##### 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, 2004. 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 Number0-24948 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)
 (440) 248-7171   Not Applicable   Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES þ
    
    NO o
 Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). YES þ
    
    NO o
 Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date. Common Stock, $0.01 Par Value
    
    7,033,713(Class)
    
    (Outstanding at January 31, 2005)




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##### Table of Contents



PVF CAPITAL CORP. INDEX PagePart I
    
    Financial InformationItem 1
    
    Financial StatementsConsolidated Statements of Financial Condition, December 31, 2004 (unaudited) and June 30, 2004.
    
    
    1Consolidated Statements of Operations for the three and six months ended December 31, 2004 and 2003 (unaudited)
    
    
    2Consolidated Statements of Cash Flows For the six months ended December 31,  2004 and 2003 (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
    
    
    13Item 4
    
    Controls and Procedures
    
    
    13Part II
    
    Other Information
    
    
    14EX-31.1 Certification of CEOEX-31.2 Certification of CFOEX-32 Section 1350 Certification




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##### Table of Contents



Part I Financial Information 
  
 PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION December 31,2004
    
    
    June 30,unaudited
    
    
    2004ASSETSCash and cash equivalents:Cash and amounts due from depository institutions
    
    $
    10,485,919
    
    
    $
    4,550,446Interest bearing deposits
    
    
    1,936,700
    
    
    
    894,327Federal funds sold
    
    
    5,025,000
    
    
    
    12,025,000Total cash and cash equivalents
    
    
    17,447,619
    
    
    
    17,469,773Securities held to maturity (fair value of $47,535,300 and $27,399,975, respectively)
    
    
    47,500,000
    
    
    
    27,500,000Mortgage-backed securities held to maturity (fair value of $33,466,315 and $35,390,465, respectively)
    
    
    33,630,845
    
    
    
    36,779,289Loans receivable held for sale, net
    
    
    10,418,306
    
    
    
    11,870,775Loans receivable, net of allowance of $4,391,204 and $4,376,704
    
    
    641,214,201
    
    
    
    610,680,821Office properties and equipment, net
    
    
    14,073,634
    
    
    
    13,888,392Real estate owned, net
    
    
    311,613
    
    
    
    70,000Federal Home Loan Bank stock
    
    
    11,058,000
    
    
    
    10,825,600Prepaid expenses and other assets
    
    
    26,752,188
    
    
    
    26,602,759Total Assets
    
    $
    802,406,406
    
    
    $
    755,687,409LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesDeposits
    
    $
    549,229,869
    
    
    $
    526,492,714Short-term advances from the Federal Home Loan Bank
    
    
    33,000,000
    
    
    
    15,000,000Long-term advances from the Federal Home Loan Bank
    
    
    120,028,877
    
    
    
    120,039,831Notes payable
    
    
    1,444,100
    
    
    
    2,486,250Subordinated debentures
    
    
    10,000,000
    
    
    
    10,000,000Advances from borrowers for taxes and insurance
    
    
    8,815,944
    
    
    
    2,376,872Accrued expenses and other liabilities
    
    
    15,127,488
    
    
    
    15,930,799Total Liabilities
    
    
    737,646,278
    
    
    
    692,326,466Stockholders EquitySerial preferred stock, none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 15,000,000 shares authorized;
7,430,193 and 7,420,045 shares issued, respectively
    
    
    74,302
    
    
    
    74,200Additional paid-in-capital
    
    
    58,406,980
    
    
    
    58,378,089Retained earnings
    
    
    9,680,227
    
    
    
    8,035,847Treasury Stock, at cost 396,480 and 377,870 shares, respectively
    
    
    (3,401,381
    )
    
    
    (3,127,193
    )Total Stockholders Equity
    
    
    64,760,128
    
    
    
    63,360,943Total Liabilities and Stockholders Equity
    
    $
    802,406,406
    
    
    $
    755,687,409
 See accompanying notes to consolidated financial statements Page 1




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##### Table of Contents



Part I Financial Information
Item 1 Financial Statements 
 PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,Interest incomeLoans
    
    $
    9,668,561
    
    
    $
    9,220,741
    
    
    $
    18,965,543
    
    
    $
    18,684,269Mortgage-backed securities
    
    
    408,450
    
    
    
    489,656
    
    
    
    828,210
    
    
    
    933,098Cash and securities
    
    
    441,798
    
    
    
    119,349
    
    
    
    759,486
    
    
    
    270,740Total interest income
    
    
    10,518,809
    
    
    
    9,829,746
    
    
    
    20,553,239
    
    
    
    19,888,107Interest expenseDeposits
    
    
    3,085,540
    
    
    
    2,720,009
    
    
    
    5,971,090
    
    
    
