##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549





FORM 10-Q







|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2011.



| ̈ | 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.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1659805                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|30000 Aurora Road, Solon, Ohio           |  | 44139     
|(Address of principal executive offices) |  | (Zip Code)

(440)
248-7171

(Registrants telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)





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  x    NO   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    YES   ̈    NO   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one)



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller Reporting Company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES   ̈    NO  x

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 |  | 25,669,718                   
|(Class)                       |  | (Outstanding at May 13, 2011)









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##### Table of Contents

PVF CAPITAL CORP.

INDEX



|                             |  |                                                                                                                |  |      |    | 
|---------------------------- |  | -------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                             |  |                                                                                                                |  | Page |   
|                            
|PART I FINANCIAL INFORMATION | 
|                             |  |                                                                                                               
|Item 1.                      |  | Financial Statements.                                                                                          |  |      |    | 
|                             |  |                                                                                                               
|                             |  | Consolidated Statements of Financial Condition, March 31, 2011 (unaudited) and June 30, 2010.                  |  |      | 1  | 
|                             |  |                                                                                                               
|                             |  | Consolidated Statements of Operations for the three and nine months ended March 31, 2011 and 2010 (unaudited). |  |      | 2  | 
|                             |  |                                                                                                               
|                             |  | Consolidated Statements of Cash Flows for the nine months ended March 31, 2011 and 2010 (unaudited).           |  |      | 3  | 
|                             |  |                                                                                                               
|                             |  | Notes to Consolidated Financial Statements (unaudited).                                                        |  |      | 4  | 
|                             |  |                                                                                                               
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations.                         |  |      | 29 | 
|                             |  |                                                                                                               
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk.                                                    |  |      | 41 | 
|                             |  |                                                                                                               
|Item 4.                      |  | Controls and Procedures.                                                                                       |  |      | 41 | 
|                            
|PART II OTHER INFORMATION    | 
|                             |  |                                                                                                               
|Item 1.                      |  | Legal Proceedings.                                                                                             |  |      | 42 | 
|                             |  |                                                                                                               
|Item 1A.                     |  | Risk Factors.                                                                                                  |  |      | 42 | 
|                             |  |                                                                                                               
|Item 2.                      |  | Unregistered Sale of Equity Securities and Use of Proceeds.                                                    |  |      | 42 | 
|                             |  |                                                                                                               
|Item 3.                      |  | Defaults Upon Senior Securities.                                                                               |  |      | 43 | 
|                             |  |                                                                                                               
|Item 4.                      |  | (Removed and Reserved).                                                                                        |  |      | 43 | 
|                             |  |                                                                                                               
|Item 5.                      |  | Other Information.                                                                                             |  |      | 43 | 
|                             |  |                                                                                                               
|Item 6.                      |  | Exhibits.                                                                                                      |  |      | 43 | 
|                            
|SIGNATURES                   | 



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##### Table of Contents

PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------

PVF CAPITAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                  |  |               |             |   |              |   |             |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ------------ | - | ----------- | -
|                                                                                                                  |  | March 31,2011 |             |   | June 30,2010 |  
|                                                                                                                  |  | (unaudited)   |             |   |              |  
|                                                                                                                  |  |              
|ASSETS                                                                                                            |  |               |             |   |              |   |             |  
|Cash and amounts due from depository institutions                                                                 |  | $             | 24,721,575  |   |              | $ | 18,283,620  |  
|Interest-bearing deposits                                                                                         |  |               | 54,803,920  |   |              |   | 111,759,326 |  
|Federal funds sold                                                                                                |  |               | 10,000,000  |   |              |   |            |  
|                                                                                                                  |  |               |             |   |              |   |             |  
|Total cash and cash equivalents                                                                                   |  |               | 89,525,495  |   |              |   | 130,042,946 |  
|Securities available for sale                                                                                     |  |               | 15,872,390  |   |              |   | 20,149,149  |  
|Mortgage-backed securities available for sale                                                                     |  |               | 38,965,491  |   |              |   | 47,145,878  |  
|Loans receivable held for sale, net                                                                               |  |               | 5,848,380   |   |              |   | 8,717,592   |  
|Loans receivable, net of allowance of $29,876,242 and $31,519,466, respectively                                   |  |               | 561,923,818 |   |              |   | 587,405,644 |  
|Office properties and equipment, net                                                                              |  |               | 7,664,780   |   |              |   | 7,876,320   |  
|Real estate owned, net                                                                                            |  |               | 8,082,863   |   |              |   | 8,173,741   |  
|Federal Home Loan Bank stock                                                                                      |  |               | 12,811,100  |   |              |   | 12,811,100  |  
|Bank-owned life insurance                                                                                         |  |               | 23,353,428  |   |              |   | 23,144,033  |  
|Prepaid expenses and other assets                                                                                 |  |               | 13,125,640  |   |              |   | 14,118,127  |  
|                                                                                                                  |  |               |             |   |              |   |             |  
|Total assets                                                                                                      |  | $             | 777,173,385 |   |              | $ | 859,584,530 |  
|                                                                                                                  |  |               |             |   |              |   |             |  
|                                                                                                                  |  |              
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                              |  |               |             |   |              |   |             |  
|Liabilities                                                                                                       |  |               |             |   |              |   |             |  
|Deposits                                                                                                          |  | $             | 647,250,571 |   |              | $ | 667,546,477 |  
|Note payable                                                                                                      |  |               | 1,179,445   |   |              |   | 1,259,444   |  
|Long-term advances from the Federal Home Loan Bank                                                                |  |               | 35,000,000  |   |              |   | 35,000,000  |  
|Repurchase agreement                                                                                              |  |               |            |   |              |   | 50,000,000  |  
|Advances from borrowers for taxes and insurance                                                                   |  |               | 7,405,240   |   |              |   | 4,930,327   |  
|Accrued expenses and other liabilities                                                                            |  |               | 11,857,625  |   |              |   | 17,605,257  |  
|                                                                                                                  |  |               |             |   |              |   |             |  
|Total liabilities                                                                                                 |  |               | 702,692,881 |   |              |   | 776,341,505 |  
|                                                                                                                  |  |               |             |   |              |   |             |  
|                                                                                                                  |  |              
|Stockholders equity                                                                                              |  |               |             |   |              |   |             |  
|Serial preferred stock, none issued                                                                               |  |               |            |   |              |   |            |  
|Common stock, $.01 par value, 65,000,000 shares authorized; 26,142,443 and 26,114,943 shares issued, respectively |  |               | 261,424     |   |              |   | 261,149     |  
|Additional paid-in capital                                                                                        |  |               | 100,483,297 |   |              |   | 100,260,665 |  
|Retained earnings (accumulated deficit)                                                                           |  |               | (22,219,533 | ) |              |   | (15,097,658 | )
|Accumulated other comprehensive income                                                                            |  |               | (207,537    | ) |              |   | 1,656,016   |  
|Treasury stock at cost, 472,725 shares, respectively                                                              |  |               | (3,837,147  | ) |              |   | (3,837,147  | )
|                                                                                                                  |  |               |             |   |              |   |             |  
|Total stockholders equity                                                                                        |  |               | 74,480,504  |   |              |   | 83,243,025  |  
|                                                                                                                  |  |               |             |   |              |   |             |  
|Total liabilities and stockholders equity                                                                        |  | $             | 777,173,385 |   |              | $ | 859,584,530 |  
|                                                                                                                  |  |               |             |   |              |   |             |  

See Notes to the Consolidated Financial Statements



1



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##### Table of Contents

PART I  FINANCIAL INFORMATION



PVF CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------------------------- |  | --------------------------- | ---------- | - | -------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                              |  | Three Months EndedMarch 31, |            |   | Nine Months EndedMarch 31, |  
|                                                              |  | 2011                        |            |   | 2010                       |   |            | 2011 |  |   | 2010       |  
|Interest and dividends income                                 |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Loans                                                         |  | $                           | 7,328,247  |   |                            | $ | 8,571,176  |      |  | $ | 23,116,620 |   |  | $ | 26,867,466 |  
|Mortgage-backed securities                                    |  |                             | 419,470    |   |                            |   | 606,234    |      |  |   | 1,347,261  |   |  |   | 1,962,861  |  
|Federal Home Loan Bank stock dividends                        |  |                             | 145,309    |   |                            |   | 145,310    |      |  |   | 418,203    |   |  |   | 450,319    |  
|Securities                                                    |  |                             | 43,033     |   |                            |   | 52,396     |      |  |   | 183,955    |   |  |   | 93,707     |  
|Fed funds sold and interest-bearing deposits                  |  |                             | 72,288     |   |                            |   | 4,349      |      |  |   | 153,404    |   |  |   | 14,748     |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Total interest and dividends income                           |  |                             | 8,008,347  |   |                            |   | 9,379,465  |      |  |   | 25,219,443 |   |  |   | 29,389,101 |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Interest expense                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Deposits                                                      |  |                             | 2,171,129  |   |                            |   | 3,226,333  |      |  |   | 7,184,421  |   |  |   | 11,348,323 |  
|Short-term borrowings                                         |  |                             |           |   |                            |   |           |      |  |   |           |   |  |   | 50         |  
|Long-term borrowings                                          |  |                             | 828,394    |   |                            |   | 891,767    |      |  |   | 2,643,346  |   |  |   | 2,715,699  |  
|Subordinated debt                                             |  |                             |           |   |                            |   | 129,760    |      |  |   |           |   |  |   | 574,499    |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Total interest expense                                        |  |                             | 2,999,523  |   |                            |   | 4,247,860  |      |  |   | 9,827,767  |   |  |   | 14,638,571 |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Net interest income                                           |  |                             | 5,008,824  |   |                            |   | 5,131,605  |      |  |   | 15,391,676 |   |  |   | 14,750,530 |  
|Provision for loan losses                                     |  |                             | 2,090,000  |   |                            |   | 7,000,000  |      |  |   | 9,390,000  |   |  |   | 11,010,000 |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Net interest income after provision for loan losses           |  |                             | 2,918,824  |   |                            |   | (1,868,395 | )    |  |   | 6,001,676  |   |  |   | 3,740,530  |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Non-interest income                                           |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Service charges and other fees                                |  |                             | 131,252    |   |                            |   | 160,652    |      |  |   | 491,947    |   |  |   | 507,735    |  
|Mortgage banking activities, net                              |  |                             | 803,656    |   |                            |   | 769,798    |      |  |   | 5,778,162  |   |  |   | 3,276,002  |  
|Increase in cash surrender value of bank-owned life insurance |  |                             | 65,773     |   |                            |   | 75,312     |      |  |   | 209,395    |   |  |   | 173,554    |  
|Gain on sale of equity securities                             |  |                             |           |   |                            |   | 23,871     |      |  |   |           |   |  |   | 23,871     |  
|Gain (loss) on real estate owned                              |  |                             | (59,560    | ) |                            |   | 6,028      |      |  |   | (282,690   | ) |  |   | (153,505   | )
|Provision for real estate owned losses                        |  |                             | (279,160   | ) |                            |   | (244,647   | )    |  |   | (1,004,470 | ) |  |   | (746,420   | )
|Gain on the cancellation of subordinated debt                 |  |                             |           |   |                            |   | 9,065,908  |      |  |   |           |   |  |   | 17,627,438 |  
|Other, net                                                    |  |                             | 174,453    |   |                            |   | 98,188     |      |  |   | 742,181    |   |  |   | 439,150    |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Total non-interest income                                     |  |                             | 836,414    |   |                            |   | 9,955,110  |      |  |   | 5,934,525  |   |  |   | 21,147,825 |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Non-interest expense                                          |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Compensation and benefits                                     |  |                             | 2,867,152  |   |                            |   | 2,316,795  |      |  |   | 7,753,597  |   |  |   | 6,930,606  |  
|Office occupancy and equipment                                |  |                             | 656,002    |   |                            |   | 645,445    |      |  |   | 2,016,648  |   |  |   | 1,970,600  |  
|Outside services                                              |  |                             | 678,471    |   |                            |   | 535,085    |      |  |   | 1,940,005  |   |  |   | 1,880,354  |  
|Federal deposit insurance premium                             |  |                             | 480,057    |   |                            |   | 584,440    |      |  |   | 1,707,741  |   |  |   | 1,887,985  |  
|Real estate owned and collection expense                      |  |                             | 846,864    |   |                            |   | 948,914    |      |  |   | 2,206,173  |   |  |   | 2,396,599  |  
|Other                                                         |  |                             | 1,089,128  |   |                            |   | 1,093,522  |      |  |   | 2,895,181  |   |  |   | 3,321,001  |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Total non-interest expense                                    |  |                             | 6,617,674  |   |                            |   | 6,124,201  |      |  |   | 18,519,345 |   |  |   | 18,387,145 |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Income (loss) before federal income taxes                     |  |                             | (2,862,436 | ) |                            |   | 1,962,514  |      |  |   | (6,583,144 | ) |  |   | 6,501,210  |  
|Federal income tax provision (benefit)                        |  |                             | (68,901    | ) |                            |   | 693,449    |      |  |   | 538,732    |   |  |   | 2,313,249  |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss)                                             |  | $                           | (2,793,535 | ) |                            | $ | 1,269,065  |      |  | $ | (7,121,876 | ) |  | $ | 4,187,961  |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|                                                              |  |                             |            |  
|Basic earnings (loss) per share                               |  | $                           | (0.11      | ) |                            | $ | 0.14       |      |  | $ | (0.28      | ) |  | $ | 0.50       |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Diluted earnings (loss) per share                             |  | $                           | (0.11      | ) |                            | $ | 0.13       |      |  | $ | (0.28      | ) |  | $ | 0.50       |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  
|Dividend declared per common share                            |  | $                           |           |   |                            | $ |           |      |  | $ |           |   |  | $ |           |  
|                                                              |  |                             |            |   |                            |   |            |      |  |   |            |   |  |   |            |  

See Notes to the Consolidated Financial Statements



2



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##### Table of Contents

PART I  FINANCIAL INFORMATION



PVF CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                               |  |                            |              |   |      |   |              |  
|------------------------------------------------------------------------------ |  | -------------------------- | ------------ | - | ---- | - | ------------ | -
|                                                                               |  | Nine Months EndedMarch 31, |             
|                                                                               |  | 2011                       |              |   | 2010 |  
|Operating activities:                                                          |  |                            |              |   |      |   |              |  
|Net income (loss)                                                              |  | $                          | (7,121,876   | ) |      | $ | 4,187,961    |  
|Adjustments to reconcile net income to net cash flow from operating activities |  |                            |              |   |      |   |              |  
|Amortization of premium on mortgage-backed securities                          |  |                            | 202,807      |   |      |   | 252,764      |  
|Depreciation and amortization                                                  |  |                            | 563,052      |   |      |   | 678,930      |  
|Provision for loan losses                                                      |  |                            | 9,390,000    |   |      |   | 11,010,000   |  
|Provision for real estate owned losses                                         |  |                            | 1,004,470    |   |      |   | 746,420      |  
|Accretion of deferred loan origination fees, net                               |  |                            | (322,505     | ) |      |   | (600,675     | )
|Gain on cancellation of subordinated debt                                      |  |                            |             |   |      |   | (17,627,438  | )
|(Gain) loss on sale of loans receivable held for sale, net                     |  |                            | (7,514,596   | ) |      |   | (3,691,269   | )
|Loss on disposal of real estate owned, net                                     |  |                            | 282,690      |   |      |   | 153,505      |  
|Gain on sale of equity securities                                              |  |                            |             |   |      |   | (23,871      | )
|Market adjustment for loans held for sale                                      |  |                            | 273,721      |   |      |   | 15,945       |  
|Change in fair value of mortgage banking derivatives                           |  |                            | 208,477      |   |      |   | 806,434      |  
|Stock compensation                                                             |  |                            | 222,908      |   |      |   | 97,549       |  
|Change in accrued interest on securities, loans, and borrowings, net           |  |                            | (60,338      | ) |      |   | 1,134,951    |  
|Origination of loans receivable held for sale, net                             |  |                            | (303,712,459 | ) |      |   | (146,265,231 | )
|Sale of loans receivable held for sale, net                                    |  |                            | 310,276,809  |   |      |   | 165,629,696  |  
|Increase in cash surrender value of bank-owned life insurance                  |  |                            | (209,395     | ) |      |   | (173,554     | )
|Net change in other assets and other liabilities                               |  |                            | (1,356,628   | ) |      |   | 11,022,159   |  
|                                                                               |  |                            |              |   |      |   |              |  
|Net cash from operating activities                                             |  |                            | 2,127,137    |   |      |   | 27,354,276   |  
|                                                                               |  |                            |              |   |      |   |              |  
|Investing activities:                                                          |  |                            |              |   |      |   |              |  
|Loan repayments and originations, net                                          |  |                            | 11,013,313   |   |      |   | 47,673,824   |  
|Principal repayments on mortgage-backed securities available for sale          |  |                            | 11,478,648   |   |      |   | 14,143,910   |  
|Purchase of mortgage-backed securities available for sale                      |  |                            | (5,138,782   | ) |      |   | (1,501,775   | )
|Purchase of securities held to maturity                                        |  |                            |             |   |      |   | (112,000,000 | )
|Purchase of securities available for sale                                      |  |                            | (47,950,000  | ) |      |   | (10,000,000  | )
|Calls of securities available for sale                                         |  |                            | 52,000,000   |   |      |   | 157,000,000  |  
|Sale of securities available for sale                                          |  |                            |             |   |      |   | 71,471       |  
|Proceeds from sale of real estate owned                                        |  |                            | 4,204,737    |   |      |   | 4,323,404    |  
|Additions to office properties and equipment, net                              |  |                            | (351,512     | ) |      |   | (98,695      | )
|                                                                               |  |                            |              |   |      |   |              |  
|Net cash from investing activities                                             |  |                            | 25,256,404   |   |      |   | 99,612,139   |  
|                                                                               |  |                            |              |   |      |   |              |  
|Financing activities:                                                          |  |                            |              |   |      |   |              |  
|Net increase (decrease) in demand deposits, NOW, and passbook savings          |  |                            | 26,244,651   |   |      |   | (185,316     | )
|Net increase (decrease) in time deposits                                       |  |                            | (46,540,557  | ) |      |   | (35,184,147  | )
|Net increase in advances from borrowers for taxes and insurance                |  |                            | 2,474,913    |   |      |   | (2,425,359   | )
|Repayment of note payable                                                      |  |                            | (80,000      | ) |      |   | (80,000      | )
|Repayment of repurchase agreement                                              |  |                            | (50,000,000  | ) |      |   |             |  
|Payment in exchange for cancellation of subordinated debt                      |  |                            |             |   |      |   | (900,000     | )
|Proceeds from Stock Offering, net of issuance cost                             |  |                            |             |   |      |   | 27,964,065   |  
|                                                                               |  |                            |              |   |      |   |              |  
|Net cash from financing activities                                             |  |                            | (67,900,993  | ) |      |   | (10,810,757  | )
|                                                                               |  |                            |              |   |      |   |              |  
|Net increase in cash and cash equivalents                                      |  |                            | (40,517,452  | ) |      |   | 116,155,658  |  
|Cash and cash equivalents at beginning of period                               |  |                            | 130,042,946  |   |      |   | 21,213,058   |  
|                                                                               |  |                            |              |   |      |   |              |  
|Cash and cash equivalents at end of period                                     |  | $                          | 89,525,494   |   |      | $ | 137,368,716  |  
|                                                                               |  |                            |              |   |      |   |              |  
|Supplemental disclosures of cash flow information:                             |  |                            |              |   |      |   |              |  
|Cash payments of interest                                                      |  | $                          | 10,087,811   |   |      | $ | 15,628,892   |  
|Cash payments of income taxes                                                  |  | $                          |             |   |      | $ |             |  
|Supplemental noncash operating activity:                                       |  |                            |              |   |      |   |              |  
|Reversal of accrued interest on subordinated debt                              |  | $                          |             |   |      | $ | 1,511,442    |  
|Supplemental noncash investing activity:                                       |  |                            |              |   |      |   |              |  
|Transfer of loans to real estate owned                                         |  | $                          | 4,396,549    |   |      | $ | 4,607,000    |  
|Supplemental noncash financing activity:                                       |  |                            |              |   |      |   |              |  
|Common stock and warrants exchanged for cancellation of debt                   |  | $                          |             |   |      | $ | 2,984,004    |  

See Notes to the
Consolidated Financial Statements



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PART I  FINANCIAL INFORMATION



PVF CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended

March 31, 2011 and 2010

(Unaudited)

NOTE 1
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

The accounting and reporting policies of PVF Capital Corp. (the
Company) conform to U.S. generally accepted accounting principles (U.S. GAAP) and general industry practice. The Companys principal subsidiary, Park View Federal Savings Bank (the Bank) is principally
engaged in the business of offering deposits through the issuance of savings accounts, money market accounts, and certificates of deposit and lending funds primarily for the purchase, construction, and improvement of real estate in Cuyahoga, Summit,
Geauga, Lake, Medina, Lorain and Portage Counties, Ohio. The deposit accounts of the Bank are insured up to applicable limits under the Federal Deposit Insurance Corporation (FDIC). The following is a description of the significant
policies, which the Company follows in preparing and presenting its consolidated financial statements.

