<PAGE>   1
                                       PVF
                                  -------------
                                  CAPITAL CORP.
                                  -------------



                                 ANNUAL REPORT
                                 JUNE 30, 1998
<PAGE>   2


                                Table of Contents

Letter to Shareholders................................................1

Special Shareholder Information.......................................3

Selected Consolidated Financial and Other Data........................4

Management's Discussion and Analysis of
Financial Condition and Results of Operations.........................6

Independent Auditors' Report.........................................15
<PAGE>   3
                               To Our Shareholders


         Fiscal 1998 was another successful year for PVF Capital Corp. We
exceeded our financial goals and objectives and feel much progress was made in
bringing a higher level of service to our customers, shareholders, and the
communities we serve. We are most proud and gratified by the many favorable
responses received from our customers regarding the quality of service provided
by our staff.

         In the fiscal year ended June 30, 1998, net income was a record $4.9
million, or $1.20 per share diluted, up 34.8% from fiscal 1997. Return on equity
reached 17.11% and return on assets was 1.23%, both returns among the best as
compared to all other Ohio publicly-traded thrifts. These results reflect the
success of our basic strategy of functioning as a niche lender, providing our
customers a wide range of lending products, collateralized by real estate, that
may not be available to them at larger banks.

         For the fiscal year ended June 30, 1998, assets increased by $62
million to $433 million, deposits grew $56 million to $344 million, and
stockholders' equity increased $4.9 million to $32 million. Additionally, we
originated in excess of $250 million in new loans.

         In January 1998, Park View Federal Savings Bank opened a full-service
branch office in the rapidly growing city of Chardon, Ohio in Geauga County. In
less than six months, the office has grown to just over $24 million in deposits
and originated an impressive number of loans in the local market area. This
opening brings the number of full-service branch office locations to ten.
Information on the location of each branch office and their hours of service is
provided at the end of this report.

         In March 1998, PVF Service Corporation, a subsidiary of PVF Capital
Corp., entered into an option agreement with Cameratta Properties Limited for
the purchase of its 250-acre parcel of land in Solon, Ohio for $5 million. The
option agreement provides for the payment of a $500,000 non-refundable deposit
that requires the buyer to purchase the property within one year or forfeit the
deposit. Completion of the purchase is dependent upon obtaining voter approval
for the planned development project from the residents of the city of Solon. The
project has the full support of the Solon City Council and will appear on the
November 1998 ballot. If the purchase is completed as provided in the contract,
an after-tax gain of approximately $2.5 million is expected to be earned in
fiscal 1999.
<PAGE>   4

         We want to assure you that PVF Capital Corp. has addressed the Year
2000 issue. This issue centers on the inability of today's computer hardware and
software, if left unaltered, to recognize the Year 2000. A project team has been
assembled and a formal plan of action was developed to take all steps possible
to prepare for potential Year 2000 problems.

         We have included Special Shareholder Information on the opposite page
that clearly demonstrates the performance of your stock since it became publicly
traded. As we continue to expand and grow, we pledge our continued efforts to
provide the best personal service to our customers, community, and shareholders.

         Finally, we invite all shareholders to attend the Annual Meeting of PVF
Capital Corp. on Monday, October 19, 1998, at 10:00 a.m., at the Cleveland
Marriott East in Beachwood, Ohio. As we continue to grow, we look forward to
another successful year of service and dedication to the community, its members,
our shareholders, and our customers.

                                   Sincerely,


                                   /s/ John R. Male

                                   John R. Male
                                   President



<PAGE>   5
                         SPECIAL SHAREHOLDER INFORMATION


         The performance of PVF Capital Corp. was recognized by The Cleveland
Plain Dealer in its annual published listing of the 100 Top Performing Public
Companies in the State of Ohio. The Board of Directors and management are proud
to inform our shareholders that the Company has made this select listing for the
third consecutive year.

         The success and profitability of the Company has resulted in an
annualized return of approximately 43% to an original investor in the stock. For
every 100 shares of stock purchased at $10.00 per share or $1,000.00 at the time
of our initial public offering, the purchaser would own 447 shares of stock with
a per share market value of $16.33 for a total market value of $7,300.00 at June
30, 1998. The following illustration summarizes the lifetime growth in value of
PVF Capital Corp. stock and offers a comparison to all NASDAQ Banks.

                    LIFETIME GROWTH IN MARKET VALUE OF $100

<TABLE>
<CAPTION>
                             30       30        30        30        30        30        30
                             Dec     June       June     June      June      June      June
                            1992     1993      1994      1995      1996      1997      1998
<S>                       <C>       <C>       <C>       <C>       <C>       <C>       <C>    
  PVF Capital Corp.       $100.00   $144.84   $164.57   $218.39   $330.49   $492.38   $732.29
  NASDAQ Banks            $100.00   $106.93   $121.61   $137.35   $178.77   $279.47   $387.09
</TABLE>


                                       3
<PAGE>   6



                 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA


FINANCIAL CONDITION DATA:

<TABLE>
<CAPTION>
                                                                                       At June 30,
                                                                -----------------------------------------------------------
                                                                1998         1997         1996           1995        1994
                                                                -----------------------------------------------------------
(in thousands)

<S>                                                            <C>          <C>          <C>          <C>          <C>     
Total assets..............................................     $433,279     $373,081     $331,634     $315,432     $238,245
Loans receivable and mortgage-backed
  securities held for investment, net.....................      371,949      341,914      278,956      250,244      206,674
Loans receivable held for sale and
  mortgage-backed securities available for sale, net......        1,645          710       18,817        4,451        3,954
Cash equivalents and securities...........................       51,017       23,576       27,884       53,812       22,226
Deposits..................................................      344,229      288,270      271,045      272,290      197,042
FHLB advances and notes payable...........................       47,384       49,715       30,191       16,800       18,160
Stockholders' equity......................................       31,209       26,273       22,474       18,818       15,742

Number of:
   Real estate loans outstanding..........................        2,676        2,648        2,527        2,512        2,259
   Savings accounts.......................................       25,122       23,190       23,259       24,007       19,007
   Offices ...............................................           10            9            9            9            7
</TABLE>

OPERATING DATA:

<TABLE>
<CAPTION>
                                                                                  Year Ended June 30,
                                                               -------------------------------------------------------------
                                                                1998         1997         1996           1995        1994
                                                               -------------------------------------------------------------
(in thousands except for earnings per share)

<S>                                                            <C>          <C>          <C>          <C>          <C>     
Interest income...........................................     $ 34,365     $ 30,963     $ 27,761     $ 22,941     $ 17,050
Interest expense..........................................       19,558       16,561       15,703       12,261        8,113
                                                              ---------     --------    ---------    ---------     --------
Net interest income
  before provision for loan losses........................       14,807       14,402       12,058       10,680        8,937
Provision for loan losses.................................          246          187          417          416            0
                                                            -----------     --------  -----------  -----------  -----------
Net interest income
  after provision for loan losses.........................       14,561       14,215       11,641       10,264        8,937
Non-interest income.......................................        1,597        1,336        1,747        1,514        1,703
Non-interest expense......................................        8,851       10,000        7,989        7,177        6,295
                                                             ----------     --------   ----------   ----------    ---------
Income before federal income tax expense and
  cumulative effect of a change in accounting principle...        7,307        5,551        5,399        4,601        4,345
Federal income taxes......................................        2,379        1,904        1,613        1,244        1,215
Cumulative effect of a change
  in accounting principle.................................            0            0            0            0          755
                                                             ----------     --------   ----------   ----------    ---------
Net income................................................     $  4,928     $  3,647     $  3,786     $  3,357     $  3,885
                                                               ========     ========     ========     ========     ========

Basic earnings per share..................................    $    1.25    $    0.95    $    0.99    $    0.88    $    1.00
                                                              =========    =========    =========    =========    =========
Diluted earnings per share................................    $    1.20    $    0.89    $    0.93    $    0.83    $    0.95
                                                              =========    =========    =========    =========    =========
</TABLE>

                                       4

<PAGE>   7

OTHER DATA:
<TABLE>
<CAPTION>
                                                                           At or For the Year Ended June 30,
                                                                -------------------------------------------------------------
                                                                1998         1997         1996           1995         1994
                                                                -------------------------------------------------------------
(in thousands)
<S>                                                               <C>          <C>          <C>          <C>          <C>  
Interest rate spread information:
    Average during year...................................        3.38%        3.84%        3.45%        3.67%        4.04%
    Average end of year...................................        3.05%        3.90%        3.51%        3.84%        4.25%
Net interest margin.......................................        3.78%        4.22%        3.90%        4.00%        4.30%
Average interest-earning assets to
  average interest-bearing liabilities....................      107.93%      107.93%      108.83%      107.08%      106.64%
Non-accruing loans (> 90 days) and
  repossessed assets to total assets......................        0.76%        1.11%        0.73%        1.14%        1.45%

Stockholders' equity to total assets......................        7.20%        7.04%        6.78%        5.97%        6.61%

Return on average assets..................................        1.23%        1.04%        1.19%        1.23%        1.78%

Return on average equity .................................       17.11%       15.19%       18.43%       19.61%       27.53%

Ratio of average equity to
  average assets..........................................        7.18%        6.84%        6.47%        6.26%        6.46%
Ratio of tangible capital to
  adjusted total assets...................................        7.21%        7.34%        7.25%        6.10%        6.37%
Ratio of core capital to
  adjusted total assets...................................        7.21%        7.34%        7.25%        6.10%        6.37%
Ratio of total capital to
  risk-weighted assets....................................       10.93%       10.62%       11.42%       10.77%       10.37%
Dividend payout ratio.....................................        0.00%    0.00%            0.00%    8.37%         0.00%
</TABLE>


                                       5


<PAGE>   8
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

GENERAL

PVF Capital Corp. ("PVF" or the "Company") owns and operates Park View Federal
Savings Bank ("Park View Federal" or the "Bank"), its principal and wholly-owned
subsidiary, and PVF Service Corporation, a wholly-owned real estate subsidiary.
Park View Federal has ten offices located in Cleveland and surrounding
communities, including three recently opened branches in Chardon, Bainbridge,
and Macedonia. The Bank's principal business consists of attracting deposits
from the general public through its branch offices and investing these funds in
loans secured by first mortgages on real estate located in its market area,
which consists of Portage, Lake, Geauga, Cuyahoga, Summit, Stark, Medina, and
Lorain Counties in Ohio. The Bank has concentrated its activities on serving the
borrowing needs of local homeowners and builders in its market area by
originating both fixed-rate and adjustable-rate single-family mortgage loans, as
well as construction loans and commercial real estate and multi-family
residential real estate loans. In addition, to a lesser extent, the Bank
originates loans secured by second mortgages, including home equity line of
credit loans secured by single-family residential properties and loans secured
by savings deposits. Lending activities are influenced by the demand for and
supply of housing, competition among lenders, the level of interest rates, and
the availability of funds. Deposit flows and cost of funds are influenced by
prevailing market rates of interest, primarily on competing investments, account
maturities, and the level of personal income and savings in the market area.

FORWARD-LOOKING STATEMENTS

When used in this Annual Report, 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 result 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.

OVERVIEW OF FINANCIAL CONDITION
AT JUNE 30, 1998, 1997, AND 1996

PVF had total assets of $433.3 million, $373.1 million, and $331.6 million at
June 30, 1998, 1997, and 1996, respectively. The primary source of the Bank's
increase in total assets has been its loan portfolio. Net loans receivable and
mortgage-backed securities totaled $373.6 million, $342.6 million, and $297.8
million at June 30, 1998, 1997, and 1996, respectively. The increase of $31.0
million in net loans and mortgage-backed securities at June 30, 1998 resulted
primarily from increases in one-to-four family residential loans, commercial
real estate loans, and one-to-four family residential construction loans of
$13.3 million, $9.6 million, and $6.2 million, respectively. The Bank's current
loans-to-one-borrower limitation was approximately $4.0 million at June 30,
1998. In addition, securities totaled $27.8 million, $14.0 million, and $14.1
million at the fiscal years ended June 30, 1998, 1997, and 1996, respectively.
The increase of $31.0 million in net loans and mortgage-backed securities, $13.8
million in securities, and $13.6 million in cash and cash equivalents at June
30, 1998 were funded by growth of $55.9 million in deposits.

The securities portfolio has been and will continue to be used primarily to meet
the regulatory liquidity requirements of the Bank in its deposit taking and
lending activities. The Bank has adopted a policy that permits investment only
in U.S. government and agency securities or Triple-A-rated securities. The Bank
invests primarily in securities having a final maturity of five years or less
that qualify as regulatory liquidity, federal funds sold, and deposits at the
Federal Home Loan Bank ("FHLB") of Cincinnati. Approximately $25.7 million, or
53.1% of the securities portfolio, has a repricing period of one year or less,
and the Bank has no plans to change the short-term nature of its securities
portfolio.

                                       6

<PAGE>   9

The Bank's deposits totaled $344.2 million, $288.3 million, and $271.0 million
at June 30, 1998, 1997, and 1996, respectively. Advances from the FHLB of
Cincinnati amounted to $46.3 million, $47.4 million, and $27.5 million at June
30, 1998, 1997, and 1996, respectively. The opening of a new branch office along
with management's decision to aggressively compete with market savings rates
resulted in an increase in savings deposits of $55.9 million for the fiscal year
ended June 30, 1998.