    5,650,188Borrowings
    
    
    1,651,115
    
    
    
    1,357,694
    
    
    
    3,189,652
    
    
    
    2,738,405Total interest expense
    
    
    4,736,655
    
    
    
    4,077,703
    
    
    
    9,160,742
    
    
    
    8,388,593Net interest income
    
    
    5,782,154
    
    
    
    5,752,043
    
    
    
    11,392,497
    
    
    
    11,499,514Provision for loan losses
    
    
    
    
    
    
    192,000
    
    
    
    136,000
    
    
    
    292,000Net interest income after provision for loan losses
    
    
    5,782,154
    
    
    
    5,560,043
    
    
    
    11,256,497
    
    
    
    11,207,514Noninterest income, netService and other fees
    
    
    170,770
    
    
    
    157,564
    
    
    
    367,984
    
    
    
    304,210Mortgage banking activities, net
    
    
    344,505
    
    
    
    604,707
    
    
    
    663,295
    
    
    
    3,277,954Other, net
    
    
    343,947
    
    
    
    105,506
    
    
    
    513,168
    
    
    
    596,969Total noninterest income, net
    
    
    859,222
    
    
    
    867,777
    
    
    
    1,544,447
    
    
    
    4,179,133Noninterest expenseCompensation and benefits
    
    
    2,616,568
    
    
    
    2,346,503
    
    
    
    5,057,600
    
    
    
    4,852,899Office occupancy and equipment
    
    
    869,502
    
    
    
    806,681
    
    
    
    1,735,482
    
    
    
    1,604,405Other
    
    
    1,091,282
    
    
    
    1,208,498
    
    
    
    2,108,310
    
    
    
    2,442,423Total noninterest expense
    
    
    4,577,352
    
    
    
    4,361,682
    
    
    
    8,901,392
    
    
    
    8,899,727Income before federal income tax provision
    
    
    2,064,024
    
    
    
    2,066,138
    
    
    
    3,899,552
    
    
    
    6,486,920Federal income tax provision
    
    
    642,000
    
    
    
    716,400
    
    
    
    1,209,900
    
    
    
    2,205,100Net income
    
    $
    1,422,024
    
    
    $
    1,349,738
    
    
    $
    2,689,652
    
    
    $
    4,281,820Basic earnings per share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.38
    
    
    $
    0.61Diluted earnings per share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.37
    
    
    $
    0.60Dividends declared per common share
    
    $
    0.074
    
    
    $
    0.067
    
    
    $
    0.148
    
    
    $
    0.202
 See accompanying notes to consolidated financial statements Page 2




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##### Table of Contents



Part I Financial Information
Item 1 Financial Statements 
 PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Six Months EndedDecember 31,2004
    
    
    2003Operating ActivitiesNet income
    
    $
    2,689,652
    
    
    $
    4,281,820Adjustments to reconcile net income to net cash provided by (used in) operating activitiesDepreciation
    
    
    917,732
    
    
    
    791,822Provision for losses on loans
    
    
    136,000
    
    
    
    292,000Accretion of deferred loan origination fees, net
    
    
    (526,539
    )
    
    
    (610,458
    )Gain on sale of loans receivable held for sale, net
    
    
    (600,070
    )
    
    
    (3,716,289
    )Gain on disposal of real estate owned, net
    
    
    (165,575
    )
    
    
    (488,839
    )Federal Home Loan Bank stock dividends
    
    
    (232,400
    )
    
    
    (210,519
    )Change in accrued interest on investments, loans, and borrowings, net
    
    
    (264,450
    )
    
    
    (174,517
    )Origination of loans receivable held for sale, net
    
    
    (61,926,713
    )
    
    
    (177,798,831
    )Sale of loans receivable held for sale, net
    
    
    63,296,360
    
    
    
    205,194,781Net change in other assets and other liabilities
    
    
    6,386,375
    
    
    
    (10,697,920
    )Net cash from operating activities
    
    
    9,710,372
    
    
    
    16,863,050Investing ActivitiesLoan repayments and originations, net
    
    
    (30,953,740
    )
    
    
    (16,446,471
    )Repayment of mortgage-backed securities
    
    
    3,148,444
    
    
    
    2,321,626Purchase of mortgage-backed securities held for investment
    
    
    0
    
    
    
    (39,853,303
    )Proceeds from sale of real estate owned
    
    
    734,861
    
    
    
    937,704Securities purchased
    
    
    (25,000,000
    )
    
    
    0Maturities of securities held to maturity
    
    
    5,000,000
    
    
    
    33,252Additions to office properties and equipment, net
    
    
    (1,102,974
    )
    
    
    (1,802,394
    )Net cash used in investing activities
    
    
    (48,173,409
    )
    