The accompanying consolidated interim
financial statements were prepared in accordance with regulations of the Securities and Exchange Commission (the SEC) for Form 10-Q. All information in the consolidated interim financial statements is unaudited except for the
June 30, 2010 consolidated statement of financial condition, which was derived from the Companys audited financial statements. Certain information required for a complete presentation in accordance with U.S. GAAP 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 nine months ended March 31, 2011 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2011. The results of operations for the Company for the periods being reported have been
derived primarily from the results of operations of the Bank. The Companys common stock is traded on the NASDAQ Capital Market under the symbol PVFC.

The following is a description of the significant policies which the Company follows in preparing and presenting its consolidated financial statements.

Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the
Bank, PVF Service Corporation (PVFSC), PVF Holdings, Inc., and Mid-Pines Land Company (MPLC). PVFSC owns some Bank premises and leases them to the Bank. PVF Holdings, Inc. and MPLC did not have any significant assets or
activity as of or for the periods presented. The Company also created PVF Capital Trust (Trust I) and PVF Capital Trust II (Trust II) for the sole purpose of issuing trust preferred securities. The trusts are not consolidated
into the financial statements. PVFSC and the Bank have entered into various nonconsolidated joint ventures that own real estate including properties leased to the Bank. The Bank has created a wholly-owned limited liability company, Crock, LLC that
has taken title to property acquired through or in lieu of foreclosure. All significant intercompany transactions and balances are eliminated in consolidation.

Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance
for loan losses, valuation of mortgage servicing rights, fair value of mortgage banking derivatives, valuation of loans held for sale, fair value of securities, valuation of real estate owned, the realizability of deferred tax assets and the
liability recorded for the Companys supplemental employee retirement plan accrual are particularly subject to change.



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Loans: Loans that management has the intent and ability to hold for the foreseeable future
or until maturity or payoff are reported at the total of principal balance outstanding, purchase premiums and discounts, deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal
balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on mortgage and commercial loans is discontinued at the time the loan is greater than 90 days delinquent unless the loan is well-secured with a loan-to-value ratio of 60% or less and in
process of collection. Interest income on consumer loans is discontinued at the time the loan is greater than 90 days delinquent. Consumer loans that become 180 days or more past due will be classified as loss and fully reserved. Past due
status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due greater
than 90 days still on accrual, if any, include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual status in accordance with the
Companys policy, typically after 90 days of non-payment.

All interest accrued but not received for loans placed on nonaccrual is
reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts
contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses: The allowance for loan
losses is maintained at a level to absorb probable incurred losses in the portfolio as of the balance sheet date. The adequacy of the allowance for loan losses is periodically evaluated by the Bank based upon the overall portfolio composition and
general market conditions as well as information about specific borrower situations and estimated collateral values. While management uses the best information available to make these evaluations, future adjustments to the allowance may be necessary
if economic conditions change substantially from the assumptions used in making the evaluations. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The
general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Bank
over the most recent 18 months. During the period ended December 31, 2010, the Bank changed the loss history period to 18 months from 12 months. This change was made to more appropriately capture the Banks recent loss experience over a
longer period of time under the current adverse economic conditions.

The portfolio segments include one-to-four family, one-to-four family
construction, multi-family, commercial real estate, land, commercial and industrial, and consumer loans. One-to-four family, one-to-four family construction, and consumer loans rely on the historic cash flows of individual borrowers and on the real
estate securing the loan. Multi-family, commercial real estate, land, and the commercial and industrial segments are comprised of loans with a reliance on historic cash flows of small business borrowers and of small scale investors, as well as of
the underlying real estate projects or land. The underwriting criteria across all segments consider the risk attributes to be impacted by weak local economic conditions and a weak real estate market.

This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors
include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting
standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in
credit concentrations. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan



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that, in managements judgment, should be charged off. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent
recoveries, if any, are credited to the allowance for loan losses.

A loan is considered impaired when, based on current information and
events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest according to the contractual terms of the loan agreement. Since the Banks loans are primarily collateral dependent, measurement of
impairment is based on the fair value of the collateral. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures.

The Banks loan portfolio is primarily secured by real estate. Collection of real estate secured loans in the portfolio is dependent on court
proceedings, and as a result, loans may remain past due for an extended period before being collected, transferred to real estate owned, or charged off. Charge-offs are recorded after the foreclosure process is complete for any deficiency between
the Banks recorded investment in the loan and the fair value of the real estate acquired or sold, to the extent that such a deficiency exists.

NOTE 2  SECURITIES

As of March 31, 2011 and June 30, 2010, respectively,
the fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:



|                       |  |                |            |  |                        |   |         |                         |  |   |           |   |  |   |            | 
|---------------------- |  | -------------- | ---------- |  | ---------------------- | - | ------- | ----------------------- |  | - | --------- | - |  | - | ---------- | 
|                       |  | March 31, 2011 |           
|                       |  | AmortizedCost  |            |  | GrossUnrecognizedGains |   |         | GrossUnrecognizedLosses |  |   | FairValue |  
|FHLB structured notes  |  | $              | 7,000,000  |  |                        | $ |        |                         |  | $ | (62,500   | ) |  | $ | 6,937,500  | 
|FNMA structured notes  |  |                | 8,950,000  |  |                        |   |        |                         |  |   | (15,110   | ) |  |   | 8,934,890  | 
|                       |  |                |            |  |                        |   |         |                         |  |   |           |   |  |   |            | 
|Total                  |  | $              | 15,950,000 |  |                        | $ |        |                         |  | $ | (77,610   | ) |  | $ | 15,872,390 | 
|                       |  |                |            |  |                        |   |         |                         |  |   |           |   |  |   |            | 
|                       | 
|                       |  | June 30, 2010  |           
|                       |  | AmortizedCost  |            |  | GrossUnrecognizedGains |   |         | GrossUnrecognizedLosses |  |   | FairValue |  
|FHLMC structured notes |  | $              | 10,000,000 |  |                        | $ | 81,325  |                         |  | $ |          |   |  | $ | 10,081,325 | 
|FNMA structured notes  |  |                | 10,000,000 |  |                        |   | 67,824  |                         |  |   |          |   |  |   | 10,067,824 | 
|                       |  |                |            |  |                        |   |         |                         |  |   |           |   |  |   |            | 
|Total                  |  | $              | 20,000,000 |  |                        | $ | 149,149 |                         |  | $ |          |   |  | $ | 20,149,149 | 
|                       |  |                |            |  |                        |   |         |                         |  |   |           |   |  |   |            | 

Securities available for sale at March 31, 2011 are summarized as follows:



|                   |  |                |            |  |            |   |            | 
|------------------ |  | -------------- | ---------- |  | ---------- | - | ---------- | 
|                   |  | March 31, 2011 |           
|                   |  | AmortizedCost  |            |  | Fair Value |  
|Available-for-sale |  |                |            |  |            |   |            | 
|One to five years  |  | $              | 7,000,000  |  |            | $ | 6,982,500  | 
|Five to ten years  |  |                | 8,950,000  |  |            |   | 8,889,890  | 
|                   |  |                |            |  |            |   |            | 
|Total              |  | $              | 15,950,000 |  |            | $ | 15,872,390 | 
|                   |  |                |            |  |            |   |            | 



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The Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association
(FNMA) structured notes are callable quarterly, have multiple coupon resets and maturities ranging up to 10 years. At March 31, 2011, gross unrealized losses have been in a loss position for less than 12 months and no impairment has
been taken as the investments are government sponsored entities and are believed to not involve credit risk.

As of March 31, 2011 and
June 30, 2010, respectively, the fair value of mortgage-backed securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:



|                                 |  |                |            |  |                      |   |           |                       |  |   |           |  |  |   |            | 
|-------------------------------- |  | -------------- | ---------- |  | -------------------- | - | --------- | --------------------- |  | - | --------- |  |  | - | ---------- | 
|                                 |  | March 31, 2011 |           
|                                 |  | AmortizedCost  |            |  | GrossUnrealizedGains |   |           | GrossUnrealizedLosses |  |   | FairValue | 
|                                 |  |                |            | 
|FNMA mortgage-backed securities  |  | $              | 18,088,719 |  |                      | $ | 528,271   |                       |  | $ |          |  |  | $ | 18,616,990 | 
|FHLMC mortgage-backed securities |  |                | 18,397,809 |  |                      |   | 113,006   |                       |  |   |          |  |  |   | 18,510,815 | 
|GNMA mortgage-backed securities  |  |                | 1,756,706  |  |                      |   | 80,980    |                       |  |   |          |  |  |   | 1,837,686  | 
|                                 |  |                |            |  |                      |   |           |                       |  |   |           |  |  |   |            | 
|Total                            |  | $              | 38,243,234 |  |                      | $ | 722,257   |                       |  | $ |          |  |  | $ | 38,965,491 | 
|                                 |  |                |            |  |                      |   |           |                       |  |   |           |  |  |   |            | 
|                                 | 
|                                 |  | June 30, 2010  |           
|                                 |  | AmortizedCost  |            |  | GrossUnrealizedGains |   |           | GrossUnrealizedLosses |  |   | FairValue | 
|                                 |  |                |            | 
|FNMA mortgage-backed securities  |  | $              | 23,208,640 |  |                      | $ | 1,147,667 |                       |  | $ |          |  |  | $ | 24,356,307 | 
|FHLMC mortgage-backed securities |  |                | 18,445,372 |  |                      |   | 1,020,651 |                       |  |   |          |  |  |   | 19,466,023 | 
|GNMA mortgage-backed securities  |  |                | 3,131,896  |  |                      |   | 191,652   |                       |  |   |          |  |  |   | 3,323,548  | 
|                                 |  |                |            |  |                      |   |           |                       |  |   |           |  |  |   |            | 
|Total                            |  | $              | 44,785,908 |  |                      | $ | 2,359,970 |                       |  | $ |          |  |  | $ | 47,145,878 | 
|                                 |  |                |            |  |                      |   |           |                       |  |   |           |  |  |   |            | 

These mortgage-backed securities are backed by residential mortgage loans and do not mature on a single maturity date.



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NOTE 3  LOANS

Loans receivable at March 31, 2011 and June 30, 2010, respectively, consisted of the following:



|                                           |  |                |             |   |               |   |             |  
|------------------------------------------ |  | -------------- | ----------- | - | ------------- | - | ----------- | -
|                                           |  | March 31, 2011 |             |   | June 30, 2010 |  
|One-to-Four Family Loans:                  |  |                |             |   |               |   |             |  
|1-4 Family Owner Occupied                  |  | $              | 67,096,337  |   |               | $ | 73,471,830  |  
|1-4 Family Non-Owner Occupied              |  |                | 38,575,000  |   |               |   | 44,263,000  |  
|1-4 Family Second Mortgage                 |  |                | 33,615,474  |   |               |   | 37,059,590  |  
|Home Equity Lines of Credit                |  |                | 72,734,768  |   |               |   | 74,419,240  |  
|Home Equity Investment Lines of Credit     |  |                | 8,192,599   |   |               |   | 8,841,389   |  
|One-to-Four Family Construction Loans:     |  |                |             |   |               |   |             |  
|1-4 Family Construction                    |  |                |            |   |               |   | 6,162,722   |  
|1-4 Family Construction Models/Speculative |  |                | 4,653,208   |   |               |   | 8,270,000   |  
|Multi-Family Loans:                        |  |                |             |   |               |   |             |  
|Multi-Family                               |  |                | 48,795,915  |   |               |   | 48,454,790  |  
|Multi-Family Second Mortgage               |  |                | 428,019     |   |               |   | 447,127     |  
|Multi-Family Construction                  |  |                | 7,818,799   |   |               |   | 3,293,715   |  
|Commercial Real Estate Loans:              |  |                |             |   |               |   |             |  
|Commercial                                 |  |                | 195,258,918 |   |               |   | 203,558,052 |  
|Commercial Second Mortgage                 |  |                | 8,155,532   |   |               |   | 8,131,965   |  
|Commercial Lines of Credit                 |  |                | 20,072,640  |   |               |   | 24,971,468  |  
|Commercial Construction                    |  |                | 4,932,804   |   |               |   | 5,293,686   |  
|Commercial and Industrial Loans            |  |                | 39,616,249  |   |               |   | 21,768,428  |  
|Land Loans:                                |  |                |             |   |               |   |             |  
|Lot Loans                                  |  |                | 23,347,658  |   |               |   | 21,939,098  |  
|Acquisition and Development Loans          |  |                | 19,320,006  |   |               |   | 29,871,821  |  
|Consumer Loans                             |  |                | 172,533     |   |               |   | 169,208     |  
|                                           |  |                |             |   |               |   |             |  
|Total Loans Receivable                     |  |                | 592,786,459 |   |               |   | 620,387,129 |  
|                                           |  |               
|Net deferred loan origination fees         |  |                | (986,399    | ) |               |   | (1,462,019  | )
|Allowance for loan losses                  |  |                | (29,876,242 | ) |               |   | (31,519,466 | )
|                                           |  |                |             |   |               |   |             |  
|Total loans receivable, net                |  | $              | 561,923,818 |   |               | $ | 587,405,644 |  
|                                           |  |                |             |   |               |   |             |  

A summary of the changes in the allowance for loan losses for the three and nine months ended March 31, 2011 and 2010,
respectively, is as follows:



|                          |  |                                |            |   |                                |   |            |                                |  |   |                               |   |  |   |             |  
|------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | ------------------------------ |  | - | ----------------------------- | - |  | - | ----------- | -
|                          |  | Three monthsendedMarch 31,2011 |            |   | Three monthsendedMarch 31,2010 |   |            | Nine monthsendedMarch 
31,2011 |  |   | Nine
monthsendedMarch 31,2010 |  
|                          |  |                                |            |  
|Beginning balance         |  | $                              | 31,492,997 |   |                                | $ | 29,912,830 |                                |  | $ | 31,519,466                    |   |  | $ | 31,483,205  |  
|Provision for loan losses |  |                                | 2,090,000  |   |                                |   | 7,000,000  |                                |  |   | 9,390,000                     |   |  |   | 11,010,000  |  
|Loans charged-off         |  |                                | (3,848,733 | ) |                                |   | (6,641,275 | )                              |  |   | (11,474,301                   | ) |  |   | (12,221,650 | )
|Recoveries                |  |                                | 141,978    |   |                                |   |           |                                |  |   | 441,077                       |   |  |   |            |  
|                          |  |                                |            |   |                                |   |            |                                |  |   |                               |   |  |   |             |  
|Ending balance            |  | $                              | 29,876,242 |   |                                | $ | 30,271,555 |                                |  | $ | 29,876,242                    |   |  | $ | 30,271,555  |  
|                          |  |                                |            |   |                                |   |            |                                |  |   |                               |   |  |   |             |  



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PART I  FINANCIAL INFORMATION



The following table presents activity in the allowance for loan losses by portfolio segment for the
three months ended March 31, 2011.



|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | ----------------------------- | - | --------- | ------------ |  | - | -------------------- | - |  | ----------------------- | ----------- | - | ---- | - | ---------- | -------- |  | - | ---------- | - |  | - | ------- |  |  | - | ----------- | -
|                                                                                                                                                                              |  | One-to-FourFamily |             |   | One-to-FourFamilyConstruction |   |           | Multi-Family |  |   | CommercialRealEstate |   |  | CommercialandIndustrial |             |   | Land |   |            | Consumer |  |   | Total      |  
|Beginning balance at December 31, 2010                                                                                                                                        |  | $                 | 10,263,194  |   |                               | $ | 1,881,756 |              |  | $ | 2,935,622            |   |  | $                       | 8,103,253   |   |      | $ | 669,481    |          |  | $ | 7,639,306  |   |  | $ | 385     |  |  | $ | 31,492,997  |  
|Provision for loan losses                                                                                                                                                     |  |                   | 1,001,661   |   |                               |   | (65,152   | )            |  |   | (39,419              | ) |  |                         | 756,591     |   |      |   | (174,645   | )        |  |   | 544,832    |   |  |   | 66,132  |  |  |   | 2,090,000   |  
|Charge-offs                                                                                                                                                                   |  |                   | (1,221,777  | ) |                               |   | (469,065  | )            |  |   | (490,082             | ) |  |                         | (59,769     | ) |      |   |           |          |  |   | (1,608,040 | ) |  |   |        |  |  |   | (3,848,733  | )
|Recoveries                                                                                                                                                                    |  |                   | 68,166      |   |                               |   | 15,379    |              |  |   |                     |   |  |                         | 41,658      |   |      |   | 16,775     |          |  |   |           |   |  |   |        |  |  |   | 141,978     |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|Ending balance at March 31, 2011                                                                                                                                              |  | $                 | 10,111,244  |   |                               | $ | 1,362,918 |              |  | $ | 2,406,121            |   |  | $                       | 8,841,733   |   |      | $ | 511,611    |          |  | $ | 6,576,098  |   |  | $ | 66,517  |  |  | $ | 29,876,242  |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|The following table presents the allowance for loan
losses and the recorded investment in loans by portfolio segment and based on the impairment method as of March 31, 2011: | 
|                                                                                                                                                                              |  | One-to-FourFamily |             |   | One-to-FourFamilyConstruction |   |           | Multi-Family |  |   | CommercialRealEstate |   |  | CommercialandIndustrial |             |   | Land |   |            | Consumer |  |   | Total      |  
|Allowance for loan losses                                                                                                                                                     |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|Ending allowance balance attributable to loans                                                                                                                                |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|Individually evaluated for impairment                                                                                                                                         |  | $                 | 4,066,269   |   |                               | $ | 1,050,248 |              |  | $ | 792,741              |   |  | $                       | 3,490,899   |   |      | $ | 134,561    |          |  | $ | 4,623,667  |   |  | $ |        |  |  | $ | 14,158,385  |  
|Collectively evaluated for impairment                                                                                                                                         |  |                   | 6,044,975   |   |                               |   | 312,670   |              |  |   | 1,613,380            |   |  |                         | 5,350,834   |   |      |   | 377,050    |          |  |   | 1,952,431  |   |  |   | 66,517  |  |  |   | 15,717,857  |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|Total ending allowance balance                                                                                                                                                |  | $                 | 10,111,244  |   |                               | $ | 1,362,918 |              |  | $ | 2,406,121            |   |  | $                       | 8,841,733   |   |      | $ | 511,611    |          |  | $ | 6,576,098  |   |  | $ | 66,517  |  |  | $ | 29,876,242  |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |             
|Loans                                                                                                                                                                         |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|Loans individually evaluated for impairment                                                                                                                                   |  | $                 | 16,291,538  |   |                               | $ | 3,686,453 |              |  | $ | 2,807,946            |   |  | $                       | 23,371,322  |   |      | $ | 399,334    |          |  | $ | 11,070,778 |   |  | $ |        |  |  | $ | 57,627,371  |  
|Loans collectively evaluated for impairment                                                                                                                                   |  |                   | 203,556,203 |   |                               |   | 959,012   |              |  |   | 54,139,867           |   |  |                         | 204,668,481 |   |      |   | 39,150,993 |          |  |   | 31,525,887 |   |  |   | 172,246 |  |  |   | 534,172,689 |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  
|Total ending loans balance                                                                                                                                                    |  | $                 | 219,847,741 |   |                               | $ | 4,645,465 |              |  | $ | 56,947,813           |   |  | $                       | 228,039,803 |   |      | $ | 39,550,327 |          |  | $ | 42,596,665 |   |  | $ | 172,246 |  |  | $ | 591,800,060 |  
|                                                                                                                                                                              |  |                   |             |   |                               |   |           |              |  |   |                      |   |  |                         |             |   |      |   |            |          |  |   |            |   |  |   |         |  |  |   |             |  