CAPITAL

PVF's stockholders' equity totaled $31.2 million, $26.3 million, and $22.5
million at the fiscal years ended June 30, 1998, 1997, and 1996, respectively.
The increases were the result of the retention of net earnings.

The Bank's primary regulator, The Office of Thrift Supervision ("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 June 30, 1998, 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:

                        Park View               Requirement for
                          Federal  Percent of   Well-Capitalized
(in thousands)            Capital   Assets (1)    Institution
                         ----------------------------------------
GAAP capital             $ 31,727     7.21%           N/A
Tangible capital         $ 31,727     7.21%           N/A
Core capital             $ 31,727     7.21%          5.00%
Tier 1 risk-based capital$ 31,727    10.11%          6.00%
Risk-based capital       $ 34,324    10.93%         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.

COMMON STOCK AND DIVIDENDS

The Company's common stock trades under the symbol "PVFC" on the Nasdaq
Small-Cap Market. A 10% stock dividend was issued in August 1995, a
three-for-two stock split effected in the form of a dividend was issued in
August 1996, a 10% stock dividend was issued in September 1997, and a
three-for-two stock split effected in the form of a dividend was issued in
August 1998. As adjusted to reflect all stock dividends and all stock splits,
the Company had 3,990,808 shares of common stock outstanding and approximately
318 holders of record of the common stock at August 31, 1998. OTS regulations
applicable to all Federal Savings Banks such as Park View Federal limit the
dividends that may be paid by the Bank to PVF. Any dividends paid may not reduce
the Bank's capital below minimum regulatory requirements.

The following table sets forth certain information as to the range of the high
and low bid prices for the Bank's common stock for the calendar quarters
indicated.(1)

<TABLE>
<CAPTION>
                          Fiscal 1998         Fiscal 1997
                      -------------------------------------
                      High Bid  Low Bid    High Bid Low Bid
                      -------------------------------------
<S>                   <C>       <C>        <C>     <C>    
Fourth Quarter        $ 18.83   $ 15.92    $ 10.99 $ 10.15
Third Quarter           16.00     12.67      10.15    9.09
Second Quarter          13.83     12.67       9.24    8.79
First Quarter           14.33     12.08       8.79    7.27
</TABLE>

(1) Quotations reflect inter-dealer prices, without retail mark-up, mark-down,
or commission, and may not represent actual transactions. Bid prices have been
adjusted to reflect the previously described stock dividends and stock splits.



LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity measures its ability to fund loans and meet withdrawals
of deposits and other cash outflows in a cost-effective manner. The Company's
primary sources of funds for operations are deposits from its primary market
area, principal and interest payments on loans and mortgage-backed securities,
sales of loans and mortgage-backed securities, and proceeds from maturing
securities and advances from the FHLB of Cincinnati. While loan and
mortgage-backed securities payments and maturing securities are relatively
stable sources of funds, deposit flows and loan prepayments are greatly
influenced by prevailing interest rates, economic conditions, and competition.
FHLB advances may be used on a short-term basis to compensate for deposit
outflows or on a long-term basis to support expanded lending and investment
activities.

The Bank uses its capital resources principally to meet its ongoing commitment
to fund maturing certificates of deposit and deposit withdrawals, repay
borrowings, fund existing and continuing loan commitments, maintain its
liquidity, and meet operating expenses. At June 30, 1998, the Bank had
commitments to originate loans totaling $27.6 million and had $44.6 million of
undisbursed loans in process. Scheduled maturities of certificates of deposit
during the twelve months following June 30, 1998 totaled $211.6 million.
Management believes that a significant portion of the amounts maturing during
fiscal 1999 will be

                                       7
<PAGE>   10

reinvested with the Bank because they are retail deposits, however, no
assurances can be made that this will occur.

Park View Federal is required by current OTS regulations to maintain specified
liquid assets of at least 4% of its net withdrawable accounts plus short-term
borrowings. Such investments serve as a source of liquid funds which the Bank
may use to meet deposit withdrawals and other short-term needs. The Bank's most
liquid assets are cash and cash equivalents, which are short-term, highly-liquid
investments with original maturities equal to or less than three months that are
readily convertible to known amounts of cash. The levels of such assets are
dependent upon the Bank's operating, financing, and investment activities at any
given time. Management believes that the liquidity levels maintained are more
than adequate to meet potential deposit outflows, repay maturing FHLB advances,
fund new loan demand, and cover normal operations. Park View Federal's daily
liquidity ratio at June 30, 1998 was 13.4%, and its short-term liquidity ratio
was significantly above regulatory requirements.

ASSET/LIABILITY MANAGEMENT

The Company'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. Park View Federal'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 Company's exposure to interest rate risk is reviewed on a quarterly basis by
the Board of Directors and the ALCO. Exposure to interest rate risk is measured
with the use of interest rate sensitivity analysis to determine the Company'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 Company has
developed strategies to manage its liquidity, shorten its 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 residential mortgage loans and adjustable-rate
mortgage loans for the acquisition, development, and construction of residential
and commercial real estate, all of which are retained by the Bank for its
portfolio. In addition, all long-term, fixed-rate mortgages are underwritten
according to guidelines of the Federal Home Loan Mortgage Corporation ("FHLMC")
and the Federal National Mortgage Association ("FNMA") and are either swapped
with the FHLMC and the FNMA in exchange for mortgage-backed securities secured
by such loans which are then sold in the market or sold directly for cash in the
secondary market.

Interest rate sensitivity analysis is used to measure the Company's interest
rate risk by computing estimated changes in NPV of its cash flows from assets,
liabilities, and off-balance sheet items in the event of a range of assumed
changes in market interest rates. NPV represents the market value of portfolio
equity and is equal to the market value of assets minus the market value of
liabilities, with adjustments made for off-balance sheet items. This analysis
assesses the risk of loss in market risk sensitive instruments in the event of
an immediate and sustained 1 and 2 percent increase or decrease in market
interest rates. The Bank's Board of Directors has adopted an interest rate

                      PROFILE OF INTEREST SENSITIVE ASSETS

(3.0%) Fixed-rate other mortgage loans 
(5.8%) Fixed-rate single-family mortgage loans
(36.1%) Adjustable-rate other mortgage loans
(42.1%) Adjustable-rate single-family mortgage loans 
(4.8%) Overnight Fed Funds
(0.7%) Adjustable-rate mortgage-backed securities 
(6.6%) Investment securities 60 months or less 
(0.9%) Consumer loans


                                       8
<PAGE>   11
                    PROFILE OF INTEREST SENSITIVE LIABILITIES

(54.9%) CD's 12 months or less 
(3.5%)  CD's 25 to 36 months 
(13.6%) CD's 13 to 24 months 
(1.0%)  CD's over 36 months 
(0.3%)  Notes Payable 12 months or less
(8.1%)  FHLB Advances over 36 months
(1.3%)  FHLB Advances 13 to 36 months 
(2.6%)  FHLB Advances 12 months or less 
(8.3%)  Passbook accounts 
(6.4%)  Transaction accounts 


risk policy which establishes maximum decreases in the NPV of 5% and 10% in
the event of an immediate and sustained 1 and 2 percent increase or decrease in
market interest rates. The following table presents the Bank's projected change
in NPV for the various rate shock levels at June 30, 1998. All market risk
sensitive instruments presented in this table are held to maturity or available
for sale. The Bank has no trading securities.

      (in thousands)

<TABLE>
<CAPTION>
    Change in    Market Value of     Dollar     Percentage
 Interest Rates  Portfolio Equity    Change       Change
 --------------  ----------------    ------       ------
<S>     <C>        <C>              <C>            <C> 
       +200        $  44,137        $  (624)       (2)%
       +100           44,997            186         0
          0           44,811
       -100           44,146           (665)       (1)
       -200           43,190         (1,621)       (4)
</TABLE>

The above table indicates that at June 30, 1998, in the event of either an
immediate and sustained increase or decrease in prevailing market interest
rates, the Bank's NPV would not be materially impacted, but would be expected to
decrease slightly. This is the case, because of the current flatness of the
yield curve along with the borrowers' and/or lenders' ability to prepay or
extend the terms of loans, investments, deposits, and borrowings. 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. At June 30, 1998, the Bank's estimated changes in NPV were within
the targets established by the Board of Directors.

NPV is calculated by the OTS using information provided by the Bank. The
calculation is based on the net present value of discounted cash flows utilizing
market prepayment assumptions and market rates of interest provided by Bloomberg
quotations and surveys performed during the quarter ended June 30, 1998, with
adjustments made to reflect the shift in the Treasury yield curve between the
survey date and the quarter-end date.

Computation of prospective effects of hypothetical interest rate changes are
based on numerous assumptions, including relative levels of market interest
rates, loan prepayments, and deposit decay, and should not be relied upon as
indicative of actual results. Further, the computations do not contemplate any
actions the Bank may undertake in response to changes in interest rates.

Certain shortcomings are inherent in the method of analysis presented in the
computation of NPV. Actual values may differ from those projections set forth in
the table, should market conditions vary from assumptions used in the
preparation of the table. Certain assets, such as adjustable-rate loans, which
represent the Bank's primary loan product, have features which restrict changes
in interest rates on a short-term basis and over the life of the asset. In
addition, the proportion of adjustable-rate loans in the Bank's portfolio could
decrease in future periods if market interest rates remain at or decrease below
current levels due to refinance activity. Further, in the event of a change in
interest rates, prepayment and early withdrawal levels would likely deviate
significantly from those assumed in the table. Finally, the ability of many
borrowers to repay their adjustable-rate debt may decrease in the event of an
interest rate increase.

In addition, the Bank uses interest rate sensitivity gap analysis to monitor the
relationship between the maturity and repricing of its interest-earning assets
and interest-bearing liabilities, while maintaining an acceptable interest rate
spread. Interest rate sensitivity gap is defined as the difference between the
amount of interest-earning assets maturing or repricing

                                       9
<PAGE>   12

within a specific time period and the amount of interest-bearing liabilities
maturing or repricing within that time period. A gap is considered positive when
the amount of interest-rate-sensitive assets exceeds the amount of
interest-rate-sensitive liabilities, and is considered negative when the amount
of interest-rate-sensitive liabilities exceeds the amount of
interest-rate-sensitive assets. Generally, during a period of rising interest
rates, a negative gap would adversely affect net interest income, while a
positive gap would result in an increase in net interest income. Conversely,
during a period of falling interest rates, a negative gap would result in an
increase in net interest income, while a positive gap would negatively affect
net interest income. Management's goal is to maintain a reasonable balance
between exposure to interest rate fluctuations and earnings. The following table
summarizes the Company's interest rate sensitivity gap analysis at June 30,
1998.


<TABLE>
<CAPTION>
                                                                   Within        1-3         3-5    greater than 
(in thousands)                                                     1 Year       Years       Years     5  Years       Total
--------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>         <C>         <C>         <C>         <C>     
Total interest-rate-sensitive assets.........................     $206,003    $101,571    $ 76,146    $ 38,443    $422,163
Total interest-rate-sensitive liabilities....................      221,560     106,027      14,956      42,808     385,351
Periodic GAP.................................................      (15,557)     (4,456)     61,190      (4,365)     36,812
Cumulative GAP...............................................      (15,557)    (20,013)     41,177      36,812
Ratio of cumulative GAP to total assets......................       (4.0)%      (5.0)%       9.1%        8.5%
</TABLE>

                              RESULTS OF OPERATIONS

GENERAL

PVF Capital Corp.'s net income for the fiscal year ended June 30, 1998 was $4.9
million, or $1.25 basic earnings per share and $1.20 diluted earnings per share,
as compared to $3.6 million, or $0.95 basic earnings per share and $0.89 diluted
earnings per share for fiscal 1997, and $3.8 million, or $0.99 basic earnings
per share and $0.93 diluted earnings per share for fiscal 1996. All per share
amounts have been adjusted for stock dividends and stock splits.

Net income for the current year increased by $1.3 million from the prior fiscal
year and exceeded net income for fiscal 1996 by $1.1 million. In the first
quarter of fiscal 1997, the Bank recorded a one-time special assessment to
recapitalize the Savings Association Insurance Fund ("SAIF") that required
SAIF-insured savings institutions to pay 65.7 cents for every $100 of deposits.
This assessment was charged against earnings in fiscal 1997 and had an after-tax
impact of $1.1 million.

NET INTEREST INCOME

Net interest income amounted to $14.8 million for the fiscal year ended June 30,
1998, as compared to $14.4 million and $12.1 million for the fiscal years ended
June 30, 1997 and 1996, respectively. The increase in net interest income of
$0.4 million and $2.3 million from the fiscal year ended June 30, 1997 to 1998
and from the fiscal year ended June 30, 1996 to 1997, respectively, is due to
changes in interest rates and changes in volume of interest-earning assets and
interest-bearing liabilities. Tables 1 and 2 provide information as to change in
the Bank's net interest income.

Table 1 sets forth certain information relating to the Bank's average
interest-earning assets (loans and investments) and interest-bearing liabilities
(deposits and borrowings) and reflects the average yield on assets and average
cost of liabilities for the periods and at the dates indicated. Such yields and
costs are derived by dividing interest income or interest expense by the average
daily balance of assets or liabilities, respectively, for the periods presented.
During the periods indicated, non-accrual loans are included in the net loan
category.

This table also presents information for the periods indicated and at June 30,
1998 with respect to the difference between the weighted-average yield earned on
interest-earning assets and weighted-average rate paid on interest-bearing
liabilities, or "interest rate spread," which savings institutions have
traditionally used as an indicator of profitability. Another indicator of an
institution's net interest income is its "net yield on interest-earning assets,"
which is its net interest income divided by the average balance of net
interest-earning assets. Net interest income is affected by the interest rate
spread and by the relative amounts of interest-earning assets and
interest-bearing liabilities.