    
    (54,809,586
    )Financing activitiesNet decrease in demand deposits, NOW, and passbook savings
    
    
    (3,252,239
    )
    
    
    (1,858,010
    )Net increase (decrease) in time deposits
    
    
    25,989,394
    
    
    
    (49,312,275
    )Repayment of long-term Federal Home Loan Bank advances
    
    
    (10,954
    )
    
    
    (20,910
    )Net increase in short-term Federal Home Loan Bank advances
    
    
    18,000,000
    
    
    
    2,000,000Net decrease in notes payable
    
    
    (1,042,150
    )
    
    
    (1,038,910
    )Purchase of treasury stock
    
    
    (274,188
    )
    
    
    0Proceeds from exercise of stock options
    
    
    28,993
    
    
    
    30,617Cash dividend paid
    
    
    (997,973
    )
    
    
    (903,771
    )Net cash from financing activities
    
    
    38,440,883
    
    
    
    (51,103,259
    )Net increase (decrease) in cash and cash equivalents
    
    
    (22,154
    )
    
    
    (89,049,795
    )Cash and cash equivalents at beginning of period
    
    
    17,469,773
    
    
    
    96,751,243Cash and cash equivalents at end of period
    
    $
    17,447,619
    
    
    $
    7,701,448Supplemental disclosures of cash flow information:Cash payments of interest expense
    
    $
    9,140,556
    
    
    $
    8,393,834Cash payments of income taxes
    
    $
    995,000
    
    
    $
    1,760,000Transfer to real estate owned
    
    $
    810,899
    
    
    $
    0
 See accompanying notes to consolidated financial statements Page 3




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##### Table of Contents



Part I Financial Information
Item 1 PVF CAPITAL CORP. 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 and 2003
(Unaudited) 1. The accompanying condensed 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, 2004 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 and six months ended December 31, 2004 are not
necessarily indicative of the results to be expected for the entire year ending June 30, 2005. The
results of operations for PVF Capital Corp. (PVF or the Company) for the periods being reported
have been derived primarily from the results of operations of Park View Federal Savings Bank (the
Bank). PVF Capital Corp.s common stock is traded on the NASDAQ SMALL-CAP ISSUES under the symbol
PVFC. Stock Compensation: Employee compensation expense under stock is reported using the intrinsic
valuation method. No stock-based compensation cost is reflected in net income, as all options
granted had an exercise price equal to or greater than the market price of the underlying common
stock at the date of grant. The following table illustrates the effect on net income and earnings
per share if expense was measured using the fair value recognition provisions of FASB Statement No.
123, Accounting for Stock Based Compensation. Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2004
    
    
    2003
    
    
    2004
    
    
    2003Net income as reported
    
    $
    1,422,024
    
    
    $
    1,349,738
    
    
    $
    2,689,652
    
    
    $
    4,281,820Less: Pro forma compensation
expense, net of tax
    
    $
    36,210
    
    
    $
    23,383
    
    
    $
    64,197
    
    
    $
    49,513Pro forma net income
    
    $
    1,385,814
    
    
    $
    1,326,355
    
    
    $
    2,625,455
    
    
    $
    4,232,307Basic earnings per share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.38
    
    
    $
    0.61Pro forma basic earnings per
share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.37
    
    
    $
    0.60Diluted earnings per share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.37
    
    
    $
    0.60Pro forma diluted earnings
per share
    
    $
    0.19
    
    
    $
    0.18
    
    
    $
    0.36
    
    
    $
    0.59
 Page 4




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##### Table of Contents



Part I Financial Information
Item 1 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued The pro forma effects are computed using option pricing models, using the following
weighted-average assumptions as of grant date for options awarded in fiscal year 2005 and 2004. Three and six months endedDecember 31,2004
    
    
    2003Risk-free interest rate
    
    
    3.75
    %
    
    
    3.76
    %Expected option life
    
    7 years
    
    7 yearsExpected stock price volatility
    
    
    29.29
    %
    
    
    29.78
    %Dividend yield
    
    
    2.21
    %
    
    
    1.99
    %Weighted average fair value
    
    $
    3.93
    
    
    $
    4.06
 2. The following table discloses earnings per share for the three and six months ended
December 31, 2004 and December 31, 2003. Three months ended December 31,2004
    
    
    2003Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSNet Income
    
    $
    1,422,024
    
    
    7,034,048

    
    
    $
    0.20
    
    
    $
    1,349,738
    
    
    7,017,909

    
    
    $
    0.19Effect of Stock
Options
    
    
    
    
    
    159,081

    
    
    
    0.00
    
    
    
    
    
    
    174,536

    
    
