##### 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 December 31, 2009.
 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
  o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller Reporting Company þ(Do not check if a smaller reporting company)
  o þ
  Common Stock, $0.01 Par Value
    
    7,979,120(Class)
    
    (Outstanding at January 27, 2010)




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##### 



PVF CAPITAL CORP.
  PagePart I Financial InformationItem 1 Financial StatementsConsolidated Statements of Financial
Condition, December 31, 2009 (unaudited)
and June 30, 2009
    
    
    1Consolidated Statements of Operations
for the three and six months ended
December 31, 2009 and 2008 (unaudited)
    
    
    2Consolidated Statements of Cash Flows
for the six months ended December 31,
2009 and 2008 (unaudited)
    
    
    3Notes to Consolidated Financial
Statements (unaudited)
    
    
    4Item 2 Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    21Item 3 Quantitative and Qualitative Disclosures
About Market Risk
    
    
    33Item 4 Controls and Procedures
    
    
    34Part II Other Information
    
    
    34Item 1 Legal Proceedings
    
    
    34Item 1A Risk Factors
    
    
    34Item 2 Unregistered Sales of Equity Securities
and Use of Proceeds
    
    
    43Item 3 Defaults Upon Senior Securities
    
    
    43Item 4 Submission of Matters to a Vote of
Security Holders
    
    
    43Item 5 Other Information
    
    
    43Item 6 Exhibits
    
    
    43SIGNATURESEX-10.6EX-31.1EX-31.2EX-32




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##### Table of Contents



PVF CAPITAL CORP.



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 December 31,2009
    
    
    June 30,unaudited
    
    
    2009ASSETSCash and cash equivalents:Cash and amounts due from depository institutions
    
    $
    17,580,652
    
    
    $
    8,464,544Interest bearing deposits
    
    
    20,080,664
    
    
    
    1,939,514Federal funds sold
    
    
    5,000,000
    
    
    
    10,809,000Total cash and cash equivalents
    
    
    42,661,316
    
    
    
    21,213,058Securities available for sale
    
    
    86,800
    
    
    
    102,800Securities held to maturity (fair values of $55,019,235 and
$49,999,939, respectively)
    
    
    55,000,000
    
    
    
    49,999,939Mortgage-backed securities available for sale
    
    
    57,432,775
    
    
    
    64,177,633Loans receivable held for sale, net
    
    
    7,181,067
    
    
    
    27,078,472Loans receivable, net of allowance of
$29,912,830 and $31,483,205, respectively
    
    
    626,438,196
    
    
    
    668,460,029Office properties and equipment, net
    
    
    8,207,998
    
    
    
    8,624,496Real estate owned, net
    
    
    12,089,581
    
    
    
    11,607,758Federal Home Loan Bank stock
    
    
    12,811,100
    
    
    
    12,811,100Bank owned life insurance
    
    
    22,992,255
    
    
    
    22,894,013Prepaid expenses and other assets
    
    
    24,396,289
    
    
    
    25,239,535Total Assets
    
    $
    869,297,377
    
    
    $
    912,208,833LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesDeposits
    
    $
    682,891,213
    
    
    $
    724,931,569Note Payable
    
    
    1,312,778
    
    
    
    1,366,111Long-term advances from the Federal Home Loan Bank
    
    
    35,000,000
    
    
    
    35,000,000Repurchase agreement
    
    
    50,000,000
    
    
    
    50,000,000Subordinated debentures
    
    
    10,000,000
    
    
    
    20,000,000Advances from borrowers for taxes and insurance
    
    
    12,828,249
    
    
    
    9,555,137Accrued expenses and other liabilities
    
    
    23,687,421
    
    
    
    21,850,819Total Liabilities
    
    
    815,719,661
    
    
    
    862,703,636Stockholders EquitySerial preferred stock, none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 15,000,000 shares authorized;
8,451,845 and 8,246,548 shares issued, respectively
    
    
    84,518
    
    
    
    82,465Additional paid-in-capital
    
    
    69,967,939
    
    
    
    69,377,852Retained earnings (accumulated deficit)
    
    
    (13,619,619
    )
    
    
    (16,538,515
    )Accumulated other comprehensive income
    
    
    982,025
    
    
    
    420,542Treasury stock, at cost 472,725 shares
    
    
    (3,837,147
    )
    
    
    (3,837,147
    )Total Stockholders Equity
    
    
    53,577,716
    
    
    
    49,505,197Total Liabilities and Stockholders Equity
    
    $
    869,297,377
    
    
    $
    912,208,833
  Page 1




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##### Table of Contents



PVF CAPITAL CORP.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest and dividends incomeLoans
    
    $
    9,139,271
    
    
    $
    10,928,594
    
    
    $
    18,296,290
    
    
    $
    22,340,835Mortgage-backed securities
    
    
    693,222
    
    
    
    687,260
    
    
    
    1,356,627
    
    
    
    1,387,533Federal Home Loan Bank stock dividends
    
    
    145,309
    
    
    
    158,871
    
    
    
    305,009
    
    
    
    329,428Securities
    
    
    31,417
    
    
    
    162,911
    
    
    
    41,311
    
    
    
    283,970Federal funds sold and interest bearing deposits
    
    
    3,006
    
    
    
    25,791
    
    
    
    10,399
    
    
    
    112,584Total interest and dividends income
    
    
    10,012,225
    
    
    
    11,963,427
    
    
    