9



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##### Table of Contents

PART I  FINANCIAL INFORMATION



The following table presents loans individually evaluated for impairment by class of loans as of and for
the three months ended March 31, 2011:



|                                           |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|------------------------------------------ |  | -------------------------- | ---------- |  | ------------------ | - | ---------- | --------------------------------- |  | - | ------------------------- |  |  | ------------------------ | ---------- |  | ---------------------------- | - | ------- |  |  | - | ------- | 
|                                           |  | UnpaidPrincipalBalance
(1) |            |  | RecordedInvestment |   |            | Allowance forLoan LossesAllocated |  |   | AverageRecordedInvestment |  |  | InterestIncomeRecognized |            |  | Cash BasisInterestRecognized |  
|With no related allowance recorded         |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|One-to-Four Family Loans:                  |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|1-4 Family Owner Occupied                  |  | $                          | 4,188,409  |  |                    | $ | 4,181,440  |                                   |  | $ |                          |  |  | $                        | 4,163,289  |  |                              | $ | 2,328   |  |  | $ | 2,328   | 
|1-4 Family Non-Owner Occupied              |  |                            | 631,421    |  |                    |   | 630,370    |                                   |  |   |                          |  |  |                          | 644,905    |  |                              |   | 2,941   |  |  |   | 2,941   | 
|1-4 Family Second Mortgage                 |  |                            | 96,067     |  |                    |   | 95,907     |                                   |  |   |                          |  |  |                          | 84,088     |  |                              |   |        |  |  |   |        | 
|Home Equity Lines of Credit                |  |                            | 793,402    |  |                    |   | 792,082    |                                   |  |   |                          |  |  |                          | 1,008,817  |  |                              |   | 1,626   |  |  |   | 1,626   | 
|Home Equity Investment Lines of Credit     |  |                            | 92,088     |  |                    |   | 91,934     |                                   |  |   |                          |  |  |                          | 130,227    |  |                              |   |        |  |  |   |        | 
|One-to-Four Family Construction Loans:     |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|1-4 Family Construction                    |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|1-4 Family Construction Models/Speculative |  |                            | 55,361     |  |                    |   | 55,269     |                                   |  |   |                          |  |  |                          | 209,107    |  |                              |   |        |  |  |   |        | 
|Multi-Family Loans:                        |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Multi-Family                               |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|Multi-Family Second Mortgage               |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|Multi-Family Construction                  |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|Commercial Real Estate Loans:              |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Commercial                                 |  |                            | 5,582,139  |  |                    |   | 5,572,851  |                                   |  |   |                          |  |  |                          | 5,692,615  |  |                              |   | 36,677  |  |  |   | 36,677  | 
|Commercial Second Mortgage                 |  |                            | 571,473    |  |                    |   | 570,522    |                                   |  |   |                          |  |  |                          | 570,479    |  |                              |   |        |  |  |   |        | 
|Commercial Lines of Credit                 |  |                            | 1,299,912  |  |                    |   | 1,297,749  |                                   |  |   |                          |  |  |                          | 1,181,159  |  |                              |   | 2,794   |  |  |   | 2,794   | 
|Commercial Construction                    |  |                            | 370,000    |  |                    |   | 369,384    |                                   |  |   |                          |  |  |                          | 369,356    |  |                              |   |        |  |  |   |        | 
|Commercial and Industrial Loans            |  |                            | 200,000    |  |                    |   | 199,667    |                                   |  |   |                          |  |  |                          | 99,834     |  |                              |   |        |  |  |   |        | 
|Land Loans:                                |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Lot loans                                  |  |                            | 102,818    |  |                    |   | 102,647    |                                   |  |   |                          |  |  |                          | 103,118    |  |                              |   |        |  |  |   |        | 
|Acquisition and Development loans          |  |                            | 109,818    |  |                    |   | 109,636    |                                   |  |   |                          |  |  |                          | 142,151    |  |                              |   |        |  |  |   |        | 
|Consumer Loans                             |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|                                           |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Total with no related allowance recorded   |  |                            | 14,092,908 |  |                    |   | 14,069,458 |                                   |  |   |                          |  |  |                          | 14,399,145 |  |                              |   | 46,366  |  |  |   | 46,366  | 
|                                           |  |                            |            |  |                    |  
|With an allowance recorded                 |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|One-to-Four Family Loans:                  |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|1-4 Family Owner Occupied                  |  |                            | 890,189    |  |                    |   | 888,707    |                                   |  |   | 253,639                   |  |  |                          | 1,049,332  |  |                              |   | 958     |  |  |   | 958     | 
|1-4 Family Non-Owner Occupied              |  |                            | 5,959,017  |  |                    |   | 5,949,101  |                                   |  |   | 2,114,317                 |  |  |                          | 6,291,712  |  |                              |   | 18,632  |  |  |   | 18,632  | 
|1-4 Family Second Mortgage                 |  |                            | 220,796    |  |                    |   | 220,428    |                                   |  |   | 221,189                   |  |  |                          | 273,538    |  |                              |   | 2,482   |  |  |   | 2,482   | 
|Home Equity Lines of Credit                |  |                            | 2,781,023  |  |                    |   | 2,776,396  |                                   |  |   | 1,301,473                 |  |  |                          | 2,545,237  |  |                              |   | 2,871   |  |  |   | 2,871   | 
|Home Equity Investment Lines of Credit     |  |                            | 666,281    |  |                    |   | 665,172    |                                   |  |   | 175,652                   |  |  |                          | 625,224    |  |                              |   | 1,927   |  |  |   | 1,927   | 
|One-to-Four Family Construction Loans:     |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|1-4 Family Construction                    |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|1-4 Family Construction Models/Speculative |  |                            | 3,637,236  |  |                    |   | 3,631,184  |                                   |  |   | 1,050,248                 |  |  |                          | 3,948,380  |  |                              |   | 3,749   |  |  |   | 3,749   | 
|Multi-Family Loans:                        |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Multi-Family                               |  |                            | 368,828    |  |                    |   | 368,214    |                                   |  |   | 87,016                    |  |  |                          | 368,186    |  |                              |   |        |  |  |   |        | 
|Multi-Family Second Mortgage               |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|Multi-Family Construction                  |  |                            | 2,443,799  |  |                    |   | 2,439,732  |                                   |  |   | 705,725                   |  |  |                          | 2,681,910  |  |                              |   |        |  |  |   |        | 
|Commercial Real Estate Loans:              |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Commercial                                 |  |                            | 11,598,579 |  |                    |   | 11,579,278 |                                   |  |   | 2,307,521                 |  |  |                          | 11,656,525 |  |                              |   | 43,570  |  |  |   | 43,570  | 
|Commercial Second Mortgage                 |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |        |  |  |   |        | 
|Commercial Lines of Credit                 |  |                            | 536,290    |  |                    |   | 535,397    |                                   |  |   | 96,836                    |  |  |                          | 607,796    |  |                              |   |        |  |  |   |        | 
|Commercial Construction                    |  |                            | 3,451,883  |  |                    |   | 3,446,139  |                                   |  |   | 1,086,542                 |  |  |                          | 3,445,878  |  |                              |   |        |  |  |   |        | 
|Commercial and Industrial Loans            |  |                            | 200,000    |  |                    |   | 199,667    |                                   |  |   | 134,561                   |  |  |                          | 262,039    |  |                              |   | 2,250   |  |  |   | 2,250   | 
|Land Loans:                                |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Lot loans                                  |  |                            | 575,803    |  |                    |   | 574,844    |                                   |  |   | 221,423                   |  |  |                          | 577,248    |  |                              |   | 2,671   |  |  |   | 2,671   | 
|Acquisition and Development loans          |  |                            | 10,300,791 |  |                    |   | 10,283,651 |                                   |  |   | 4,402,243                 |  |  |                          | 11,787,452 |  |                              |   | 28,141  |  |  |   | 28,141  | 
|Consumer Loans                             |  |                            |           |  |                    |   |           |                                   |  |   |                          |  |  |                          |           |  |                              |   |         |  |  |   |         | 
|                                           |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|Total with an allowance recorded           |  |                            | 43,630,515 |  |                    |   | 43,557,910 |                                   |  |   | 14,158,385                |  |  |                          | 46,120,457 |  |                              |   | 107,251 |  |  |   | 107,251 | 
|                                           |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 
|                                           |  |                            |            |  |                    |  
|Total loans evaluated for impairment       |  | $                          | 57,723,423 |  |                    | $ | 57,627,368 |                                   |  | $ | 14,158,385                |  |  | $                        | 60,519,602 |  |                              | $ | 153,617 |  |  | $ | 153,617 | 
|                                           |  |                            |            |  |                    |   |            |                                   |  |   |                           |  |  |                          |            |  |                              |   |         |  |  |   |         | 



|(1) | There is $5.1 million of loans individually identified for impairment accruing interest.
|--- | ----------------------------------------------------------------------------------------



10



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##### Table of Contents

PART I  FINANCIAL INFORMATION



At June 30, 2010, the recorded investment in loans, which have individually been identified as
being impaired, totaled $50,551,258. Included in the impaired amount at June 30, 2010 is $32,521,481, related to loans with a corresponding valuation allowance of $10,322,692. At June 30, 2010, $18,029,777 of impaired loans had no specific
allowance for loan losses allocated. Average impaired loans for the three-month period ended March 31, 2010, was $71,216,357. Average impaired loans for the nine-month periods ended March 31, 2011 and March 31, 2010 was $65,260,625
and $71,719,567, respectively. Interest recognized on impaired loans while considered impaired for the three-month period ended March 31, 2010 and the nine-month periods ended March 31, 2011 and 2010, respectively, while considered
impaired was not material.

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on
accrual by class of loans as of March 31, 2011. Nonaccrual loans and loans past due over 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired
loans.



|                                           |  |               |            |  |                                           |   |   | 
|------------------------------------------ |  | ------------- | ---------- |  | ----------------------------------------- | - | - | 
|                                           |  | Nonaccrual(1) |            |  | Loans Past DueOver 90 
DaysStill Accruing |  
|One-to-Four Family Loans:                  |  |               |            |  |                                           |   |   | 
|1-4 Family Owner Occupied                  |  | $             | 5,154,330  |  |                                           | $ |  | 
|1-4 Family Non-Owner Occupied              |  |               | 5,725,677  |  |                                           |   |  | 
|1-4 Family Second Mortgage                 |  |               | 67,325     |  |                                           |   |  | 
|Home Equity Lines of Credit                |  |               | 3,467,380  |  |                                           |   |  | 
|Home Equity Investment Lines of Credit     |  |               | 757,106    |  |                                           |   |  | 
|One-to-Four Family Construction Loans:     |  |               |            |  |                                           |   |   | 
|1-4 Family Construction                    |  |               |           |  |                                           |   |  | 
|1-4 Family Construction Models/Speculative |  |               | 3,609,877  |  |                                           |   |  | 
|Multi-Family Loans:                        |  |               |            |  |                                           |   |   | 
|Multi-Family                               |  |               | 368,214    |  |                                           |   |  | 
|Multi-Family Second Mortgage               |  |               |           |  |                                           |   |  | 
|Multi-Family Construction                  |  |               | 2,439,732  |  |                                           |   |  | 
|Commercial Real Estate Loans:              |  |               |            |  |                                           |   |   | 
|Commercial                                 |  |               | 13,594,417 |  |                                           |   |  | 
|Commercial Second Mortgage                 |  |               | 570,522    |  |                                           |   |  | 
|Commercial Lines of Credit                 |  |               | 1,701,931  |  |                                           |   |  | 
|Commercial Construction                    |  |               | 3,815,524  |  |                                           |   |  | 
|Commercial and Industrial Loans            |  |               | 399,334    |  |                                           |   |  | 
|Land Loans:                                |  |               |            |  |                                           |   |   | 
|Lot loans                                  |  |               | 499,749    |  |                                           |   |  | 
|Acquisition and Development loans          |  |               | 10,393,288 |  |                                           |   |  | 
|Consumer Loans                             |  |               |           |  |                                           |   |  | 
|                                           |  |               |            |  |                                           |   |   | 
|Total                                      |  | $             | 52,564,406 |  |                                           | $ |  | 
|                                           |  |               |            |  |                                           |   |   | 



|(1) | Nonaccrual status denotes loans on which, in the opinion of management, the collection of additional interest is unlikely, or loans that meet the nonaccrual criteria
established by regulatory authorities. Payments received on a nonaccrual 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At June 30, 2010, total loans on nonaccrual and loans past due over 90 days still on accrual totaled $69,565,018.



11



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##### Table of Contents

PART I  FINANCIAL INFORMATION



The following table presents the aging of the recorded investment in past due loans as of March 31,
2011 by class of loan. Performing loans are accruing loans less than 90 days past due. Nonperforming loans are all loans not accruing.



|                                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|------------------------------------------ |  | ------------------ | --------- |  | ------------------ | - | --------- | -------------------------- |  | - | ------------- |  |  | ----------------- | ---------- |  | ----- | - | ----------- |  |  | - | ----------- | 
|                                           |  | 30-59 DaysPast Due |           |  | 60-89 DaysPast Due |   |           | GreaterThan90 DaysPast Due |  |   | TotalPast Due |  |  | Loans NotPast Due |            |  | Total |  
|Performing Loans                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|One-to-Four Family Loans:                  |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|1-4 Family Owner Occupied                  |  | $                  | 1,027,700 |  |                    | $ | 676,569   |                            |  | $ |              |  |  | $                 | 1,704,269  |  |       | $ | 60,126,089  |  |  | $ | 61,830,358  | 
|1-4 Family Non-Owner Occupied              |  |                    | 221,863   |  |                    |   | 438,104   |                            |  |   |              |  |  |                   | 659,967    |  |       |   | 32,125,167  |  |  |   | 32,785,134  | 
|1-4 Family Second Mortgage                 |  |                    | 446,947   |  |                    |   | 98,488    |                            |  |   |              |  |  |                   | 545,435    |  |       |   | 32,946,778  |  |  |   | 33,492,213  | 
|Home Equity Lines of Credit                |  |                    | 337,870   |  |                    |   | 39,495    |                            |  |   |              |  |  |                   | 377,365    |  |       |   | 68,768,992  |  |  |   | 69,146,357  | 
|Home Equity Investment Lines of Credit     |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   | 7,421,860   |  |  |   | 7,421,860   | 
|One-to-Four Family Construction Loans:     |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|1-4 Family Construction                    |  |                    | 1,004,689 |  |                    |   |          |                            |  |   |              |  |  |                   | 1,004,689  |  |       |   | 30,899      |  |  |   | 1,035,588   | 
|1-4 Family Construction Models/Speculative |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   |            |  |  |   |            | 
|Multi-Family Loans:                        |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Multi-Family                               |  |                    | 282,152   |  |                    |   | 1,837,399 |                            |  |   |              |  |  |                   | 2,119,551  |  |       |   | 46,226,953  |  |  |   | 48,346,504  | 
|Multi-Family Second Mortgage               |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   | 427,307     |  |  |   | 427,307     | 
|Multi-Family Construction                  |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   | 5,366,056   |  |  |   | 5,366,056   | 
|Commercial Real Estate Loans:              |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Commercial                                 |  |                    | 435,939   |  |                    |   | 1,079,440 |                            |  |   |              |  |  |                   | 1,515,379  |  |       |   | 179,824,210 |  |  |   | 181,339,589 | 
|Commercial Second Mortgage                 |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   | 7,571,439   |  |  |   | 7,571,439   | 
|Commercial Lines of Credit                 |  |                    | 1,844,796 |  |                    |   | 131,215   |                            |  |   |              |  |  |                   | 1,976,011  |  |       |   | 16,361,296  |  |  |   | 18,337,307  | 
|Commercial Construction                    |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   | 1,109,072   |  |  |   | 1,109,072   | 
|Commercial and Industrial Loans            |  |                    | 300,359   |  |                    |   | 885       |                            |  |   |              |  |  |                   | 301,244    |  |       |   | 38,849,748  |  |  |   | 39,150,992  | 
|Land Loans:                                |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Lot loans                                  |  |                    | 2,781,403 |  |                    |   | 34,637    |                            |  |   |              |  |  |                   | 2,816,040  |  |       |   | 19,993,019  |  |  |   | 22,809,059  | 
|Acquisition and Development loans          |  |                    | 780,330   |  |                    |   | 159,720   |                            |  |   |              |  |  |                   | 940,050    |  |       |   | 7,954,523   |  |  |   | 8,894,573   | 
|Consumer Loans                             |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   | 172,246     |  |  |   | 172,246     | 
|                                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Total Performing Loans                     |  | $                  | 9,464,048 |  |                    | $ | 4,495,952 |                            |  | $ |              |  |  | $                 | 13,960,000 |  |       | $ | 525,275,654 |  |  | $ | 539,235,654 | 
|                                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|                                           |  |                    |           |  |                    |  
|Nonperforming Loans                        |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|One-to-Four Family Loans:                  |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|1-4 Family Owner Occupied                  |  | $                  |          |  |                    | $ | 362,036   |                            |  | $ | 3,958,964     |  |  | $                 | 4,321,000  |  |       | $ | 833,330     |  |  | $ | 5,154,330   | 
|1-4 Family Non-Owner Occupied              |  |                    | 131,073   |  |                    |   | 194,938   |                            |  |   | 4,678,042     |  |  |                   | 5,004,053  |  |       |   | 721,624     |  |  |   | 5,725,677   | 
|1-4 Family Second Mortgage                 |  |                    |          |  |                    |   |          |                            |  |   | 67,325        |  |  |                   | 67,325     |  |       |   |            |  |  |   | 67,325      | 
|Home Equity Lines of Credit                |  |                    |          |  |                    |   | 195,431   |                            |  |   | 3,177,488     |  |  |                   | 3,372,919  |  |       |   | 94,461      |  |  |   | 3,467,380   | 
|Home Equity Investment Lines of Credit     |  |                    | 92,646    |  |                    |   |          |                            |  |   | 664,461       |  |  |                   | 757,107    |  |       |   |            |  |  |   | 757,107     | 
|One-to-Four Family Construction Loans:     |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|1-4 Family Construction                    |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   |            |  |  |   |            | 
|1-4 Family Construction Models/Speculative |  |                    |          |  |                    |   |          |                            |  |   | 3,206,242     |  |  |                   | 3,206,242  |  |       |   | 403,635     |  |  |   | 3,609,877   | 
|Multi-Family Loans:                        |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Multi-Family                               |  |                    |          |  |                    |   |          |                            |  |   | 368,214       |  |  |                   | 368,214    |  |       |   |            |  |  |   | 368,214     | 
|Multi-Family Second Mortgage               |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   |            |  |  |   |            | 
|Multi-Family Construction                  |  |                    |          |  |                    |   |          |                            |  |   | 2,439,732     |  |  |                   | 2,439,732  |  |       |   |            |  |  |   | 2,439,732   | 
|Commercial Real Estate Loans:              |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Commercial                                 |  |                    |          |  |                    |   | 853,986   |                            |  |   | 10,030,899    |  |  |                   | 10,884,885 |  |       |   | 2,709,532   |  |  |   | 13,594,417  | 
|Commercial Second Mortgage                 |  |                    |          |  |                    |   |          |                            |  |   | 570,522       |  |  |                   | 570,522    |  |       |   |            |  |  |   | 570,522     | 
|Commercial Lines of Credit                 |  |                    |          |  |                    |   |          |                            |  |   | 1,701,931     |  |  |                   | 1,701,931  |  |       |   |            |  |  |   | 1,701,931   | 
|Commercial Construction                    |  |                    |          |  |                    |   |          |                            |  |   | 3,815,524     |  |  |                   | 3,815,524  |  |       |   |            |  |  |   | 3,815,524   | 
|Commercial and Industrial Loans            |  |                    |           |  |                    |   |           |                            |  |   | 199,667       |  |  |                   | 199,667    |  |       |   | 199,667     |  |  |   | 399,334     | 
|Land Loans:                                |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Lot loans                                  |  |                    |          |  |                    |   |          |                            |  |   | 499,748       |  |  |                   | 499,748    |  |       |   |            |  |  |   | 499,748     | 
|Acquisition and Development loans          |  |                    |          |  |                    |   |          |                            |  |   | 8,273,583     |  |  |                   | 8,273,583  |  |       |   | 2,119,705   |  |  |   | 10,393,288  | 
|Consumer Loans                             |  |                    |          |  |                    |   |          |                            |  |   |              |  |  |                   |           |  |       |   |            |  |  |   |            | 
|                                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Total Nonperforming Loans                  |  |                    | 223,719   |  |                    |   | 1,606,391 |                            |  |   | 43,652,342    |  |  |                   | 45,482,452 |  |       |   | 7,081,954   |  |  |   | 52,564,406  | 
|                                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 
|Total Loans                                |  | $                  | 9,687,767 |  |                    | $ | 6,102,343 |                            |  | $ | 43,652,342    |  |  | $                 | 59,442,452 |  |       | $ | 532,357,608 |  |  | $ | 591,800,060 | 
|                                           |  |                    |           |  |                    |   |           |                            |  |   |               |  |  |                   |            |  |       |   |             |  |  |   |             | 



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Troubled Debt Restructurings:

Included in non-accruing loans were $997,471 and $2,985,113 of troubled debt restructurings having valuation allowances totaling $347,387 and $1,013,106, respectively, at March 31, 2011 and
June 30, 2010. There were $12,337,586 and $6,265,784 of troubled debt restructurings having valuation allowances totaling $619,770 and $80,800, respectively, of accruing interest loans at March 31, 2011 and June 30, 2010.

