##### 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  [  ]     Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 
 Commission File Number 0-24948 PVF Capital Corp. 
 Ohio
    
    34-1659805(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 30000 Aurora Road, Solon, Ohio
    
    44139(Address of principal executive offices)
    
    (Zip Code)
 (440) 248-7171 
 Not Applicable 
 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES
[X]                    
NO [  ] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). YES
[X]                    
NO [  ] Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date. Common Stock, $0.01 Par Value
    
    7,037,363(Class)
    
    (Outstanding at November 5, 2004)




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PVF CAPITAL CORP. INDEX PagePart I
    
    Financial InformationItem 1
    
    Financial StatementsConsolidated Statements of Financial
Condition, September 30, 2004 (unaudited)
and June 30, 2004.
    
    
    1Consolidated Statements of Operations for
the three months ended September 30,
2004 and 2003 (unaudited).
    
    
    2Consolidated Statements of Cash Flows for
the three months ended September 30, 2004
and 2003 (unaudited).
    
    
    3Notes to Consolidated Financial
Statements (unaudited).
    
    
    4Item 2
    
    Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    6Liquidity and Capital Resources
    
    
    11Item 3
    
    Quantitative and Qualitative Disclosures
About Market Risk
    
    
    12Item 4
    
    Controls and Procedures
    
    
    12Part II
    
    Other Information
    
    
    13EX-23.1 Amended Consent of Crowe, Chizek and Co. LLCEX-31.1 Rule 13a-14(a) Certification of Chief Executive OfficerEX-31.2 Rule 13a-14(a) Certification of Chief Financial OfficerEX-32 Section 1350 Certification




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##### Table of Contents



PART I FINANCIAL INFORMATION 
  PVF CAPITAL CORP. 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 September 30,2004
    
    June 30,unaudited
    
    2004ASSETSCash and cash equivalents:Cash and amounts due from depository institutions
    
    $
    12,076,868
    
    
    $
    4,550,446Interest bearing deposits
    
    
    1,010,420
    
    
    
    894,327Federal funds sold
    
    
    5,025,000
    
    
    
    12,025,000Total cash and cash equivalents
    
    
    18,112,288
    
    
    
    17,469,773Securities held to maturity
    
    
    27,500,000
    
    
    
    27,500,000Mortgage-backed securities held to maturity
    
    
    35,195,634
    
    
    
    36,779,289Loans receivable held for sale, net
    
    
    8,679,191
    
    
    
    11,870,775Loans receivable, net of allowance of
$4,512,704 and $4,376,704
    
    
    632,308,391
    
    
    
    610,680,821Office properties and equipment, net
    
    
    14,305,335
    
    
    
    13,888,392Real estate owned, net
    
    
    794,613
    
    
    
    70,000Federal Home Loan Bank stock
    
    
    10,941,200
    
    
    
    10,825,600Prepaid expenses and other assets
    
    
    26,272,541
    
    
    
    26,602,759Total Assets
    
    $
    774,109,193
    
    
    $
    755,687,409LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesDeposits
    
    $
    512,419,285
    
    
    $
    526,492,714Short-term advances from the FHLBank
    
    
    45,000,000
    
    
    
    15,000,000Long-term advances from the FHLBank
    
    
    120,034,395
    
    
    
    120,039,831Notes payable
    
    
    1,965,175
    
    
    
    2,486,250Subordinated debentures
    
    
    10,000,000
    
    
    
    10,000,000Advances from borrowers for taxes and insurance
    
    
    4,610,643
    
    
    
    2,376,872Accrued expenses and other liabilities
    
    
    16,152,942
    
    
    
    15,930,799Total Liabilities
    
    
    710,182,440
    
    
    
    692,326,466Stockholders EquitySerial preferred stock, none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 15,000,000 shares authorized;
7,422,235 and 7,420,045 shares issued, respectively
    
    
    74,222
    
    
    
    74,200Additional paid-in-capital
    
    
    58,397,051
    
    
    
    58,378,089Retained earnings
    
    
    8,778,848
    
    
    
    8,035,847Treasury Stock, at cost 390,880 and 377,870 shares, respectively
    
    
    (3,323,368
    )
    
    
    (3,127,193
    )Total Stockholders Equity
    
    
    63,926,753
    
    
    
    63,360,943Total Liabilities and Stockholders Equity
    
    $
    774,109,193
    
    
    $
    755,687,409
 See accompanying notes to consolidated financial statements Page 1