    20,009,636
    
    
    
    24,454,350Interest expenseDeposits
    
    
    3,763,458
    
    
    
    6,249,819
    
    
    
    8,121,990
    
    
    
    12,192,372Short-term borrowings
    
    
    50
    
    
    
    700
    
    
    
    50
    
    
    
    9,799Long-term borrowings
    
    
    911,835
    
    
    
    912,877
    
    
    
    1,823,932
    
    
    
    1,823,591Subordinated debt
    
    
    194,640
    
    
    
    346,109
    
    
    
    444,739
    
    
    
    671,554Total interest expense
    
    
    4,869,983
    
    
    
    7,509,505
    
    
    
    10,390,711
    
    
    
    14,697,316Net interest income
    
    
    5,142,242
    
    
    
    4,453,922
    
    
    
    9,618,925
    
    
    
    9,757,034Provision for loan losses
    
    
    2,250,000
    
    
    
    3,641,000
    
    
    
    4,010,000
    
    
    
    4,332,000Net interest income after provision for loan losses
    
    
    2,892,242
    
    
    
    812,922
    
    
    
    5,608,925
    
    
    
    5,425,034Noninterest income, netService and other fees
    
    
    181,499
    
    
    
    177,546
    
    
    
    347,083
    
    
    
    355,800Mortgage banking activities, net
    
    
    1,451,477
    
    
    
    420,478
    
    
    
    2,506,204
    
    
    
    878,177Increase (decrease) in cash surrender value of bank owned life
insurance
    
    
    77,849
    
    
    
    (56,215
    )
    
    
    98,242
    
    
    
    (3,289
    )Impairment of securities
    
    
    
    
    
    
    (102,400
    )
    
    
    0
    
    
    
    (1,841,200
    )Gain (loss) on real estate owned
    
    
    (140,420
    )
    
    
    (73,078
    )
    
    
    (159,533
    )
    
    
    (86,486
    )Provision for real estate owned losses
    
    
    (430,773
    )
    
    
    
    
    
    
    (501,773
    )
    
    
    Gain on sale of mortgage-backed securities available for sale
    
    
    
    
    
    
    665,929
    
    
    
    0
    
    
    
    665,929Gain on the cancelation of subordinated debt
    
    
    
    
    
    
    
    
    
    
    8,561,530
    
    
    
    0Other, net
    
    
    189,239
    
    
    
    147,296
    
    
    
    340,962
    
    
    
    169,261Total noninterest income, net
    
    
    1,328,871
    
    
    
    1,179,556
    
    
    
    11,192,715
    
    
    
    138,192Noninterest expenseCompensation and benefits
    
    
    2,372,132
    
    
    
    3,015,544
    
    
    
    4,613,811
    
    
    
    5,573,559Office occupancy and equipment
    
    
    646,888
    
    
    
    698,928
    
    
    
    1,325,155
    
    
    
    1,405,678Outside services
    
    
    492,911
    
    
    
    469,900
    
    
    
    1,345,269
    
    
    
    856,732Federal deposit insurance premium
    
    
    737,812
    
    
    
    140,696
    
    
    
    1,303,545
    
    
    
    332,099Real estate owned expense
    
    
    665,496
    
    
    
    538,396
    
    
    
    1,447,685
    
    
    
    727,311Other
    
    
    1,111,605
    
    
    
    1,151,551
    
    
    
    2,227,479
    
    
    
    2,055,253Total noninterest expense
    
    
    6,026,844
    
    
    
    6,015,015
    
    
    
    12,262,944
    
    
    
    10,950,632Income (loss) before federal income tax provision
    
    
    (1,805,731
    )
    
    
    (4,022,537
    )
    
    
    4,538,696
    
    
    
    (5,387,406
    )Federal income tax provision (benefit)
    
    
    (524,700
    )
    
    
    (1,301,000
    )
    
    
    1,619,800
    
    
    
    (1,764,612
    )Net income (loss)
    
    
    (1,281,031
    )
    
    
    (2,721,537
    )
    
    
    2,918,896
    
    
    
    (3,622,794
    )Basic earnings (loss) per share
    
    $
    (0.16
    )
    
    $
    (0.35
    )
    
    $
    0.37
    
    
    $
    (0.47
    )Diluted earnings (loss) per share
    
    $
    (0.16
    )
    
    $
    (0.35
    )
    
    $
    0.37
    
    
    $
    (0.47
    )Dividends declared per common share
    
    $
    0.000
    
    
    $
    0.000
    
    
    $
    0.000
    
    
    $
    0.010
  Page 2




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##### Table of Contents



PVF CAPITAL CORP.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months EndedDecember 31,2009
    
    
    2008Operating ActivitiesNet income (loss)
    
    $
    2,918,897
    
    
    
    ($3,622,794
    )Adjustments to reconcile net income to net cash from operating
activitiesAmortization of premium on mortgage-backed securities
    
    
    174,533
    
    
    
    16,497Depreciation and amortization
    
    
    467,449
    
    
    
    606,009Provision for loan losses
    
    
    4,010,000
    
    
    
    4,332,000Provision for real estate owned losses
    
    
    501,773
    
    
    
    0Impairment of securites
    
    
    0
    
    
    
    1,841,200Accretion of deferred loan origination fees, net
    
    
    (602,134
    )
    
    
    (307,506
    )Gain on cancellation of subordinated debt
    
    
    (8,561,530
    )
    