Credit Quality Indicators:

The Bank
categorizes loans into risk strata based on relevant borrower information about the ability to service debt. This information includes a review of current financial information, historic payment experience, credit documentation, relevant public
information and other factors, as determined by credit underwriting guidelines. The Bank, through its analysis of individual borrowers, classifies each loan as to credit risk. All loans considered non-homogeneous, specifically those that are deemed
commercial and industrial or commercial real estate loans, are subject to review annually by the Bank, regardless of loan size. These loans are reviewed continually and changes to the risk rating, if necessary, occur on a quarterly basis. Loans that
are considered homogeneous, or those which fall into the categories of one-to-four family loans or into consumer loans, are not individually rated annually. The payment performance of the homogeneous loans serves as the clear credit indicator of
classification into the categories of pass-rated loans or into substandard, nonaccrual loans. Homogeneous loans that are less than 90 days past due are generally reported as pass-rated loans, unless related to a rated commercial and industrial
or commercial real estate loan. Homogeneous loans which are greater than 90 days past due are placed on nonaccrual and rated substandard. Payment performance indicators are based on performance through March 31, 2011. The Bank uses the
following definitions for adverse risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that
requires close attention. If left unattended, the potential weaknesses may result in further deterioration in the repayment prospects of the loan or of the institutions credit position at a future date.

Substandard. Loans classified as substandard are protected inadequately by the current financial means of the borrower or through the liquidation
of collateral pledged. Loans classified as substandard have a well-defined weakness and without substantial intervention, there is a distinct possibility that the institution may incur a loss. As a matter of practice, if the Bank feels that a
total loss is imminent, it designates nearly all of these loans to charge off. Accordingly, the Bank uses the loan classification of doubtful, as defined below, sparingly.

Doubtful. Loans classified as doubtful have all of the inherent weaknesses of those loans classified as substandard with the added structural weakness rendering the collection in full highly
unlikely. As such, this category is used sparingly by the Bank.



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As of March 31, 2011, and based on the most recent analysis performed by the Company, the risk
category of loans by class of loans is as follows:



|                                           |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|------------------------------------------ |  | ------- | ----------- |  | -------------- | - | ---------- | ----------- |  | - | ---------- |  |  | ----- | - |  |  | - | ----------- | 
|                                           |  | Pass(1) |             |  | SpecialMention |   |            | Substandard |  |   | Doubtful   |  |  | Total |  
|One-to-Four Family Loans:                  |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|1-4 Family Owner Occupied                  |  | $       | 60,823,500  |  |                | $ | 621,029    |             |  | $ | 5,651,808  |  |  | $     |  |  |  | $ | 67,096,337  | 
|1-4 Family Non-Owner Occupied              |  |         | 31,697,488  |  |                |   | 78,315     |             |  |   | 6,799,198  |  |  |       |  |  |  |   | 38,575,001  | 
|1-4 Family Second Mortgage                 |  |         | 33,464,796  |  |                |   | 83,241     |             |  |   | 67,437     |  |  |       |  |  |  |   | 33,615,474  | 
|Home Equity Lines of Credit                |  |         | 68,738,582  |  |                |   | 421,760    |             |  |   | 3,574,426  |  |  |       |  |  |  |   | 72,734,768  | 
|Home Equity Investment Lines of Credit     |  |         | 7,285,012   |  |                |   | 103,916    |             |  |   | 803,671    |  |  |       |  |  |  |   | 8,192,599   | 
|One-to-Four Family Construction Loans:     |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|1-4 Family Construction                    |  |         |            |  |                |   |           |             |  |   |           |  |  |       |  |  |  |   |            | 
|1-4 Family Construction Models/Speculative |  |         |            |  |                |   | 908,513    |             |  |   | 3,744,695  |  |  |       |  |  |  |   | 4,653,208   | 
|Multi-Family Loans:                        |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|Multi-Family                               |  |         | 46,450,823  |  |                |   | 1,976,264  |             |  |   | 368,828    |  |  |       |  |  |  |   | 48,795,915  | 
|Multi-Family Second Mortgage               |  |         | 428,019     |  |                |   |           |             |  |   |           |  |  |       |  |  |  |   | 428,019     | 
|Multi-Family Construction                  |  |         | 5,375,000   |  |                |   |           |             |  |   | 2,443,799  |  |  |       |  |  |  |   | 7,818,799   | 
|Commercial Real Estate Loans:              |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|Commercial                                 |  |         | 167,813,284 |  |                |   | 7,673,575  |             |  |   | 19,772,059 |  |  |       |  |  |  |   | 195,258,918 | 
|Commercial Second Mortgage                 |  |         | 7,584,059   |  |                |   |           |             |  |   | 571,473    |  |  |       |  |  |  |   | 8,155,532   | 
|Commercial Lines of Credit                 |  |         | 13,957,607  |  |                |   | 2,216,766  |             |  |   | 3,898,267  |  |  |       |  |  |  |   | 20,072,640  | 
|Commercial Construction                    |  |         | 1,110,921   |  |                |   |           |             |  |   | 3,821,883  |  |  |       |  |  |  |   | 4,932,804   | 
|Commercial and Industrial Loans            |  |         | 34,865,820  |  |                |   | 3,615,946  |             |  |   | 1,134,483  |  |  |       |  |  |  |   | 39,616,249  | 
|Land Loans:                                |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|Lot loans                                  |  |         | 19,023,513  |  |                |   | 1,219,236  |             |  |   | 3,104,909  |  |  |       |  |  |  |   | 23,347,658  | 
|Acquisition and Development loans          |  |         | 7,976,205   |  |                |   | 377,205    |             |  |   | 10,966,595 |  |  |       |  |  |  |   | 19,320,005  | 
|Consumer Loans                             |  |         | 172,533     |  |                |   |           |             |  |   |           |  |  |       |  |  |  |   | 172,533     | 
|                                           |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 
|Total                                      |  | $       | 506,767,162 |  |                | $ | 19,295,766 |             |  | $ | 66,723,531 |  |  | $     |  |  |  | $ | 592,786,459 | 
|                                           |  |         |             |  |                |   |            |             |  |   |            |  |  |       |   |  |  |   |             | 



|(1) | There is $26.9 million in non-homogeneous loans which are subject to individual review for risk rating included in the pass risk category based on payment status as
they have not yet been individually reviewed.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 4  MORTGAGE BANKING ACTIVITIES

Loans held for sale at March 31, 2011 and June 30, 2010 were $5,848,380 and $8,717,592, respectively.

The Bank adopted the fair value option for accounting for its loans held for sale effective July 1, 2008. The fair value of loans held for sale
exceeded the unpaid principal balance of these loans by $50,451 and $324,172 as of March 31, 2011 and June 30, 2010, respectively. The gain on loans held for sale as of March 31, 2011 was reported in the mortgage banking activities
line of the consolidated statement of operations. Interest on loans held for sale was reported in interest income.

The Bank services real
estate loans for investors that are not included in the accompanying consolidated financial statements. Mortgage servicing rights are established based on the 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. At March 31, 2011, the mortgage loan servicing portfolio
was approximately $1.1 billion.



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Originated mortgage servicing rights capitalized and amortized during the nine months ended
March 31, 2011 and 2010 were as follows:



|                                   |  |                            |            |   |      |   |            |  
|---------------------------------- |  | -------------------------- | ---------- | - | ---- | - | ---------- | -
|                                   |  | Nine Months EndedMarch 31, |           
|                                   |  | 2011                       |            |   | 2010 |  
|Servicing rights:                  |  |                            |            |   |      |   |            |  
|Beginning of period                |  | $                          | 6,960,969  |   |      | $ | 6,097,861  |  
|Additions                          |  |                            | 3,545,737  |   |      |   | 2,372,649  |  
|Amortized to expense               |  |                            | (2,494,990 | ) |      |   | (1,517,144 | )
|Valuation allowance for impairment |  |                            | (338,427   | ) |      |   |           |  
|                                   |  |                            |            |   |      |   |            |  
|End of period                      |  | $                          | 7,673,289  |   |      | $ | 6,953,366  |  
|                                   |  |                            |            |   |      |   |            |  

Originated mortgage servicing rights capitalized and amortized during the three months ended March 31, 2011 and 2010
were as follows:



|                                               |  |                             |           |   |      |   |           |  
|---------------------------------------------- |  | --------------------------- | --------- | - | ---- | - | --------- | -
|                                               |  | Three Months EndedMarch 31, |          
|                                               |  | 2011                        |           |   | 2010 |  
|Servicing rights:                              |  |                             |           |   |      |   |           |  
|Beginning of period                            |  | $                           | 7,065,460 |   |      | $ | 6,940,695 |  
|Additions                                      |  |                             | 855,323   |   |      |   | 503,710   |  
|Amortized to expense                           |  |                             | (374,152  | ) |      |   | (491,039  | )
|Recovery of valuation allowance for impairment |  |                             | 126,658   |   |      |   |          |  
|                                               |  |                             |           |   |      |   |           |  
|End of period                                  |  | $                           | 7,673,289 |   |      | $ | 6,953,366 |  
|                                               |  |                             |           |   |      |   |           |  

Activity in the valuation allowance for mortgage servicing rights over the nine months and three months ended March 31,
2011, as compared with the same periods during 2010, was as follows:



|                             |  |                                   |            |   |                                   |   |   | 
|---------------------------- |  | --------------------------------- | ---------- | - | --------------------------------- | - | - | 
|                             |  | Nine months endedMarch 31, 
2011  |            |   | Nine months endedMarch 31, 
2010  |  
|                             |  |                                  
|Balance, beginning of period |  | $                                 |           |   |                                   | $ |  | 
|Impairment charges           |  |                                   | (1,183,799 | ) |                                   |   |  | 
|Impairment recoveries        |  |                                   | 845,372    |   |                                   |   |  | 
|                             |  |                                   |            |   |                                   |   |   | 
|Balance, end of period       |  | $                                 | (338,427   | ) |                                   | $ |  | 
|                             |  |                                   |            |   |                                   |   |   | 
|                             |  |                                  
|                             |  | Three months endedMarch 31, 
2011 |            |   | Three months endedMarch 31, 
2010 |  
|                             |  |                                  
|Balance, beginning of period |  | $                                 | (465,085   | ) |                                   | $ |  | 
|Impairment charges           |  |                                   |           |   |                                   |   |  | 
|Impairment recoveries        |  |                                   | 126,658    |   |                                   |   |  | 
|                             |  |                                   |            |   |                                   |   |   | 
|Balance, end of period       |  | $                                 | (338,427   | ) |                                   | $ |  | 
|                             |  |                                   |            |   |                                   |   |   | 



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Mortgage banking activities, net as presented in the consolidated statements of operations consisted of
the following:



|                                                      |  |                             |          |   |                            |   |          |      |  |   |            |   |  |   |            |  
|----------------------------------------------------- |  | --------------------------- | -------- | - | -------------------------- | - | -------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                      |  | Three Months EndedMarch 31, |          |   | Nine Months EndedMarch 31, |  
|                                                      |  | 2011                        |          |   | 2010                       |   |          | 2011 |  |   | 2010       |  
|                                                      |  |                             |          |  
|Mortgage loan servicing fees                          |  | $                           | 672,852  |   |                            | $ | 648,468  |      |  | $ | 1,967,297  |   |  | $ | 1,924,256  |  
|Amortization of mortgage servicing rights             |  |                             | (374,152 | ) |                            |   | (491,039 | )    |  |   | (2,494,990 | ) |  |   | (1,517,144 | )
|Recovery (impairment) of mortgage servicing fees      |  |                             | 126,658  |   |                            |   |         |      |  |   | (338,427   | ) |  |   |           |  
|Market adjustment for loans held for sale             |  |                             | (56,372  | ) |                            |   | 43,107   |      |  |   | (273,721   | ) |  |   | (15,945    | )
|Changes in fair value of mortgage banking derivatives |  |                             | (331,744 | ) |                            |   | (166,840 | )    |  |   | (596,593   | ) |  |   | (806,434   | )
|Realized gains on sale of loans                       |  |                             | 766,414  |   |                            |   | 736,102  |      |  |   | 7,514,596  |   |  |   | 3,691,269  |  
|                                                      |  |                             |          |   |                            |   |          |      |  |   |            |   |  |   |            |  
|Mortgage banking activities, net                      |  | $                           | 803,656  |   |                            | $ | 769,798  |      |  | $ | 5,778,162  |   |  | $ | 3,276,002  |  
|                                                      |  |                             |          |   |                            |   |          |      |  |   |            |   |  |   |            |  

The above amounts do not include non-interest expense related to mortgage banking activities.

At March 31, 2011 and June 30, 2010, the Bank had interest rate-lock commitments on $14,819,973 and $49,396,694, respectively, of loans
intended for sale in the secondary market. These commitments are considered to be free-standing derivatives and the change in fair value is recorded in the financial statements. The fair value of these commitments as of March 31, 2011 and
June 30, 2010 was estimated to be $170,447 and $1,022,888, respectively, which is included in accrued expenses and other liabilities in the consolidated statements of financial condition. To mitigate the interest rate risk represented by these
interest rate-lock commitments, the Bank entered into contracts to sell mortgage loans of $11,275,000 and $33,806,000 as of March 31, 2011 and June 30, 2010, respectively. These contracts are also considered to be free-standing derivatives
and the change in fair value also is recorded in the financial statements. The fair value of these contracts at March 31, 2011 and June 30, 2010 was estimated to be $(43,187) and $(299,035), respectively. These amounts are added to (netted
against) the fair value of interest rate-lock commitments recorded in prepaid and other assets. Changes in fair value for both types of derivatives are reported in mortgage banking activities in the consolidated statements of operations.

NOTE 5  STOCK COMPENSATION

Employee compensation expense under stock options is reported using the fair value recognition provisions under ASC 718. The Company has adopted ASC 718
using the modified prospective method. For the quarters ended March 31, 2011 and 2010, compensation expense of $38,193 and $5,409, respectively, was recognized in the income statement related to the vesting of previously issued awards plus
vesting of new awards. For the nine months ended March 31, 2011 and 2010, compensation expense of $83,445 and $97,549, respectively, was recognized in the income statement related to the vesting of previously issued awards plus vesting of new
awards. No income tax benefit was recognized related to these expenses for the three- and nine-month periods ended March 31, 2011. For the three and nine months ended March 31, 2010 an income tax benefit of $8,575 was recognized related to
these expenses.

As of March 31, 2011, there was $296,915 of compensation expense related to unvested awards not yet recognized in the
financial statements. The weighted-average period over which this expense is to be recognized is 2.1 years.



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PART I  FINANCIAL INFORMATION



The 2010 Equity Incentive Plan (the 2010 Plan) replaces the 2008 Equity Incentive Plan and
all remaining available shares from the 2008 Equity Incentive Plan will be available for distribution under the 2010 Plan. Generally, the Company can issue incentive stock options, nonqualified stock options, stock appreciation rights, restricted
stock and other stock-based compensation under the 2010 Plan; however, as detailed in Note 10  Regulatory Matters and Managements Plans, the Company currently cannot issue awards under the 2010 Plan without receiving prior approval from
the OTS. Generally, for incentive stock options, a percentage of the options awarded become exercisable on the date of grant and on each anniversary date of grant. The option period expires ten years from the date of grant, except for awards to
individuals who own more than 10% of the Companys outstanding stock. Awards to these individuals expire after five years from the date of grant and are exercisable at 110% of the market price at the date of grant.

Previously, nonqualified stock options have been granted to directors, which vest immediately. The option period expires ten years from the date of grant
and the exercise price is the market price at the date of grant.

The aggregate intrinsic value of all options outstanding at March 31,
2011 was $17,925. The aggregate intrinsic value of all options that were exercisable at March 31, 2011 was $225. The Company has not issued any stock option awards to directors of the Company since the institution of the regulatory orders
detailed in Note 10  Regulatory Matters and Managements Plans.

A summary of stock-based compensation activity is as follows:



|                                         |  |                                                            |         |   |                                                           |   |      |        |  |  |                               |   |  |   |      | 
|---------------------------------------- |  | ---------------------------------------------------------- | ------- | - | --------------------------------------------------------- | - | ---- | ------ |  |  | ----------------------------- | - |  | - | ---- | 
|                                         |  | Three months endedMarch 31, 
2011Total options outstanding |         |   | Nine months endedMarch 31, 
2011Total options outstanding |  
|                                         |  | Shares                                                     |         |   | Weighted-AverageExercisePrice                             |   |      | Shares |  |  | Weighted-AverageExercisePrice |  
|                                         |  |                                                            |         |  
|Options outstanding, beginning of period |  |                                                            | 627,758 |   |                                                           | $ | 5.32 |        |  |  | 480,151                       |   |  | $ | 6.92 | 
|Forfeited                                |  |                                                            | (26,920 | ) |                                                           |   | 9.40 |        |  |  | (32,320                       | ) |  |   | 9.44 | 
|Expired                                  |  |                                                            |        |   |                                                           |   |     |        |  |  | (54,493                       | ) |  |   | 5.95 | 
|Exercised                                |  |                                                            |        |   |                                                           |   |     |        |  |  |                              |   |  |   |     | 
|Granted                                  |  |                                                            | 15,000  |   |                                                           |   | 1.82 |        |  |  | 222,500                       |   |  |   | 1.81 | 
|                                         |  |                                                            |         |   |                                                           |   |      |        |  |  |                               |   |  |   |      | 
|Options outstanding, end of period       |  |                                                            | 615,838 |   |                                                           | $ | 5.06 |        |  |  | 615,838                       |   |  | $ | 5.06 | 
|                                         |  |                                                            |         |   |                                                           |   |      |        |  |  |                               |   |  |   |      | 
|                                         |  |                                                            |         |  
|Options exercisable, end of period       |  |                                                            | 322,625 |   |                                                           | $ | 6.95 |        |  |  | 322,625                       |   |  | $ | 6.95 | 
|                                         |  |                                                            |         |   |                                                           |   |      |        |  |  |                               |   |  |   |      | 

The weighted-average remaining contractual life of options outstanding as of March 31, 2011 was 7.3 years. The
weighted-average remaining contractual life of vested options outstanding as of March 31, 2010 was 5.8 years.

No options were exercised
in the nine-month periods ended March 31, 2011 and 2010, respectively.



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The fair value for stock options granted to executive officers and certain other employees during the
nine months ended March 31, 2011, which consisted of individual grants in August and December 2010, and January 2011, was determined at the date of grant using a Black-Scholes options-pricing model and the following assumptions:



|                                         |  |            |       |  
|---------------------------------------- |  | ---------- | ----- | -
|                                         |  | Fiscal2011 |      
|Expected average risk-free interest rate |  |            | 3.32  | %
|Expected average life (in years)         |  |            | 6.00  |  
|Expected volatility                      |  |            | 34.00 | %
|Expected dividend yield                  |  |            | 0.00  | %

The weighted-average fair value of these
grants was $0.98 per option. The expected average risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the life of the option. The expected average life represents the
weighted-average period of time that options granted are expected to be outstanding giving consideration to vesting schedules, historical exercise and forfeiture patterns. Expected volatility is based on historical volatilities of the Companys
common stock. The expected dividend yield is based on historical information.