    
    0.00Diluted EPSNet Income
    
    $
    1,422,024
    
    
    7,193,129

    
    
    $
    0.20
    
    
    $
    1,349,738
    
    
    7,192,445

    
    
    $
    0.19
  Six months ended December 31,2004
    
    
    2003Income
    
    
    Shares
    
    
    Per Share
    
    
    Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSNet Income
    
    $
    2,689,652
    
    
    7,035,801
    
    
    
    $
    0.38
    
    
    $
    4,281,820
    
    
    7,015,156
    
    
    
    $
    0.61Effect of Stock
Options
    
    
    
    
    
    168,275
    
    
    
    
    (0.01
    )
    
    
    
    
    
    170,706
    
    
    
    
    (0.01
    )Diluted EPSNet Income
    
    $
    2,689,652
    
    
    7,204,076
    
    
    
    $
    0.37
    
    
    $
    4,281,820
    
    
    7,185,862
    
    
    
    $
    0.60
 There were 14,700 and 7,000 options not considered in the diluted Earnings Per Share
calculation for the three- and six-month periods ended December 31, 2004 and 2003, respectively,
because they were anti-dilutive. Page 5




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##### Table of Contents



Part I Financial Information
Item 1 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued 3. Mortgage Banking Activities: The Company services real estate loans for investors that are not
included in the accompanying condensed 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. December 31,2004
    
    
    2003Servicing rights:Beginning of period
    
    $
    5,358,845
    
    
    $
    4,655,182Additions
    
    
    682,892
    
    
    
    2,643,810Amortized to expense
    
    
    (869,745
    )
    
    
    (1,963,212
    )End of period
    
    $
    5,171,992
    
    
    $
    5,335,780Valuation allowance:Beginning of period
    
    $
    0
    
    
    $
    670,000Reductions credited to expense
    
    
    0
    
    
    
    (670,000
    )End of period
    
    $
    0
    
    
    $
    0
 Mortgage banking activities, net consist of the following: Three Months Ended
    
    
    Six Months EndedDecember 31,
    
    
    December 31,2004
    
    
    2003
    
    
    2004
    
    
    2003Mortgage loan servicing fees
    
    $
    474,132
    
    
    $
    447,260
    
    
    $
    932,970
    
    
    $
    854,877Amortization and impairment of
mortgage loan servicing fees
    
    $
    (432,396
    )
    
    $
    (442,289
    )
    
    $
    (869,745
    )
    
    $
    (1,293,212
    )Gain on sales of loans
    
    $
    302,769
    
    
    $
    599,736
    
    
    $
    600,070
    
    
    $
    3,716,289Mortgage banking activities,
net
    
    $
    344,505
    
    
    $
    604,707
    
    
    $
    663,295
    
    
    $
    3,277,954
 Page 6




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##### Table of Contents



Part I Financial Information
Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following analysis discusses changes in financial condition and results of operations at and
for the three-month and six-month periods ended December 31, 2004 for PVF Capital Corp. (PVF or
the Company), Park View Federal Savings Bank (the Bank), its principal and wholly-owned
subsidiary, PVF Service Corporation (PVFSC), a wholly-owned real estate subsidiary, Mid Pines
Land Co., a wholly-owned real estate subsidiary, and PVF Holdings, Inc., a wholly-owned and
currently inactive subsidiary. FORWARD-LOOKING STATEMENTS When used in this Form 10-Q, the words or phrases will likely result, are expected to, will
continue, is anticipated, estimate, project, or similar expressions are intended to identify
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are subject to certain risks and uncertainties including changes in economic
conditions in the Companys market area, changes in policies by regulatory agencies, fluctuations
in interest rates, demand for loans in the Companys market area, and competition that could cause
actual results to differ materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company wishes to advise
readers that the factors listed above could affect the Companys financial performance and could
cause the Companys actual results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the
results of any revisions, which may be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events. FINANCIAL CONDITION Consolidated assets of PVF were $802.4 million as of December 31, 2004, an increase of
approximately $46.7 million, or 6.2%, as compared to June 30, 2004. The Bank remained in regulatory
capital compliance for tier one core capital, tier one risk-based capital, and total risk-based
capital with capital levels of 8.75%, 10.41%, and 11.01%, respectively, at December 31, 2004. During the six months ended December 31, 2004, the Companys cash and cash equivalents,
which consist of cash, interest-bearing deposits, and federal funds sold, remained at approximately
$17.5 million, as compared to June 30, 2004. The change in the composition of the Companys cash
and cash equivalents consisted of an increase in cash and interest-bearing deposits of $7.0 million
and a decrease in federal funds sold of $7.0 million. The net $25.9 million, or 3.9%, increase in
loans receivable, loans receivable held for sale, and mortgage-backed securities during the six
months ended December 31, 2004, resulted from an increase in loans receivable of $30.5 million, a
decrease in loans receivable held for sale of $1.5 million, and a Page 7