    
    0(Gain) loss on sale of loans receivable held for sale, net
    
    
    (2,955,167
    )
    
    
    (171,878
    )(Gain) loss on sale of mortgage-backed securities held for sale, net
    
    
    0
    
    
    
    (665,929
    )Loss on disposal of real estate owned, net
    
    
    159,533
    
    
    
    86,486Market adjustment for loans held for sale
    
    
    59,052
    
    
    
    (160,320
    )Change in fair value of mortgage banking derivatives
    
    
    639,594
    
    
    
    (237,995
    )Stock compensation
    
    
    92,140
    
    
    
    152,009Federal Home Loan Bank stock dividends
    
    
    0
    
    
    
    (170,500
    )Change in accrued interest on securities, loans, and borrowings, net
    
    
    296,336
    
    
    
    1,052,708Origination of loans receivable held for sale, net
    
    
    (114,467,163
    )
    
    
    (20,265,561
    )Sale of loans receivable held for sale, net
    
    
    135,391,742
    
    
    
    23,901,504(Increase) decrease in cash surrender value of bank owned life
insurance
    
    
    (98,242
    )
    
    
    3,289Net change in other assets and other liabilities
    
    
    2,885,136
    
    
    
    (306,949
    )Net cash from operating activities
    
    
    20,911,949
    
    
    
    6,082,270Investing ActivitiesLoan repayments and originations, net
    
    
    35,023,718
    
    
    
    (22,381,391
    )Principal repayments on mortgage-backed securities available for sale
    
    
    8,938,773
    
    
    
    1,912,965Purchase of mortgage-backed securities available for sale
    
    
    (1,501,775
    )
    
    
    (67,967,811
    )Sale of mortgage-backed securities
    
    
    0
    
    
    
    65,090,007Purchase of securities held to maturity
    
    
    (112,000,000
    )
    
    
    (10,000,000
    )Maturities of securities held to maturity
    
    
    107,000,000
    
    
    
    7,580,000Proceeds from sale of real estate owned
    
    
    2,447,120
    
    
    
    5,269,654Additions to office properties and equipment, net
    
    
    (50,951
    )
    
    
    (410,824
    )Net cash from investing activities
    
    
    39,856,885
    
    
    
    (20,907,400
    )Financing activitiesNet increase (decrease) in demand deposits, NOW, and passbook savings
    
    
    7,888,905
    
    
    
    (3,708,706
    )Net increase (decrease) in time deposits
    
    
    (49,929,261
    )
    
    
    40,763,751Net increase in advances from borrowers for taxes and insurance
    
    
    3,273,112
    
    
    
    1,977,540Net increase (decrease) in short-term Federal Home Loan Bank advances
    
    
    0
    
    
    
    (9,000,000
    )Repayment of note payable
    
    
    (53,333
    )
    
    
    0Net proceeds from line of credit
    
    
    0
    
    
    
    425,000Payment in exchange for cancellation of subordinated debt
    
    
    (500,000
    )
    
    
    0Cash dividend paid
    
    
    0
    
    
    
    (97,173
    )Net cash from financing activities
    
    
    (39,320,577
    )
    
    
    30,360,412Net increase in cash and cash equivalents
    
    
    21,448,258
    
    
    
    15,535,282Cash and cash equivalents at beginning of period
    
    
    21,213,058
    
    
    
    17,804,394Cash and cash equivalents at end of period
    
    $
    42,661,316
    
    
    $
    33,339,676Supplemental disclosures of cash flow information:Cash payments of interest expense
    
    $
    10,553,661
    
    
    $
    13,767,342Cash payments of income taxes
    
    $
    0
    
    
    $
    0Supplemental noncash investing activity:Transfer of loans to real estate owned
    
    $
    3,088,476
    
    
    $
    10,793,213Supplemental noncash financing activity:Common stock and warrants exchanged for cancellation of debt
    
    $
    1,329,328
    
    
    $
    0




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##### Table of Contents



PVF CAPITAL CORP.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the Six Months Ended
December 31, 2009 and 2008
(Unaudited)
     4




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##### Table of Contents



Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueFNMA mortgage-backed securities
    
    $
    31,084,760
    
    
    $
    761,507
    
    
    $
    (17,390
    )
    
    $
    31,828,877FHLMC mortgage-backed securities
    
    
    21,254,568
    
    
    
    605,743
    
    
    
    
    
    
    
    21,860,311GNMA mortgage-backed securities
    
    
    3,644,728
    
    
    
    98,859
    
    
    
    
    
    
    
    3,743,587Total
    
    $
    55,984,056
    
    
    $
    1,466,109
    
    
    $
    (17,390
    )
    
    $
    57,432,775
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueFNMA mortgage-backed securities
    
    $
    32,999,418
    
    
    $
    262,310
    
    
    $
    (17,721
    )
    
    $
    33,244,007FHLMC mortgage-backed securities
    
    
    26,029,802
    
    
    
    256,223
    
    
    
    
    
    
    
    26,286,025GNMA mortgage-backed securities
    
    
    4,566,428
    
    
    
    81,173
    
    
    
    
    
    
    
    4,647,601Total
    
    $
    63,595,648
    
    
    $
    599,706
    
    
    $
    (17,721
    )
    
    $
    64,177,633
   Gross
    
    
    GrossAmortized
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S Treasury
    
    $
    50,000,000
    
    
    $
    
    
    
    $
    
    
    