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##### Table of Contents



PART 1 FINANCIAL STATEMENTS
ITEM 1 FINANCIAL STATEMENTS PVF CAPITAL CORP. 
 CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)
 Three Months EndedSeptember 30,2004
    
    2003Interest incomeLoans
    
    $
    9,296,982
    
    
    $
    9,463,528Mortgage-backed securities
    
    
    419,760
    
    
    
    443,442Cash and securities
    
    
    317,688
    
    
    
    151,391Total interest income
    
    
    10,034,430
    
    
    
    10,058,361Interest expenseDeposits
    
    
    2,885,550
    
    
    
    2,930,179Borrowings
    
    
    1,538,537
    
    
    
    1,380,711Total interest expense
    
    
    4,424,087
    
    
    
    4,310,890Net interest income
    
    
    5,610,343
    
    
    
    5,747,471Provision for loan losses
    
    
    136,000
    
    
    
    100,000Net interest income after provision for loan losses
    
    
    5,474,343
    
    
    
    5,647,471Noninterest incomeService and other fees
    
    
    197,214
    
    
    
    146,646Mortgage banking activities, net
    
    
    318,790
    
    
    
    2,673,247Other, net
    
    
    169,221
    
    
    
    491,463Total noninterest income
    
    
    685,225
    
    
    
    3,311,356Noninterest expenseCompensation and benefits
    
    
    2,441,032
    
    
    
    2,506,396Office properties and equipment
    
    
    865,980
    
    
    
    797,724Other
    
    
    1,017,028
    
    
    
    1,233,925Total noninterest expense
    
    
    4,324,040
    
    
    
    4,538,045Income before federal income tax provision
    
    
    1,835,528
    
    
    
    4,420,782Federal income tax provision
    
    
    567,900
    
    
    
    1,488,700Net income
    
    $
    1,267,628
    
    
    $
    2,932,082Basic earnings per share
    
    $
    0.18
    
    
    $
    0.42Diluted earnings per share
    
    $
    0.18
    
    
    $
    0.41Dividends declared per common share
    
    $
    0.074
    
    
    $
    0.067
 See accompanying notes to consolidated financial statements Page 2




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##### Table of Contents



PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS PVF CAPITAL CORP. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months EndedSeptember 30,2004
    
    2003Operating ActivitiesNet Income
    
    $
    1,267,628
    
    
    $
    2,932,082Adjustments to reconcile net income to net cash from operating activitiesDepreciation
    
    
    452,972
    
    
    
    378,393Provision for loan losses
    
    
    136,000
    
    
    
    100,000Accretion of unearned discount and deferred loan origination fees, net
    
    
    (254,433
    )
    
    
    (311,349
    )Gain on sale of loans, net
    
    
    (297,301
    )
    
    
    (3,116,285
    )Gain on sale of real estate owned, net
    
    
    0
    
    
    
    (438,928
    )Federal Home Loan Bank stock dividends
    
    
    (115,600
    )
    
    
    (104,729
    )Change in accrued interest on investments, loans, and borrowings, net
    
    
    (182,025
    )
    
    
    (82,674
    )Origination of loans receivable held for sale, net
    
    
    (29,360,388
    )
    
    
    (138,941,988
    )Sale of loans receivable held for sale, net
    
    
    32,495,530
    
    
    
    157,201,320Net change in other assets and other liabilities, net
    
    
    3,274,602
    
    
    
    (13,682,643
    )Net cash from operating activities
    
    
    7,416,985
    
    
    
    3,933,199Investing ActivitiesLoan repayments and originations, net
    
    
    (22,233,750
    )
    
    
    8,589,177Repayment of mortgage-backed securities
    
    
    1,583,655
    
    
    
    1,113,239Purchase of mortgage-backed securities held for investment
    
    
    0
    
    
    
    (39,853,303
    )Disposals of real estate owned
    
    
    0
    
    
    
    888,928Securities maturities
    
    
    5,000,000
    
    
    
    33,252Securities purchased
    
    
    (5,000,000
    )
    
    
    0Additions to office properties and equipment, net
    
    
    (869,915
    )
    
    
    (903,468
    )Net cash from investing activities
    
    
    (21,520,010
    )
    
    
    (30,132,175
    )Financing activitiesNet increase (decrease) in demand deposits, NOW, and passbook savings
    
    
    (4,071,015
    )
    