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##### Table of Contents



Part I Financial Information
Item 2 FINANCIAL CONDITION continued decrease in mortgage-backed securities of $3.1 million. The increase of $30.5 million in loans
receivable held for investment included increases of $9.8 million in home equity line of credit
loans, $9.3 million in land loans, $9.2 million in one-to-four family and commercial construction
loans, $8.6 million in one-to-four family residential loans, $1.8 million in non real-estate loans,
and $1.7 million in multi-family loans, offset by decreases of $3.5 million in commercial line of
credit loans and $6.4 million in commercial real estate loans. The decrease of $3.1 million in
mortgage-backed securities resulted from principal payments received. The decrease of $1.5 million
in loans receivable held for sale is attributable to the continued slowdown in refinancing activity
resulting from rising interest rates during the period. The increase of $20.0 million in securities held to maturity resulted from the purchase of $25.0
million in Federal Home Loan Bank agency securities and the maturity of $5.0 million in agency
securities. Managements decision to attract new certificates of deposit by offering competitive market rates
resulted in an increase of $22.7 million, or 4.3%, in deposits. The decrease in notes payable of
$1.0 million, or 41.9%, is the result of principal payments made on notes payable. Advances
increased by $18.0 million, or 13.3%, as a result of short-term borrowings from the Federal Home
Loan Bank of Cincinnati. The increase in advances from borrowers for taxes and insurance of $6.4
million is attributable to timing differences between the collection and payment of taxes and
insurance. The decrease in accrued expenses and other liabilities of $0.8 million, or 5.0%, is
primarily the result of timing differences between the collection and remittance of payments
received on loans serviced for investors. Proceeds from the increase in deposits of $22.7 million, the increase in advances of $18.0 million,
the increase in advances from borrowers for tax and insurance of $6.4 million, the maturity of $5.0
million in securities, and earnings of $2.7 million, were used to fund the net increase of $25.9
million in loans receivable, loans receivable held for sale, and mortgage-backed securities,
purchase $25.0 million in securities, repay $1.0 million in notes payable, pay cash dividends of
$1.0 million, purchase treasury stock of $0.3 million, and fund the decrease in accrued expenses
and other liabilities of $0.8 million. RESULTS OF OPERATIONS
    
    Three months ended December 31, 2004,compared to three months endedDecember 31, 2003.
 PVFs net income is dependent primarily on its net interest income, which is the difference between
interest earned on its loans and investments and interest paid on interest-bearing liabilities. Net
interest income is determined by (i) the difference between yields earned on interest-earning
assets and rates paid on interest-bearing liabilities (interest-rate spread) and (ii) the
relative amounts of interest-earning assets and interest-bearing liabilities. The Companys
interest-rate spread is affected by regulatory, economic and competitive factors that influence
interest rates, loan demand and deposit flows. Net interest income also includes accretion of loan
origination fees, net of origination costs. Page 8




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued PVFs net income is also affected by the generation of non-interest income, which primarily
consists of loan servicing income, service fees on deposit accounts, and gains on the sale of loans
held for sale. In addition, net income is affected by the level of operating expenses and loan loss
provisions. The Companys net income for the three months ended December 31, 2004 was $1,422,000 as compared to
$1,349,700 for the prior year comparable period. This represents an increase of $72,300, or 5.4%,
when compared with the prior year comparable period. Net interest income for the three months ended December 31, 2004 increased by $30,100, or 0.5%, as
compared to the prior year comparable period. This resulted from an increase of $689,100, or 7.0%,
in interest income and an increase of $659,000, or 16.2%, in interest expense. The increase in
interest income resulted primarily from an increase of $82.7 million in the average balance of
interest-earning assets in the current period. The increase in the average balance of
interest-earning assets was partially offset by a decrease of 9 basis points in the return on
interest-earning assets and resulted in an overall increase to interest income of $689,100 in the
current period. The average balance on interest-bearing liabilities increased by $94.5 million,
while the average cost of funds on interest-bearing liabilities decreased by 2 basis points in the
current period. This resulted in an overall increase in interest expense of $659,000. The Companys
net interest income increased by $30,100 due to an increase in the average balances of both
interest-earning assets and interest-bearing liabilities offset partially by a decrease of 7 basis
points in the Companys interest-rate spread during the current period as compared to the prior
year comparable period. For the three months ended December 31, 2004, no provision for loan losses was recorded, while a
provision for loan losses of $192,000 was recorded in the prior year comparable period. The Company
uses a systematic approach to determine the adequacy of its loan loss allowance and the necessary
provision for loan losses. The loan portfolio is reviewed and delinquent loan accounts are analyzed
individually on a monthly basis, with respect to payment history, ability to repay, probability of
repayment, and loan-to-value percentage. Consideration is given to the types of loans in the
portfolio and the overall risk inherent in the portfolio. After reviewing current economic
conditions, changes to the size and composition of the loan portfolio, changes in delinquency
status, levels of non-accruing loans, non-performing assets, impaired loans, and actual loan losses
incurred by the Company, management establishes an appropriate reserve percentage applicable to
each category of loans, and a provision for loan losses is recorded when necessary to bring the
allowance to a level consistent with this analysis. Management believes it uses the best
information available to make a determination as to the adequacy of the allowance for loan losses.
During the three months ended December 31, 2004, management determined it was not necessary to
record a provision for loan losses in the current period due to a decrease to classified assets.
During the three months ended December 31, 2003, the Company experienced an increase in loans held
for investment of $24.9 million and an increase in the level of non-accruing loans of $1.3 million.
Due to the increase in loans held for investment along with an Page 9