    $
    50,000,000FNMA debenture
    
    
    5,000,000
    
    
    
    19,235
    
    
    
    
    
    
    
    5,019,235Total
    
    $
    55,000,000
    
    
    $
    19,235
    
    
    $
    
    
    
    $
    55,019,235
 5




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##### Table of Contents



Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairCost
    
    
    Gain
    
    
    Loss
    
    
    ValueU.S. government treasury securities
    
    $
    49,999,939
    
    
    $
    
    
    
    $
    
    
    
    $
    49,999,939
    December 31,
    
    
    June 30,2009
    
    
    2009Real estate mortgages:One-to-four family residential
    
    $
    157,205,143
    
    
    $
    158,260,119Home equity line of credit
    
    
    87,337,153
    
    
    
    88,538,739Multi-family residential
    
    
    55,503,164
    
    
    
    58,291,094Commercial
    
    
    204,989,577
    
    
    
    191,099,881Commercial equity line of credit
    
    
    35,025,323
    
    
    
    46,276,418Land
    
    
    58,129,539
    
    
    
    60,818,227Construction  residential
    
    
    20,805,950
    
    
    
    39,070,316Construction  multi-family
    
    
    3,747,334
    
    
    
    5,200,155Construction  commercial
    
    
    9,030,364
    
    
    
    20,233,229Total real estate mortgages
    
    
    631,773,547
    
    
    
    667,788,178Non-real estate loans
    
    
    24,577,479
    
    
    
    32,155,056Total loans receivable
    
    
    656,351,026
    
    
    
    699,943,234Allowance for loan losses
    
    
    (29,912,830
    )
    
    
    (31,483,205
    )Loans receivable, net
    
    $
    626,438,196
    
    
    $
    668,460,029
  Three months
    
    
    Three months
    
    
    Six months
    
    
    Six monthsended
    
    
    ended
    
    
    ended
    
    
    endedDec. 31,2009
    
    
    Dec. 31, 2008
    
    
    Dec. 31, 2009
    
    
    Dec. 31, 2008Beginning
balance
    
    $
    31,823,982
    
    
    $
    8,843,278
    
    
    $
    31,483,205
    
    
    $
    9,653,972Provision for
loan losses
    
    
    2,250,000
    
    
    
    3,641,000
    
    
    
    4,010,000
    
    
    
    4,332,000Charge-offs
    
    
    (4,161,152
    )
    
    
    (1,484,270
    )
    
    
    (5,580,375
    )
    
    
    (2,985,964
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending
balance
    
    $
    29,912,830
    
    
    $
    11,000,008
    
    
    $
    29,912,830
    
    
    $
    11,000,008
 6




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##### Table of Contents



December 31,
    
    
    June 30,2009
    
    
    2009(Dollars in thousands)Loans on non-accruing status (1):Real estate mortgages:One-to-four family residential
    
    $
    18,669
    
    
    $
    15,551Commercial
    
    
    16,463
    
    
    
    13,140Multi-family residential (2)
    
    
    
    
    
    
    371Construction and land (2)
    
    
    36,295
    
    
    
    39,757Non real estate
    
    
    584
    
    
    
    943Total loans on non-accrual status:
    
    
    72,011
    
    
    
    69,762Loans past due 90 days, still on accrual
status:Real estate mortgages:Commercial
    
    
    152
    
    
    
    Construction and land
    
    
    1,180
    
    
    
    729Total non-performing loans
    
    $
    73,343
    
    
    $
    70,491
 
 (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. 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)
    
    Two loans totaling $3,308,500 were reclassified from multi-family residential to construction
and land for the period ended June 30, 2009.   Six Months EndedDecember 31,2009
    
    
    2008Servicing rights:Beginning of period
    
    $
    6,097,861
    
    
    $
    4,398,783Additions
    
    
    1,868,939
    
    
    
    244,521Amortized to expense
    
    
    (1,026,105
    )
    
    
    (712,478
    )End of period
    
    $
    6,940,695
    
    
    $
    3,930,826
 7




---



##### Table of Contents



Three Months EndedDecember 31,2009
    
    
    2008Servicing rights:Beginning of period
    
    $
    6,619,595
    
    
    $
    4,210,419Additions
    
    
    856,137
    
    
    
    72,462Amortized to expense
    
    
    (535,037
    )
    
    
    (352,055
    )End of period
    
    $
    6,940,695
    
    
    $
    3,930,826
  Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Mortgage loan servicing fees
    
    $
    641,584
    
    
    $
    507,783
    
    
    $
    1,275,788
    
    
    $
    1,020,463Amortization and impairment of
mortgage loan servicing rights
    
    
    (535,037
    )
    
    
    (352,056
    )
    
    
    (1,026,105
    )
    
    
    (712,479
    )Loan origination and sales activity
    
    
    1,344,930
    
    
    
    264,751
    
    
    
    2,256,521
    
    
    
    570,193Mortgage banking activities, net
    
    $
    1,451,477
    
    
    $
    420,478
    
    
    $
    2,506,204
    
    
    $
    878,177
   8




---



##### Table of Contents



Six months endedDecember 31, 2009Total options outstandingWeightedAverageExerciseShares
    
    
    PriceOptions outstanding, beginning
of period
    
    
    582,792
    
    
    $
    8.54Forfeited
    
    
    (94,669
    )
    
    
    8.79Expired
    
    
    (35,431
    )
    