There were 267,500 shares of restricted stock issued to
executive officers and certain other employees with a fair value of $1.87 per share at March 31, 2011. The total fair value of restricted stock issued at March 31, 2011 was $500,425. As of March 31, 2011, there was $410,185 of
compensation expense related to unvested awards not yet recognized in the financial statements. The weighted-average period of time over which this expense is to be recognized is 4.1 years at March 31, 2011.

A summary of changes in the Companys restricted stock for the nine months ended March 31, 2011 is as follows:



|                            |  |        |         |   |                                      |   |         | 
|--------------------------- |  | ------ | ------- | - | ------------------------------------ | - | ------- | 
|Nonvested Shares            |  | Shares |         |   | Weighted-AverageGrant-DateFair Value |  
|                            |  |       
|Nonvested at July 1, 2010   |  |        | 240,000 |   |                                      | $ | 451,200 | 
|Granted                     |  |        | 27,500  |   |                                      |   | 49,225  | 
|Vested                      |  |        | (48,000 | ) |                                      |   | 90,240  | 
|Forfeited                   |  |        |        |   |                                      |   |        | 
|                            |  |        |         |   |                                      |   |         | 
|Nonvested at March 31, 2011 |  |        | 315,500 |   |                                      | $ | 410,185 | 
|                            |  |        |         |   |                                      |   |         | 

There were 2,566,000 shares available for future issuance under the existing stock plan at March 31, 2011.



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NOTE 6  EARNINGS PER SHARE

The following table discloses earnings (loss) per share for the three and nine months ended March 31, 2011 and March 31, 2010, respectively:



|                                                           |  |                              |            |   |                     |  |            |                 |  |   |                         |   |  |                     |           |  |                 |  |           |  |  |   |      | 
|---------------------------------------------------------- |  | ---------------------------- | ---------- | - | ------------------- |  | ---------- | --------------- |  | - | ----------------------- | - |  | ------------------- | --------- |  | --------------- |  | --------- |  |  | - | ---- | 
|                                                           |  | Three months ended March 31, |           
|                                                           |  | 2011                         |            |   | 2010                | 
|                                                           |  | Income(Loss)(Numerator)      |            |   | Shares(Denominator) |  |            | Per ShareAmount |  |   | Income(Loss)(Numerator) |   |  | Shares(Denominator) |           |  | Per ShareAmount | 
|                                                           |  |                              |            |   |                     | 
|Basic EPS                                                  |  |                              |            |   |                     |  |            |                 |  |   |                         |   |  |                     |           |  |                 |  |           |  |  |   |      | 
|Net Income (loss)                                          |  | $                            | (2,793,535 | ) |                     |  | 25,669,718 |                 |  | $ | (0.11                   | ) |  | $                   | 1,269,065 |  |                 |  | 9,171,798 |  |  | $ | 0.14 | 
|                                                           |  |                              |            |   |                     | 
|Effect of dilutive securities - stock options and warrants |  |                              |           |   |                     |  |           |                 |  | $ | 0.00                    |   |  |                     |          |  |                 |  | 267,458   |  |  | $ | 0.01 | 
|                                                           |  |                              |            |   |                     | 
|Diluted EPS                                                |  |                              |            |   |                     |  |            |                 |  |   |                         |   |  |                     |           |  |                 |  |           |  |  |   |      | 
|Net Income (loss)                                          |  | $                            | (2,793,535 | ) |                     |  | 25,669,718 |                 |  | $ | (0.11                   | ) |  | $                   | 1,269,065 |  |                 |  | 9,439,256 |  |  | $ | 0.13 | 
|                                                           | 
|                                                           |  | Nine months ended March 31,  |           
|                                                           |  | 2011                         |            |   | 2010                | 
|                                                           |  | Income(Loss)(Numerator)      |            |   | Shares(Denominator) |  |            | Per ShareAmount |  |   | Income(Loss)(Numerator) |   |  | Shares(Denominator) |           |  | Per ShareAmount | 
|                                                           |  |                              |            |   |                     | 
|Basic EPS                                                  |  |                              |            |   |                     |  |            |                 |  |   |                         |   |  |                     |           |  |                 |  |           |  |  |   |      | 
|Net Income (loss)                                          |  | $                            | (7,121,876 | ) |                     |  | 25,651,552 |                 |  | $ | (0.28                   | ) |  | $                   | 4,187,961 |  |                 |  | 8,322,923 |  |  | $ | 0.50 | 
|                                                           |  |                              |            |   |                     | 
|Effect of dilutive securities - stock options and warrants |  |                              |           |   |                     |  |           |                 |  | $ | 0.00                    |   |  |                     |          |  |                 |  | 90,584    |  |  | $ | 0.00 | 
|                                                           |  |                              |            |   |                     | 
|Diluted EPS                                                |  |                              |            |   |                     |  |            |                 |  |   |                         |   |  |                     |           |  |                 |  |           |  |  |   |      | 
|Net Income (loss)                                          |  | $                            | (7,121,876 | ) |                     |  | 25,651,552 |                 |  | $ | (0.28                   | ) |  | $                   | 4,187,961 |  |                 |  | 8,413,507 |  |  | $ | 0.50 | 

There were 378,338 options not
considered in the diluted earnings per share calculation for the three- and nine-month periods ended March 31, 2011, because they were not dilutive as the exercise price is higher than the average stock price. None of the options were dilutive
since the Company was in a net loss position for the period. There were 361,451 options not considered in the diluted earnings per share calculation for the three- and nine-month periods ended March 31, 2010, because they were not dilutive.

Also included for consideration in the diluted earnings per share calculation for the three-month period ended March 31, 2011 were
warrants to acquire shares of common stock issued as part of two separate exchanges more fully described in Note 8  Subordinated Debt. The warrants issued on September 3, 2009 include warrants to purchase 797,347 shares of common stock
and are exercisable at any time before September 3, 2011 at a price of $1.75 per share. The warrants issued on March 16, 2010 include warrants to purchase 1,246,179 shares of common stock and are exercisable at any time before
March 16, 2015 at a price of $1.75 per share. The warrants were considered for potential dilution for the period ended March 31, 2011 because the exercise price of the warrants, $1.75 per warrant, was less than the average market price of
the Companys common stock for the period; however, since the Company was in a net loss position for the period, the warrants were not dilutive.



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PART I  FINANCIAL INFORMATION



NOTE 7  FAIR VALUE

U.S. GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants on the measurement date. U.S. GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1:
Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted market prices in markets that are not active, and other inputs that
are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a
companys own assumptions about the assumptions that market participants would use to price an asset or liability.

The Company used the
following methods and significant assumptions to estimate fair value.

Securities and mortgage-backed securities. The fair value of
securities available for sale is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1 inputs). The fair value of mortgage-backed securities is determined through matrix pricing. This is a mathematical
technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities relationship to other benchmark quoted securities (Level 2 inputs).

Loans held for sale. The fair value of loans held for sale is determined using quoted secondary market prices.

Mortgage banking pipeline derivatives. The fair value of loan commitments is measured using current market rates for the associated mortgage loans
(Level 2 inputs). The fair value of mandatory forward sales contracts is measured using secondary market pricing (Level 2 inputs).



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Assets and liabilities measured at fair value on a recurring basis at March 31, 2011 and
June 30, 2010 are summarized below:



|                                                |  |                |            |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|----------------------------------------------- |  | -------------- | ---------- | - | ------------------------------------------------------------ | - | ---------- | -------------------------------------------- |  | - | -------------------------------------- | - |  | - | - | 
|                                                |  | March 31, 2011 |            |   | Quoted Prices inActive 
Markets forIdentical Assets(Level 1) |   |            | Significant OtherObservable 
Inputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) |  
|Assets:                                         |  |                |            |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|Securities available for sale                  |  | $              | 15,872,390 |   |                                                              | $ | 15,872,390 |                                              |  |   |                                        |   |  |   |   | 
|FHLB structured note                            |  |                | 6,937,500  |   |                                                              |   | 6,937,500  |                                              |  |   |                                       |   |  |   |  | 
|FNMA structured note                            |  |                | 8,934,890  |   |                                                              |   | 8,934,890  |                                              |  |   |                                       |   |  |   |  | 
|Loans held-for-sale                             |  |                | 5,848,380  |   |                                                              |   |           |                                              |  |   | 5,848,380                              |   |  |   |  | 
|Mortgage-backed securities available for sale  |  |                | 38,965,491 |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|FNMA mortgage-backed securities                 |  |                | 18,616,990 |   |                                                              |   |           |                                              |  |   | 18,616,990                             |   |  |   |  | 
|FHLMC mortgage-backed securities                |  |                | 18,510,815 |   |                                                              |   |           |                                              |  |   | 18,510,815                             |   |  |   |  | 
|GNMA mortgage-backed securities                 |  |                | 1,837,686  |   |                                                              |   |           |                                              |  |   | 1,837,686                              |   |  |   |  | 
|Interest rate-lock commitments                  |  |                | 170,447    |   |                                                              |   |           |                                              |  |   | 170,447                                |   |  |   |  | 
|                                                |  |                |            |  
|Liabilities:                                    |  |                |            |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|Mandatory forward sales contracts               |  |                | (43,187    | ) |                                                              |   |           |                                              |  |   | (43,187                                | ) |  |   |  | 
|                                                |  |                |            |  
|                                                |  | June 30, 2010  |            |   | Quoted Prices inActive 
Markets forIdentical Assets(Level 1) |   |            | Significant OtherObservable 
Inputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) |  
|Assets:                                         |  |                |            |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|Securities available for sale                  |  | $              | 20,149,149 |   |                                                              | $ | 20,149,149 |                                              |  |   |                                        |   |  |   |   | 
|FHLMC structured note                           |  |                | 10,081,325 |   |                                                              |   | 10,081,325 |                                              |  | $ |                                       |   |  | $ |  | 
|FNMA structured note                            |  |                | 10,067,824 |   |                                                              |   | 10,067,824 |                                              |  |   |                                       |   |  |   |  | 
|Loans held-for-sale                             |  |                | 8,717,592  |   |                                                              |   |           |                                              |  |   | 8,717,592                              |   |  |   |  | 
|Mortgage-backed securities available for sale  |  |                | 47,145,878 |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|FNMA mortgage-backed securities                 |  |                | 24,356,307 |   |                                                              |   |           |                                              |  |   | 24,356,307                             |   |  |   |  | 
|FHLMC mortgage-backed securities                |  |                | 19,466,023 |   |                                                              |   |           |                                              |  |   | 19,466,023                             |   |  |   |  | 
|GNMA mortgage-backed securities                 |  |                | 3,323,548  |   |                                                              |   |           |                                              |  |   | 3,323,548                              |   |  |   |  | 
|Interest rate-lock commitments                  |  |                | 1,022,888  |   |                                                              |   |           |                                              |  |   | 1,022,888                              |   |  |   |  | 
|                                                |  |                |            |  
|Liabilities:                                    |  |                |            |   |                                                              |   |            |                                              |  |   |                                        |   |  |   |   | 
|Mandatory forward sales contracts               |  |                | (299,000   | ) |                                                              |   |           |                                              |  |   | (299,000                               | ) |  |   |  | 



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Assets measured at fair value on a nonrecurring basis at March 31, 2011 and June 30, 2010 are
summarized below:



|                                   |  |                |            |  |                                                              |   |   |                                              |  |   |                                        |  |  |   |            | 
|---------------------------------- |  | -------------- | ---------- |  | ------------------------------------------------------------ | - | - | -------------------------------------------- |  | - | -------------------------------------- |  |  | - | ---------- | 
|                                   |  | March 31, 2011 |            |  | Quoted Prices inActive 
Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable 
Inputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|Assets:                            |  |                |            |  |                                                              |   |   |                                              |  |   |                                        |  |  |   |            | 
|Impaired loans                     |  |                |            |  |                                                              |   |   |                                              |  |   |                                        |  |  |   |            | 
|1-4 Family                         |  | $              | 6,451,036  |  |                                                              |   |  |                                              |  |   |                                       |  |  | $ | 6,451,036  | 
|1-4 Family Construction            |  |                | 2,586,988  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 2,586,988  | 
|Multi-Family                       |  |                | 2,019,886  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 2,019,886  | 
|Commercial Real Estate             |  |                | 12,095,853 |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 12,095,853 | 
|Commercial Non-Real Estate         |  |                | 65,439     |  |                                                              |   |   |                                              |  |   |                                        |  |  |   | 65,439     | 
|Land                               |  |                | 6,252,928  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 6,252,928  | 
|Real estate owned                  |  |                |            |  |                                                              |   |   |                                              |  |   |                                        |  |  |   |            | 
|1-4 Family                         |  |                | 1,043,320  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 1,043,320  | 
|Commercial Real Estate             |  |                | 660,893    |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 660,893    | 
|Land                               |  |                | 2,532,323  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 2,532,323  | 
|Impaired mortgage servicing rights |  |                | 6,568,906  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 6,568,906  | 
|                                   |  |                |            | 
|                                   |  | June 30, 2010  |            |  | Quoted Prices inActive 
Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable 
Inputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|Assets:                            |  |                |            |  |                                                              |   |   |                                              |  |   |                                        |  |  |   |            | 
|Impaired loans                     |  | $              | 22,198,789 |  |                                                              | $ |  |                                              |  | $ |                                       |  |  | $ | 22,198,789 | 
|Real estate owned                  |  |                | 5,700,752  |  |                                                              |   |  |                                              |  |   |                                       |  |  |   | 5,700,752  | 

Impaired loans, which are usually
measured for impairment using the fair value of the collateral less estimated selling cost, had an unpaid principal balance of $57,723,424. Of these impaired loans, $43,630,516 was carried at a fair value of $29,472,130, as a result of a specific
valuation allowance of $14,158,386. The fair value of collateral is usually estimated by third-party or internal appraisals of the collateral. The present value of estimated cash flows is based on internal models of expected borrower activity. The
provision for loan losses related to changes in the fair value of impaired loans was $9.2 million for the nine months ended March 31, 2011.

Real estate owned is recorded at fair value based on property appraisals, less estimated selling costs, at the date of transfer. The carrying amount of real estate owned is not re-measured to fair value
on a recurring basis, but is subject to fair value adjustments when the carrying amount exceeds the fair value, less estimated selling costs. For the nine-month period ended March 31, 2011, the Bank recognized $282,690 in loss on the disposal
of real estate owned and recorded a provision for the real estate owned losses of $1,004,470. Additionally, the expense of servicing real estate owned for this nine-month period totaled $2,206,173.



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The carrying amount and estimated fair values of financial instruments at March 31, 2011 and
June 30, 2010, respectively, were as follows:



|                                                       |  |                 |          |   |                     |   |          |                 |  |   |                     |   |  |   |          |  
|------------------------------------------------------ |  | --------------- | -------- | - | ------------------- | - | -------- | --------------- |  | - | ------------------- | - |  | - | -------- | -
|                                                       |  | March 31, 2011  |          |   | June 30, 2010       |  
|                                                       |  | Carrying Amount |          |   | Estimated FairValue |   |          | Carrying Amount |  |   | Estimated FairValue |  
|                                                       |  | (in thousands)  |         
|Assets:                                                |  |                 |          |   |                     |   |          |                 |  |   |                     |   |  |   |          |  
|Cash and amounts due from depository institutions      |  | $               | 24,722   |   |                     | $ | 24,722   |                 |  | $ | 18,284              |   |  | $ | 18,284   |  
|Interest-bearing deposits                              |  |                 | 54,804   |   |                     |   | 54,804   |                 |  |   | 111,759             |   |  |   | 111,759  |  
|Federal funds sold                                     |  |                 | 10,000   |   |                     |   | 10,000   |                 |  |   |                    |   |  |   |         |  
|Securities available for sale                          |  |                 | 15,872   |   |                     |   | 15,872   |                 |  |   | 20,149              |   |  |   | 20,149   |  
|Mortgage-backed securities available for sale          |  |                 | 38,965   |   |                     |   | 38,965   |                 |  |   | 47,146              |   |  |   | 47,146   |  
|Loans receivable, net                                  |  |                 | 561,924  |   |                     |   | 570,399  |                 |  |   | 587,406             |   |  |   | 606,083  |  
|Loans receivable held for sale, net                    |  |                 | 5,848    |   |                     |   | 5,848    |                 |  |   | 8,718               |   |  |   | 8,718    |  
|Federal Home Loan Bank stock                           |  |                 | 12,811   |   |                     |   | NA       |                 |  |   | 12,811              |   |  |   | NA       |  
|Accrued interest receivable                            |  |                 | 2,515    |   |                     |   | 2,515    |                 |  |   | 2,715               |   |  |   | 2,715    |  
|Commitments to make loans intended to be sold          |  |                 | 170      |   |                     |   | 170      |                 |  |   | 1,023               |   |  |   | 1,023    |  
|                                                       |  |                 |          |  
|Liabilities:                                           |  |                 |          |   |                     |   |          |                 |  |   |                     |   |  |   |          |  
|Demand deposits and passbook savings                   |  |                 | (223,051 | ) |                     |   | (223,051 | )               |  |   | (196,807            | ) |  |   | (196,807 | )
|Time deposits                                          |  |                 | (424,200 | ) |                     |   | (430,505 | )               |  |   | (470,740            | ) |  |   | (479,680 | )
|Note payable                                           |  |                 | (1,179   | ) |                     |   | (1,179   | )               |  |   | (1,259              | ) |  |   | (1,259   | )
|Advances from the Federal Home Loan Bank of Cincinnati |  |                 | (35,000  | ) |                     |   | (36,866  | )               |  |   | (35,000             | ) |  |   | (37,203  | )
|Repurchase agreement                                   |  |                 |         |   |                     |   |         |                 |  |   | (50,000             | ) |  |   | (51,468  | )
|Mandatory forward sales contracts                      |  |                 | (43      | ) |                     |   | (43      | )               |  |   | (299                | ) |  |   | (299     | )
|Accrued interest payable                               |  |                 | (120     | ) |                     |   | (120     | )               |  |   | (380                | ) |  |   | (380     | )

The estimated fair value amounts have been
determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is involved in interpreting market data so as to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value
amounts.

The Company used the following methods and assumptions to estimate fair value for items not described above:

Cash and amounts due from depository institutions, interest-bearing deposits, and federal funds sold. The carrying amount is a reasonable estimate
of fair value because of the short maturity of these instruments.

Loans receivable. For performing loans receivable, fair value is
estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources adjusted to reflect differences in servicing and credit costs.

Federal Home Loan Bank stock. It was not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

Accrued interest receivable and accrued interest payable. The carrying amount is a reasonable estimate of the fair value.



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Demand deposits and time deposits.The fair value of demand deposits, savings accounts, and
certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using discounted cash flows and rates currently offered for deposits of similar remaining
maturities.

Note payable. The carrying amount is a reasonable estimate of the fair value.

Notes payable and subordinated debentures. The carrying value of the Companys variable-rate note payable and the Companys subordinated
debt is a reasonable estimate of fair value based on the current incremental borrowing rate for similar types of borrowing arrangements adjusted for the Companys credit risk profile.

Advances from the Federal Home Loan Bank of Cincinnati. The fair value of the Banks Federal Home Loan Bank of Cincinnati debt is estimated based on the current rates offered to the Bank for
debt of the same remaining maturities.

NOTE 8  SUBORDINATED DEBT

In June 2004, the Company formed Trust I, a special purpose entity formed for the sole purpose of issuing $10.0 million of variable-rate trust preferred securities. The Company issued variable-rate
Subordinated Deferrable Interest Debentures due June 29, 2034 (the Trust I Debentures) to Trust I in exchange for the proceeds of the offering of the trust preferred securities. The trust preferred securities offered by Trust I had
a variable interest rate that adjusted to the three-month LIBOR rate plus 260 basis points. The Trust I Debentures were the sole asset of Trust I.