    
    1,956,879Net decrease in time deposits
    
    
    (10,002,414
    )
    
    
    (49,239,424
    )Repayment of long-term Federal Home Loan Bank advances
    
    
    (5,436
    )
    
    
    (10,377
    )Net increase in Federal Home Loan Bank advances
    
    
    30,000,000
    
    
    
    0Net decrease in notes payable
    
    
    (521,075
    )
    
    
    (519,455
    )Proceeds from exercise of stock options
    
    
    18,984
    
    
    
    4,488Purchase of treasury stock
    
    
    (196,175
    )
    
    
    0Cash dividend paid
    
    
    (477,329
    )
    
    
    (431,656
    )Net cash from financing activities
    
    
    14,745,540
    
    
    
    (48,239,545
    )Net decrease in cash and cash equivalents
    
    
    642,515
    
    
    
    (74,438,521
    )Cash and cash equivalents at beginning of period
    
    
    17,469,773
    
    
    
    96,751,243Cash and cash equivalents at end of period
    
    $
    18,112,288
    
    
    $
    22,312,722Supplemental disclosures of cash flow information:Cash payments of interest expense
    
    $
    4,410,175
    
    
    $
    4,309,947Cash payments of income taxes
    
    $
    0
    
    
    $
    3,070,000Supplemental schedule of noncash investing activities:Transfer to real estate owned
    
    $
    724,613
    
    
    $
    0
 See accompanying notes to consolidated financial statements Page 3




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##### Table of Contents



Part I Financial Information
Item 1 PVF CAPITAL CORP. 
 Notes to Consolidated Financial Statements September 30, 2004 and 2003
(Unaudited)  1.
    
    The accompanying consolidated interim financial statements were prepared
in accordance with regulations of the Securities and Exchange Commission
for Form 10-Q. All information in the consolidated interim financial
statements is unaudited except for the June 30, 2004 consolidated
statement of financial condition which was derived from the Corporations
audited financial statements. Certain information required for a complete
presentation in accordance with accounting principles generally accepted
in the United States of America has been condensed or omitted. However,
in the opinion of management, these interim financial statements contain
all adjustments, consisting only of normal recurring accruals, necessary
to fairly present the interim financial information. The results of
operations for the three months ended September 30, 2004 are not
necessarily indicative of the results to be expected for the entire year
ending June 30, 2005. PVF Capital Corp.s common stock is traded on the
NASDAQ SMALL-CAP ISSUES under the symbol PVFC.Stock Compensation: Employee compensation expense under stock is reported
using the intrinsic valuation method. No stock-based compensation cost is
reflected in net income, as all options granted had an exercise price
equal to or greater than the market price of the underlying common stock
at the date of grant. The following table illustrates the effect on net
income and earnings per share if expense was measured using the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock
Based Compensation. Three Months EndedSeptember 30,2004
    
    2003Net Income as reported
    
    $
    1,267,628
    
    
    $
    2,932,082Less: Pro forma compensation
expense, net of tax
    
    $
    25,034
    
    
    $
    26,130Pro forma net income
    
    $
    1,242,594
    
    
    $
    2,905,952Basic earnings per share
    
    $
    0.18
    
    
    $
    0.42Pro forma basic earnings per share
    
    $
    0.18
    
    
    $
    0.41Diluted earnings per share
    
    $
    0.18
    
    
    $
    0.41Pro forma diluted earnings per share
    
    $
    0.17
    
    
    $
    0.40
 Page 4




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Part I Financial Information
Item 1  2.
    
    The following table discloses earnings per share for the three months
ended September 30, 2004 and September 30, 2003. Three months ended
September 30,2004
    
    2003Income
    
    Shares
    
    Per-Share
    
    Income
    
    Shares
    
    Per-Share(Numerator)
    
    (Denominator)
    
    Amount
    
    (Numerator)
    
    (Denominator)
    
    AmountBasic EPSIncome available to
common stockholders
    
    $
    1,267,628
    
    
    
    7,036,443
    
    
    $
    0.18
    
    
    $
    2,932,082
    
    
    
    7,011,598
    
    
    $
    0.42Effect of Stock Options
    
    
    
    
    
    
    177,469
    
    
    $
    0.00
    
    
    
    
    
    
    
    166,877
    
    
    $
    0.01Diluted EPSIncome available to
common stockholders
    
    $
    1,267,628
    
    
    
    7,213,912
    
    
    $
    0.18
    
    
    $
    2,932,082
    
    
    
    7,178,475
    
    
    $
    0.41
  3.
    