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued increase in the level of non-accruing loans and recognition of specific loan losses, management
determined it was necessary to record a provision for loan losses of $192,000 in the prior period.
At June 30, 2004, the allowance for loan losses was $4.4 million, which represented 41.2% of
non-accruing loans and 0.71% of net loans. At December 31, 2004, the allowance for loan losses was
$4.4 million, which represented 40.7% of non-accruing loans and 0.68% of net loans. December 31,
    
    
    June 30,2004
    
    
    2004(Dollars in thousands)Non-accruing loans (1):Real estate
    
    $
    10,789
    
    
    $
    10,633Accruing loans which are contractually past due
90 days or more:Real estate
    
    $
    1,275
    
    
    $
    503Total non-accrual and 90 days
past due loans
    
    $
    12,064
    
    
    $
    11,136Ratio of non-performing loans to total loans
    
    
    1.86
    %
    
    
    1.80
    %Other non-performing assets (2)
    
    $
    312
    
    
    $
    70Total non-performing assets
    
    $
    12,376
    
    
    $
    11,206Total non-performing assets to
total assets
    
    
    1.54
    %
    
    
    1.48
    %
   (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. For the three months ended December 31, 2004, non-interest income decreased by $8,600, or
1.0%, from the prior year comparable period. This resulted primarily from a decrease of $260,200,
or 43.0%, in mortgage-banking activities that resulted from a decrease of $297,200 in profit on
loan sales in the current period offset by an increase of $37,000 in loan servicing income. The
increase in loan servicing income is attributable to an increase in the volume of loans serviced
for others along with a slowdown in the amortization of mortgage loan servicing rights that
resulted from increasing market interest rates and decreased prepayment speed on loans serviced for
others. During these periods, PVF pursued a strategy of originating long-term, fixed-rate loans
pursuant to Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage
Association (FNMA) guidelines and selling such loans to the FHLMC or the FNMA, while retaining
the servicing. The origination of these types of loans has slowed in current periods. In addition, service and other fees increased by $13,200, or 8.4%, primarily due to increases in
NOW account and late charge fee income. Other non-interest income, net, increased by $238,400, or
226.0%, in the current Page 10




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued period primarily due to gains on real estate owned and the Banks investment in bank-owned life
insurance (BOLI). Non-interest expense for the three months ended December 31, 2004 increased by $215,700, or 4.9%,
from the prior year comparable period. This was primarily the result of an increase in compensation
and benefits of $270,100, or 11.5%, as the result of increased staffing, incentive bonuses paid,
and salary and wage adjustments. Office occupancy and equipment increased $62,800, or 7.8%, due to
the operation of one additional branch office along with increases in office rental expenses. Other
non-interest expense decreased $117,200, or 9.7%, as the result of decreases in outside services,
stationery, printing and supplies, and legal fees. The federal income tax provision for the three-month period ended December 31, 2004 decreased to an
effective rate of 31.1% for the current period from an effective rate of 34.7% for the prior year
comparable period. The effective tax rate was lower for the period ended December 31, 2004 due to
tax-exempt income earned on BOLI. RESULTS OF OPERATIONS
    