                                       10
<PAGE>   13




Table 1  
<TABLE>
<CAPTION>
                                                         AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS AND RATES
                                                                            FOR THE YEAR ENDED JUNE 30,
                                                         1998                      1997                     1996
                                               ------------------------------------------------------------------------------------
                                               Average               Yield/  Average              Yield/   Average           Yield/
(in thousands)                                 Balance    Interest   Cost    Balance    Interest   Cost    Balance  Interest  Cost
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>       <C>       <C>      <C>       <C>         <C>     <C>      <C>       <C>  
Interest-earning assets:
  Loans...................................      $361,308  $ 32,500  9.00%    $317,453  $ 29,419    9.27%   $272,768 $ 25,572  9.38%
  Mortgage-backed securities..............         2,439       155   6.36       3,832       285    7.44       3,961      269  6.79
  Securities and other interest-earning assets    27,918     1,710   6.13      19,706     1,259    6.39      32,732    1,920  5.87
                                                --------  --------           --------  --------            -------- --------      
       Total interest-earning assets......       391,665    34,365   8.77     340,991    30,963    9.08     309,461   27,761  8.97
                                                          --------                     --------                     --------      
  Non-interest-earning assets.............         9,291                        9,773                         7,775
                                                --------                     --------                      --------  
       Total assets.......................      $400,956                     $350,764                      $317,236
                                                ========                     ========                      ========

Interest-bearing liabilities:
  Deposits................................      $321,039  $ 17,062  5.31     $272,341  $ 13,957    5.12    $270,975 $ 14,889  5.49
  FHLB advances...........................        40,240     2,351  5.84       41,083     2,367    5.76      10,638      546  5.13
                                                --------  --------  ----     --------  --------    ----    -------- --------  ----
  Notes payable...........................         1,604       145  9.04        2,510       237    9.44       2,746      268  9.80
       Total interest-bearing liabilities.       362,883    19,558  5.39      315,934    16,561    5.24     284,359   15,703  5.52
                                                          --------  ----               --------    ----             --------  ----
  Non-interest-bearing liabilities........         9,267                       10,825                        12,337
                                                --------                     --------                      --------
       Total liabilities .................       372,150                      326,759                       296,696

Stockholders' equity......................        28,806                       24,005                        20,540
                                                --------                     --------                      --------
       Total liabilities and stockholders' 
         equity                                 $400,956                     $350,764                      $317,236

Net interest income.......................                $ 14,807                     $ 14,402                     $ 12,058
                                                          ========                     ========                     ========       

Interest rate spread......................                          3.38%                          3.84%                      3.45%
                                                                    ====                           ====                       ==== 
Net yield on interest-earning assets......                          3.78%                          4.22%                      3.90%
                                                                    ====                           ====                       ==== 
Ratio of average interest-earning assets
  to average interest-bearing liabilities.       107.93%                    107.93%                   108.83%
                                                 ======                     ======                    ====== 
</TABLE>

Table 2 illustrates the extent to which changes in interest rates and shifts in
the volume of interest-related assets and liabilities have affected the Bank's
interest income and expense during the years indicated. The table shows the
changes by major component, distinguishing between changes relating to volume
(changes in average volume multiplied by average old rate), changes relating to
rate (changes in average rate multiplied by average old volume), and changes
relating to rate and volume (changes in average rate multiplied by changes in
average volume).

As is evidenced by these tables, interest rate changes unfavorably affected the
Bank's net interest income for the fiscal year ended June 30, 1998, while
favorably affecting the Bank's net interest income for the fiscal year ended
June 30, 1997. Due to the long-term nature of the Bank's loan portfolio and
short-term nature of its deposit portfolio, along with decreasing interest rates
and a relatively flat yield curve during much of the fiscal year ended June 30,
1998, the Bank experienced a decrease of 46 basis points in its interest rate
spread to 3.38% for fiscal 1998 from 3.84% for fiscal 1997, while during fiscal
1997 its interest rate spread increased 39 basis points from 3.45% for fiscal
1996. These changes in average interest rate spread resulted in a decrease in
net interest income for the year ended June 30, 1998 of $1.5 million due to
interest rate changes and an increase of $845,000 for the year ended June 30,
1997.

Net interest income was favorably affected by volume changes during the two
years ended June 30, 1998 and 1997. Accordingly, net interest income grew by
$2.1 million and $1.8 million due to volume changes for the fiscal years ended
June 30, 1998 and 1997, respectively. Changes attributable to both rate and
volume impacted net interest income negatively during the fiscal years ended
June 30, 1998 and June 30, 1997.

                                       11
<PAGE>   14


The rate/volume analysis illustrates the effect that volatile interest rate
environments can have on a financial institution. Increasing interest rates or a
flattening yield curve will both have a negative effect on net interest income,
while decreasing interest rates or a steepening yield curve will both have a
positive effect on net interest income.








<TABLE>
<CAPTION>
      Table 2                                                           YEAR ENDED JUNE 30,
                                           --------------------------------------------------------------------------------
                                             1998            vs.           1997        1997         vs.              1996
                                           --------------------------------------------------------------------------------
                                                     Increase (Decrease)                       Increase (Decrease)
                                                             Due to                                   Due to
                                           --------------------------------------    -------------------------------------
                                                                  Rate/                                    Rate/
      (in thousands)                        Volume      Rate     Volume     Total      Volume    Rate     Volume   Total
                                            -------------------------------------    -------------------------------------
      Interest income:
<S>                                         <C>      <C>         <C>      <C>         <C>      <C>       <C>       <C>    
        Loans...........................    $ 4,064  $   (864)   $ (119)  $ 3,081     $ 4,190  $   (295) $   (48)  $ 3,847
        Mortgage-backed securities......       (104)      (41)       15      (130)         (9)       26       (1)       16
        Securities and other
          interest-earning assets.......        525       (52)      (22)      451        (764)      170      (67)     (661)
                                          ---------  ---------  -------- --------   ---------   -------  -------  --------
            Total interest-earning assets               4,485      (957)     (126)      3,402     3,417      (99)     (116)
                                                     ----------------------------------------------------------- ---------
  3,202
      Interest expense:
        Deposits........................      2,496       517        92     3,105          75    (1,001)      (5)     (931)
        FHLB advances...................        (49)       34        (1)      (16)      1,561        67      193     1,821
        Other borrowings................        (86)      (10)        4       (92)        (23)      (10)        1      (32)
                                         ------------------------------ ---------- ---------- --------- ------------------
            Total interest-bearing
              liabilities...............      2,361       541        95     2,997       1,613      (944)     189       858
                                           -------------------------------------------------- --------- -------- ---------
      Net interest income...............    $ 2,124   $(1,498)   $ (221) $    405     $ 1,804  $    845   $ (305)  $ 2,344
                                            =======   =======    ======  ========     =======  ========   ======   =======
</TABLE>


PROVISION FOR LOAN LOSSES

Due to the increased risks associated with commercial real estate, construction,
and land loans, the Bank carefully monitors its loan portfolio and establishes
levels of unallocated and specific reserves for loan losses. Provisions for loan
losses are charged to earnings to bring the total allowances for loan losses to
a level considered adequate by management to provide for probable loan losses,
based on prior loss experience, volume and type of lending conducted by the
Bank, industry standards, and past due loans in the Bank's loan portfolio. The
Bank's policies require the review of assets on a regular basis, and the Bank
appropriately classifies loans as well as other assets if warranted. The Bank
establishes specific provisions for loan losses when a loan is deemed to be
uncollectible in an amount equal to the net book value of the loan or to any
portion of the loan deemed uncollectible. A loan that is classified as either
substandard or doubtful is assigned an allowance based upon the specific
circumstances on a loan-by-loan basis after consideration of the underlying
collateral and other pertinent economic and market conditions. In addition, the
Bank maintains unallocated allowances based upon the establishment of a risk
category for each type of loan in the Bank's portfolio.

The Company uses a systematic approach in determining the adequacy of its loan
loss allowance and the necessary provision for loan losses, whereby the loan
portfolio is reviewed generally and delinquent loan accounts are analyzed
individually, on a monthly basis. Consideration is given primarily to the types
of loans in the portfolio and the overall risk inherent in the portfolio, as
well as, with respect to individual loans, account status, payment history,
ability to repay and probability of repayment, and loan-to-value percentages.
After reviewing current economic conditions, changes in delinquency status, 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 with respect to the allowance for
loan losses, recognizing that future adjustments may be necessary depending upon
a change in economic conditions.

During 1998, the Company experienced growth in the loan portfolio of $28.5
million, or 8.3%, while

                                       12
<PAGE>   15

maintaining the composition of the loan portfolio. In addition, the level of
impaired loans decreased from $4.1 million to $3.3 million, while allowance
related to impaired loans increased from $69,000 to $196,000. The decrease in
the level of impaired loans caused the percentage of impaired loans to allowance
for loan losses to increase from 65% to 82%. Net charge-offs increased from
$77,000 in 1997 to $234,000 in 1998. Therefore, taking into consideration the
growth of the portfolio, the lower level of impaired loans, as well as the
higher level of net charge-offs and the overall performance of the portfolio,
the Company provided $246,000 of additional provision to maintain the allowance
at a level deemed appropriate of $2.7 million.

During 1997, the Company experienced growth in the loan portfolio of $52.6
million, or 18.2%, while maintaining the composition of the loan portfolio.
Although the level of impaired loans increased from $2.4 million to $4.1
million, the allowance related to impaired loans decreased from $394,000 to
$69,000 due to the adequate underlying value of impaired loans. Therefore,
despite the fact that the level of impaired loans increased, causing the
percentage of impaired loans to allowance for loan losses to decrease from 109%
to 65%, this did not result in a need to increase the allowance significantly.
Net charge-offs also decreased from $254,000 in 1996 to $77,000 in 1997.
Therefore, taking into consideration the growth of the portfolio, as well as the
low level of net charge-offs and the overall performance of the portfolio, the
Company provided $187,000 of additional provision to maintain the allowance at a
level deemed appropriate of $2.7 million.

NON-INTEREST INCOME

Non-interest income amounted to $1.6 million, $1.3 million, and $1.7 million for
the fiscal years ended June 30, 1998, 1997, and 1996 respectively. The
fluctuations in non-interest income are due primarily to fluctuations in income
derived from mortgage banking activities and fee income on deposit accounts.
Income attributable to mortgage banking activities consists of loan servicing
income, gains and losses on the sale of loans and mortgage-backed securities,
and market valuation provisions and recoveries. Income from mortgage banking
activities amounted to $869,000, $663,000, and $925,000 for the fiscal years
ended June 30, 1998, 1997, and 1996, respectively. The increase in income from
mortgage banking activities of $206,000 from the fiscal year ended June 30, 1997
to 1998 is primarily due to an increase in net profit realized on the sale of
loans and mortgage-backed securities. Other non-interest income amounted to
$727,000, $673,000, and $822,000 for the fiscal years ended June 30, 1998, 1997,
and 1996, respectively. Changes in other non-interest income are the result of
service and other miscellaneous fee income, income realized on the sale of
assets and investments, and the disposal of real estate owned properties.

NON-INTEREST EXPENSE

Non-interest expense amounted to $8.9 million, $10.0 million, and $8.0 million
for the fiscal years ended June 30, 1998, 1997, and 1996, respectively. The
principal component of non-interest expense is compensation and related benefits
which amounted to $4.5 million, $4.4 million, and $4.1 million for the fiscal
years ended June 30, 1998, 1997, and 1996, respectively. The increase in
compensation for the fiscal years ended June 30, 1998 and 1997 is due primarily
to growth in the staff, the opening of a new branch in fiscal 1998, employee
401K benefits, a compensation incentive plan for both management and loan
originators, and inflationary salary and wage adjustments to employees. Office
occupancy totaled $1.6 million, $1.6 million, and $1.4 million for the fiscal
years ended June 30, 1998, 1997, and 1996, respectively. The increased occupancy
expense is attributable to maintenance and repairs to office buildings, and
costs attributable to opening and operating additional branch offices. Other
non-interest expense totaled $2.7 million, $4.0 million, and $2.4 million for
the fiscal years ended June 30, 1998, 1997, and 1996, respectively. The increase
in other non-interest expense of $1.6 million from the fiscal year ended June
30, 1996 to 1997 is attributable to the previously mentioned SAIF assessment.
Changes in other non-interest expense are the result of advertising,
professional and legal services, regulatory and insurance expenses, and
franchise tax expense.

FEDERAL INCOME TAXES

The Bank's federal income tax expense was $2.4 million, $1.9 million, and $1.6
million for the fiscal years ended June 30, 1998, 1997, and 1996, respectively.
Due to the availability of tax credits for the fiscal year ended June 30, 1998
and statutory bad debt deductions for the fiscal year ended June 30, 1996, and
other miscellaneous deductions, the Bank's effective federal income tax rate was
below the expected tax rate of 35% with an effective rate of 33%, 34%, and 30%
for the fiscal years ended June 30, 1998, 1997, and 1996, respectively.