    Mortgage Banking Activities: The Company services real estate loans for
investors that are not included in the accompanying condensed consolidated
financial statements. Mortgage servicing rights are established based on
the allocated fair value of servicing rights retained on loans originated
by the Bank and subsequently sold in the secondary market. Mortgage
servicing rights are included in the consolidated statements of financial
condition under the caption Prepaid expenses and other assets. 2004
    
    2003Servicing rights:Beginning balance
    
    $
    5,358,845
    
    
    $
    4,655,182Originated
    
    
    353,743
    
    
    
    2,144,654Amortized
    
    
    (437,349
    )
    
    
    (1,520,923
    )End of period
    
    $
    5,275,239
    
    
    $
    5,278,913Valuation allowance:Beginning balance
    
    $
    
    
    
    $
    670,000Reductions credited to expense
    
    
    
    
    
    
    670,000End of period
    
    $
    
    
    
    $
    
 Mortgage banking activities, net consists of the following: Three Months EndedSeptember
30,2004
    
    2003Mortgage loan servicing fees
    
    $
    458,838
    
    
    $
    407,616Amortization and impairment of
mortgage loan servicing fees
    
    
    (437,349
    )
    
    
    (850,654
    )Gain on sales of loans
    
    
    297,301
    
    
    
    3,116,285Mortgage banking activities, net
    
    $
    318,790
    
    
    $
    2,673,247
 Page 5




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##### Table of Contents



Part I Financial Information 
  MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following analysis discusses changes in financial condition and results of
operations at and for the three-month period ended September 30, 2004 for PVF
Capital Corp. (PVF or the Company), Park View Federal Savings Bank (the
Bank), its principal and wholly-owned subsidiary, PVF Service Corporation, a
wholly-owned real estate subsidiary, Mid Pines Land Co., a wholly-owned real
estate subsidiary, and three other wholly-owned subsidiaries which are
currently inactive. FORWARD-LOOKING STATEMENTS When used in this Form 10-Q, the words or phrases will likely result, are
expected to, will continue, is anticipated, estimate, project, or
similar expressions are intended to identify forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties including
changes in economic conditions in the Companys market area, changes in
policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Companys market area and competition that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made. The Company wishes to advise readers that the factors listed
above could affect the Companys financial performance and could cause the
Companys actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements. The Company does not undertake, and specifically disclaims any obligation, to
publicly release the results of any revisions, which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events. FINANCIAL CONDITION Consolidated assets of PVF were $774.1 million as of September 30, 2004, an
increase of approximately $18.4 million, or 2.4%, as compared to June 30, 2004.
The Bank remained in regulatory capital compliance for tier one core capital,
tier one risk-based capital, and total risk-based capital with capital levels
of 8.89%, 10.48% and 11.12%, respectively, at September 30, 2004. During the three months ended September 30, 2004, the Companys cash and cash
equivalents, which consist of cash, interest-bearing deposits and federal funds
sold, increased $0.6 million, or 3.7%, as compared to June 30, 2004. The change
in the Companys cash and cash equivalents consisted of an increase in cash and
interest-bearing deposits of $7.6 million and a decrease in federal funds sold
of $7.0 million. Page 6




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##### Table of Contents



Part I Financial Information
Item 2FINANCIAL CONDITION continued The net $16.8 million, or 2.6%, increase in loans receivable, loans receivable
held for sale, and mortgage-backed securities during the three months ended
September 30, 2004, resulted from an increase in loans receivable of $21.6
million, and decreases in loans receivable held for sale and mortgage-backed
securities of $3.2 million and $1.6 million, respectively. The increase of
$21.6 million in loans receivable included increases of $8.3 million in
construction loans, $5.7 million in land loans, $5.5 million in consumer loans,
$3.8 million in single-family loans, $2.1 million in home equity line of credit
loans and $0.1 million in multi-family loans. These increases were partially
offset by decreases of $2.6 million in commercial real estate loans and $1.3
million in commercial equity line of credit loans. The decrease in loans
receivable held for sale is the result of a decline in mortgage refinancing
activity. The decrease in mortgage-backed securities resulted from payments
received of $1.6 million. The loan activity for the quarter ended September 30,
2004 resulted in no material change to the overall composition of the
portfolio. As a result of managements decision not to match market certificate of deposit
rates, deposits decreased by $14.1 million, or 2.7%. This decrease in deposits
was offset by an increase of $30.0 million, or 22.2%, in short-term advances
from the Federal Home Loan Bank FHLB. The decrease in notes payable of $0.5
million, or 21.0%, is the result of payments made on notes payable. The increase in real estate owned of $0.7 million is the result of three
properties being added to the Banks real estate owned properties. The increase
of $0.4 million in office properties and equipment is attributable to capital
improvements to the investment in new computer equipment and software. The
increase in advances from borrowers for taxes and insurance of $2.2 million is
due to timing differences between the collection and payment of escrow funds. The increase in advances of $30.0 million from the FHLB, the sale and repayment
of loans receivable held for sale and mortgage-backed securities of $4.8
million, the increase in advances from borrowers for taxes and insurance of
$2.2 million, and earnings of $1.3 million were used to fund the increase of
$21.6 million in loans receivable, fund the decrease of $14.1 million in
deposits, repay $0.5 million in notes payable, pay a cash dividend of $0.5
million, and fund the increase of $0.4 million in office properties and
equipment. Page 7




