury Stock, at cost, 460,218 and 451,088 shares, respectively
    
    
    (3,700,837
    )
    
    
    (3,581,405
    )Total Stockholders Equity
    
    
    67,146,863
    
    
    
    66,453,179Total Liabilities and Stockholders Equity
    
    $
    851,329,153
    
    
    $
    823,898,698




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##### Table of Contents



PVF CAPITAL CORP.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedSeptember 30,2005
    
    
    2004Interest and dividends incomeLoans
    
    $
    11,487,566
    
    
    $
    9,296,982Mortgage-backed securities
    
    
    359,011
    
    
    
    419,760Federal Home Loan Bank stock dividends
    
    
    139,052
    
    
    
    115,651Securities
    
    
    518,188
    
    
    
    189,451Fed funds sold and interest-bearing deposits
    
    
    78,730
    
    
    
    12,586Total interest income
    
    
    12,582,547
    
    
    
    10,034,430Interest expenseDeposits
    
    
    4,384,078
    
    
    
    2,885,550Short-term borrowings
    
    
    211,439
    
    
    
    130,386Long-term borrowings
    
    
    1,298,334
    
    
    
    1,298,882Subordinated debt
    
    
    153,876
    
    
    
    109,269Total interest expense
    
    
    6,047,727
    
    
    
    4,424,087Net interest income
    
    
    6,534,820
    
    
    
    5,610,343Provision for loan losses
    
    
    37,300
    
    
    
    136,000Net interest income after provision for loan losses
    
    
    6,497,520
    
    
    
    5,474,343Noninterest incomeService and other fees
    
    
    255,531
    
    
    
    197,214Mortgage banking activities, net
    
    
    321,154
    
    
    
    318,790Increase in cash surrender value of bank-owned life insurance
    
    
    167,136
    
    
    
    117,700Other, net
    
    
    35,356
    
    
    
    51,521Total noninterest income
    
    
    779,177
    
    
    
    685,225Noninterest expenseCompensation and benefits
    
    
    3,141,881
    
    
    
    2,441,032Office properties and equipment
    
    
    1,036,225
    
    
    
    865,980Other
    
    
    1,196,090
    
    
    
    1,017,028Total noninterest expense
    
    
    5,374,196
    
    
    
    4,324,040Income before federal income tax provision
    
    
    1,902,501
    
    
    
    1,835,528Federal income tax provision
    
    
    550,900
    
    
    
    567,900Net income
    
    $
    1,351,601
    
    
    $
    1,267,628Basic earnings per share
    
    $
    0.18
    
    
    $
    0.16Diluted earnings per share
    
    $
    0.17
    
    
    $
    0.16Dividends declared per common share
    
    $
    0.074
    
    
    $
    0.067




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##### Table of Contents



PVF CAPITAL CORP.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months EndedSeptember 30,2005
    
    
    2004Operating ActivitiesNet Income
    
    $
    1,351,601
    
    
    $
    1,267,628Adjustments to reconcile net income to net cash from operating activitiesAmortization of premium on mortgage-backed securities
    
    
    20,386
    
    
    
    19,745Depreciation
    
    
    459,932
    
    
    
    452,972Provision for loan losses
    
    
    37,300
    
    
    
    136,000Accretion of unearned discount and deferred loan origination fees, net
    
    
    (358,375
    )
    
    
    (254,433
    )Gain on sale of loans, net
    
    
    (299,218
    )
    
    
    (297,301
    )Mortgage banking provision
    
    
    67,000
    
    
    
    0Stock compensation
    
    
    34,200
    
    
    
    0Federal Home Loan Bank stock dividends
    
    
    (139,000
    )
    
    
    (115,600
    )Change in accrued interest on investments, loans, and borrowings, net
    
    
    (145,944
    )
    
    
    (182,025
    )Origination of loans receivable held for sale, net
    
    
    (37,374,523
    )
    
    
    (29,360,388
    )Sale of loans receivable held for sale, net
    
    
    33,583,575
    
    
    
    32,495,530Net change in other assets and other liabilities, net
    
    
    3,995,877
    
    
    
    3,274,602Net cash from operating activities
    
    
    1,232,811
    
    
    
    7,436,730Investing ActivitiesLoan repayments and originations, net
    
    
    (16,969,606
    )
    
    
    (22,253,495
    )Repayment of mortgage-backed securities
    
    
    1,922,151
    
    
    
    1,583,655Proceeds from sale of real estate owned
    
    
    150,000
    
    
    
    0Securities maturities
    
    
    0
    
    
    
    5,000,000Securities purchased
    
    
    0
    
    
    