YEAR 2000

Park View Federal realizes the challenges of the Year 2000 issue. In compliance
with regulatory guidelines, a project team was assembled to review the effects
the century

                                       13
<PAGE>   16

change has on current systems and to assess the potential risks that it
presents. A formal plan of action was developed to address and correct this
issue and has been approved by the Bank's Board of Directors with the full
support of senior management. An inventory of internal systems, both computer
and non-computer related, was completed in this process. Relationships with
third-party vendors were also analyzed. Potential weaknesses were then
documented and prioritized as to their effect on critical business functions.
Our major software supplier has dedicated tremendous resources to help in
addressing this issue. They recently released the remediated version of the
system that has undergone extensive beta testing. All user departments are
involved in the testing process in-house to assure validation of the changes.
Our software supplier has advised us that this testing is expected to reveal any
potential problems well in advance of the impending deadline. At the same time,
testing will take place of those external relationships with which the Bank
exchanges information. Additional testing is also expected to take place on all
other mission-critical information systems. It is believed that this readiness
will increase the likelihood of uninterrupted operation of Bank functions.

In addressing this issue, the Bank has used its current internal staffing with
little reliance on outside resources. Major vendors have provided remediated
software at no expense to the Bank. No major system had to be replaced and none
is expected to be replaced in the coming years. As a result, expenses were
approximately $5,000 for fiscal year 1997 with expenditures for fiscal year 1998
estimated at $20,000. These expenditures are in the areas of customer awareness
and additional software tools for testing.

Rapid and accurate data processing is essential to Company operations. If
testing reveals that any system critical to continued business operation should
fail, all internal and external resources available will be directed toward
correcting these systems. System delays, mistakes, or failures could have an
adverse impact on the Company. We are currently under contract with an external
consulting service should a system failure occur. End-user contingencies are
also being developed. It is expected that these plans will be in place during
the fourth quarter of 1998.

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements and related data presented herein have
been prepared in accordance with GAAP, which requires the measurement of
financial position and operating results in terms of historical dollars, without
considering changes in the relative purchasing power of money over time due to
inflation. Unlike most industrial companies, substantially all of the assets and
liabilities of the Bank are monetary in nature. As a result, interest rates have
a more significant impact on the Bank's performance than the effects of general
levels of inflation. Interest rates do not necessarily move in the same
direction or in the same magnitude as the prices of goods and services since
such prices are affected by inflation to a larger extent than interest rates.
For further information regarding the effect of interest rate fluctuations on
the Bank, see "Asset/Liability Management."

EFFECT OF NEW FINANCIAL ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income. SFAS
No. 130 requires public business enterprises to additionally report items that
affect comprehensive income but not net income. Examples of these items relevant
to the Company include unrealized gains and losses on securities available for
sale. At this time, the Company does not have other comprehensive income to be
reported.

In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information. SFAS No. 131 requires public business
enterprises to report certain information about operating segments. Also
required is certain information about products and services, geographic areas in
which an enterprise operates, and any major customers. SFAS No. 131 is effective
for years beginning after December 15, 1997. Management does not expect the
implementation of SFAS No. 131 to have a material impact on the Company's
consolidated financial position or results of operations.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. This statement
establishes comprehensive accounting and reporting requirements for derivative
instruments and hedging activities. This statement requires entities to
recognize all derivatives as either assets or liabilities, with the instruments
measured at fair value. The accounting for gains and losses resulting from
changes in fair value of the derivative instrument depends on the use of the
derivative and the type of risk being hedged. This statement is effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999. Earlier
adoption, however, is permitted. At the present time, the Bank has not fully
analyzed the effect or timing of the adoption of SFAS No. 133 on the Bank's
consolidated financial statements.

                                       14
<PAGE>   17




                          INDEPENDENT AUDITORS' REPORT



The Board of Directors
PVF Capital Corp. and Subsidiaries
Cleveland, Ohio:

We have audited the accompanying consolidated statements of financial condition
of PVF Capital Corp. and subsidiaries (Company) as of June 30, 1998 and 1997,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended June 30, 1998.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of PVF Capital Corp.
and subsidiaries as of June 30, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three-year period
ended June 30, 1998, in conformity with generally accepted accounting
principles.



/s/ KPMG PEAT MARWICK LLP


Cleveland, Ohio
July 16, 1998
                                       15


<PAGE>   18



                       PVF CAPITAL CORP. AND SUBSIDIARIES

                 Consolidated Statements of Financial Condition

                             June 30, 1998 and 1997



<TABLE>
<CAPTION>
                              Assets                                    1998               1997
                              ------                                    ----               ----
<S>                                                                 <C>               <C>      
Cash and amounts due from depository institutions                   $  2,447,631      7,760,029
Interest bearing deposits                                                394,331        445,401
Federal funds sold                                                    20,375,000      1,375,000
                                                                    ------------   ------------

Cash and cash equivalents                                             23,216,962      9,580,430

Securities held to maturity (fair values of
   $27,767,525 and $13,899,370, respectively)                         27,800,000     13,995,350
Mortgage-backed securities held to maturity, net (market
   values of $2,965,247 and $516,579, respectively)                    2,950,856        511,530
 Loans receivable held for long-term investment, net of allowance
   for loan losses of $2,686,521 and $2,674,537, respectively        368,998,087    341,402,566
Loans receivable held for sale, net                                    1,644,735        709,604
Office properties and equipment, net                                   2,313,546      1,882,390
Real estate in development                                               938,071        909,758
Real estate owned                                                        699,236           --
Investment required by law
   Stock in the Federal Home Loan Bank of Cincinnati                   3,507,564      2,762,314
Prepaid expenses and other assets                                      1,210,099      1,327,358
                                                                    ------------   ------------

                  Total assets                                      $433,279,156    373,081,300
                                                                    ============   ============

               Liabilities and Stockholders' Equity
               ------------------------------------
Liabilities
   Deposits                                                         $344,228,729    288,269,674
   Advances from the Federal Home Loan Bank of Cincinnati             46,324,456     47,405,424
   Notes payable                                                       1,060,000      2,310,000
   Advances from borrowers for taxes and insurance                     4,931,114      4,511,595
   Accrued expenses and other liabilities                              5,526,147      4,311,191
                                                                    ------------   ------------

                  Total liabilities                                  402,070,446    346,807,884

Commitments                                                                 --             --

Stockholders' equity
   Serial preferred stock, $.01 par value, 1,000,000 shares
     authorized; none issued                                                --             --
   Common stock, $.01 par value, 5,000,000 shares authorized;
     3,990,808 and 3,485,007 shares issued and outstanding,
     respectively                                                         39,908         25,556
   Additional paid-in capital                                         14,517,452     14,522,275
   Retained earnings (substantially restricted)                       16,651,350     11,725,585
                                                                    ------------   ------------

                  Total stockholders' equity                          31,208,710     26,273,416

                  Total liabilities and stockholders' equity        $433,279,156    373,081,300
                                                                    ============   ============
</TABLE>


See accompanying notes to consolidated financial statements.

                                       16
<PAGE>   19


                       PVF CAPITAL CORP. AND SUBSIDIARIES

                      Consolidated Statements of Operations

                    Years ended June 30, 1998, 1997, and 1996



<TABLE>
<CAPTION>
                                                                    1998            1997             1996
                                                                    ----            ----             ----

<S>                                                              <C>            <C>            <C>       
Interest income
   Loans                                                         $32,499,826    29,418,869     25,572,082
   Mortgage-backed securities                                        155,446       285,246        268,604
   Cash and securities                                             1,709,951     1,258,732      1,920,620
                                                                 -----------   -----------    -----------

           Total interest income                                  34,365,223    30,962,847     27,761,306

Interest expense
   Deposits                                                       17,062,418    13,957,543     14,888,819
   Short-term borrowings                                             978,144     1,182,874        327,751
   Long-term borrowings                                            1,517,766     1,420,346        486,609
                                                                 -----------   -----------    -----------

           Total interest expense                                 19,558,328    16,560,763     15,703,179
                                                                 -----------   -----------    -----------

           Net interest income                                    14,806,895    14,402,084     12,058,127

Provision for loan losses                                            246,000       187,000        417,000
                                                                 -----------   -----------    -----------

           Net interest income after provision for loan losses    14,560,895    14,215,084     11,641,127
                                                                 -----------   -----------    -----------

Noninterest income
   Service and other fees                                            621,277       519,512        462,985
   Mortgage banking activities, net                                  869,535       663,002        924,657
   Gain on sale of securities available for sale, net                   --            --           74,721
   Other, net                                                        105,905       153,253        284,505
                                                                 -----------   -----------    -----------

           Total noninterest income, net                           1,596,717     1,335,767      1,746,868

Noninterest expense
   Compensation and benefits                                       4,512,664     4,423,470      4,136,243
   Office, occupancy, and equipment                                1,631,802     1,603,583      1,433,037
   Insurance                                                         255,365       445,804        737,845
   Special SAIF assessment                                              --       1,707,867           --
   Professional and legal                                            264,555       208,164        167,689
   Other                                                           2,185,965     1,611,475      1,513,650
                                                                 -----------   -----------    -----------

           Total noninterest expense                               8,850,351    10,000,363      7,988,464
                                                                 -----------   -----------    -----------

           Income before federal income taxes                      7,307,261     5,550,488      5,399,531

Federal income taxes
   Current                                                         2,332,125     1,975,742      1,280,375
   Deferred                                                           47,230       (72,093)       333,000
                                                                 -----------   -----------    -----------

                                                                   2,379,355     1,903,649      1,613,375
                                                                 -----------   -----------    -----------

           Net income                                            $ 4,927,906     3,646,839      3,786,156
                                                                 ===========   ===========    ===========

Basic earnings per share                                         $      1.25           .95            .99
                                                                 ===========   ===========    ===========

Diluted earnings per share                                       $      1.20           .89            .93
                                                                 ===========   ===========    ===========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       17
<PAGE>   20


                       PVF CAPITAL CORP. AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity

                    Years ended June 30, 1998, 1997, and 1996


<TABLE>
<CAPTION>
                                                                                  Net
                                                 Additional                    Unrealized
                                     Common        Paid-In         Retained    Securities
                                      Stock         Capital         Earnings    Losses           Total
                                   ----------   -----------    -----------    -----------    -----------
<S>                             <C>             <C>             <C>            <C>           <C>                       
Balance at June 30, 1995          $    14,041     8,155,885     10,647,942           --       18,817,868
    Net income                           --            --        3,786,156           --        3,786,156
    Stock dividend issued,
      140,325 shares                    1,404     1,822,821     (1,824,225)          --             --
    Cash paid in-lieu of
      fractional shares                  --            --           (1,098)          --           (1,098)
    Stock options exercised,
      4,537 shares                         45        24,955           --             --           25,000
    Net change in unrealized
      securities losses, net of
      taxes of $79,471                   --            --             --         (154,268)      (154,268)
    Three-for-two stock split
      effected in the form of a
      dividend                          7,745        (7,745)          --             --             --
                                   ----------   -----------    -----------    -----------    -----------
Balance at June 30, 1996               23,235     9,995,916     12,608,775       (154,268)    22,473,658
    Net income                           --            --        3,646,839           --        3,646,839
    Stock dividend issued,
      232,224 shares                    2,321     4,526,359     (4,528,680)          --             --
    Cash paid in-lieu of
      fractional shares                  --            --           (1,349)          --           (1,349)
    Net change in unrealized
      securities losses, net of
      taxes of $79,471                   --            --             --          154,268        154,268
                                   ----------   -----------    -----------    -----------    -----------
Balance at June 30, 1997               25,556    14,522,275     11,725,585           --       26,273,416
    Net income                           --            --        4,927,906           --        4,927,906
    Stock options exercised,
      127,278 shares                    1,049         8,480           --             --            9,529
    Cash paid in-lieu of
      fractional shares                  --            --           (2,141)          --           (2,141)
    Three-for-two stock split
      effected in the form of a
      dividend                         13,303       (13,303)          --             --             --
                                   ----------   -----------    -----------    -----------    -----------
Balance at June 30, 1998          $    39,908    14,517,452     16,651,350           --       31,208,710
                                  ===========   ===========    ===========    ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       18

<PAGE>   21




                       PVF CAPITAL CORP. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                    Years ended June 30, 1998, 1997, and 1996


<TABLE>
<CAPTION>

                                                                              1998               1997              1996
                                                                              ----               ----              ----
<S>                                                           <C>                  <C>              <C>      
Operating activities
   Net income                                                 $   4,927,906        3,646,839        3,786,156
   Adjustments required to reconcile net income to net
     cash used in operating activities
       Accretion of discount on securities                           (4,650)          (1,250)         (25,475)
       Depreciation and amortization                                512,290          468,296          477,946
       Provision for loan losses                                    246,000          187,000          417,000
       Accretion of unearned discount and deferred loan
         origination fees, net                                   (1,464,630)      (1,660,399)      (1,554,098)
       Deferred income tax provision                                (47,230)          72,093         (333,000)
       Gain on sale of securities, net                                 --               --            (74,721)
       Proceeds from loans held for sale                         81,294,421       46,020,308       36,564,603
       Originations of loans held for sale                      (82,229,552)     (53,500,828)     (51,350,242)
       Mortgage banking operations, excluding mortgage
         loan servicing fees and amortization of MSRs              (483,915)        (250,757)        (382,898)
       Net change in other assets and other liabilities           1,342,926          (62,112)       1,461,043
                                                              -------------    -------------    -------------

                Net cash provided by (used in) operating
                  activities                                      4,093,566       (5,080,810)     (11,013,686)
                                                              -------------    -------------    -------------