    
    7.76Exercised
    
    
    
    
    
    
    Granted
    
    
    115,000
    
    
    
    1.91Options outstanding, end of period
    
    
    567,692
    
    
    $
    7.20Options exercisable, end of period
    
    
    428,572
    
    
    $
    7.46
   9




---



##### Table of Contents



2008Expected average risk-free interest rate
    
    
    3.40
    %Expected average life (in years)
    
    
    10.00Expected volatility
    
    
    34.13
    %Expected dividend yield
    
    
    0
    %
   Three months ended December 31,2009
    
    
    2008Income
    
    
    
    
    
    
    
    
    
    
    Income(loss)
    
    
    Shares
    
    
    Per Share
    
    
    (loss)
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPS
Net Income
(loss)
    
    
    ($1,281,031
    )
    
    
    7,979,120
    
    
    
    ($0.16
    )
    
    
    ($2,721,538
    )
    
    
    7,773,823
    
    
    
    ($0.35
    )Effect of
Stock Options
    
    
    
    
    
    
    4,293
    
    
    
    0.00
    
    
    
    
    
    
    
    
    
    
    
    0.00Diluted EPS
Net Income
(loss)
    
    
    ($1,281,031
    )
    
    
    7,983,413
    
    
    
    ($0.16
    )
    
    
    ($2,721,538
    )
    
    
    7,773,823
    
    
    
    ($0.35
    )
 Six months ended December 31,2009
    
    
    2008Income
    
    
    
    
    
    
    
    
    
    
    Income(loss)
    
    
    Shares
    
    
    Per Share
    
    
    (loss)
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPS
Net Income
(loss)
    
    $
    2,918,896
    
    
    
    7,891,136
    
    
    $
    0.37
    
    
    
    ($3,622,794
    )
    
    
    7,773,823
    
    
    
    ($0.47
    )Effect of
Stock Options
    
    
    
    
    
    
    2,147
    
    
    
    0.00
    
    
    
    
    
    
    
    0
    
    
    
    0.00Diluted EPS
Net Income
(loss)
    
    $
    2,918,896
    
    
    
    7,893,283
    
    
    $
    0.37
    
    
    
    ($3,622,794
    )
    
    
    7,773,823
    
    
    
    ($0.47
    )
 10




---



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Securities and Mortgage-backed Securities (MBS)
 11




---



##### Table of Contents



Loans held for sale
 Mortgage banking pipeline derivatives
 Warrants.
  QuotedPrices inActiveMarkets
    
    Significantfor
    
    Other
    
    SignificantIdentical
    
    Observable
    
    UnobservableDecember 31,
    
    Assets
    
    Inputs
    
    Inputs2009
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Assets:Securities available
for sale
    
    $
    86,800
    
    
    $
    86,800
    
    
    $
    
    
    
    
    Loans held for sale
    
    
    7,181,067
    
    
    
    
    
    
    
    7,181,067Mortgage-backed
securities available
for sale:FNMA MBS
    
    
    31,828,877
    
    
    
    
    
    
    
    31,828,877
    
    
    
    FHLMC MBS
    
    
    21,860,311
    
    
    
    
    
    
    
    21,860,311
    
    
    
    GNMA MBS
    
    
    3,743,587
    
    
    
    
    
    
    
    3,743,587
    
    
    
    Interest rate lock
Commitments
    
    
    521,272
    
    
    
    
    
    
    
    521,272Mandatory forward sales
Contracts
    
    
    43,909
    
    
    
    
    
    
    
    43,909
    
    
    
    Liabilities:Warrants
    
    
    (829,645
    )
    
    
    
    
    
    
    
    
    
    
    (829,645
    )
  QuotedPrices inActiveMarkets
    
    Significantfor
    
    Other
    
    SignificantIdentical
    
    Observable
    
    UnobservableDecember 31,
    
    Assets
    
    Inputs
    
    Inputs2009
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Assets:Impaired loans
    
    $
    17,363,817
    
    
    
    
    
    
    
    
    
    
    $
    17,363,817Real estate owned
    
    
    12,089,581
    
    
    
    
    
    
    
    
    
    
    
    12,089,581
  12




---



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December 31, 2009
    
    June 30, 2009Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(in thousands)Assets:Cash and amounts due from
depository institutions
    
    $
    17,581
    
    
    $
    17,581
    
    
    $
    8,465
    
    
    $
    8,465Interest-bearing deposits
    
    
    20,081
    
    
    
    20,081
    
    
    
    1,940
    
    
    
    1,940Federal funds sold
    
    
    5,000
    
    
    
    5,000
    
    
    
    10,809
    
    
    
    10,809Securities held to maturity
    
    
    55,000
    
    
    
    55,019
    
    
    
    50,000
    
    
    
    50,000Equity securities
    
    
    87
    
    
    
    87
    
    
    
    103
    
    
    
    103Mortgage-backed securities
available for sale
    
    
    57,433
    
    
    
    57,433
    
    
    
    64,178
    
    
    
    64,178Loans receivable, net
    
    
    626,438
    
    
    
    629,326
    
    
    
    668,460
    
    
    
    667,697Loans receivable held for
sale, net
    
    
    7,181
    
    
    
    7,181
    
    
    
    27,078
    
    
    
    27,078Federal Home Loan Bank stock
    
    
    12,811
    
    

    NA

    
    
    12,811
    


    NAAccrued interest receivable
    
    
    3,016
    
    
    