    Six months ended December 31, 2004,compared to six months ended
December 31, 2003.
 The Companys net income for the six months ended December 31, 2004 was $2,689,600 as compared to
$4,281,800 for the prior year comparable period. This represents a decrease of $1,592,200, or
37.2%, when compared with the prior year comparable period. Net interest income for the six months ended December 31, 2004 decreased by $107,000, or 0.9%, due
to an increase of $665,100, or 3.3%, in interest income and a $772,100, or 9.2%, increase in
interest expense. The increase in interest income resulted primarily from an increase of $53.8
million in the average balance of interest-earning assets in the current period. The increase in
the average balance of interest-earning assets was offset by a decrease of 15 basis points in the
return on interest-earning assets and resulted in an overall increase to interest income of
$665,100 in the current period. The average balance of interest-bearing liabilities increased by
$76.4 million, while the average cost of funds on interest-bearing liabilities decreased by 8 basis
points in the current period, resulting in an overall increase in interest expense of $772,100. The
Companys net interest income decreased by $107,000 due to a decrease of 7 basis points in the
Companys interest-rate spread during the current period as compared to the prior year comparable
period. For the six months ended December 31, 2004, a provision for loan losses of $136,000 was recorded,
while a provision for loan losses of $292,000 was recorded in the prior year comparable period.
During the six months ended December 31, 2004, the Company experienced an increase in loans
receivable held for investment of $30.5 million. In addition, the level of non-accruing loans
increased by $156,000 and the level of classified assets decreased by $1.5 million. Management
determined it was necessary to record a provision for loan losses in the current period due to
increases in loans receivable Page 11




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued held for investment, specific loan loss allocations, and non-accruing loans. During the six months
ended December 31, 2003, the Company experienced an increase in loans held for investment of $17.1
million and an increase in the level of non-accruing loans of $1.5 million. Due to the increase in
loans receivable held for investment along with an increase in the level of non-accruing loans and
recognition of specific loan losses, management determined it was necessary to record a provision
for loan losses of $292,000 in the prior period. For the six months ended December 31, 2004, non-interest income decreased by $2,634,700, or 63.0%,
from the prior year comparable period. This resulted primarily from a decrease of $2,614,700, or
79.8%, in mortgage-banking activities that resulted from a decrease of $3,116,200 in profit on loan
sales in the current period offset by an increase of $501,500 in loan servicing income. The
increase in loan servicing income is attributable to a decrease in the amortization of mortgage
loan servicing rights that resulted from a slowdown in prepayment speed on loans serviced for
others. In addition, other non-interest income, net, decreased by $83,800, or 14.0%, in the current period
primarily due to decreased gains on the sale of real estate owned. Service and other fees increased
by $63,800, or 21.0%, primarily due to increases in savings and NOW account fee income and late
charge fee income. Non-interest expense for the six months ended December 31, 2004 increased by $1,700, from the prior
year comparable period. This was primarily the result of an increase in compensation and benefits
of $204,700, or 4.2%, as the result of increased staffing, incentive bonuses paid, and salary and
wage adjustments. Office occupancy and equipment increased by $131,100, or 8.2%, due to the
operation of one additional branch office along with increases in office rental expenses. Other
non-interest expense decreased by $334,100, or 13.7%, primarily as the result of decreases in
advertising, outside services, stationery, printing and supplies, and charitable contributions. The federal income tax provision for the six-month period ended December 31, 2004 decreased to an
effective rate of 31.0% for the current period from an effective rate of 34.0% for the prior year
comparable period. The effective tax rate was lower for the period ended December 31, 2004 due to
tax-exempt income earned on BOLI. 
 LIQUIDITY AND CAPITAL RESOURCES The Companys liquidity measures its ability to generate adequate amounts of funds to meet its cash
needs. Adequate liquidity guarantees that sufficient funds are available to meet deposit
withdrawals, fund loan commitments, purchase securities, maintain adequate reserve requirements,
pay operating expenses, provide funds for debt service, pay dividends to stockholders and meet
other general commitments in a cost-effective manner. Our primary source of funds are deposits, principal and interest payments on loans, proceeds from
the sale of loans, and advances from the Federal Home Loan Bank of Cincinnati (FHLB). While
maturities and scheduled Page 12