Investing activities
   Loans originated                                            (143,825,436)    (136,862,188)    (105,097,698)
   Principal repayments on loans                                116,232,185       87,823,393       76,464,071
   Loans purchased                                                     --               --        (13,161,755)
   Loans sold                                                          --               --         10,976,057
   Proceeds from sales of mortgage-backed securities
     available for sale                                                --         12,598,136          894,443
   Principal repayments on mortgage-backed securities
     available for sale                                                --            241,974          195,177
   Principal repayments on mortgage-backed securities
     held to maturity                                               589,488          123,716        2,246,171
   Proceeds from sales of securities available
     for sale                                                          --               --         10,007,188
   Purchase of mortgage-backed securities held to maturity       (3,017,075)            --               --
   Purchase of securities held to maturity                      (27,800,000)            --        (24,298,789)
   Maturities of securities held to maturity                     14,000,000          100,000       41,491,590
   Federal Home Loan Bank (FHLB) stock purchased,
     net                                                           (745,250)        (882,314)        (123,865)
   (Additions) disposal to office properties and
     equipment                                                     (943,445)         220,880         (322,935)
   Disposals of real estate owned                                 1,025,818          508,837          826,080
   (Additions) disposals of real estate in development, net         (28,313)         (54,867)          30,859
                                                              -------------    -------------    -------------

                Net cash provided by (used in)
                  investing activities                          (44,512,028)     (36,182,433)         126,594
                                                              -------------    -------------    -------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       19
<PAGE>   22


                       PVF CAPITAL CORP. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                    Years ended June 30, 1998, 1997, and 1996



<TABLE>
<CAPTION>
                                                                1998             1997            1996
                                                                ----             ----            ----
<S>                                                         <C>              <C>             <C>         
Financing activities
   Payments on FHLB advances                                $(92,580,968)    (72,576,227)    (25,018,349)
   Proceeds from FHLB advances                                91,500,000      92,500,000      37,500,000
   Proceeds from notes payable                                      --              --         1,200,000
   Repayment of notes payable                                 (1,250,000)       (400,000)       (290,000)
   Net increase (decrease) in NOW and passbook savings         5,693,428         (48,405)      5,132,229
   Proceeds from issuance of certificates of deposit          85,884,130      58,655,161      45,556,108
   Payments on maturing certificates of deposit              (35,618,504)    (41,382,167)    (51,933,694)
   Other                                                         426,908         305,095         (87,566)
                                                            ------------    ------------    ------------

                Net cash provided by financing activities     54,054,994      37,053,457      12,058,728
                                                            ------------    ------------    ------------

Net increase (decrease) in cash and cash equivalents          13,636,532      (4,209,786)      1,171,636

Cash and cash equivalents at beginning of year                 9,580,430      13,790,216      12,618,580
                                                            ------------    ------------    ------------

Cash and cash equivalents at end of year                    $ 23,216,962       9,580,430      13,790,216
                                                            ============    ============    ============

Supplemental disclosures of cash flow information
   Cash payments of interest expense                        $ 19,530,151      16,416,368      15,611,439
   Cash payments of income taxes                               2,617,000       1,580,000       1,165,000
                                                            ============    ============    ============

Supplemental schedule of noncash investing and
   financing activities
     Loans exchanged for mortgage-backed securities         $       --         5,376,484       8,052,331
     Transfers from real estate owned                           (989,299)       (481,567)       (706,538)
     Transfers to real estate owned                            2,714,353         428,982         759,122
                                                            ============    ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       20

<PAGE>   23


09/12/98



                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                          June 30, 1998, 1997, and 1996



(1)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

       The accounting and reporting policies of PVF Capital Corp. and its
       subsidiaries (Company) conform to generally accepted accounting
       principles and general industry practice. The Company's principal
       subsidiary, Park View Federal Savings Bank (Bank), is principally engaged
       in the business of offering savings 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 and eastern Lorain
       Counties, Ohio. The deposit accounts of the Bank are insured under the
       Savings Association Insurance Fund (SAIF) of the Federal Deposit
       Insurance Corporation (FDIC) and are backed by the full faith and credit
       of the United States government. 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 PVF Capital
       Corp. and its wholly owned subsidiaries, Park View Federal Savings Bank
       and PVF Service Corporation. All significant intercompany transactions
       and balances are eliminated in consolidation.

       USE OF ESTIMATES

       The preparation of financial statements in conformity with generally
       accepted accounting principles 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.

       ALLOWANCE FOR 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.

       The adequacy of the allowance for loan losses is periodically evaluated
       by the Bank based upon the overall portfolio composition and general
       market conditions. 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. Future adjustments to the
       allowance may also be required by regulatory examiners based on their
       judgments about information available to them at the time of their
       examination.

       Uncollectible interest on loans that are contractually 90 days or more
       past due is charged off, or an allowance is established. The allowance is
       established by a charge to interest income equal to all interest
       previously accrued, and income is subsequently recognized only to the
       extent cash payments are received until the loan is determined to be
       performing in accordance with the applicable loan terms in which case the
       loan is returned to accrual status.

       MORTGAGE BANKING ACTIVITIES

       Mortgage loans held for sale are carried at the lower of cost or market
       value, determined on a net aggregate basis.

                                       21
<PAGE>   24
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


       The Company retains servicing on loans that are sold. Effective January
       1, 1996, the Company adopted Statement of Financial Accounting Standards
       No. 122, Accounting for Mortgage Servicing Rights. Effective January 1,
       1997, the Company adopted Statement of Financial Accounting Standards No.
       125, Accounting for Transfers and Servicing of Financial Assets and
       Extinguishments of Liabilities, which supersedes SFAS No. 122 and
       provides accounting and reporting standards for transfers and servicing
       of financial assets and extinguishments of liabilities.

       As a result of the adoption, the Company recognizes an asset for mortgage
       servicing rights based on an allocation of total loan cost using relative
       fair values, or a liability for mortgage servicing rights based on fair
       value, if the benefits of servicing are not expected to adequately
       compensate the Company. The cost of mortgage servicing rights is
       amortized in proportion to, and over the period of, estimated net
       servicing revenues. Impairment of mortgage servicing rights is assessed
       based on the fair value of those rights. Fair values are estimated using
       discounted cash flows based on current market interest rates and
       prepayment assumptions. For purposes of measuring impairment, the rights
       are stratified based on predominant risk characteristics of the
       underlying loans such as interest rates and scheduled maturity. The
       amount of impairment recognized is the amount by which the capitalized
       mortgage servicing rights exceed their fair value. The Company monitors
       prepayments, and in the event that actual prepayments exceed original
       estimates, amortization is adjusted accordingly.

       INVESTMENT AND MORTGAGE-BACKED SECURITIES

       The Company classifies all securities as held to maturity or available
       for sale. Securities held to maturity are limited to debt securities that
       the holder has the positive intent and the ability to hold to maturity;
       these securities are reported at amortized cost. Securities available for
       sale consist of all other securities; these securities are reported at
       fair value, and unrealized gains and losses are not reflected in earnings
       but are reflected as a separate component of stockholders' equity, net of
       tax. Investment and mortgage-backed securities that could be sold in the
       future because of changes in interest rates or other factors are not be
       classified as held to maturity.

       Gains or losses on the sales of all securities are recognized at the date
       of sale (trade date).

       OFFICE PROPERTIES AND EQUIPMENT

       Depreciation and amortization are computed using the straight-line method
       at rates expected to amortize the cost of the assets over their estimated
       useful lives or, with respect to leasehold improvements, the term of the
       lease, if shorter.

       FEDERAL INCOME TAXES

       The Company files a consolidated tax return with its wholly owned
       subsidiaries and provides deferred federal income taxes in recognition of
       temporary differences between financial statement and income tax
       reporting. Deferred tax assets and liabilities are recognized for the
       future tax consequences attributable to differences between the financial
       statement carrying amounts of existing assets and liabilities and their
       respective tax bases.

       Deferred tax assets and liabilities are measured using enacted tax rates
       expected to apply to taxable income in the years in which those temporary
       differences are expected to be recovered or settled, and the effect on
       deferred tax assets and liabilities of a change in tax rates is
       recognized in income in the period that includes the enactment date.

                                                                     (Continued)

                                       22
<PAGE>   25
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

       LOAN ORIGINATION AND COMMITMENT FEES

       The Bank defers loan origination and commitment fees and certain direct
       loan origination costs and amortizes the net amount over the lives of the
       related loans as a yield adjustment if the loans are held for investment,
       or recognizes the net fees as mortgage banking income when the loans are
       sold.

       REAL ESTATE IN DEVELOPMENT

       Real estate in development is carried at the lower of cost, including
       capitalized holding costs, or fair value less estimated selling costs.

       STATEMENTS OF CASH FLOWS

       For purposes of the consolidated statements of cash flows, the Company
       considers cash and amounts due from depository institutions, interest
       bearing deposits, and federal funds sold with original maturities of less
       than three months to be cash equivalents.

       EARNINGS PER SHARE

       SFAS No. 128, "Earnings Per Share," was adopted for 1998 with all
       prior-period earnings per share data restated. The statement requires
       dual presentation of basic earnings per share and diluted earnings per
       share on the Consolidated Statements of Operations. Earnings per share is
       calculated by dividing net income for the period by the weighted average
       number of shares of common stock outstanding during the period. The
       assumed exercise of stock options is included in the calculation of
       diluted earnings per share.

       The per share data for 1998, 1997, and 1996 are adjusted to reflect the
       three-for-two stock issuance declared July 1996; and the 10 percent stock
       dividend declared July 1997 and the three-for-two stock issuance declared
       July, 1998.

       RECLASSIFICATION

       Certain reclassifications have been made to the prior year amounts to
       conform to the current year presentation.

(2)    Securities

       Securities held to maturity at June 30, 1998 and 1997, are summarized as
       follows:

<TABLE>
<CAPTION>
                                                                 1998
                                        -------------------------------------------------------
                                                          Gross         Gross        Estimated
                                         Amortized     Unrealized    Unrealized        Fair
                                            Cost           Gain          Loss           Value
<S>                                     <C>                 <C>          <C>         <C>       
United States Government and
  agency securities                     $27,800,000         4,565        (37,040)    27,767,525
                                        ===========   ===========    ===========    ===========

Due after five years                    $18,000,000          --          (37,040)    17,962,960
Due after one year through five years     9,800,000         4,565           --        9,804,565
                                        -----------   -----------    -----------    -----------
                                        $27,800,000         4,565        (37,040)    27,767,525
                                        ===========   ===========    ===========    ===========
</TABLE>

                                                                     (Continued)


                                       23
<PAGE>   26

                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>

                                                                                    1997
                                                         --------------------------------------------------------
                                                                             Gross         Gross        Estimated
                                                            Amortized     Unrealized    Unrealized        Fair
                                                              Cost           Gain          Loss           Value
                                                         --------------------------------------------------------
<S>                                                        <C>            <C>            <C>           <C>       
       United States Government and
         agency securities                                 $ 13,995,350         -        (95,980)      13,899,370
                                                           ============   ============    ======       ==========

       Due after one year through five years                 13,995,350         -        (95,980)      13,899,370
                                                             ----------   ------------    ------       ----------
                                                           $ 13,995,350         -        (95,980)      13,899,370
                                                           ============   ============    ======       ==========
</TABLE>

       There were no sales of securities for the year ended June 30, 1998 or
       1997. Realized gains and losses on sales of securities available for sale
       were $100,658 and $25,937, respectively, for the year ended June 30,
       1996.

(3)    MORTGAGE-BACKED SECURITIES

Mortgage-backed securities held to maturity at June 30, 1998 and 1997, are
summarized as follows:

<TABLE>
<CAPTION>
                                                         --------------------------------------------------------
                                                                                    1998
                                                                            Gross         Gross        Estimated
                                                           Amortized      Unrealized    Unrealized        Fair
                                                              Cost           Gain          Loss          Value
                                                         --------------------------------------------------------
<S>                                                     <C>                 <C>     <C>                <C>      
         FHLMC mortgage-backed securities               $    2,932,491      14,391         -             2,946,882
         Accrued interest receivable                            18,365      -              -                18,365
                                                        --------------   ---------   ------------      -----------
                                                        $    2,950,856      14,391         -             2,965,247
                                                        ==============      ======   ============        =========

         Due after one year through five years          $    2,950,856      14,391         -             2,965,247
                                                        ==============      ======   ============        =========
</TABLE>


<TABLE>
<CAPTION>

                                                         --------------------------------------------------------
                                                                                    1997
                                                         --------------------------------------------------------
                                                                            Gross         Gross        Estimated
                                                           Amortized      Unrealized    Unrealized        Fair
                                                              Cost           Gain          Loss          Value
                                                         --------------------------------------------------------
<S>                                                        <C>               <C>     <C>                  <C>    
         FHLMC mortgage-backed securities                  $  504,903        5,049          -             509,952
         Accrued interest receivable                            6,627        -              -               6,627
                                                           ----------     --------    ------------      ---------
                                                           $  511,530        5,049          -             516,579
                                                           ==========        =====    ============        =======

         Due after ten years                               $  511,530        5,049          -             516,579
                                                           ==========        =====    ============        =======
</TABLE>

                                                                     (Continued)