    3,016
    
    
    
    3,475
    
    
    
    3,475Mandatory forward sales
contracts
    
    
    44
    
    
    
    44
    
    
    
    699
    
    
    
    699Commitments to make loans
intended to be sold
    
    
    521
    
    
    
    521
    
    
    
    506
    
    
    
    506Warrants issuedLiabilities:Demand deposits and
passbook savings
    
    
    (196,086
    )
    
    
    (196,086
    )
    
    
    (188,198
    )
    
    
    (188,198
    )Time deposits
    
    
    (486,805
    )
    
    
    (496,868
    )
    
    
    (536,734
    )
    
    
    (547,620
    )Note payable
    
    
    (1,313
    )
    
    
    (1,313
    )
    
    
    (1,366
    )
    
    
    (1,366
    )Advances from the Federal
Home Loan Bank
of Cincinnati
    
    
    (35,000
    )
    
    
    (36,562
    )
    
    
    (35,000
    )
    
    
    (36,517
    )Repurchase agreement
    
    
    (50,000
    )
    
    
    (53,524
    )
    
    
    (50,000
    )
    
    
    (53,900
    )Subordinated debentures
    
    
    (10,000
    )
    
    
    (1,900
    )
    
    
    (20,000
    )
    
    
    (3,800
    )Accrued interest payable
    
    
    (1,213
    )
    
    
    (1,156
    )
    
    
    (1,379
    )
    
    
    (1,379
    )Warrants
    
    
    (830
    )
    
    
    (830
    )
    
    
    
    
    
    
    
  13




---



##### Table of Contents



Cash and amounts due from depository institutions, interest bearing deposits, and federal funds
sold.
 Loans receivable
 Federal Home Loan Bank stock.
 Demand deposits and time deposits.
 Note payable.
 Advances from the Federal Home Loan Bank of Cincinnati
 Notes payable and subordinated debentures
 Accrued interest receivable and accrued interest payable
  14




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15




---



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16




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17




---



##### Table of Contents



Three months ended
    
    
    Six months endedDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Unrealized holding gains (losses) on
available for sale securities
    
    $
    (165,496
    )
    
    $
    1,239,521
    
    
    $
    850,734
    
    
    $
    (499,279
    )Reclassification adjustment
for losses (gains)realized in income
    
    
    
    
    
    
    (563,529
    )
    
    
    
    
    
    
    1,175,271Net unrealized gains (losses)
    
    
    (165,496
    )
    
    
    675,992
    
    
    
    850,734
    
    
    
    675,992Tax effect
    
    
    (56,268
    )
    
    
    229,837
    
    
    
    289,251
    
    
    
    229,837Other comprehensive income (loss)
    
    $
    (109,228
    )
    
    $
    446,155
    
    
    $
    561,483
    
    
    $
    446,155
  Business
Combinations
 18




---



##### Table of Contents



Consolidation,
 Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities (
 Measuring
Liabilities at Fair Value
  , Accounting for
Transfers of Financial Assets, an Amendment of FASB Statement No. 140 (
 19




---



##### Table of Contents



Amendments
to FASB Interpretation No. 46(R)
  20




---



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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING STATEMENTS
   FINANCIAL CONDITION
   21




---



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22




---



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23




---



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RESULTS OF OPERATIONS
 
     24




---



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RESULTS OF OPERATIONS continued
  December 31, 2009

    
    December 31, 2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Cost
    
    
    Balance
    
    
    Interest
    
    
    Yield/CostInterest-earning assetsLoans(1)
    
    $
    687,658
    
    
    $
    9,139
    
    
    
    5.32
    %
    
    $
    736,767
    
    
    $
    10,929
    
    
    
    5.93
    %Mortgage-backed securities
    
    
    59,724
    
    
    
    693
    
    
    
    4.64
    %
    
    
    57,190
    
    
    
    687
    
    
    
    4.81
    %Investments and other
    
    
    79,764
    
    
    
    180
    
    
    
    0.90
    %
    
    
    51,277
    
    
    
    347
    
    
    
    2.71
    %Total interest-earning
assets
    
    
    827,146
    
    
    
    10,012
    
    
    
    4.84
    %
    
    
    845,234
    
    
    
    11,963
    
    
    
    5.66
    %Non-interest-earning assets
    
    
    51,043
    
    
    
    
    
    
    
    
    
    
    
    58,912Total Assets
    
    $
    878,189
    
    
    
    
    
    
    
    
    
    
    $
    904,146Interest-bearing
liabilitiesDeposits
    
    $
    694,234
    
    
    $
    3,763
    
    
    
    2.17
    %
    
    $
    697,093
    
    
    $
    6,249
    
    
    
    3.59
    %Borrowings
    
    
    86,436
    
    
    
    912
    
    
    
    4.22
    %
    
    
    86,375
    
    
    
    913
    
    
    
    4.23
    %Subordinated debt
    
    
    10,000
    
    
    
    195
    
    
    
    7.80
    %
    
    
    20,000
    
    
    
    347
    
    
    
    6.94
    %Total interest-bearing
liabilities
    
    
    790,670
    
    
    
    4,870
    
    
    
    2.46
    %
    
    
    803,468
    
    
    
    7,509
    
    
    
    3.74
    %Non-interest-bearing
liabilities
    
    
    33,283
    
    
    
    
    
    
    
    
    
    
    
    33,679Total liabilities
    
    
    823,953
    
    
    