In July 2006, the Company formed Trust II, a special purpose entity formed for the sole purpose of issuing $10.0 million of variable-rate trust preferred securities. The Company issued variable-rate
Subordinated Deferrable Interest Debentures due July 6, 2036 (the Trust II Debentures) to Trust II in exchange for the proceeds of the offering of the trust preferred securities. The trust preferred securities issued by Trust II
carried a fixed rate of 7.462% until September 15, 2011 and thereafter a variable interest rate that adjusted to the three-month LIBOR rate plus 175 basis points. The Trust II Debentures were the sole asset of Trust II.

On September 1, 2009, the Company entered into an exchange agreement (Exchange Agreement I) with the holder and collateral manager of
the $10.0 million principal amount trust preferred securities issued by Trust I in 2004. Under Exchange Agreement I, on September 3, 2009, the securities holder exchanged its $10.0 million of trust preferred securities for the
following consideration paid by the Company: (i) a cash payment of $500,000; (ii) a number of shares of the Companys common stock equal to $500,000 divided by the average daily closing price of the Companys common stock for the
20 business days prior to September 1, 2009, equating to 205,297 shares; (iii) a warrant to purchase 769,608 shares of the Companys common stock (the Trust I Warrant A); and (iv) a warrant to purchase 27,739
shares of Company common stock (the Trust I Warrant B) as a result of the issuance of common stock in connection with the second trust preferred exchange as described below. The exercise price for all warrants was $1.75, the price at
which the Company completed a rights offering and an offering to a standby investor, which is more fully described in Note 11  Common Stock Issuance. The warrants are exercisable for two years following the closing.

As a result of the repurchase of the trust preferred securities issued by Trust I, the Company recorded a gain of $8,561,530, which was included in
non-interest income for the year ended June 30, 2010. The estimated fair values of the Trust I Warrant A and Trust I Warrant B were estimated to be $808,088 and $29,126, respectively, and were recorded in paid-in capital.

On October 9, 2009, the Company entered into an exchange agreement (Exchange Agreement II) with investors, including principally
directors and officers of the Company and the Bank as well as certain individuals not affiliated with the Company (collectively, the Investors), who held trust preferred securities with an aggregate liquidation amount of $10.0 million
issued by Trust II in 2006. Under the terms of Exchange Agreement II, on March 16, 2010, the Investors exchanged the $10.0 million of trust preferred securities for aggregate consideration consisting of: (i) $400,000 in cash,
(ii) shares of common stock valued at $600,000 based on the average daily closing price of the common stock over the 20 trading days prior to October 9, 2009, equating to 280,241 shares; (iii) warrants to



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purchase 797,347 shares of the Companys common stock (the Trust II A Warrants); and (iv) warrants to purchase 448,832 shares of the Companys common stock (the
Trust II B Warrants) that were issued as a result of the Company completing a rights offering and an offering to a standby investor, which is more fully described in Note 11  Common Stock Issuance. The exercise price for the
warrants is $1.75, the price of the shareholder rights offering. The warrants are exercisable for five years following the closing.

As a
result of the repurchase of the trust preferred securities issued by Trust II, the Company recorded a gain of $9,065,908, which was included in non-interest income for the year ended June 30, 2010. The estimated fair values of the Trust II A
Warrants and Trust II B Warrants were estimated to be $669,771 and $377,019, respectively, and were recorded as paid-in capital.

NOTE 9
 REPURCHASE AGREEMENT

In March 2006, the Bank entered into a $50 million repurchase agreement with another institution (Citigroup)
collateralized by mortgage-backed securities and securities. The repurchase was for a five-year term and matured in March 2011. Interest was adjustable quarterly during the first year based on the three-month LIBOR rate minus 100 basis points. After
year one, the rate adjusted to 4.99% and the repurchase agreement became callable quarterly at the option of the issuer.

On March 21,
2011 the repurchase agreement matured and the Bank repurchased the securities for $50 million utilizing cash on deposit at the Federal Reserve Bank of Cleveland. Annual interest expense associated with this borrowing was approximately $2.5 million.

NOTE 10  REGULATORY MATTERS AND MANAGEMENTS PLANS

The Bank is subject to various regulatory capital requirements administered by the Office of Thrift Supervision (OTS). Failure to meet minimum capital requirements can result in certain
mandatory and possibly additional discretionary actions by banking regulators that, if undertaken, could have a direct material effect on the Companys financial statements. Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The
Banks capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

OTS regulations require savings institutions to maintain certain minimum levels of regulatory capital. An institution that fails to comply with its regulatory capital requirements must obtain OTS approval
of a capital plan and can be subject to a capital directive and certain restrictions on its operations. At March 31, 2011, the adjusted total minimum regulatory capital regulations require institutions to have a minimum tangible capital to
adjusted total assets ratio of 1.5%; a minimum leverage ratio of core (Tier 1) capital to adjusted total assets of 4.0%; a minimum ratio of core (Tier 1) capital to risk-weighted assets of 4.0%; and a minimum ratio of total capital to risk-weighted
assets of 8.0%. At March 31, 2011 and 2010, respectively, the Bank exceeded all of the aforementioned regulatory capital requirements. For more information, please refer to section on Liquidity and Capital Resources.

On October 19, 2009, the Company and the Bank each entered into a Stipulation and Consent to the Issuance of Order to Cease and Desist with the OTS,
whereby the Company and the Bank each consented to the issuance of a Order to Cease and Desist (the Company Order and the Bank Order) without admitting or denying that grounds exist for the OTS to initiate an administrative
proceeding against the Company or the Bank.

The Bank Order requires the Bank to take several actions, including but not limited to:
(i) by December 31, 2009, meet and maintain (1) a Tier 1 (core) capital ratio of at least 8.0% and (2) a total risk-based capital ratio of at least 12.0% after the funding of an adequate allowance for loan and lease losses and
submit a detailed plan to accomplish this; (ii) if the Bank fails to meet these capital requirements at any time after December 31, 2009, within 15 days



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thereafter, prepare a written contingency plan detailing actions to be taken, with specific time frames, providing for (a) a merger with another federally insured depository institution or
holding company thereof, or (b) voluntary liquidation; (iii) adopt revisions to the Banks liquidity policy to, among other things, increase the Banks minimum liquidity ratio; (iv) reduce the level of adversely classified
assets to no more than 50% of core capital plus allowance for loan and lease losses by December 31, 2010 and to reduce the level of adversely classified assets and assets designated as special mention to no more than 65% of core capital plus
allowance for loan and lease losses by December 31, 2010; (v) submit for OTS approval a new business plan that includes the requirements contained in the Bank Order and that also includes well supported and realistic strategies to achieve
consistent profitability by September 30, 2010; (vi) restrict quarterly asset growth to an amount not to exceed net interest credited on deposit liabilities until the OTS approves of the new business plan; (vii) cease to accept, renew
or roll over any brokered deposit or act as a deposit broker, without the prior written waiver of the FDIC and (viii) not declare or pay dividends or make any other capital distributions from the Bank without receiving prior OTS approval.

The Company Order requires the Company to take several actions, including, but not limited to: (i) submit a capital plan that includes,
among other things, (1) the establishment of a minimum tangible capital ratio of tangible equity capital to total tangible assets commensurate with the Companys consolidated risk profile, and (2) specific plans to reduce the risks to
the Company from its current debt levels and debt servicing requirements; (ii) not declare, make or pay any cash dividends or other capital distributions or purchase, repurchase or redeem or commit to purchase, repurchase or redeem Company
equity stock without the prior non-objection of the OTS, except that this provision does not apply to immaterial capital stock redemptions that arise in the normal course of the Companys business in connection with its stock-based compensation
plans; and (iii) not incur, issue, renew, roll over or increase any debt or commit to do so without the prior non-objection of the OTS (debt includes loans, bonds, cumulative preferred stock, hybrid capital instruments such as subordinated debt
or trust preferred securities, and guarantees of debt).

The Bank Order and the Company Order also impose certain on-going reporting
obligations and additional restrictions on severance and indemnification payments, changes in directors and management, employment agreements and compensation arrangements that the Company and the Bank may enter into, third-party service contracts
and transactions with affiliates.

The Company and the Bank believe they are in compliance with all requirements of the Bank Order and the
Company Order that are required to date, with the exception of the level of adversely classified assets and achieving the return to profitability. At March 31, 2011, the Banks level of adversely classified assets to core capital plus the
allowance for loan and lease losses was 69.62%, and its level of adversely classified assets and assets designated as special mention was 91.76%. Although the Bank did not meet the reduced adversely classified asset levels required by March 31,
2011, and has not yet returned to profitability, it will continue to work to comply with all such requirements in the future.

The Bank Order
and the Company Order will remain in effect until terminated, modified, or suspended in writing by the OTS.

Regulations limit capital
distributions by savings institutions. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At March 31, 2011, the Bank was not allowed to make any capital distributions without
regulatory approval.

NOTE 11  COMMON STOCK ISSUANCE

On March 26, 2010, the Company completed a rights offering and an offering to a standby investor. Stockholders exercised subscription rights to purchase all 14,706,247 shares offered at a
subscription price of $1.75 per share. Additionally, the standby investor purchased 2,436,610 shares at the subscription price of $1.75 per share. In total, the Company raised proceeds of $27,964,015, net of issuance costs. Upon completing the
offering, the Company contributed approximately $20.0 million of the proceeds to the capital of the Bank to improve its regulatory capital position. During the quarter ended December 31, 2010, the Company contributed an additional $4.0 million
to the



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capital of the Bank. At March 31, 2011, the Banks Tier 1 (core) capital ratio was 9.09% and its total risk-based capital ratio was 13.10% which exceeds the requirements of the Bank
Order. With the additional capital invested in the Bank, the Bank exceeded the minimum capital ratios required under the Bank Order. However, until the Bank Order is terminated, the Bank cannot be classified as well-capitalized under prompt
corrective action provisions.

NOTE 12  OTHER COMPREHENSIVE INCOME

Other comprehensive income (loss) components and related tax effects were as follows at March 31, 2011 and 2010:



|                                                                        |  |                             |            |   |                            |   |           |      |  |   |            |   |  |   |           |  
|----------------------------------------------------------------------- |  | --------------------------- | ---------- | - | -------------------------- | - | --------- | ---- |  | - | ---------- | - |  | - | --------- | -
|                                                                        |  | Three months endedMarch 31, |            |   | Nine months endedMarch 31, |  
|                                                                        |  | 2011                        |            |   | 2010                       |   |           | 2011 |  |   | 2010       |  
|Unrealized holding gains (losses) on available for sale securities      |  | $                           | (447,261   | ) |                            | $ | 30,223    |      |  | $ | (1,864,472 | ) |  | $ | 902,777   |  
|Reclassification adjustment for losses (gains) realized in income       |  |                             |           |   |                            |   | (23,871   | )    |  |   |           |   |  |   | (23,871   | )
|Tax effect of holding gains and losses on available for sale securities |  |                             | (152,068   | ) |                            |   | 2,159     |      |  |   | (633,919   | ) |  |   | 313,230   |  
|Tax effect of deferred tax asset valuation allowance                    |  |                             | 150,000    |   |                            |   |          |      |  |   | 633,000    |   |  |   |          |  
|                                                                        |  |                             |            |   |                            |   |           |      |  |   |            |   |  |   |           |  
|Other comprehensive income (loss)                                       |  |                             | (445,193   | ) |                            |   | 4,193     |      |  |   | (1,863,553 | ) |  |   | 565,676   |  
|Net income (loss)                                                       |  |                             | (2,793,535 | ) |                            |   | 1,269,065 |      |  |   | (7,121,876 | ) |  |   | 4,187,961 |  
|                                                                        |  |                             |            |   |                            |   |           |      |  |   |            |   |  |   |           |  
|Total comprehensive income (loss)                                       |  | $                           | (3,238,728 | ) |                            | $ | 1,273,258 |      |  | $ | (8,985,429 | ) |  | $ | 4,753,637 |  
|                                                                        |  |                             |            |   |                            |   |           |      |  |   |            |   |  |   |           |  

NOTE 13  ADOPTION OF NEW ACCOUNTING STANDARDS

In January 2010, the FASB issued ASU No. 2010-6 Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.The ASU amends Subtopic
820-10 with new disclosure requirements and clarification of existing disclosure requirements. New disclosures required include the amount of significant transfers in and out of levels 1 and 2 fair value measurements and the reasons for the
transfers. In addition, the reconciliation for level 3 activity is required on a gross rather than net basis. The ASU provides additional guidance related to the level of disaggregation in determining classes of assets and liabilities and
disclosures about inputs and valuation techniques. The amendments are effective for annual or interim reporting periods beginning after December 15, 2009, except for the requirement to provide the reconciliation for level 3 activity on a gross
basis which will be effective for fiscal years beginning after December 15, 2010.

On July 21, 2010, the FASB issued ASU
No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, which requires significant new disclosures about the allowance for credit losses and the credit quality of
financing receivables. The requirements are intended to enhance transparency regarding credit losses and the credit quality of loan and lease receivables. Under this statement, allowance for credit losses and fair value are to be disclosed
by portfolio segment, while credit quality information, impaired financing receivables and nonaccrual status are to be presented by class of financing receivable. Disclosure of the nature and extent, the financial impact and segment information
of troubled debt restructurings is also required. The disclosures are presented at the level of disaggregation that management uses when assessing and monitoring the portfolios risk and performance. This ASU is effective for interim
and annual reporting periods after December 15, 2010. The Company included these disclosures in the notes to the financial statements this quarter.

In January 2011, FASB issued Accounting Standards Update 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20(ASU
2011-01). ASU 2011-01 was issued as a result of concerns raised from stakeholders that the introduction of new disclosure requirements (paragraphs 310-10-50-31 through 50-34 of the FASB Accounting Standards Codification) about troubled debt
restructurings in one reporting period followed by a change in what constitutes a troubled debt restructuring shortly thereafter would be burdensome for preparers and may not provide financial statement users with useful information.



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In April 2011, FASB issued Accounting Standards Update 2011-02, A Creditors Determination
of Whether a Restructuring Is a Troubled Debt Restructuring (ASU 2011-02). The ASU provides additional guidance to creditors for evaluating whether a modification or restructuring of a receivable is a troubled debt restructuring
(TDR). The new guidance requires creditors to evaluate modifications and restructurings of receivables using a more principles-based approach, which may result in more modifications and restructurings being considered TDRs. Additionally,
creditors will be required to provide additional disclosures about their TDR activities in accordance with the requirements of ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit
Losses which was deferred by ASU 2011-01 Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20(ASU 2011-01). The new guidance will be effective for the first interim
or annual period beginning on or after June 15, 2011, with retrospective application required to the beginning of the annual period of adoption. Disclosure requirements will be effective for the first interim and annual period beginning on or
after June 15, 2011. Management is currently working through the guidance to determine the impact, if any, to the consolidated financial statements.

NOTE 14  INCOME TAXES

The Company recorded a valuation allowance against deferred
tax assets at December 31, 2010 based on its estimate of future reversal and utilization. In determining the amount of deferred tax assets that are more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a
regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future income, and projected future reversals of deferred tax items, including feasible tax planning
strategies. Based on these criteria, the Company determined that it was necessary to establish a valuation allowance against deferred tax assets of $2.4 million, resulting in a net deferred tax asset of $0 at December 31, 2010. In recording the
valuation allowance, $1.8 million was recognized against results from continuing operations, while $0.6 million, the portion of the change in the deferred tax asset relating to changes which flowed through comprehensive loss, was recorded to other
comprehensive loss. An ongoing analysis of the Companys deferred tax asset has resulted in recognizing a valuation allowance of $3.1 million, resulting in a net deferred tax asset of $0 at March 31, 2011. Accordingly, no tax benefit was
recognized during the quarter related to the Companys reported loss.



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|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- and nine-month periods ended
March 31, 2011 for the Company, the Bank, its principal and wholly-owned subsidiary, PVFSC, a wholly-owned real estate subsidiary, Mid-Pines Land Co., a wholly-owned real estate subsidiary, PVF Holdings, Inc., PVF Community Development and PVF
Mortgage Corporation, three wholly-owned and currently inactive subsidiaries.

The Company, as a savings and loan holding company and the Bank
are currently regulated and supervised by the OTS. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), the OTS will be merged into the Office of the Comptroller of the Currency (the
OCC) by July 21, 2011. Thereafter the OCC will assume responsibility for regulating the Bank. All orders, resolutions, determinations, agreements, interpretations, guidelines, procedures and advisory materials issued by the OTS will
remain in effect and shall be enforceable by or against the OCC, until modified, terminated or superseded. The Board of Governors of the Federal Reserve System (the Federal Reserve Board) will assume responsibility for regulating savings
and loan holding companies and thus, will become the primary federal regulator of the Company. The powers, rulemaking authorities, and duties of the OTS related to savings and loan holding companies and their non-depository institution subsidiaries
will also be enforceable by or against the Federal Reserve Board, until modified, terminated or superseded. Additionally, under the Dodd-Frank Act, the Federal Reserve Board has the authority to set capital standards for all savings and loan
holding companies.

Forward-Looking Statements

When used in this Quarterly Report on 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. Additional factors that may affect the Companys results are discussed below under Item 1A. Risk Factors and in
the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2010 under Item 1A. Risk Factors. 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 the Company were $777.2 million as of March 31, 2011, a decrease of approximately $82.4 million, or 9.6%, as compared to June 30, 2010. The Banks regulatory capital
ratios for Tier 1 (core) capital, Tier 1 risk-based capital, and total risk-based capital were 9.09%, 11.83% and 13.10%, respectively, at March 31, 2011.

At March 31, 2011, the Companys cash and cash equivalents, which consist of cash, interest-bearing deposits and federal funds sold totaled $89.5 million, a decrease of $40.5 million, or 31.2%,
as compared to June 30, 2010. The change in the Companys cash, cash equivalents and federal funds sold consisted of an increase in cash of $6.4 million and federal funds sold of $10.0 million, which was more than offset by a decrease in
interest-bearing deposits of $56.9 million. The decrease in cash and cash equivalents resulted primarily from the repayment of the matured repurchase agreement borrowing obligation and a decline in deposits, and was partially offset by



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repayments of loans receivable, a decline in loans receivable available for sale, the repayment of mortgage-backed securities available for sale, and a decline in securities available for sale.
The decrease to cash and cash equivalents was in accordance with the Banks decision to retain the securities that served as collateral for the repurchase agreement and to pledge to the FHLB to serve as collateral for FHLB borrowing capacity.
This allowed the Bank to maintain its overall liquidity position, by replacing on balance sheet liquidity with off balance sheet liquidity and to maintain lower cash balances, while maintaining liquidity sufficient to meet potential funding needs.

The Bank continued the origination of fixed-rate single-family loans for sale in the secondary market. The origination and sale of fixed-rate
loans has historically generated gains on sale and allowed the Bank to increase its investment in loans serviced. Mortgage application volume, while high for most of the year, has slowed in the current quarter due to an increase in historically low
interest rates, economic forecasts and inflation results. This resulted in elevated mortgage refinancing activity during the six-month period ended December 31, 2010 and a decline in mortgage refinancing activity during the quarter ended
March 31, 2011. New home sales continue to remain weak, limiting new home financing opportunities.

During the nine months ended
March 31, 2011, mortgage-backed securities available for sale decreased by $8.2 million as a result of principal repayments of $11.5 million, the amortization of $0.2 million in book premium and a decline in the market valuation adjustment of
$1.6 million for securities held for sale, which was partially offset by the purchase of $5.1 million in mortgage-backed securities available for sale.

Securities available for sale decreased by $4.3 million during the nine months ended March 31, 2011 as a result of calls exercised on agency securities totaling $52.0 million and a decline in the
market valuation adjustment of $0.2 million, which was partially offset by the purchase of $47.5 million in agency securities available for sale.

Loans receivable, net, decreased by $25.5 million, or 4.3%, during the nine months ended March 31, 2011. The decrease in loans receivable included decreases in one-to-four family, one-to-four family
construction, commercial real estate, and land loan categories, partially offset by increases in the multi-family and the commercial and industrial loan categories. This decline was primarily due to portfolio paydowns and amortization combined with
the results of problem loan disposition and limited new loan production as the Bank addresses its asset quality issues and works to reposition its balance sheet and strengthen its capital ratios. The Bank has recently begun to originate high quality
commercial and industrial loans and select commercial real estate loans, experiencing growth of $13.8 million, or 53.7%, in the commercial and industrial loan portfolio during the quarter ended March 31, 2011. Additionally, almost all new
residential loan production is being sold in the secondary market in this interest rate environment, as the Bank manages its interest rate and liquidity risk along with its capital ratios. Since the Company successfully completed its common stock
offering and exceeds the capital ratio requirements of the OTS and continues to make meaningful progress in its problem asset resolution, the Bank intends to continue to accelerate the origination of commercial and industrial loans for its
portfolio.