                                       24
<PAGE>   27
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


(4)    LOANS RECEIVABLE HELD FOR LONG-TERM INVESTMENT

       Loans receivable held for long-term investment at June 30, 1998 and 1997,
       consist of the following:
<TABLE>
<CAPTION>
                                                                                 1998               1997
                                                                                 ----               ----
<S>                                                                      <C>                    <C>        
           Real estate mortgages
              One-to-four family residential                             $   140,562,371        128,186,837
              Home equity line of credit                                      18,761,725         16,941,154
              Multifamily residential                                         31,493,450         31,090,035
              Commercial                                                      94,587,534         84,940,296
              Land                                                            30,462,374         32,045,277
              Construction                                                    96,062,788         82,610,430
                                                                         ---------------        -----------
                         Total real estate mortgages                         411,930,242        375,814,029
           Consumer                                                            3,887,263          3,595,550
                                                                         ---------------        -----------
                                                                             415,817,505        379,409,579
           Accrued interest receivable                                         2,198,910          2,086,288
           Deferred loan origination fees                                     (1,673,697)        (1,717,859)
           Unearned discount                                                     (35,887)           (47,715)
           Undisbursed portion of loan proceeds                              (44,622,223)       (35,653,190)
           Allowance for loan losses                                          (2,686,521)        (2,674,537)
                                                                         ---------------        -----------
                                                                         $   368,998,087        341,402,566
                                                                         ===============        ===========
</TABLE>
  
       A summary of the changes in the allowance for loan losses for the years
       ended June 30, 1998, 1997, and 1996, is as follows (write-offs include
       transfers to real estate owned):

<TABLE>
<CAPTION>
                                                                             1998              1997              1996
                                                                             ----              ----              ----
<S>                                                                  <C>                     <C>               <C>      
              Beginning Balance                                      $     2,674,537         2,564,720         2,402,098

              Provision charged to operations                                246,000           187,000           417,000
              Write-offs                                                    (236,593)         (197,875)         (265,361)
              Recoveries                                                       2,577           120,692            10,983
                                                                     ---------------         ---------         ---------
              Ending Balance                                         $     2,686,521         2,674,537         2,564,720
                                                                     ===============         =========         =========
</TABLE>

       The following is a summary of the principal balances (as rounded) of
       loans on nonaccrual status, and loans past due 90 days or more which were
       on accrual status, at June 30:
<TABLE>
<CAPTION>
                                                                                   1998             1997
                                                                                   ----             ----
<S>                                                                           <C>                   <C>    
           Loans on nonaccrual status
              Real estate mortgages
                One-to-four family residential                                $  1,242,000          918,000
                Construction and land                                            2,026,000        3,179,000
              Consumer                                                              15,000           40,000
                                                                              ------------        ---------
                         Total loans on nonaccrual status                        3,283,000        4,137,000
                                                                              ------------        ---------
           Past due loans on accrual status
              Real estate mortgages
                Construction and land                                              163,000          476,000
                                                                              ------------        ---------
                         Total past due loans                                 $  3,446,000        4,613,000
                                                                              ============        =========
</TABLE>

                                                                     (Continued)

                                       25
<PAGE>   28
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

       It is the Bank's policy to not record into income partial interest
       payments. During the years ended June 30, 1998 and 1997, gross interest
       income of $204,736 and $310,162, respectively, would have been recorded
       on loans accounted for on a nonaccrual basis if the loans had been
       current throughout the period.

       At June 30, 1998 and 1997, the recorded investment in loans which have
       been identified as being impaired totaled $3,283,000 and $4,137,000,
       respectively. Included in the impaired amount at June 30, 1998 and 1997,
       is $453,113 and $159,863, respectively, related to loans with a
       corresponding valuation allowance of $196,386 and $68,763, respectively.
       The Company recognized no interest on impaired loans in 1998, 1997, and
       1996 (during the portion of the respective years that they were
       impaired).

       Average impaired loans for the years ended June 30, 1998, 1997, and 1996
       amounted to $3,791,500, $3,245,000, and $2,979,000, respectively.

(5)    LOANS RECEIVABLE HELD FOR SALE

       Loans receivable held for sale at June 30, 1998 and 1997, consist of the
       following:
<TABLE>
<CAPTION>

                                                                                 1998
                                                      ------------------------------------------------------------
                                                                          Gross         Gross         Estimated
                                                       Amortized       Unrealized     Unrealized       Market
                                                          Cost            Gains         Losses          Value
                                                      ------------------------------------------------------------
<S>                                                   <C>                 <C>       <C>                <C>      
       Real estate mortgages                          $  1,660,719        30,065         -             1,690,784
       Deferred loan origination fees                      (15,984)       -              -               (15,984)
                                                      ------------    ----------     ---------       -----------
                                                      $  1,644,735        -              -             1,674,800
                                                      ============    ==========     =========         =========
</TABLE>

<TABLE>
<CAPTION>

                                                                                 1997
                                                      ------------------------------------------------------------
                                                                          Gross         Gross         Estimated
                                                       Amortized       Unrealized     Unrealized       Market
                                                          Cost            Gains         Losses          Value
                                                     -------------------------------------------------------------
<S>                                                   <C>                 <C>       <C>                <C>      
       Real estate mortgages                         $    721,502         14,286          -             735,788
       Deferred loan origination fees                     (11,898)         -              -             (11,898)
                                                        ---------      ---------      ---------         -------
                                                     $    709,604         14,286          -             723,890
                                                     ============         ======      =========         =======
</TABLE>

       Mortgage banking activities, net, for each of the years in the three-year
       period ended June 30, 1998, consist of the following:
<TABLE>
<CAPTION>
                                                                              1998          1997          1996
                                                                              ----          ----          ----

<S>                                                                      <C>               <C>           <C>    
       Mortgage loan servicing fees                                      $   617,080       580,328       541,759
       Amortization of mortgage servicing rights                            (231,460)     (168,083)       -
       Gross realized
         Gains on sales of loans                                           1,209,893       975,826       831,283
         Losses on sales of loans                                           (725,978)     (578,053)     (347,142)
         Gains on sales of mortgage-backed securities                         -             16,673        21,386
         Losses on sales of mortgage-backed securities                        -            (81,759)      (40,625)
       Market valuation provision for losses on loans
         held for sale                                                        -           (176,514)      (82,004)
       Market valuation recoveries                                              -           94,584        -
                                                                         -------------    --------  -------

                                                                         $   869,535       663,002       924,657
                                                                         ===========       =======       =======
</TABLE>

                                                                     (Continued)

                                       26
<PAGE>   29
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

       A summary of the changes in the allowance for mortgage banking market
       value losses for the years ended June 30, 1998, 1997, and 1996 is as
       follows:

<TABLE>
<CAPTION>
                                                                                 1998        1997         1996
                                                                                 ----        ----         ----

<S>                                                                         <C>              <C>              
           Balance at beginning of year                                     $   -            13,314          -

           Market valuation provision for losses on loans
              held for sale                                                     -           176,514       82,004
           Market valuation loss on loans and mortgage-
              backed securities sold                                            -           (95,244)         -
           Market valuation recoveries                                          -           (94,584)         -
           Discount on loans transferred to held for investment                 -              -         (68,690)
                                                                            ------        ---------      --------

           Balance at end of year                                           $   -              -          13,314
                                                                            ======        =========     ========
</TABLE>

       At June 30, 1998, 1997, and 1996, the Bank was servicing whole and
       participation mortgage loans for others aggregating approximately
       $233,893,979; $195,250,000; and $171,043,000, respectively. The Bank had
       $3,304,702; and $2,186,100 at June 30, 1998 and 1997, respectively, of
       funds collected on mortgage loans serviced for others due to investors,
       which is included in accrued expenses and other liabilities.

       Originated mortgage servicing rights capitalized and amortized during the
       years ended June 30, 1998, 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
                                                                                  1998           1997            1996
                                                                                  ----           ----            ----

<S>                                                                         <C>                  <C>             
              Beginning balance                                             $    451,000         241,000        -
              Originated                                                         386,600         378,000       241,000
              Amortized                                                         (231,400)       (168,000)      -
                                                                              ----------         -------   -----

              Ending balance                                                $    606,200         451,000       241,000
                                                                              ==========         =======       =======

              Estimated fair value                                          $  1,639,261         865,481       241,000
                                                                               =========         =======       =======
</TABLE>

       No valuation allowance has been established for mortgage servicing rights
       as there has been no impairment on those rights.

(6)    OFFICE PROPERTIES AND EQUIPMENT

       Office properties and equipment at cost, less accumulated depreciation
       and amortization at June 30, 1998 and 1997, are summarized as follows:

<TABLE>
<CAPTION>
                                                                                 1998           1997
                                                                                 ----           ----

<S>                                                                        <C>                   <C>    
              Land and land improvements                                   $     207,092         207,092
              Building and building improvements                               1,062,525       1,059,793
              Leasehold improvements                                           1,847,269       1,457,711
              Furniture and equipment                                          3,512,837       2,961,682
                                                                           -------------       ---------

                                                                               6,629,723       5,686,278
              Less accumulated depreciation and amortization                  (4,316,177)     (3,803,888)
                                                                           -------------       ---------

                                                                           $   2,313,546       1,882,390
                                                                           =============       =========
</TABLE>


                                                                     (Continued)

                                       27
<PAGE>   30
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(7)    DEPOSITS

       Deposit balances at June 30, 1998 and 1997, are summarized by interest
       rate as follows:
<TABLE>
<CAPTION>

                                                                         1998                          1997
                                                                   ------------------           -------------------
                                                                   Amount          %             Amount          %
                                                                   ------        ----           -------        ----
<S>                                 <C>                      <C>               <C>          <C>             <C>
       NOW and money
         market accounts            Noninterest bearing      $     6,261,947       1.8%      $   5,619,988      1.9%
                                     2.00 -    5.00%              24,756,893       7.2          19,963,938      6.9
                                                                  ----------   -------       -------------  -------
                                                                  31,018,840       9.0          25,583,926      8.8

       Passbook savings              3.00 -    5.00%              31,844,333       9.3          31,585,818     11.0

       Certificates of deposit       2.50 -    2.99%                 385,101        .1             456,618       .2
                                     3.00 -    3.99                -               -            -               -
                                     4.00 -    4.99                9,568,477       2.8          12,352,923      4.2
                                     5.00 -    5.99              121,695,954      35.4         119,613,292     41.5
                                     6.00 -    6.99              137,125,129      39.8          82,592,866     28.7
                                     7.00 -    7.99               12,406,221       3.5          15,906,866      5.5
                                     8.00 -    8.99                  184,674        .1             170,361       .1
                                     9.00 -    9.99                   -             -                7,004      -
                                                             ---------------    -------      -------------  -------
                                                                 281,365,556      81.7         231,099,930     80.2
                                                             ---------------     -----       -------------   ------
                                                             $   344,228,729     100.0%      $ 288,269,674    100.0%
                                                             ===============     =====       =============    =====

       Weighted average rate on deposits                                          5.32%                        5.22%
                                                                                ======                       ======
</TABLE>



<TABLE>
<CAPTION>

                                                                         1998                          1997
                                                                   -------------------           ------------------
                                                                   Amount          %             Amount          %
                                                                   -------        ---            ------         ----
         Remaining term to maturity of
         certificates of deposit
<S>        <C>                                               <C>                  <C>     <C>                  <C>  
           12 months or less                                 $   211,559,590      75.2%   $    172,492,046     74.6%
           13 to 24 months                                        52,392,548      18.6          32,592,344     14.1
           25 to 36 months                                        13,613,228       4.8          20,728,309      9.0
           Over 36 months                                          3,800,190       1.4           5,287,231      2.3
                                                             ---------------   -------       -------------  -------
                                                             $   281,365,556     100.0%   $    231,099,930    100.0%
                                                             ===============     =====         ===========    =====
       Weighted average rate on certificates
         of deposit                                                               5.95%                        5.90%
                                                                                ======                       ======
</TABLE>

       Time deposits in amounts of $100,000 or more totaled $47,573,221 and
       $48,907,331 at June 30, 1998 and 1997, respectively.

       Interest expense on deposits is summarized as follows:

<TABLE>
<CAPTION>
                                                               1998              1997             1996
                                                               ----              ----             ----
<S>                                                       <C>                     <C>              <C>    
              NOW accounts                                $      599,436          529,889          414,869
              Passbook accounts                                  870,661          867,687          865,170
              Certificates of deposit                         15,592,321       12,559,967       13,608,780
                                                              ----------       ----------       ----------
                                                          $   17,062,418       13,957,543       14,888,819
                                                              ==========       ==========       ==========
</TABLE>

                                                                     (Continued)

                                       28
<PAGE>   31
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(8)    ADVANCES FROM THE FEDERAL HOME LOAN BANK OF CINCINNATI

       Advances from the Federal Home Loan Bank of Cincinnati, with maturities
       and interest rates thereon at June 30, 1998 and 1997, were as follows:

<TABLE>
<CAPTION>
                        Maturity            Interest Rate                1998              1997
                        --------            -------------                ----              ----
<S>                 <C>                     <C>                   <C>                   <C>
                    March 1998                 5.50                $      -               5,000,000
                    March 2001                 5.93                      5,000,000        5,000,000
                    February 2003              6.00                        500,000          500,000
                    February 2006              6.05                        824,456          905,424
                    September 1998             6.63                       -              26,000,000
                    March 1999                 6.50                     10,000,000       10,000,000
                    February 2008              5.37                     10,000,000         -
                    March 2008                 5.15                      5,000,000         -
                    March 2008                 5.64                     10,000,000         -
                    March 2008                 5.13                      5,000,000         -
                                                                   ---------------       ----------
                                                                   $    46,324,456       47,405,424
                                                                   ===============       ==========

                    Weighted average interest rate                            5.71%            6.39%
                                                                              ====             ====
</TABLE>

       The Bank maintains two lines of credit, totaling $60,000,000, with the
       Federal Home Loan Bank of Cincinnati (FHLB). The $40,000,000 repurchase
       line matures in September 1998. The Bank has chosen to take daily
       advances from this line, with the interest rate set daily. The
       $20,000,000 cash management line matures in December 1998. Serving as
       collateral for such advances, the Bank has pledged mortgage loans with
       unpaid principal balances aggregating approximately $69,486,683 and
       $71,108,136 at June 30, 1998 and 1997, respectively.
       In addition, stock in the FHLB is pledged for such advances.