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##### Table of Contents



Part I Financial Information
Item 2  RESULTS OF OPERATIONS
    Three months ended September 30, 2004
compared to the three months ended
September 30, 2003. PVFs net income is dependent primarily on its net interest income, which is
the difference between interest earned on its loans and investments and
interest paid on interest-bearing liabilities. Net interest income is
determined by (i) the difference between yields earned on interest-earning
assets and rates paid on interest-bearing liabilities (interest-rate spread)
and (ii) the relative amounts of interest-earning assets and interest-bearing
liabilities. The Companys interest-rate spread is affected by regulatory,
economic and competitive factors that influence interest rates, loan demand and
deposit flows. Net interest income also includes amortization of loan
origination fees, net of origination costs. PVFs net income is also affected by the generation of non-interest income,
which primarily consists of loan servicing income, service fees on deposit
accounts, and gains on the sale of loans held for sale. In addition, net income
is affected by the level of operating expenses and loan loss provisions. The Companys net income for the three months ended September 30, 2004 was
$1,267,600. This represents a $1,664,500, or 56.8%, decrease when compared with
the prior year comparable period. This decrease is primarily the result of a
decline in refinancing activity that resulted in a decrease in income from
mortgage banking activities in the current period, in addition to a gain on the
sale of real estate owned in the prior period. Net interest income for the three months ended September 30, 2004 decreased by
$137,100, or 2.4%, as compared to the prior year comparable period, due to a
decrease of $23,900, or 0.2%, in total interest income and an increase in total
interest expense of $113,200, or 2.6%, from the prior year comparable period.
The decrease in total interest income of $23,900 in the current period resulted
from a decrease in the return on interest-earning assets of 22 basis points
offset by an increase of $25.0 million in the average balances of
interest-earning assets from the prior year comparable period. The increase in
total interest expense of $113,200 in the current period resulted from a
decrease of 14 basis points in the average cost of funds on interest-bearing
liabilities offset by an increase in the average balances of interest-bearing
liabilities of $50.8 million from the prior year comparable period. The
Companys net interest income decreased primarily because of an 8 basis point
decrease in the Companys interest-rate spread during the current period
partially offset by balance sheet growth in both interest-earning assets and
interest-bearing liabilities as compared to the prior year comparable period. Page 8




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued For the three months ended September 30, 2004, a provision for loan losses of
$136,000 was recorded, while a provision for loan losses of $100,000 was
recorded in the prior year comparable period. The Company uses a systematic
approach to determine the adequacy of its loan loss allowance and the necessary
provision for loan losses. The loan portfolio is reviewed and delinquent loan
accounts are analyzed individually on a monthly basis, with respect to payment
history, ability to repay, probability of repayment, and loan-to-value
percentage. Consideration is given to the types of loans in the portfolio and
the overall risk inherent in the portfolio. After reviewing current economic
conditions, changes to the size and composition of the loan portfolio, changes
in delinquency status, levels of non-accruing loans, non-performing assets,
impaired loans, and actual loan losses incurred by the Company, management
establishes an appropriate reserve percentage applicable to each category of
loans, and a provision for loan losses is recorded when necessary to bring the
allowance to a level consistent with this analysis. Management believes it uses
the best information available to make a determination as to the adequacy of
the allowance for loan losses. During the three months ended September 30, 2004, the Company experienced
decreases in the level of non-accruing loans and classified assets of $1.3
million and $1.0 million, respectively. Despite decreases to non-accruing loans
and classified assets, management determined it was necessary to record a
provision for loan losses of $136,000 in the current period due to an increase
in the total loan portfolio of $21.6 million and an increase in the recognition
of specific loan losses in the current period. During the three months ended
September 30, 2003, the Company experienced decreases in the level of
non-accruing loans and classified assets of $0.4 million and $0.7 million,
respectively. Despite a decrease in the loan portfolio of $17.1 million and
decreases to non-accruing loans and classified assets, management determined it
was necessary to record a provision for loan losses of $100,000 in the prior
period due to an increase in the recognition of specific loan losses in the
prior period. At June 30, 2004, the allowance for loan losses was $4.4 million,
which represented 41.2% of non-performing loans and 0.71% of net loans. At
September 30, 2004, the allowance for loan losses was $4.5 million, which
represented 48.2% of non-performing loans and 0.71% of net loans. Page 9