    (5,000,000
    )Additions to office properties and equipment, net
    
    
    (486,225
    )
    
    
    (869,915
    )Net cash from investing activities
    
    
    (15,383,680
    )
    
    
    (21,539,755
    )Financing activitiesNet increase (decrease) in demand deposits, NOW, and passbook savings
    
    
    (2,012,350
    )
    
    
    (4,071,015
    )Net decrease in time deposits
    
    
    10,599,565
    
    
    
    (10,002,414
    )Repayment of long-term Federal Home Loan Bank advances
    
    
    (3,945
    )
    
    
    (5,436
    )Net increase in Federal Home Loan Bank advances
    
    
    15,000,000
    
    
    
    30,000,000Net decrease in notes payable
    
    
    (322,830
    )
    
    
    (521,075
    )Proceeds from exercise of stock options
    
    
    0
    
    
    
    18,984Purchase of treasury stock
    
    
    (119,432
    )
    
    
    (196,175
    )Cash dividend paid
    
    
    (522,685
    )
    
    
    (477,329
    )Net cash from financing activities
    
    
    22,618,323
    
    
    
    14,745,540Net decrease in cash and cash equivalents
    
    
    8,467,454
    
    
    
    642,515Cash and cash equivalents at beginning of period
    
    
    11,090,076
    
    
    
    17,469,773Cash and cash equivalents at end of period
    
    $
    19,557,530
    
    
    $
    18,112,288Supplemental disclosures of cash flow information:Cash payments of interest expense
    
    $
    6,031,673
    
    
    $
    4,410,175Cash payments of income taxes
    
    $
    0
    
    
    $
    0Supplemental schedule of noncash investing activities:Transfer to real estate owned
    
    $
    150,000
    
    
    $
    724,613




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PVF CAPITAL CORP.
 
 Notes to Consolidated Financial Statements
 September 30, 2005 and 2004
 (Unaudited)
 1.
    
    The accompanying consolidated interim financial statements were prepared in accordance with
regulations of the Securities and Exchange Commission for Form 10-Q. All information in the
consolidated interim financial statements is unaudited except for the June 30, 2005
consolidated statement of financial condition which was derived from the Corporations audited
financial statements. Certain information required for a complete presentation in accordance
with accounting principles generally accepted in the United States of America has been
condensed or omitted. However, in the opinion of management, these interim financial
statements contain all adjustments, consisting only of normal recurring accruals, necessary to
fairly present the interim financial information. The results of operations for the three
months ended September 30, 2005 are not necessarily indicative of the results to be expected
for the entire year ending June 30, 2006. PVF Capital Corp.s common stock is traded on the
NASDAQ SMALL-CAP ISSUES under the symbol PVFC.
 Share
Based Payment
  
 Page 4




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Three Months EndedSeptember 30, 2004Net Income as reported
    
    $
    1,267,628Less: Pro forma compensation
expense, net of tax
    
    $
    25,034Pro forma net income
    
    $
    1,242,594Basic earnings per share
    
    $
    0.16Pro forma basic earnings per share
    
    $
    0.16Diluted earnings per share
    
    $
    0.16Pro forma diluted earnings per share
    
    $
    0.16
 2.
    
    The following table discloses earnings per share for the three months ended September 30,
2005 and September 30, 2004.
 Three months ended September 30,2005
    
    
    2004Income
    
    
    Shares
    
    
    Per-Share
    
    
    Income
    
    
    Shares
    
    
    Per-Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSIncome available to
common stockholders
    
    $
    1,351,601
    
    
    
    7,719,026
    
    
    $
    0.18
    
    
    $
    1,267,628
    
    
    
    7,740,087
    
    
    $
    0.16Effect of Stock Options
    
    
    
    
    
    
    163,893
    
    
    $
    0.01
    
    
    
    
    
    
    
    195,216
    
    
    $
    0.00Diluted EPSIncome available to
common stockholders
    
    $
    1,351,601
    
    
    
    7,882,919
    
    
    $
    0.17
    
    
    $
    1,267,628
    
    
    
    7,935,303
    
    
    $
    0.16
 Page 5




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3.
    