    
    
    
    
    
    
    
    
    837,147Stockholders Equity
    
    
    54,236
    
    
    
    
    
    
    
    
    
    
    
    66,999Total liabilities and
stockholders equity
    
    $
    878,189
    
    
    
    
    
    
    
    
    
    
    $
    904,146Net interest income
    
    
    
    
    
    $
    5,142
    
    
    
    
    
    
    
    
    
    
    $
    4,454Interest-rate spread
    
    
    
    
    
    
    
    
    
    
    2.38
    %
    
    
    
    
    
    
    
    
    
    
    1.92
    %Yield on interest-earning
assets
    
    
    
    
    
    
    
    
    
    
    2.49
    %
    
    
    
    
    
    
    
    
    
    
    2.11
    %Interest-earning assets to
interest-bearing
liabilities
    
    
    104.61
    %
    
    
    
    
    
    
    
    
    
    
    105.20
    %
 
 (1)
    
    Non-accruing loans are included in the average loan balances for the periods
presented. 25




---



##### Table of Contents



RESULTS OF OPERATIONS continued
   December 31, 2009
    
    
    June 30, 2009General valuation allowance
    
    $
    15,584,765
    
    
    $
    15,071,653Specific valuation allowance
    
    
    14,328,065
    
    
    
    16,411,552Total valuation allowance
    
    $
    29,912,830
    
    
    $
    31,483,205
     26




---



##### Table of Contents



RESULTS OF OPERATIONS continued
   Dec. 31, 2009
    
    
    June 30, 2009Total non-performing loans
    
    $
    73,343
    
    
    $
    70,491Other non-performing assets (1)
    
    
    12,090
    
    
    
    11,608Total non-performing assets
    
    $
    85,433
    
    
    $
    82,099Ratio of non-performing loans to total loans
    
    
    11.17
    %
    
    
    10.07
    %Total non-performing assets to total assets
    
    
    9.83
    %
    
    
    9.00
    %
 
 (1)
    
    Other non-performing assets represent property acquired by the Bank through foreclosure or
repossession.   27




---



##### Table of Contents



RESULTS OF OPERATIONS continued
       28




---



##### Table of Contents



RESULTS OF OPERATIONS continued
  RESULTS OF OPERATIONS
    
    Six months ended December 31, 2009,compared to six months endedDecember 31, 2008.
    29




---



##### Table of Contents



RESULTS OF OPERATIONS continued
 December 31, 2009
    
    
    December 31, 2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Cost
    
    
    Balance
    
    
    Interest
    
    
    Yield/CostInterest-earning assetsLoans (1)
    
    $
    695,698
    
    
    $
    18,296
    
    
    
    5.26
    %
    
    $
    733,792
    
    
    $
    22,341
    
    
    
    6.09
    %Mortgage-backed securities
    
    
    61,278
    
    
    
    1,357
    
    
    
    4.43
    %
    
    
    56,092
    
    
    
    1,387
    
    
    
    4.95
    %Investments and other
    
    
    74,389
    
    
    
    357
    
    
    
    0.96
    %
    
    
    45,217
    
    
    
    726
    
    
    
    3.21
    %Total interest-earning
assets
    
    
    831,365
    
    
    
    20,010
    
    
    
    4.81
    %
    
    
    835,101
    
    
    
    24,454
    
    
    
    5.86
    %Non-interest-earning assets
    
    
    58,164
    
    
    
    
    
    
    
    
    
    
    
    56,797Total Assets
    
    $
    889,529
    
    
    
    
    
    
    
    
    
    
    $
    891,898Interest-bearing liabilitiesDeposits
    
    $
    703,001
    
    
    $
    8,122
    
    
    
    2.31
    %
    
    $
    686,640
    
    
    $
    12,192
    
    
    
    3.55
    %Borrowings
    
    
    86,450
    
    
    
    1,824
    
    
    
    4.22
    %
    
    
    87,079
    
    
    
    1,833
    
    
    
    4.28
    %Subordinated debt
    
    
    13,478
    
    
    
    445
    
    
    
    6.60
    %
    
    
    20,000
    
    
    
    672
    
    
    
    6.72
    %Total interest-bearing
liabilities
    
    
    802,929
    
    
    
    10,391
    
    
    
    2.59
    %
    
    
    793,719
    
    
    
    14,697
    
    
    
    3.70
    %Non-interest-bearing
liabilities
    
    
    33,941
    
    
    
    
    
    
    
    
    
    
    
    30,488Total liabilities
    
    
    836,870
    
    
    
    
    
    
    
    
    
    
    
    824,207Stockholders
Equity
    
    
    52,659
    
    
    
    
    
    
    
    
    
    
    
    67,691Total liabilities and
stockholders equity
    
    $
    889,529
    
    
    
    
    
    
    
    
    
    
    $
    891,898Net interest income
    
    
    
    
    
    $
    9,619
    
    
    
    
    
    
    
    
    
    
    $
    9,757Interest-rate spread
    
    
    
    
    
    
    
    
    
    
    2.22
    %
    
    
    
    
    
    
    
    
    
    
    2.16
    %Yield on interest-earning
assets
    
    
    
    
    
    
    
    
    
    
    2.31
    %
    
    
    
    
    
    
    
    
    
    
    2.34
    %Interest-earning assets to
interest-bearing
liabilities
    
    
    103.54
    %
    
    
    
    
    
    
    
    
    
    
    105.21
    %
 
 (1)
    
    Non-accruing loans are included in the average loan balances for the periods presented.  30




---



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RESULTS OF OPERATIONS continued
       31




---



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LIQUIDITY AND CAPITAL RESOURCES
     32




---



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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Asset/Liability Management
   33




---



##### Table of Contents



CONTROLS AND PROCEDURES
  
 Part II Other Information
 
 Item 1.
    