       The Bank has the capacity to borrow up to 25 percent of its assets, upon
       approval of the FHLB. At June 30, 1998 and 1997, the Bank had the
       capacity to borrow an additional $62,000,000 and $46,000,000,
       respectively, in FHLB advances.

(9)    NOTES PAYABLE

       Notes payable consist of the following at June 30, 1998 and 1997:

<TABLE>
<CAPTION>

                                         Maturity       Interest Rate              1998           1997
                                         --------       -------------              ----           ----
<S>                                <C>                    <C>              <C>                  <C>    
           Promissory note          September 2000           9.50%            $   -                600,000
           Mortgage note            July 2000                9.00%               1,060,000       1,710,000
                                                                                 ---------       ---------
                                                                              $  1,060,000       2,310,000
                                                                                 =========       =========
</TABLE>

       On June 30, 1996, PVF Capital Corp. secured a mortgage note from a
       federally insured institution at a fixed interest rate. Interest payments
       are due on the first day of each month, and principal payments of $10,000
       per month are due beginning in August 1998 through the date of maturity,
       July 2000, at which time the remaining unpaid principal balance is due
       and payable in full. The note was paid in full on October 2, 1997.

       On August 16, 1996, PVF Service Corporation, a wholly owned subsidiary of
       the Company, secured a promissory note from another federally insured
       institution at a variable interest rate that adjusts to prime plus 1
       percent without notice on the effective date of each change in the
       lender's prime rate.


                                                                     (Continued)


                                       29
<PAGE>   32
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(10)   FEDERAL INCOME TAXES AND RETAINED EARNINGS
       The accompanying consolidated financial statements reflect provisions for
       federal income taxes differing from the amounts computed by applying the
       U.S. federal income tax statutory rate to income before federal income
       taxes. These differences are reconciled as follows:

<TABLE>
<CAPTION>

                                                         1998                      1997                      1996
                                                 -------------------       -------------------       --------------------
                                                             Percent                   Percent                   Percent
                                                               of                        of                        of
                                                             Pretax                    Pretax                    Pretax
                                                  Amount      Income        Amount      Income        Amount      Income
                                                  ------     --------      -------    --------        ------     --------
<S>                                          <C>              <C>           <C>         <C>           <C>          <C>  
       Computed expected tax                 $    2,557,541   35.0%         1,942,671   35.0 %        1,889,836    35.0%
       Decrease in tax resulting from
         Benefit of graduated rates                 (73,073)  (1.0)           (55,505)  (1.0)           (53,995)   (1.0)
         Tax credits                               (287,788)  (3.9)          -           -             -            -
         Other, net                                 182,675    2.5             16,483   (0.3)          (222,466)   (4.1)
                                             --------------  -----        -----------  -----          ---------   -----
                                             $    2,379,355   32.6%         1,903,649   34.3%         1,613,375    29.9%
                                             ==============   ====        ===========   ====          =========    ====
</TABLE>

       The net tax effects of temporary differences that give rise to
       significant portions of the deferred tax assets and liabilities at June
       30, 1998 and 1997, are:

<TABLE>
<CAPTION>
                                                                                    1998         1997
                                                                                    ----         ----
<S>                                                                         <C>                  <C>    
                Deferred tax assets
                  Loan loss and other reserves                              $     883,039        883,466
                  Capital loss carryforward                                       102,374         -
                  Other                                                           162,707         66,170
                                                                               ----------       --------
                           Total gross deferred tax assets                      1,148,120        949,636
                  Less valuation allowance                                       (102,374)        -
                                                                               ----------        -------
                           Net deferred tax assets                              1,045,746        949,636
                                                                                ---------        -------
                Deferred tax liabilities
                  Deferred loan fees                                              262,929        218,165
                  FHLB stock dividend                                             517,587        442,226
                  Unrealized gains on loan sales, net                            -                 3,140
                  Originated mortgage servicing asset                             206,094        153,423
                  Bad debt reserves over base year reserves                      -                55,433
                  Other                                                           144,150        115,033
                                                                            -------------        -------
                           Total gross deferred tax liabilities                 1,130,760        987,420
                                                                            -------------        -------
                           Net deferred tax (liability)                     $     (85,014)       (37,784)
                                                                            =============       ========
</TABLE>

       A valuation allowance is established to reduce the deferred tax asset if
       it is more likely than not that the related tax benefits will not be
       realized. In management's opinion, it is more likely than not that the
       tax benefits will be realized; consequently, no valuation allowance has
       been established as of June 30, 1998 or 1997, other than as noted above
       for the capital loss carryforward.

       Retained earnings at June 30, 1998 includes approximately $4,516,000 for
       which no provision for federal income tax has been made. This amount
       represents allocations of income during years prior to 1988 to bad debt
       deductions for tax purposes only. These qualifying and nonqualifying base
       year reserves and supplemental reserves will be recaptured into income in
       the event of certain distributions and redemptions. Such recapture would
       create income for tax purposes only, which would be subject to the then
       current

                                                                     (Continued)

                                       30
<PAGE>   33
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements



       corporate income tax rate. Recapture would not occur upon the
       reorganization, merger, or acquisition of the Bank, nor if the Bank is
       merged or liquidated tax-free into a bank or undergoes a charter change.
       If the Bank fails to qualify as a bank or merges into a nonbank entity,
       these reserves will be recaptured into income.

       The favorable reserve method previously afforded to thrifts was repealed
       for tax years beginning after December 31, 1995. Large thrifts must
       switch to the specific charge-off method of section 166, while small
       thrifts, such as the Bank, must switch to the reserve method of section
       585 (the method used by small commercial banks). In general, a thrift is
       required to recapture the amount of its qualifying and nonqualifying
       reserves in excess of its qualifying and nonqualifying base year
       reserves. There is an exception to the general recapture provision for
       small thrifts. A small thrift is required to recapture the portion of its
       reserves that exceeds the greater of (1) the experience method reserve
       computed as if the thrift had always been a small bank, or (2) the lesser
       of the qualifying and nonqualifying base year reserves or the contracted
       base year reserves.
       The Bank has no such excess reserves to recapture.

(11)   LEASES

       Future minimum payments under noncancelable operating leases with initial
       or remaining terms of one year or more consisted of the following at June
       30, 1998:

<TABLE>
<CAPTION>
                   Year Ending June 30,
                   --------------------
<S>                <C>                                       <C>
                           1999                              $     332,798
                           2000                                    249,014
                           2001                                    242,645
                           2002                                    242,645
                        Thereafter                                 316,613
                                                             -------------
            Total minimum lease payments                     $   1,383,715
                                                             =============
</TABLE>

      During the years ended June 30, 1998, 1997, and 1996, rental expense is as
      follows:
<TABLE>
<CAPTION>

                                                                   1998          1997          1996
                                                                   ----          ----          ----

<S>                                                           <C>               <C>           <C>    
                Net rental expense                            $   435,097       374,420       331,941
                                                              ===========       =======       =======
</TABLE>

(12)   COMMITMENTS AND CONTINGENCIES

       In the normal course of business, the Bank enters into commitments with
       off-balance sheet risk to meet the financing needs of its customers.
       Commitments to extend credit involve elements of credit risk and interest
       rate risk in excess of the amount recognized in the consolidated
       statements of financial condition. The Bank's exposure to credit loss in
       the event of nonperformance by the other party to the commitment is
       represented by the contractual amount of the commitment. The Bank uses
       the same credit policies in making commitments as it does for on-balance
       sheet instruments. Interest rate risk on commitments to extend credit
       results from the possibility that interest rates may have moved
       unfavorably from the position of the Bank since the time the commitment
       was made.

       Commitments to extend credit are agreements to lend to a customer as long
       as there is no violation of any condition established in the contract.
       Commitments generally have fixed expiration dates of 60 to 120 days or
       other termination clauses and may require payment of a fee. Since some of
       the commitments may expire without being drawn upon, the total commitment
       amounts do not necessarily represent future cash requirements.


                                                                     (Continued)

                                       31
<PAGE>   34
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


       The Bank evaluates each customer's creditworthiness on a case-by-case
       basis. The amount of collateral obtained by the Bank upon extension of
       credit is based on management's credit evaluation of the applicant.
       Collateral held is generally residential and commercial real estate.

       The Bank's lending is concentrated in Northeastern Ohio, and as a result,
       the economic conditions and market for real estate in Northeastern Ohio
       could have a significant impact on the Bank.

       At June 30, 1998 and 1997, the Bank had the following commitments:

<TABLE>
<CAPTION>
                                                                                1998          1997
                                                                                ----          ----

               Commitments to sell mortgage loans
<S>                                                                     <C>                    <C>    
               in the secondary market                                  $     3,407,600        773,000
               Commitments to fund variable mortgage loans                   21,871,601     29,098,000
               Commitments to fund fixed mortgage loans                       5,736,100      2,103,000
</TABLE>

       There are pending against the Company various lawsuits and claims which
       arise in the normal course of business. In the opinion of management, any
       liabilities that may result from pending lawsuits and claims will not
       materially affect the financial position of the Company.

(13)   REGULATORY CAPITAL

       Office of Thrift Supervision (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 June 30,
       1998, the minimum regulatory capital regulations require institutions to
       have tangible capital equal to 1.5 percent of adjusted total assets, a 3
       percent leverage capital ratio, and an 8 percent risk-based capital
       ratio. At June 30, 1998, the Bank exceeded all of the aforementioned
       regulatory capital requirements.

       The Federal Deposit Insurance Corporation Improvement Act (FDICIA) was
       signed into law on December 19, 1991. Regulations implementing the prompt
       corrective action provisions of FDICIA became effective on December 19,
       1992. The prompt corrective action regulations define specific capital
       categories based on an institution's capital ratios. The capital
       categories, in declining order, are "well capitalized," "adequately
       capitalized," "undercapitalized," "significantly undercapitalized," and
       "critically undercapitalized." To be considered "well capitalized," an
       institution must generally have a leverage ratio of at least 5 percent, a
       Tier 1 risk-based capital ratio of at least 6 percent, and a total
       risk-based capital ratio of at least 10 percent. As of June 30, 1998, the
       most recent notification from the OTS categorized the Bank as "well
       capitalized" under the regulatory framework for prompt corrective action.

                                                                     (Continued)
                                       32
<PAGE>   35
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


       At June 30, 1998 and 1997, the Bank was in compliance with regulatory
       capital requirements as set forth below (dollars in thousands):
<TABLE>
<CAPTION>

                                                                                                Tier-1       Total
                                                                                    Core/        Risk-       Risk-
                                                        Equity       Tangible     Leverage       Based       Based
                                                        Capital       Capital      Capital      Capital     Capital
                                                        -------       -------      -------      -------     -------
<S>                                                  <C>               <C>          <C>           <C>          <C>   
       June 30, 1998
         GAAP capital                                $    31,727       31,727       31,727        31,727       31,727
         General loan valuation allowances                              -            -             -            2,597
                                                                 ------------  ------------    ---------    ---------

         Regulatory capital                                            31,727       31,727        31,727       34,324
         Total assets                                    440,065
                                                         -------
         Adjusted total assets                                        440,065      440,065
                                                                      -------      -------
         Risk-weighted assets                                                                    313,915      313,915
                                                                                                 -------      -------
         Capital ratio                                     7.21%        7.21%        7.21%        10.11%       10.93%
         Regulatory requirement                                          1.5%        3.00%                      8.00%
         Regulatory capital category
           Well capitalized -
              equal to or greater than                                               5.00%         6.00%       10.00%
</TABLE>

<TABLE>
<CAPTION>

                                                                                                Tier-1       Total
                                                                                    Core/        Risk-       Risk-
                                                        Equity       Tangible     Leverage       Based       Based
                                                        Capital       Capital      Capital      Capital     Capital
                                                        -------       -------      -------      -------     -------
       June 30, 1997
<S>                                                  <C>               <C>          <C>           <C>          <C>   
         GAAP capital                                $    27,604       27,604       27,604        27,604       27,604
         General loan valuation allowances                              -            -             -            2,598
                                                                 ------------  -----------    ---------      --------
         Regulatory capital                                            27,604       27,604        27,604       30,202
         Total assets                                    375,915
                                                         -------
         Adjusted total assets                                        375,915      375,915
                                                                      -------      -------
         Risk-weighted assets                                                                    284,483      284,483
                                                                                                 -------      -------
         Capital ratio                                     7.34%        7.34%        7.34%         9.70%       10.62%
         Regulatory requirement                                         1.50%        3.00%                      8.00%
         Regulatory capital category
           Well capitalized -
              equal to or greater than                                               5.00%         6.00%       10.00%
</TABLE>


                                                                     (Continued)

                                       33

<PAGE>   36
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


(14)   STOCK OPTIONS

       The Bank offered stock options to the directors and officers of the bank
       in 1993, 1997, and 1998. Under the 1992 plan, 381,830 options were
       originally granted, which are exercisable for a ten-year period and can
       be exercised at any time. In 1996, 32,100 options were granted and in
       1997 32,550 were granted which are exercisable for a ten-year period,
       with 20 percent of the options vesting each year. Options were granted at
       fair market value and, accordingly, no charges were reflected in the
       compensation and benefits expense due to the granting of stock options.
       The excess of the option price over the par value of the shares purchased
       through the exercise of stock options is credited to additional capital:
<TABLE>
<CAPTION>

                                                         1998                      1997                      1996
                                                 ------------------        ------------------        -------------------
                                                            Average                   Average                   Average
                                                            Option                    Option                    Option
       (Shares in 000's)                         Shares       Price         Shares      Price         Shares      Price
                                                 ------     -------         ------    -------         ------    -------
<S>                                              <C>        <C>             <C>       <C>             <C>       <C>    
       Outstanding beginning of year             399,143    $ 2.84          363,833   $ 2.23          375,062   $  2.23
       Exercised                                (191,412)     2.25          -           2.23          (11,229)     2.23
       Expired                                    (1,980)     9.09          -           -             -            -
       Granted                                    32,550     13.16           35,310     9.09          -            -

       Outstanding end of year                   238,301      4.67          399,143     2.84          363,833      2.23

       Exercisable end of year                   192,560      4.67          370,895     2.84          291,066      2.23

</TABLE>


       As of June 30, 1998, options outstanding have exercise prices between
       $2.23 and $13.17 and a weighted average remaining contractual life of 5.2
       years.