    Mortgage Banking Activities: The Company services real estate loans for investors
that are not included in the accompanying consolidated financial statements. Mortgage
servicing rights are established based on the allocated fair value of servicing rights
retained on loans originated by the Bank and subsequently sold in the secondary market.
Mortgage servicing rights are included in the consolidated statements of financial condition
under the caption Prepaid expenses and other assets.
 2005
    
    
    2004Servicing rights:Beginning balance
    
    $
    5,001,474
    
    
    $
    5,358,845Originated
    
    
    357,064
    
    
    
    353,743Amortized
    
    
    (397,544
    )
    
    
    (437,349
    )End of period
    
    $
    4,960,994
    
    
    $
    5,275,239
  Three Months EndedSeptember 30,2005
    
    
    2004Mortgage loan servicing fees
    
    $
    486,480
    
    
    $
    458,838Amortization of mortgage servicing rights
    
    
    (397,544
    )
    
    
    (437,349
    )Unrealized losses on sales of loans
    
    
    (67,000
    )
    
    
    Gain on sales of loans
    
    
    299,218
    
    
    
    297,301Mortgage banking activities, net
    
    $
    321,154
    
    
    $
    318,790
 Page 6




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING STATEMENTS
   FINANCIAL CONDITION
   Page 7




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##### Table of Contents



FINANCIAL CONDITION continued
      
 Page 8




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##### Table of Contents



RESULTS
OF OPERATIONS
    
    Three months ended September 30, 2005
compared to the three months ended
September 30, 2004.
      Page 9




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RESULTS OF OPERATIONS continued
  
 Page 10




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RESULTS OF OPERATIONS continued
 At September 30,
    
    
    June 30,2005
    
    
    2005(Dollars in thousands)Non-accruing loans (1):Real estate
    
    $
    7,592
    
    
    $
    11,750Accruing loans which are contractually
past due 90 days or more:Real estate
    
    $
    60
    
    
    $
    608Total non-accrual and 90 days
past due loans
    
    $
    7,652
    
    
    $
    12,358Ratio of non-performing loans to total loans
    
    
    1.12
    %
    
    
    1.85
    %Other non-performing assets (2)
    
    $
    1,319
    
    
    $
    1,319Total non-performing assets
    
    $
    8,971
    
    
    $
    13,677Total non-performing assets to
total assets
    
    
    1.05
    %
    
    
    1.66
    %
 
 (1)
    
    Non-accrual status denotes loans on which, in the opinion of management, the collection of
additional interest is unlikely, or loans that meet the non-accrual criteria established by
regulatory authorities. Non-accrual loans include all loans classified as doubtful or loss,
loans in foreclosure, and all loans greater than 90-days past due. Payments received on a
non-accrual loan are either applied to the outstanding principal balance or recorded as
interest income, depending on an assessment of the collectibility of the principal balance of
the loan.
 (2)
    
    Other non-performing assets represent property acquired by the Bank through foreclosure or
repossession.
  
 Page 11




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##### Table of Contents



RESULTS OF OPERATIONS continued
  
 LIQUIDITY AND CAPITAL RESOURCES
     
  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Page 12




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##### Table of Contents



CONTROLS AND PROCEDURES
   Page 13




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Item 1.
    
    Legal Proceedings. N/AItem 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
 (a)
    
    N/A(b)
    
    N/A(c)
    
    The following table illustrates the repurchase of the
Companys common stock during the period ended September 30, 2005:
 (c) Total Number of
    
    
    (d) Maximum NumberShares Purchased as
    
    
    of Shares that MayPart of Publicly
    
    
    Yet Be Purchased(a) Total Number of
    
    
    (b) Average Price
    
    
    Announced Plans or
    
    
    Under the Plans orPeriod
    
    Shares Purchased
    
    
    Paid per Share
    
    
    Programs
    
    
    ProgramsJuly 1 throughJuly 31, 2005
    
    
    4,730
    
    
    $
    12.94
    
    
    
    4,730
    
    
    
    282,509August 1 throughAugust 31, 2005
    
    
    4,400
    
    
    $
    13.23
    
    
    
    4,400
    
    
    
    278,109September 1 throughSeptember 30, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    9,130
    
    
    $
    13.08
    
    
    
    9,130
    
    
    
    278,109
  Item 3.
    
    Defaults Upon Senior Securities. N/AItem 4.
    
    Submission of Matters to a Vote of Security Holders. N/AItem 5.
    
    Other Information. N/AItem 6.
    
    Exhibits
 The following exhibits are filed herewith:31.1
    
    
    Rule 13a-14(a) Certification of Chief Executive Officer31.2
    
    
    Rule 13a-14(a) Certification of Chief Financial Officer32
    
    
    Section 1350 Certification
 Page 14




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Signature
  PVF Capital Corp.
     (Registrant)Date:
November 8, 2005
    
    /s/ C. Keith SwaneyC. Keith Swaney
President, Chief Operating Officer and Treasurer(Only authorized officer andPrincipal Financial Officer)