The Bank does not originate sub-prime loans and only originates Alt A loans for sale, without recourse, in the secondary market.
All one-to-four family loans are underwritten according to agency underwriting standards. Exceptions, if any, are submitted to the Banks board loan committee for approval. Any exposure the Bank may have to these types of loans is immaterial.

The decrease of $2.9 million in loans receivable held for sale as of March 31, 2011 was the result of decreased new loan originations
and timing differences between the origination and the sale of loans. One-to-four family mortgage application volume has slowed much of the current period as a result of higher interest rates resulting in less refinancing activity and related
revenue.

Real estate owned activity for the most recent nine-month period ended March 31, 2011 consisted of the addition of 17
single-family properties, 5 land loans and 2 nonresidential real estate properties totaling approximately $5.4 million, offset by the disposal of 14 single-family properties and 2 land loans totaling $2.6 million. The Bank incurred a loss of
approximately $0.3 million on the disposition of these properties. The Bank also recorded an impairment charge of $1.0 million on the carrying amount of real estate still in inventory at March 31, 2011, based



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on updated valuations and market conditions. At March 31, 2011, the Bank held 40 properties totaling $8.1 million in real estate owned. The real estate owned included 20 single-family
properties, 15 land properties, and 5 commercial properties.

The Bank generally seeks to fund loan activity and liquidity by generating
deposits through its branch network and through the use of various borrowing facilities. During the nine-month period ending March 31, 2011, the Bank funded a decrease in deposits and the repayment of its repurchase agreement with the proceeds
from the repayment of loans and mortgage-backed securities, proceeds received on callable securities, and use of the existing liquidity position. Deposits decreased by $20.3 million, or 3.0%, as a result of the maturity of $28.1 million in brokered
deposits, $18.4 million in retail certificates of deposit, and an increase of $26.2 million in non-maturing deposits. Brokered deposits represent funds which the Bank obtains through a deposit broker that places deposits from third parties with
insured depository institutions. Under the Bank Order, the Bank is currently prohibited from obtaining or renewing brokered deposits. At March 31, 2011, the Bank had no remaining brokered deposits. The decline in retail certificates of deposit
was strategically directed as part of managements relationship pricing initiative which targeted rate sensitive non-relationship deposits for reduction. Management has updated its retail certificate of deposit strategy to maintain or grow this
portfolio and its liquidity position as it funds anticipated loan portfolio growth. Additionally, the Bank repaid a $50.0 million repurchase agreement which matured on March 21, 2011. Management paid off this borrowing by utilizing a portion of
its cash and cash equivalents position and retained the securities currently collateralizing this obligation.

The increase in advances from
borrowers for taxes and insurance of $2.5 million for the period ended March 31, 2011 is attributable to timing differences between the collection and payment of taxes and insurance. The decrease of $5.8 million in accrued expenses and other
liabilities is primarily the result of timing differences between the collection and remittance of funds received on loans serviced for investors.



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Results of Operations: Three months ended March 31, 2011, compared to three months ended
March 31, 2010.

The Company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, the collectibility of loans, and deposit flows. Net interest income also includes amortization of loan origination fees, net of origination costs.

The Company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, loan loss provisions, and costs associated with the acquisition, maintenance and disposal of real estate.

The Companys net loss for the three months ended March 31, 2011 was $2,793,535, as compared to a net income of $1,269,065 for the prior year
comparable period. This represents a change to earnings of $4,062,600 when compared with the prior year comparable period. The prior year periods results included a nonrecurring pretax gain of $9,065,908 associated with the cancellation of
debt. Excluding the gain, a net loss of $4,714,434 would have been recorded in that period.

Net Interest Income

Net interest income for the three months ended March 31, 2011 decreased by $122,781, or 2.4%, as compared to the prior year comparable period. This
resulted from a decrease of $1,371,118, or 14.6%, in interest income, which was offset by a decrease of $1,248,337, or 29.4%, in interest expense. The slight decrease in net interest income was attributable to an increase of 2 basis points in the
interest-rate spread that was more than offset by a lower volume of interest sensitive assets and liabilities for the quarter ended March 31, 2011, as compared to the prior year comparable period. The increase in the interest-rate spread
resulted primarily from significantly lower costs of deposits, which decreased the Banks cost on interest-bearing liabilities by 54 basis points from the prior year comparable period (as part of managements efforts to reduce funding
costs), which more than offset the decrease of 52 basis points on interest-earning assets, as the balance sheet continues to reprice lower.

Total average interest-earning assets for the quarter ended March 31, 2011 were $30.7 million lower, compared to the comparable quarter in 2010.
Average loan balances continued to be impacted by loan payments and payoffs, which are not being totally replaced by new portfolio loan production, as well as loan charge-offs and problem loan disposition contributing to the overall decline. The
impact of lower loan balances was partially offset by higher average investments and cash and cash equivalents, but funds were reinvested at substantially lower yields.

For the quarter ended March 31, 2011, total average interest-bearing liabilities were $48.2 million lower than the comparable quarter in 2010. This resulted from the deleveraging that occurred as
part of managements strategy to reduce the Companys risk profile, improve the Companys capital ratios, as well as a result of a lack of attractive long-term investments and lower deposit balances. Deposit balances dropped as the
Bank did not renew maturing brokered deposits. Additionally, the Bank experienced a shift in the composition of deposits from retail certificates of deposit into money market and NOW accounts.



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The following table presents comparative information for the three months ended March 31, 2011 and
2010, respectively, with respect to average balances and average yields and costs for interest-earning assets and interest-bearing liabilities:



|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|------------------------------------------------------- |  | ---------------------- | ------- | - | -------------- | - | ----- | ----------------- |  |  | -------------- | - |  | -------- | ------- | - | ----------------- | - | ----- |  |  |  | ---- | -
|                                                        |  | March 31, 2011         |         |   | March 31, 2010 |  
|                                                        |  | AverageBalance         |         |   | Interest       |   |       | AverageYield/Cost |  |  | AverageBalance |   |  | Interest |         |   | AverageYield/Cost |  
|                                                        |  | (dollars in thousands) |        
|Interest-earning assets                                 |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Loans(1)                                                |  | $                      | 599,459 |   |                | $ | 7,329 |                   |  |  | 4.89           | % |  | $        | 656,028 |   |                   | $ | 8,571 |  |  |  | 5.23 | %
|Mortgage-backed securities                              |  |                        | 41,836  |   |                |   | 419   |                   |  |  | 4.01           |   |  |          | 55,770  |   |                   |   | 606   |  |  |  | 4.35 |  
|Investments and other                                   |  |                        | 135,463 |   |                |   | 260   |                   |  |  | 0.77           |   |  |          | 95,686  |   |                   |   | 202   |  |  |  | 0.84 |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Total interest-earning assets                           |  |                        | 776,758 |   |                |   | 8,008 |                   |  |  | 4.12           |   |  |          | 807,484 |   |                   |   | 9,379 |  |  |  | 4.64 |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Non-interest-earning assets                             |  |                        | 50,606  |   |                |   |       |                   |  |  |                |   |  |          | 72,317  |   |                   |   |       |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Total assets                                            |  | $                      | 827,364 |   |                |   |       |                   |  |  |                |   |  | $        | 879,801 |   |                   |   |       |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Interest-bearing liabilities                            |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Deposits                                                |  | $                      | 647,192 |   |                | $ | 2,171 |                   |  |  | 1.34           | % |  | $        | 685,244 |   |                   | $ | 3,226 |  |  |  | 1.88 | %
|Borrowings                                              |  |                        | 83,540  |   |                |   | 828   |                   |  |  | 3.96           |   |  |          | 86,273  |   |                   |   | 892   |  |  |  | 4.14 |  
|Subordinated debt                                       |  |                        |        |   |                |   |      |                   |  |  |               |   |  |          | 7,394   |   |                   |   | 130   |  |  |  | 7.03 |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Total interest-bearing liabilities                      |  |                        | 730,732 |   |                |   | 2,999 |                   |  |  | 1.64           |   |  |          | 778,911 |   |                   |   | 4,248 |  |  |  | 2.18 |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Non-interest-bearing liabilities                        |  |                        | 20,471  |   |                |   |       |                   |  |  |                |   |  |          | 31,045  |   |                   |   |       |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Total liabilities                                       |  |                        | 751,203 |   |                |   |       |                   |  |  |                |   |  |          | 809,956 |   |                   |   |       |  |  |  |      |  
|Stockholders equity                                    |  |                        | 76,161  |   |                |   |       |                   |  |  |                |   |  |          | 69,845  |   |                   |   |       |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Total liabilities and stockholders equity              |  | $                      | 827,364 |   |                |   |       |                   |  |  |                |   |  | $        | 879,801 |   |                   |   |       |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Net interest income                                     |  |                        |         |   |                | $ | 5,009 |                   |  |  |                |   |  |          |         |   |                   | $ | 5,131 |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Interest-rate spread                                    |  |                        |         |   |                |   |       |                   |  |  | 2.48           | % |  |          |         |   |                   |   |       |  |  |  | 2.46 | %
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Yield on interest-earning assets                        |  |                        |         |   |                |   |       |                   |  |  | 2.58           | % |  |          |         |   |                   |   |       |  |  |  | 2.54 | %
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  
|Interest-earning assets to interest-bearing liabilities |  |                        | 106.30  | % |                |   |       |                   |  |  |                |   |  |          | 103.67  | % |                   |   |       |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |       |                   |  |  |                |   |  |          |         |   |                   |   |       |  |  |  |      |  



|(1) | Non-accruing loans are included in the average loan balances for the periods presented.
|--- | ---------------------------------------------------------------------------------------



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Provision for Loan Losses and Asset Quality

For the three months ended March 31, 2011, a provision for loan losses of $2.1 million was recorded, while a provision for loan losses of $7.0
million was recorded in the prior year comparable period. The decrease in the provision for the current period reflects declines in classified and nonperforming assets as compared to the prior period. During the period, the Bank disposed of $6.6
million in nonperforming assets and charged off an additional $0.5 million in nonperforming assets, utilizing $3.4 million and $0.5 million in specific allowances, respectively.

The provision for loan losses for the current period reflects managements judgments about the credit quality of the Banks loan portfolio. The allowance for loan losses consists of a specific
component and a general component.

The following is a breakdown of the valuation allowances:



|                             |  |                |            |  |               |   |            | 
|---------------------------- |  | -------------- | ---------- |  | ------------- | - | ---------- | 
|                             |  | March 31, 2011 |            |  | June 30, 2010 |  
|                             |  |               
|General valuation allowance  |  | $              | 15,717,857 |  |               | $ | 16,902,971 | 
|Specific valuation allowance |  |                | 14,158,385 |  |               |   | 14,616,876 | 
|                             |  |                |            |  |               |   |            | 
|Total valuation allowance    |  | $              | 29,876,242 |  |               | $ | 31,519,847 | 
|                             |  |                |            |  |               |   |            | 

The allowance for loan losses was 5.05% of loans outstanding at March 31, 2011, compared with 5.09% at June 30,
2010. The coverage of nonperforming loans improved as the allowance for loan losses was 56.84% at March 31, 2011 compared with 45.62% at June 30, 2010. The general valuation portion of the allowance was 2.91% and 3.08% of performing loans
at March 31, 2011 and June 30, 2010, respectively.

Managements approach includes establishing a specific valuation allowance
by evaluating individual nonperforming loans for probable losses based on a systematic approach involving estimating the realizable value of the underlying collateral. Additionally, management establishes a general valuation allowance for pools of
performing loans segregated by collateral type. For the general valuation allowance, management is applying a prudent loss factor based on historical loss experience, trends based on changes to nonperforming loans and foreclosure activity, and a
subjective evaluation of the local population and economic environment. The loan portfolio is segregated into categories based on collateral type and a loss factor is applied to each category. The initial basis for each loss factor is the
Banks loss experience for each category. Historical loss percentages are calculated based on transfers from the general reserve to the specific reserve, indicating a loss has been incurred, for each risk category during the historical period
and dividing the total by the average balance of each category. Presently, historical loss percentages are updated on a monthly basis using an 18-month rolling average. Subjective adjustments are made to the Banks historical experience
including consideration of trends in delinquencies and classified loans, portfolio growth, national and local economic and business conditions including unemployment, bankruptcy and foreclosures and effectiveness of credit administration, as
appropriate.

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. The current period provision for loan losses reflects the continued level of elevated charge-offs during the
period.

The total allowance for loan losses decreased slightly during the quarter, which was directionally consistent with the reduction in
nonperforming loans and a smaller total loan portfolio. The general portion of the allowance declined $297,300, while the specific allowance decreased by $1,319,400 during the quarter as a result of the reduction and disposition of impaired loans.
Based on recent portfolio trends, historical loss experience and



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managements factors, the Bank has experienced an increase to the general valuation allowance allocation to the one-to-four family loan pools, multi-family loan pools, commercial non real
estate loan pools, and land loan pools, while commercial real estate loan pools, one-to-four family construction loan pools, and consumer loan pools experienced a decreased allocation. The change in the specific valuation allowance fiscal
year-to-date was the result of the ongoing review of the individual loans for impairment and updates to valuations. Almost all of these loans are real estate related and considered collateral dependent. Real estate valuations in the Banks
marketplace have declined and updated valuations have resulted in increased impairment valuation allowances. These additional specific allowances have been more than offset through utilization associated with impaired loan dispositions, resulting in
a decline in the specific allowance during the quarter and year to date.

The Bank continues to aggressively review and monitor its loan
portfolio. This review involves analyzing all large borrowing relationships, delinquency trends, and loan collateral valuation in order to identify impaired loans. This analysis is performed so that management can identify all troubled loans and
loan relationships as well as deteriorating loans and loan relationships. As a result of this review, detailed action plans are developed to either resolve or liquidate the loan and end the borrowing relationship.

Nonperforming assets at March 31, 2011 and June 30, 2010 were as follows:



|                                            |  |                |            |   |               |   |            |  
|------------------------------------------- |  | -------------- | ---------- | - | ------------- | - | ---------- | -
|                                            |  | March 31, 2011 |            |   | June 30, 2010 |  
|                                            |  |               
|Total nonperforming loans                   |  | $              | 52,652,019 |   |               | $ | 69,565,017 |  
|Other nonperforming assets(1)               |  |                | 8,082,863  |   |               |   | 8,173,741  |  
|                                            |  |                |            |   |               |   |            |  
|Total nonperforming assets                  |  | $              | 60,734,882 |   |               | $ | 77,738,758 |  
|                                            |  |                |            |   |               |   |            |  
|Ratio of nonperforming loans to total loans |  |                | 8.88       | % |               |   | 11.24      | %
|                                            |  |                |            |   |               |   |            |  
|Total nonperforming assets to total assets  |  |                | 7.81       | % |               |   | 9.04       | %
|                                            |  |                |            |   |               |   |            |  



|(1) | Other nonperforming assets represent property acquired by the Bank through foreclosure or repossession.
|--- | -------------------------------------------------------------------------------------------------------

The elevated levels of nonperforming loans at March 31, 2011 and June 30, 2010 were attributable to poor current local economic conditions.
Residential markets nationally and locally have been adversely impacted by a significant increase in foreclosures, as a result of the problems faced by sub-prime borrowers and the resulting contraction of residential credit available to all but the
most credit worthy borrowers. Land development projects nationally and locally have experienced slow sales and price decreases. The Bank has significant exposure to the residential market in the Greater Cleveland, Ohio area. As a result, the Bank
continues to experience an elevated level of nonperforming loans. Due to an increase in foreclosure activity in the area, the foreclosure process in Cuyahoga County, the Banks primary market, has become elongated. As such, loans have remained
past due for considerable periods prior to being collected, transferred to real estate owned, or charged off. The Bank experienced a decrease in nonperforming loans in the one-to-four family, construction, land, and commercial real estate loan
portfolios.

Of the $52.7 million and $69.6 million in non-accruing loans at March 31, 2011 and June 30, 2010, $37.5 million and
$50.1 million, respectively, were individually identified as impaired. All of these loans are collateralized by various forms of non-residential real estate or residential construction. These loans were reviewed for the likelihood of full collection
based primarily on the value of the underlying collateral and, to the extent collection of loan principal was in doubt, specific loss reserves were established. The evaluation of the underlying collateral included a consideration of the potential
impact of erosion in real estate values due to poor local economic conditions and a potentially long foreclosure process. This consideration involves obtaining an updated valuation



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of the underlying real estate collateral and estimating carrying and disposition costs to arrive at an estimate of the net realizable value of the collateral. Included in the impaired amount at
March 31, 2011 and June 30, 2010 were $29,163,391 and $32,521,481, respectively, related to loans with a corresponding valuation allowance of $9,821,449 and $10,322,692, respectively. At March 31, 2011 and June 30, 2010,
respectively, $8,291,521 and $18,029,777 of nonperforming loans had no allowance for loan losses allocated. The remaining balance of nonperforming loans represents homogeneous one-to-four family loans. These loans are also subject to the rigorous
process for evaluating and accruing for specific loan loss situations described above. Through this process, specific loan loss reserves of $3,561,354, or 37.9%, and $3,966,256, or 20.9%, were established for these loans as of March 31, 2011
and June 30, 2010, respectively.

There are $5.1 million and $1.8 million in performing loans for which the Bank has established specific
loan loss reserves as of March 31, 2011 and June 30, 2010, respectively. These loans are collateralized by various forms of one-to-four family real estate, non-residential real estate or residential construction. These loans are also
subject to the rigorous process for evaluating and accruing for specific loan loss situations described above. Through this process, specific loan loss reserves of $0.8 million and $0.4 million were established for these loans as of March 31,
2011 and June 30, 2010, respectively. The Bank was accruing interest on $14.1 million and $27.6 million of adversely classified loans at March 31, 2011 and June 30, 2010, respectively.

Non-Interest Income

For the three
months ended March 31, 2011, non-interest income decreased by $9,118,696 from the prior year comparable period. This resulted primarily from the Company entering into an exchange agreement in the prior year period whereby the Company paid
$400,000 in cash, and issued $600,000 in common stock and warrants valued at $1,046,790 in exchange for the cancellation of $10.0 million of the Trust Preferred Obligation of PVF Capital Trust II plus accrued but unpaid interest. This transaction
resulted in a pretax gain of $9,065,908.

In the current period, income from mortgage banking activities increased by $33,858 as a result of
lower gains on loan origination and sales activity of $234,070, a valuation impairment recovery of $126,658 recorded to the book value of mortgage loan servicing rights, and an increase to mortgage loan servicing fees of $24,384 along with a
decrease to the amortization of mortgage loan servicing rights of $116,886. The Bank pursues a strategy of originating long-term fixed-rate loans pursuant to FHLMC and FNMA guidelines and selling such loans to the FHLMC or the FNMA, while retaining
the servicing rights of such loans.

In the current period, other, net increased by $76,265 primarily due to increased income generated by the
Companys partnership interest in a title company, as the result of higher loan refinancing activity. The title company earnings are directly correlated to loan origination activity of the Bank.

Gains and losses on the sale of real estate owned, including write-downs, is recorded in non-interest income and was a net loss of $339,000 for the
quarter ended March 31, 2011 compared with a loss of $239,000 in the prior year period.

During the period, the Company began originating
Small Business Administration (SBA) loans which it intends to retain the unguaranteed balance thereof and sell the guaranteed portion in the secondary market and recognize the resulting gain on loan sale income. Subject to approval by
the SBA, the Company expects to begin selling its originations in the period ending June 30, 2011. Also during the period, the Company entered into an agreement with a local mortgage company to begin offering Federal Housing Administration
residential mortgage loans under a brokerage arrangement.

Non-Interest Expense

Non-interest expense for the three months ended March 31, 2011 increased by $493,474, or 8.1%, from the prior year comparable period. This resulted
from increases in compensation and benefits of $550,357, office occupancy and equipment of $10,557, and outside services of $143,386, which was partially offset by decreases to real estate owned expense of $102,050, FDIC insurance of $104,383 and
other, net of $4,393.