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued At September 30,
    
    June 30,2004
    
    2004(Dollars in thousands)Non-accruing loans (1):Real estate
    
    $
    9,369
    
    
    $
    10,633Accruing loans which are contractually past due
90 days or more:Real estate
    
    $
    1,079
    
    
    $
    503Total non-accrual and 90 days
past due loans
    
    $
    10,448
    
    
    $
    11,136Ratio of non-performing loans to total loans
    
    
    1.63
    %
    
    
    1.80
    %Other non-performing assets (2)
    
    $
    795
    
    
    $
    70Total non-performing assets
    
    $
    11,243
    
    
    $
    11,206Total non-performing assets to
total assets
    
    
    1.45
    %
    
    
    1.48
    %
   (1)
    
    Non-accrual status denotes loans on which, in the opinion of management,
the collection of additional interest is unlikely, or loans that meet the
non-accrual criteria established by regulatory authorities. Non-accrual
loans include all loans classified as doubtful or loss, loans in
foreclosure, and all loans greater than 90-days past due with a
loan-to-value ratio greater than 65%. Payments received on a non-accrual
loan are either applied to the outstanding principal balance or recorded
as interest income, depending on an assessment of the collectibility of
the principal balance of the loan.(2)
    
    Other non-performing assets represent property acquired by the Bank
through foreclosure or repossession. For the three months ended September 30, 2004, non-interest income decreased by
$2,626,100, or 79.3%, from the prior year comparable period. The decrease was
primarily the result of a decrease of $2,354,500, or 88.1%, in income from
mortgage-banking activities that resulted from a decrease of $2,819,000 in
profit on loan sales in the current period offset by an increase of $464,500 in
loan servicing income. The reduction in profit on loan sales for the quarter is
a result of a slowdown in refinancing activities during the current period.
During these periods, PVF pursued a strategy of originating long-term,
fixed-rate loans pursuant to Federal Home Loan Mortgage Corporation (FHLMC)
and Federal National Mortgage Association (FNMA) guidelines and selling such
loans to the FHLMC or the FNMA, while retaining the servicing. In addition, other income, net decreased by $322,200, or 65.6%, in the current
period, primarily due to gains recognized on the sale of real estate owned in
the prior period. Service and other fees increased by $50,600, or 34.5%, from
the prior year comparable period, primarily due to increases in NOW account fee
income in the current period. Page 10




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Part I Financial Information
Item 2 RESULTS OF OPERATIONS continued Non-interest expense for the three months ended September 30, 2004 decreased by
$214,000, or 4.7%, from the prior year comparable period. This was primarily
the result of a decrease in other non-interest expense of $216,900, or 17.6%,
due primarily to decreases in advertising expense, costs for outside services,
charitable contributions, postage and special mail, and stationery, printing
and supplies. The decrease of $65,400, or 2.6%, in compensation and benefits is
attributable to a decrease in accrued incentive bonuses. Office properties and
equipment expense increased by $68,300, or 8.6%, primarily due to the opening
of an additional new branch office along with increases in office rental
expense. The federal income tax provision for the three-month periods ended September
30, 2004 and September 30, 2003 was at an effective rate of 30.9% and 33.7%,
respectively. The effective tax rate was lower for the period ended September
30, 2004 due to tax-exempt income earned on bank-owned life insurance. 
 LIQUIDITY AND CAPITAL RESOURCES The Companys liquidity measures its ability to generate adequate amounts of
funds to meet cash needs. Adequate liquidity guarantees that sufficient funds
are available to meet deposit withdrawals, fund loan commitments, purchase
securities, maintain adequate reserve requirements, pay operating expenses,
provide funds for debt service, pay dividends to stockholders and meet other
general commitments in a cost-effective manner. Our primary source of funds are deposits, principal and interest payments on
loans, proceeds from the sale of loans, and advances from the Federal Home Loan
Bank. While maturities and scheduled amortization on loans are predictable
sources of funds, deposit flows and mortgage prepayments are greatly influenced
by general interest rates, economic conditions and local competition. Our most liquid assets are cash and cash equivalents. The levels of these
assets are dependent on our operating, financing, lending and investment
activities during any given period. Additional sources of funds include lines
of credit available from the FHLB. Management believes the Company maintains sufficient liquidity to meet its
operational needs. Page 11