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Part I Financial Information
Item 2 LIQUIDITY AND CAPITAL RESOURCES continued amortization of loans are predictable sources of funds, deposit flows and mortgage prepayments are
greatly influenced by general interest rates, economic conditions and local competition. Our most
liquid assets are cash and cash equivalents. The levels of these assets are dependent on our
operating, financing, lending and investing activities during any given period. Additional sources
of funds include lines of credit available from the FHLB. Management believes the Company maintains sufficient liquidity to meet current operational needs. Part I Financial Information 
 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no significant changes to the Companys interest rate risk position or any changes
to how the Company manages its Asset/Liability position since June 30, 2004. This is attributable
to the Companys Asset/Liability Management policy of monitoring and matching the maturity and
re-pricing characteristics of its interest-earning assets and interest-bearing liabilities, while
remaining short-term with the weighted-average maturity and re-pricing periods. Part I Financial Information 
 Item 4 CONTROLS AND PROCEDURES As of the end of the period covered by this report, management of the Company carried out an
evaluation, under the supervision and with the participation of the Companys principal executive
officer and principal financial officer, of the effectiveness of the Companys disclosure controls
and procedures. Based on this evaluation, the Companys principal executive officer and principal
financial officer concluded that the Companys disclosure controls and procedures are effective in
ensuring that information required to be disclosed by the Company in reports that it files or
submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported, within the time periods specified in the Securities and Exchange Commissions rules
and forms. It should be noted that the design of the Companys disclosure controls and procedures
is based in part upon certain reasonable assumptions about the likelihood of future events, and
there can be no reasonable assurance that any design of disclosure controls and procedures will
succeed in achieving its stated goals under all potential future conditions, regardless of how
remote, but the Companys principal executive and financial officers have concluded that the
Companys disclosure controls and procedures are, in fact, effective at a reasonable assurance
level. Page 13




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Part I Financial Information
Item 4 CONTROLS AND PROCEDURES continued There have been no changes in the Companys internal control over financial reporting (to the
extent that elements of internal control over financial reporting are subsumed within disclosure
controls and procedures) identified in connection with the evaluation described in the above
paragraph that occurred during the Companys last fiscal quarter, that has materially affected, or
is reasonably likely to materially affect, the Companys internal control over financial reporting. 
 Part II Other Information Item 1.
    
    Legal Proceedings. N/AItem 2.
    
    Unregistered sale of Equity Securities and Use of Proceeds.(a)
(b)
    
    N/A
N/A(c)
    
    The following table illustrates the repurchase of the Companys
common stock during the period ended December 31, 2004:
 (c) TotalNumber ofSharesPurchased as(a) Total
    
    
    
    
    
    
    
    
    Part of
    
    
    
    (d) Maximum Number ofNumber of
    
    
    
    (b) Average
    
    
    
    Publicly
    
    
    
    Shares that May YetShares
    
    
    
    Price Paid
    
    
    
    Announced Plans
    
    
    
    Be Purchased UnderPeriod
    
    
    Purchased
    
    
    
    per Share
    
    
    
    or Programs
    
    
    
    the Plans or ProgramsOctober 1 through October 31, 2004
    
    
    
    800
    
    
    
    $
    13.16
    
    
    
    
    800
    
    
    
    
    279,527November 1 through November 30, 2004
    
    
    
    4,000
    
    
    
    $
    14.10
    
    
    
    
    4,000
    
    
    
    
    275,527December 1 through December 31,2004
    
    
    
    800
    
    
    
    $
    14.50
    
    
    
    
    800
    
    
    
    
    274,727Total
    
    
    
    5,600
    
    
    
    $
    14.02
    
    
    
    
    5,600
 In August 2002, the Company announced a stock repurchase program to acquire up to 5% of the
Companys common stock. This plan was renewed for an additional year in August 2003 and 2004. The
plan is renewable on an annual basis and will expire in August 2005, if not renewed. Item 3. Defaults Upon Senior Securities. N/A Item 4. Submission of Matters to a Vote of Security Holders. The Companys Annual Meeting of Stockholders was held on October 18, 2004. A total of 6,191,827
shares of the Companys common stock were represented at the Annual Meeting in person or by proxy. Page 14




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Part II Other Information
Item 4. continued Stockholders voted in favor of the election of four nominees for director. The voting results for
each nominee were as follows: Votes in FavorNominee
    
    of election
    
    
    Votes WithheldRobert K. Healey
    
    
    6,023,244
    
    
    
    168,583Stuart D. Neidus
    
    
    6,088,149
    
    
    
    103,678C. Keith Swaney
    
    
    6,087,674
    
    
    
    104,153Gerald A. Fallon
    
    
    6,018,011
    
    
    
    173,816
 The following directors continued in office with terms ending October 2005. John R. Male Stanley T. Jaros Raymond J. Negrelli Ronald D. Holman, II Proposal to ratify the appointment of Crowe Chizek and Company LLC as independent certified public
accountants of the Company for the fiscal year ending June 30, 2005. Votes For
    
    Votes against
    
    Abstain
    
    Not Voting6,129,139
    
    23,338
    
    39,350
    
    -0-
 Item 5.
    
    Other Information. N/AItem 6.
    
    (a)
    
    ExhibitsThe 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 15




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Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant had duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized. PVF Capital Corp.
      (Registrant)Date: February 7, 2005
    /s/ C. Keith SwaneyC. Keith SwaneyPresident, Chief Operating Officer
and Treasurer
(Only authorized officer and
  Principal Financial Officer)