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The increase to compensation and benefits is due to higher incentive compensation associated with retail
banking results, including the higher mortgage banking revenues year to date, along with staffing and other related compensation benefits associated with positioning the Company for growth and transition. The increase in outside services is
primarily due to increased cost associated with the migration to an outside service provider for information technology. The decrease to real estate owned expense for the period is attributable to a decline in the acquisition and maintenance of
properties acquired through foreclosure as compared with last year, but is elevated during the current period as well due to the activity levels associated with problem asset disposition. The decrease in the cost of FDIC insurance is due to a lower
deposit base.

Income Tax Expense (Benefit)

The federal income tax provision (benefit) for the three-month period ended March 31, 2011 represented an effective benefit rate of 2.4% on the loss for the current period, compared to 35.3% for the
prior year comparable period. The Company recorded a valuation allowance against deferred tax assets of $2.4 million, resulting in a net deferred tax asset of $0 at December 31, 2010. An ongoing analysis of the Companys deferred tax asset
has resulted in recognizing a valuation allowance of $3.1 million, resulting in a net deferred tax asset of $0 at March 31, 2011. Accordingly, no tax benefit was recognized during the quarter related to the Companys reported loss.

Results of Operations: Nine months ended March 31, 2011, compared to nine months ended March 31, 2010.

The Companys net loss for the nine months ended March 31, 2011 was $7,121,876, as compared to net income of $4,187,961 for the prior year
comparable period. This represents a decrease of $11,309,837 when compared with the prior year comparable period. The primary reason the Company was profitable in the prior period was the $17,627,438 gain on an exchange the Company entered into
during the period, resulting in the cancellation of the $20.0 million of Trust Preferred Debentures.

Net interest income for the nine months
ended March 31, 2011 increased by $641,146, or 4.3%, as compared to the prior year comparable period. This resulted from a decrease of $4,169,658, or 14.2%, in interest income more than offset by a decrease of $4,810,804, or 32.9%, in interest
expense. The increase in net interest income was attributable to a 16 basis point increase in the interest-rate spread partially offset by a decrease in the average balance of interest-earning assets and interest-bearing liabilities for the quarter
ended March 31, 2011 as compared to the prior year comparable period. The increase in interest-rate spread resulted primarily from a decrease of 70 basis points in rates paid on deposits in the current period. This decrease in deposit costs
resulted in an overall decline of 68 basis points on the cost of interest-bearing liabilities which more than offset the decrease of 52 basis points on interest-earning assets.



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The following table presents comparative information for the nine months ended March 31, 2011 and
2010 about average balances and average yields and costs for interest-earning assets and interest-bearing liabilities. Net interest income is affected by the interest-rate spread and by the relative amounts of interest-earning assets and
interest-bearing liabilities.



|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|------------------------------------------------------- |  | ---------------------- | ------- | - | -------------- | - | ------ | ----------------- |  |  | -------------- | - |  | -------- | ------- | - | ----------------- | - | ------ |  |  |  | ---- | -
|                                                        |  | March 31, 2011         |         |   | March 31, 2010 |  
|                                                        |  | AverageBalance         |         |   | Interest       |   |        | AverageYield/Cost |  |  | AverageBalance |   |  | Interest |         |   | AverageYield/Cost |  
|                                                        |  | (dollars in thousands) |        
|Interest-earning assets                                 |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Loans(1)                                                |  | $                      | 615,002 |   |                | $ | 23,117 |                   |  |  | 5.01           | % |  | $        | 682,475 |   |                   | $ | 26,867 |  |  |  | 5.25 | %
|Mortgage-backed securities                              |  |                        | 43,783  |   |                |   | 1,347  |                   |  |  | 4.10           |   |  |          | 59,442  |   |                   |   | 1,963  |  |  |  | 4.40 |  
|Investments and other                                   |  |                        | 134,695 |   |                |   | 755    |                   |  |  | 0.75           |   |  |          | 81,488  |   |                   |   | 559    |  |  |  | 0.91 |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Total interest-earning assets                           |  |                        | 793,480 |   |                |   | 25,219 |                   |  |  | 4.24           |   |  |          | 823,405 |   |                   |   | 29,389 |  |  |  | 4.76 |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Non-interest-earning assets                             |  |                        | 44,285  |   |                |   |        |                   |  |  |                |   |  |          | 66,318  |   |                   |   |        |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Total assets                                            |  | $                      | 837,765 |   |                |   |        |                   |  |  |                |   |  | $        | 889,723 |   |                   |   |        |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Interest-bearing liabilities                            |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Deposits                                                |  | $                      | 650,410 |   |                | $ | 7,184  |                   |  |  | 1.47           | % |  | $        | 697,082 |   |                   | $ | 11,348 |  |  |  | 2.17 | %
|Borrowings                                              |  |                        | 85,335  |   |                |   | 2,643  |                   |  |  | 4.13           |   |  |          | 86,320  |   |                   |   | 2,716  |  |  |  | 4.20 |  
|Subordinated debt                                       |  |                        |        |   |                |   |       |                   |  |  |               |   |  |          | 11,450  |   |                   |   | 574    |  |  |  | 6.68 |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Total interest-bearing liabilities                      |  |                        | 735,745 |   |                |   | 9,827  |                   |  |  | 1.78           |   |  |          | 794,852 |   |                   |   | 14,638 |  |  |  | 2.46 |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Non-interest-bearing liabilities                        |  |                        | 22,571  |   |                |   |        |                   |  |  |                |   |  |          | 33,849  |   |                   |   |        |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Total liabilities                                       |  |                        | 758,316 |   |                |   |        |                   |  |  |                |   |  |          | 828,701 |   |                   |   |        |  |  |  |      |  
|Stockholders equity                                    |  |                        | 79,449  |   |                |   |        |                   |  |  |                |   |  |          | 61,022  |   |                   |   |        |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Total liabilities and stockholders equity              |  | $                      | 837,765 |   |                |   |        |                   |  |  |                |   |  | $        | 889,723 |   |                   |   |        |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Net interest income                                     |  |                        |         |   |                | $ | 15,392 |                   |  |  |                |   |  |          |         |   |                   | $ | 14,751 |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Interest-rate spread                                    |  |                        |         |   |                |   |        |                   |  |  | 2.46           | % |  |          |         |   |                   |   |        |  |  |  | 2.30 | %
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Yield on interest-earning assets                        |  |                        |         |   |                |   |        |                   |  |  | 2.59           | % |  |          |         |   |                   |   |        |  |  |  | 2.39 | %
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  
|Interest-earning assets to interest-bearing liabilities |  |                        | 107.85  | % |                |   |        |                   |  |  |                |   |  |          | 103.59  | % |                   |   |        |  |  |  |      |  
|                                                        |  |                        |         |   |                |   |        |                   |  |  |                |   |  |          |         |   |                   |   |        |  |  |  |      |  



|(1) | Non-accruing loans are included in the average loan balances for the periods presented.
|--- | ---------------------------------------------------------------------------------------

Provision for Loan Losses

For the nine months ended March 31, 2011, a provision for
loan losses of $9,390,000 was recorded, while a provision for loan losses of $11,010,000 was recorded in the prior year comparable period. The current period provision for loan losses reflects increases to specific loan loss reserves, adjustments to
historical loan loss percentages based upon the methodology described previously, and the elevated level of charge-offs during the current period.



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##### Table of Contents

PART I  FINANCIAL INFORMATION



Non-Interest Income

For the nine months ended March 31, 2011, non-interest income decreased by $15,213,300 from the prior year comparable period. This resulted primarily from the Company entering into two separate
exchange agreements whereby the Company paid cash, and issued common stock and warrants in exchange for the cancellation of subordinated debt that resulted in a pretax gain of $17,627,400. Income from mortgage banking activities increased by
$2,502,160 as a result of the higher levels of residential mortgage refinancing activities in the first half of the current fiscal year. Other, net increased by $303,031 primarily due to income generated by the Companys partnership interest in
a title company, and income on bank-owned life insurance (BOLI) increased by $35,841. These increases were partially offset by higher losses and write-downs on real estate owned of $387,235 and a decline in service and other fees of
$15,788 in the current year period.

In the current period, income from mortgage banking activities increased by $2,502,160, as a result of:
(i) increased loan refinancing activity resulting from cyclically low market rates during the first half of the year, which resulted in an increase to gains on loan origination and sales activity of $3,775,392; (ii) partially offset by a
valuation impairment charge of $338,427 recorded against the book value of the mortgage loan servicing rights; and (iii) an increase to mortgage loan servicing fees of $43,042. This gain was partially offset by an increase to the amortization
of mortgage loan servicing rights of $977,847.

During the prior year period, the Bank was able to restructure its investment in BOLI,
transferring the balances from money market accounts into separate accounts generating earnings in excess of the cost of insurance. The Bank realized the full benefit of this restructuring in the current period. For part of the prior year comparable
period, the earnings of the money market account were insufficient to offset the cost of BOLI.

Non-Interest Expense

Non-interest expense for the nine months ended March 31, 2011 increased by $132,201, or 0.7%, from the prior year comparable period. This resulted
from increases to compensation and benefits of $822,991, outside services of $59,651, and office occupancy and equipment of $46,048, partially offset by decreases in other, net of $425,819, real estate owned expense of $190,426, and FDIC insurance
of $180,244.

The decrease to other, net is primarily the result of lower legal expenses and lower state franchise tax expense in the current
period. The decrease to real estate owned expense is attributable to a decline in the acquisition and maintenance of properties acquired through foreclosure. The decrease in the cost of FDIC insurance is due to a lower deposit base. The increase to
compensation and benefits is due to incentive compensation associated with the higher mortgage banking revenues along with higher staffing and other related compensation benefits.

Income Tax Expense (Benefit)

The federal income tax provision for the nine-month period
ended March 31, 2011 represented an effective rate of 8.2% on the loss for the current period compared to an effective rate of 35.6% on income for the prior year comparable period. The Company recorded a valuation allowance against deferred tax
assets of $2.4 million, resulting in a net deferred tax asset of $0 at December 31, 2010. In recording the valuation allowance, $1.8 million was recognized against results from continuing operations, while $0.6 million, the portion of the
change in the deferred tax asset relating to changes which flowed through comprehensive loss, was recorded to other comprehensive loss. An ongoing analysis of the Companys deferred tax asset has resulted in recognizing a valuation allowance of
$3.1 million, resulting in a net deferred tax asset of $0 at March 31, 2011.



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##### Table of Contents

PART I  FINANCIAL INFORMATION



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. The
primary sources of funds are deposits, principal and interest payments on loans, proceeds from the sale of loans, repurchase agreements, and advances from the FHLB. While maturities and scheduled 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. The Companys most liquid assets are cash and cash equivalents. The levels of these assets are dependent
on the Companys operating, financing, lending and investing activities during any given period. Additional sources of funds include lines of credit available from the FHLB.

During the current period, the Company changed its overall liquidity position by using payments received on loans, mortgage-backed securities and securities along with its cash and cash equivalents
position to redeem brokered and retail certificates of deposits along with the funding of the matured $50 million repurchase agreement. This resulted in a lower on balance sheet liquidity position and higher off balance sheet liquidity via higher
secured borrowing capacity with the FHLB.

Management believes the Company maintains sufficient liquidity to meet current operational needs.
Cash at the Company level totaled $5,185,826 at March 31, 2011.

The Banks primary regulator, the OTS, has implemented a statutory
framework for capital requirements which establishes five categories of capital strength ranging from well capitalized to critically undercapitalized. An institutions category depends upon its capital level in relation
to relevant capital measures, including two risk-based capital measures, a tangible capital measure and a core/leverage capital measure. At March 31, 2011, the Bank was in compliance with all of the current applicable regulatory capital
measurements to meet the definition of a well-capitalized institution, as demonstrated in the following table:



|                          |  |                         |        |  |                      |  |       |                                            |  |  |       |  
|------------------------- |  | ----------------------- | ------ |  | -------------------- |  | ----- | ------------------------------------------ |  |  | ----- | -
|(In thousands)            |  | Park ViewFederalCapital |        |  | Percent ofAssets
(1) |  |       | Requirement forWell-CapitalizedInstitution | 
|Tangible capital          |  | $                       | 71,498 |  |                      |  | 9.11  | %                                          |  |  | N/A   |  
|Tier-1 core capital       |  |                         | 71,498 |  |                      |  | 9.11  |                                            |  |  | 5.00  | %
|Tier-1 risk-based capital |  |                         | 71,498 |  |                      |  | 11.86 |                                            |  |  | 6.00  |  
|Total risk-based capital  |  |                         | 79,136 |  |                      |  | 13.12 |                                            |  |  | 10.00 |  



|(1) | Tangible and core capital levels are shown as a percentage of total adjusted assets; risk-based capital levels are shown as a percentage of risk-weighted assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

Pursuant to the Bank Order, the OTS directed the Bank to raise its Tier 1 (core) capital and total risk-based capital ratios to
8% and 12%, respectively, by December 31, 2009. At March 31, 2011, the Bank continued to meet these capital requirements. During the quarter ended December 31, 2010, the Company invested an additional $4.0 million in the capital of
the Bank. With the addition of capital invested in the Bank, the Bank exceeded the required capital ratios under the Bank Order. However, until the Bank Order is terminated, the Bank cannot be classified as well-capitalized under prompt corrective
action provisions.

Under the Bank and Company Orders, the Bank may not declare or pay dividends or make any other capital distributions from
the Bank without receiving prior OTS approval. In addition, the Company shall not declare, make or pay any cash dividends or other capital distributions or purchase, repurchase or redeem or commit to purchase, repurchase or redeem any Company equity
stock without the prior non-objection of the OTS.



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##### Table of Contents

PART I  FINANCIAL INFORMATION



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates and equity prices. The Banks market risk is
generally composed of interest rate risk.

Asset/Liability Management: The Banks asset and liability committee
(ALCO), which includes senior management representatives, monitors and considers methods of managing the rate sensitivity and repricing characteristics of the balance sheet components consistent with maintaining acceptable levels of
changes in net portfolio value (NPV) and net interest income. The Banks asset and liability management program is designed to minimize the impact of sudden and sustained changes in interest rates on NPV and net interest income.

The Banks exposure to interest rate risk is reviewed on a quarterly basis by the ALCO and the Banks Board of Directors. Exposure
to interest rate risk is measured with the use of interest rate sensitivity analysis to determine the Banks change in NPV in the event of hypothetical changes in interest rates, while interest rate sensitivity gap analysis is used to determine
the repricing characteristics of the Banks assets and liabilities. If estimated changes to NPV and net interest income are not within the limits established by the Board, the Board may direct management to adjust its asset and liability mix to
bring interest rate risk within Board-approved limits.

In order to reduce the exposure to interest rate fluctuations, the Bank has developed
strategies to manage its liquidity, shorten the effective maturity and increase the interest rate sensitivity of its asset base. Management has sought to decrease the average maturity of its assets by emphasizing the origination of adjustable-rate
loans and loans with shorter balloon maturities which are retained by the Bank for its portfolio. In addition, all long-term, fixed-rate mortgages are underwritten according to guidelines of the FHLMC and the FNMA, which are then sold directly for
cash in the secondary market. The Bank carefully monitors the maturity and repricing of its interest-earning assets and interest-bearing liabilities to minimize the effect of changing interest rates on its NPV. The Banks interest rate risk
position is the result of the repricing characteristics of assets and liabilities. The balance sheet is primarily comprised of interest-earning assets having a maturity and repricing period of one month to five years. These assets were funded
primarily utilizing interest-bearing liabilities having a final maturity of two years or less and a repurchase agreement.



|Item 4. | Controls and Procedures.
|------- | ------------------------

As of the end
of the period covered by this Quarterly Report on Form 10-Q, 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: (i) is recorded, processed, summarized and reported, within the time
periods specified in the SECs rules and forms; and (ii) is accumulated and communicated to the Companys management, including its principal executive and principal financial officers or persons performing similar functions, as
appropriate to allow timely decisions regarding disclosure. 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. During the period covered by this Quarterly Report on Form 10-Q, there was no change in internal
control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

None.



|Item 1A. | Risk Factors.
|-------- | -------------

The Companys
results of operations, financial condition or liquidity may be adversely impacted by issues arising in foreclosure practices, including delays in the foreclosure process, related to certain industry deficiencies, as well as potential losses in
connection with actual or projected repurchases and indemnification payments related to mortgages sold into the secondary market.

Recent announcements of deficiencies in foreclosure documentation by several large seller/servicer financial institutions have raised various concerns
relating to mortgage foreclosure practices in the United States. A group of state attorneys general and state bank and mortgage regulators in all 50 states and the District of Columbia is currently reviewing foreclosure practices and a number of
mortgage sellers/servicers have temporarily suspended foreclosure proceedings in some or all states in which they do business in order to evaluate their foreclosure practices and underlying documentation.

The Company primarily conducts its loan sale and securitization activity with the FHLMC, and to a lesser degree the FNMA, and acts as seller and servicer
of these mortgage loans. In connection with these and other securitization transactions, the Company makes certain representations and warranties that the loans meet certain criteria, such as collateral type and underwriting standards. The Company
may be required to repurchase the loans and/or indemnify these organizations against losses due to material breaches of these representations and warranties.

The Company evaluated its foreclosure documentation procedures, given the recent announcements made by other financial institutions regarding their foreclosure activities. The results of the
Companys review indicate that its procedures for reviewing and validating the information in its documentation are sound and its foreclosure affidavits are accurate. The Company has implemented additional reviews of pending foreclosures to
ensure that all appropriate actions are taken to enable foreclosure actions to continue.

Although the Company believes that its mortgage
documentation and procedures have been appropriate, it is possible that the Company may receive repurchase requests in the future and the Company may not be able to reach favorable settlements with respect to such requests. During the period, the
Company received a request from the FHLMC to repurchase three loans totaling $457,372 due to non-compliance with FHLMC underwriting standards. In addition, the Company could face delays and challenges in the foreclosure process arising from claims
relating to industry practices generally, which could adversely affect recoveries and the Companys financial results, whether through increased expenses of litigation and property maintenance, deteriorating values of underlying mortgaged
properties or unsuccessful litigation results generally.



|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 March 31, 2011.
| | --- | --------------------------------------------------------------------------------------------



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PART II  OTHER INFORMATION



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

None.



|Item 4. | (Removed and Reserved).
|------- | -----------------------



|Item 5. | Other Information.
|------- | ------------------

None.



|Item 6. | Exhibits.
|------- | ---------



|      |  |                                                                 
|----- |  | ----------------------------------------------------------------
|      | 
|3.11  |  | First Amended and Restated Articles of Incorporation, as amended
|      | 
|3.22  |  | Code of Regulations, as amended and restated                    
|      | 
|10.13 |  | PVF Capital Corp. Form of Restricted Stock Award                
|      | 
|10.23 |  | PVF Capital Corp. Form of Stock Option Award                    
|      | 
|31.13 |  | Rule 13a-14(a) Certification of Chief Executive Officer         
|      | 
|31.23 |  | Rule 13a-14(a) Certification of Chief Financial Officer         
|      | 
|323   |  | Section 1350 Certifications                                     



|(1) | Incorporated by reference to the Companys Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on February 10, 2010
(Commission File No. 333-163037).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to the Companys Current Report on Form 8-K filed with the Commission on February 6, 2008 (Commission File No. 0-24948).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Filed herewith.
|--- | ---------------



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##### Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



|                   |  |                                           
|------------------ |  | ------------------------------------------
|                   |  | PVF Capital Corp.                         
|                   |  | (Registrant)                              
|                   | 
|Date: May 13, 2011 |  | /s/ Robert J. King, Jr.                   
|                   |  | Robert J. King, Jr.                       
|                   |  | President and Chief Executive Officer     
|                   |  | (Duly authorized officer)                 
|                   | 
|                   |  | /s/ James H. Nicholson                    
|                   |  | James H. Nicholson                        
|                   |  | Chief Financial Officer                   
|                   |  | (Principal financial officer)             
|                   | 
|                   |  | /s/ Edward B. Debevec                     
|                   |  | Edward B. Debevec                         
|                   |  | Treasurer and Principal Accounting Officer
|                   |  | (Principal accounting officer)