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##### Table of Contents



Part I Financial Information 
  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no significant changes to the Companys interest rate risk
position or any changes to how the Company manages its Asset/Liability position
since June 30, 2004. This is attributable to the Companys Asset/Liability
Management policy of monitoring and matching the maturity and re-pricing
characteristics of its interest-earning assets and interest-bearing
liabilities, while remaining short-term with the weighted average maturity and
re-pricing periods. Part I Financial Information 
  CONTROLS AND PROCEDURES As of the end of the period covered by this report, management of the Company
carried out an evaluation, under the supervision and with the participation
of the Companys principal executive officer and principal financial officer,
of the effectiveness of the Companys disclosure controls and procedures.
Based on this evaluation, the Companys principal executive officer and
principal financial officer concluded that the Companys disclosure controls
and procedures are effective in ensuring that information required to be
disclosed by the Company in reports that it files or submits under the
Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported, within the time periods specified in the Securities
and Exchange Commissions rules and forms. It should be noted that the design
of the Companys disclosure controls and procedures is based in part upon
certain reasonable assumptions about the likelihood of future events, and
there can be no reasonable assurance that any design of disclosure controls
and procedures will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote, but the Companys principal
executive and financial officers have concluded that the Companys disclosure
controls and procedures are, in fact, effective at a reasonable assurance
level. There have been no changes in the Companys internal control over financial
reporting (to the extent that elements of internal control over financial
reporting are subsumed within disclosure controls and procedures) identified
in connection with the evaluation described in the above paragraph that
occurred during the Companys last fiscal quarter, that has materially
affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting. Page 12




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##### Table of Contents



Part II Other Information Item 1. Legal Proceedings. N/A Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  (a)
    
    N/A(b)
    
    N/A(c)
    
    N/A The following table illustrates the repurchase of the Companys common stock
during the period ended September 30, 2004: (c) TotalNumber ofSharesPurchased asPart of
    
    (d) Maximum Number(a) Total
    
    (b)
    
    Publicly
    
    of Shares that MayNumber of
    
    Average
    
    Announced
    
    Yet Be PurchasedShares
    
    Price Paid
    
    Plans or
    
    Under the Plans orPeriod
    
    Purchased
    
    per Share
    
    Programs
    
    ProgramsJuly 1 through
July 31, 2004
    
    
    2,750
    
    
    $
    14.64
    
    
    
    2,750
    
    
    
    290,587August 1 through
August 31, 2004
    
    
    10,260
    
    
    $
    15.20
    
    
    
    10,260
    
    
    
    280,327September 1 through
September 30,2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    13,010
    
    
    $
    15.08
    
    
    
    13,010
    
    
    
    280,327
 In August 2002 the Company announced a stock repurchase program to acquire up
to 5% of the Companys common stock. This plan was renewed for an additional
year in August 2003 and 2004. The plan is renewable on an annual basis and will
expire in August 2005, if not renewed. Item 3. Defaults Upon Senior Securities. N/A Item 4. Submission of Matters to a Vote of Security Holders. N/A Item 5. Other Information. N/A Item 6. Exhibits The following exhibits are filed herewith:  23.1
    
    Amended Consent of Crowe, Chizek and Company LLC31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer32
    
    Section 1350 Certification Page 13




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##### Table of Contents



Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized. PVF Capital Corp.(Registrant)Date: November 8, 2004
    
    /s/ C. Keith SwaneyC. Keith SwaneyPresident, Chief OperatingOfficer and Treasurer(Only authorized officer andPrincipal Financial Officer)