    Legal Proceedings. N/A
 
 Item 1A.
    
    Risk Factors
  We are subject to restrictions and conditions of Cease and Desist Orders issued by the Office of
Thrift Supervision. We have incurred and expect to continue to incur significant additional
regulatory compliance expense in connection with the Cease and Desist Orders. Failure to comply
with the Cease and Desist Orders could result in additional enforcement action against us.
  34




---



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Our capital levels were not sufficient to achieve compliance with the higher capital requirements
by December 31, 2009 and any capital cushion in the future may not be sufficient to absorb
additional loan or other losses and maintain compliance with these higher capital requirements.
  Our classified asset levels currently are not sufficient to achieve compliance with the classified
asset levels we must meet by December 31, 2010.
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Higher loan losses could require us to increase our allowance for loan losses through a charge to
earnings.
  A continuation of recent turmoil in the financial markets could have an adverse effect on our
financial position or results of operations.
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The current economic recession could result in increases in our level of non-performing loans
and/or reduce demand for our products and services, which would lead to lower revenue, higher loan
losses and lower earnings.
  Our emphasis on construction and commercial real estate lending and land loans may expose us to
increased lending risks.
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Our adjustable-rate mortgage loans may expose us to increased lending risks.
  PVFs financial condition and results of operations are dependent on the economy in Park View
Federals market area.
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Increased and/or special Federal Deposit Insurance Corporation assessments will hurt our earnings.
  Park View Federal has been notified by the counterparty to a repurchase agreement that the
counterparty is entitled to declare that an event of default has occurred under the repurchase
agreement.
   Changing interest rates may decrease our earnings and asset values.
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PVF and Park View Federal operate in a highly regulated environment and may be adversely affected
by changes in laws and regulations.
  Proposed regulatory reform may have a material impact on our operations.
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Strong competition within Park View Federals market area could hurt profits and slow growth.
  Stockholders will face significant dilution as a result of a contemplated stock offering and
warrants issued or to be issued in exchange for trust preferred securities.
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We could, as a result of our stock offering or future investments in our common stock by 5%
holders, experience an ownership change for tax purposes that could cause us to permanently lose
a portion of our U.S. federal deferred tax assets.
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Item 2.
    
    Unregistered Sale of Equity Securities and Use of Proceeds.
(a) N/A
(b) N/A
(c) The Company did not repurchase its equity securities during the period ended December 31, 2009:
 
 Item 3.
    
    Defaults Upon Senior Securities. N/A
 
 Item 4.
    
    Submission of Matters to a Vote of Security Holders. N/A
 
 Item 5.
    
    Other Information. N/A.
 
 Item 6.
    
    (a)
    Exhibits
 3.11
    
    Articles of Incorporation, as amended and restated
 3.22
    
    Code of Regulations, as amended and restated
 3.35
    
    Bylaws, as amended and restated
 4.13
    
    Specimen Common Stock Certificate
 4.24
    
    Form of Common Stock Warrant issued to Alesco Preferred Funding IV, Ltd.
 4.34
    
    Form of Common Stock Warrant issued to Alesco Preferred Funding IV, Ltd.
 10.14
    
    Exchange Agreement between PVF Capital Corp., Marty E. Adams, Umberto P. Fedeli,
Robert J. King, Jr., James B. Pastore, John S. Loeber, Lee Burdman, Jonathan A. Levy, Richard
R. Hollington Jr. and Richard R. Hollington, III, dated October 9, 2009
 10.26
    
    Stipulation and Consent to the Issuance of an Order to Cease and Desist between
Park View Federal Savings Bank and the Office of Thrift Supervision
 10.36
    
    Order to Cease and Desist issued by the Office of Thrift Supervision for Park View Federal Savings Bank
 10.46
    
    Stipulation and Consent to the Issuance of an Order to Cease and Desist between
PVF Capital Corp. and the Office of Thrift Supervision
 10.56
    
    Order to Cease and Desist issued by the Office of Thrift Supervision for PVF Capital Corp.
 10.6
    
    Letter Agreement between PVF Capital Corp. and Thomas J. Smith, dated November 24, 2009
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31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer
 31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer
 32
    
    Section 1350 Certification
 
 (1)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2002 (Commission File No. 0-24948).(2)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K filed on February 6,
2008 (Commission File No. 0-24948).(3)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 1996 (Commission File No. 0-24948).(4)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009 (Commission File No. 0-24948).(5)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-1 filed on
November 12, 2009 (Commission File No. 333-163037).(6)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K filed on October 23,
2009 (Commission File No. 0-24948). 44




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Signatures
  PVF Capital Corp.
(Registrant)Date: January 29, 2010
    /s/ Robert J. King, Jr.Robert J. King, Jr.President and Chief Executive Officer
(Duly authorized officer)/s/ James H. NicholsonJames H. NicholsonChief Financial Officer
(Principal financial officer)/s/ Edward B. DebevecEdward B. DebevecTreasurer and Principal Accounting Officer
(Principal accounting officer)