       The Company has elected to disclose pro forma net income and net income
       per share as if the fair-value-based method had been applied in measuring
       compensation costs. The Company's pro forma information for the years
       ended June 30:

<TABLE>
<CAPTION>

                                                                          1998              1997             1996
                                                                          ----              ----             ----
<S>                                                                  <C>                 <C>               <C>      
            Net income                                               $  4,927,906        3,646,839         3,786,156
            Less: Compensation expense,
              net of tax                                                   34,720           60,539            43,966
                                                                     ------------        ---------         ---------
            Pro forma earnings                                       $  4,893,186        3,586,300         3,742,190
                                                                     ============        =========         =========

            Basic earnings per share                                      $  1.25              .95               .99
                                                                             ====              ===               ===
            Pro forma basic earnings per share                            $  1.24              .94               .98
                                                                             ====              ===               ===
            Diluted earning per share                                     $  1.20              .89               .93
                                                                             ====              ===               ===
            Pro forma diluted earnings per share                          $  1.19              .87               .92
                                                                             ====              ===               ===
</TABLE>

       Compensation expense reflected in the pro forma disclosures is not
       indicative of future amounts when the SFAS No. 123 prescribed method will
       apply to all outstanding nonvested awards.

       The fair value of each option grant is estimated on the date of grant
       using the Black-Scholes option-pricing model with the following
       assumptions used for grants in 1998, 1997, and 1996; expected dividend
       yield of -0-, and expected option lives of 7 years; expected volatility
       of 5 percent, 20 percent, and 20 percent, and risk free interest rates of
       5.56 percent, 6 percent, and 6 percent, respectively.

                                                                     (Continued)


                                       34
<PAGE>   37
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


       Pursuant to the terms of the plans, share information and exercise prices
       have been adjusted to reflect the impact of stock splits and dividends
       subsequent to the granting dates of the options.

(15)   EARNINGS PER SHARE

       Reconciliation of Basic Earnings Per Share to Diluted Earnings Per Share
       for The Years Ended June 30:
<TABLE>
<CAPTION>

                                                                                             1998
                                                                          -----------------------------------------
                                                                            Net                          Per-Share
                                                                           Income         Shares           Amount
                                                                           ------         ------           ------
                                                   
<S>                                                                    <C>                <C>               <C> 
       Basic EPS                                                       $  4,927,906       3,938,379         1.25
       Income available to common shareholders

       Effect of Stock Options                                                -             158,824          .05
                                                                       ------------      ----------        -----

       Diluted EPS
       Income available to common
         shareholders                                                  $  4,927,906       4,097,203         1.20
                                                                       ============       =========         ====
</TABLE>

<TABLE>
<CAPTION>
                                                                                             1997
                                                                       -------------------------------------------
                                                                            Net                          Per-Share
                                                                           Income         Shares           Amount
                                                                           ------         ------           ------
<S>                                                                    <C>                <C>                <C>
       Basic EPS                                                       $  3,646,839       3,833,343          .95
       Income available to common shareholders

       Effect of Stock Options                                                -             272,621          .06
                                                                       ------------      ----------          ---

       Diluted EPS
       Income available to common
         shareholders                                                  $  3,646,839       4,105,964          .89
                                                                          =========       =========          ===
</TABLE>


<TABLE>
<CAPTION>

                                                                                             1996
                                                                       --------------------------------------------
                                                                            Net                          Per-Share
                                                                           Income         Shares           Amount
                                                                           ------         ------           ------
<S>                                                                    <C>                <C>                <C>
       Basic EPS                                                       $  3,786,156       3,833,343          .99
       Income available to common shareholders

       Effect of Stock Options                                                -             223,346          .06
                                                                       ------------      ----------          ---

       Diluted EPS
       Income available to common
         shareholders                                                  $  3,786,156       4,066,689          .93
                                                                          =========       =========          ===
</TABLE>


                                                                     (Continued)

                                       35
<PAGE>   38
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(16)   FAIR VALUE OF FINANCIAL INSTRUMENTS

       The estimated fair value amounts have been determined by the Bank using
       available market information and appropriate valuation methodologies.
       However, considerable judgment is necessarily required to interpret
       market data to develop the estimates of fair value. Accordingly, the
       estimates presented herein are not necessarily indicative of the amounts
       the Bank 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.


<TABLE>
<CAPTION>

                                                           June 30, 1998                       June 30, 1997
                                                   ---------------------------          ----------------------------
                                                   Carrying          Estimated          Carrying         Estimated
                                                     Amount         Fair Value           Amount          Fair Value
                                                     ------         ----------           ------          ----------
<S>                                           <C>                      <C>                <C>               <C>      
       Assets
         Cash and amounts due from
           depository institutions            $       2,447,631        2,447,631          7,760,029         7,760,029
         Interest bearing deposits                      394,331          394,331            445,401           445,401
         Federal funds sold                          20,375,000       20,375,000          1,375,000         1,375,000
         Securities held to maturity                 27,800,000       27,767,525         13,995,350        13,899,370
         Mortgage-backed securities
           held to maturity, net                      2,950,856        2,965,247            511,530           516,579
         Loans receivable held for
           Long-term investment, net                368,998,087      378,879,256        341,402,566       348,162,337
           Sale, net                                  1,644,735        1,674,800            709,604           723,890
         Stock in the Federal Home
           Loan Bank of Cincinnati                    3,507,564        3,507,564          2,762,314         2,762,314

       Liabilities
         Demand deposits                             62,863,173       62,683,173         57,169,744        56,586,613
         Time deposits                              281,365,556      282,062,000        231,099,930       226,477,931
         Advances from the Federal
           Home Loan Bank of
           Cincinnati                                46,324,456       45,434,000         47,405,424        47,072,000
         Notes payable                                1,060,000        1,060,000          2,310,000         2,310,000
</TABLE>

       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.

       Securities and mortgage-backed securities. Estimated fair value for
       securities and mortgage-backed securities is based on quoted market
       prices.

       Loans receivable held for investment and held for sale. For loans
       receivable held for sale, fair value is estimated using the quoted market
       prices for securities backed by similar loans, adjusted for differences
       in loan characteristics. For performing loans receivable held for
       investment, 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. For other loans, cash flows and maturities are estimated based on
       contractual interest rates and historical experience and are discounted
       using secondary market rates adjusted for differences in servicing and
       credit costs.

       Fair value for significant nonperforming loans is based on recent
       external appraisals. If appraisals are not available, estimated cash
       flows are discounted using a rate commensurate with the risk associated
       with the estimated cash flows. Assumptions regarding credit risk, cash
       flows, and discount rates are judgmentally determined using available
       market information and specific borrower information.

                                                                     (Continued)

                                       36
<PAGE>   39
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


       Stock in the Federal Home Loan Bank of Cincinnati. This item is valued at
       cost, which represents redemption value and approximate fair value.

       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.

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

       Notes payable. The carrying value of the Company's fixed rate note
       payable is a reasonable estimate of fair value based on the current
       incremental borrowing rate for similar types of borrowing arrangements.
       For the variable rate note payable, the carrying amount is a reasonable
       estimate of fair value.

       Off-balance sheet instruments. The fair value of commitments is estimated
       using the fees currently charged to enter similar agreements, taking into
       account the remaining terms of the agreements and the counterparties'
       credit standing. For fixed-rate loan commitments, fair value also
       considers the difference between current levels of interest rates and the
       committed rates. The fair value of undisbursed lines of credit is based
       on fees currently charged for similar agreements or on estimated cost to
       terminate them or otherwise settle the obligations with the
       counterparties at the reporting date. The carrying amount and fair value
       of off-balance sheet instruments is not significant as of June 30, 1998
       and 1997.

                                                                     (Continued)

                                       37

<PAGE>   40
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


(17)   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

       The following is a summary of the unaudited consolidated quarterly
       results of operations for 1998 and 1997 (in thousands of dollars, except
       per share data): (1)

<TABLE>
<CAPTION>
                                                                Quarters for the Year Ended June 30, 1998      
                                                                -----------------------------------------
                                                                  First    Second      Third      Fourth
                                                               ------------------------------------------
<S>                                                            <C>           <C>        <C>        <C>  
           Interest income                                     $  8,196      8,569      8,713      8,887
           Interest expense                                       4,683      4,782      4,861      5,232
                                                                  -----      -----      -----      -----
                    Net interest income                           3,513      3,787      3,852      3,655
           Provision for losses on loans                             45         50        106         45
           Noninterest income                                       425        367        461        344
           Noninterest expense                                    2,006      2,104      2,173      2,568
                                                                  -----      -----      -----      -----
           Income before taxes                                    1,887      2,000      2,034      1,386
           Federal income taxes                                     626        699        700        354
                                                                 ------     ------     ------     ------
                    Net income                                 $  1,261      1,301      1,334      1,032
                                                                  =====      =====      =====      =====

           Basic earnings per share (2)                        $   0.33       0.33       0.33       0.26
                                                                 ======     ======     ======     ======

           Diluted earnings per share (2)                      $   0.31       0.32       0.32       0.25
                                                                 ======     ======     ======     ======
</TABLE>




<TABLE>
<CAPTION>
                                                                Quarters for the Year Ended June 30, 1997
                                                                -----------------------------------------
                                                                  First    Second      Third      Fourth
                                                               -----------------------------------------
<S>                                                            <C>           <C>        <C>        <C>  
           Interest income                                     $  7,536      7,662      7,733      8,032
           Interest expense                                       4,015      4,099      4,133      4,314
                                                                  -----      -----      -----      -----
                    Net interest income                           3,521      3,563      3,600      3,718
           Provision for losses on loans                          -          -            107         80
           Noninterest income                                       234        295        464        343
           Noninterest expense                                    3,756      2,068      2,097      2,079
                                                                  -----      -----      -----      -----
           Income (loss) before taxes                                (1)     1,790      1,860      1,902
           Federal income taxes                                     (10)       609        638        647
                                                                -------     ------     ------     ------
                    Net income (loss)                          $    (11)     1,181      1,222      1,255
                                                                 ======      =====      =====      =====

           Basic earnings per share (2)                        $   0.00       0.31       0.32       0.33
                                                                 ======     ======     ======     ======

           Diluted earnings per share (2)                      $   0.00        .29        .30        .31
                                                                 ======     ======     ======     ======
</TABLE>


----------------------------------

(1)    The total of the four quarterly amounts may not equal the full year
       amount due to rounding.
(2)    After giving effect to a three-for-two stock split, declared on July 16,
       1998 and distributed on August 17, 1998.

                                                                     (Continued)


                                       38
<PAGE>   41
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


(18)   PARENT COMPANY

       Condensed parent company only financial information as of and for the
       years ended June 30, 1998 and 1997, follows:

<TABLE>
<CAPTION>

       Condensed Statements of Financial Condition          1998            1997
       -------------------------------------------          ----            ----
<S>                                                     <C>                <C>   
Cash and amounts due from depository institutions       $    27,949        51,541
Prepaid expenses and other assets                           621,904       364,730
Investment in subsidiaries, at equity in underlying
  value of net assets                                    30,559,036    26,527,063
                                                        -----------   -----------
           Total assets                                 $31,208,889    26,943,334
                                                        ===========   ===========

Notes payable                                           $      --         600,000
Accrued expenses and other liabilities                          179        69,918
                                                        -----------   -----------
                                                                179       669,918
Stockholders' equity                                     31,208,710    26,273,416
                                                        -----------   -----------
           Total liabilities and stockholders' equity   $31,208,889    26,943,334
                                                        ===========   ===========
</TABLE>


<TABLE>
<CAPTION>

       Condensed Statements of Operations            1998           1997        1996
       ----------------------------------            ----           ----        ----

<S>                                              <C>             <C>          <C>    
Income
  Mortgage banking activities                    $  421,344      493,440      488,814
Expenses
  Interest expense                                    7,758       70,136       92,513
  General and administrative                        266,287      255,804      234,063
                                                 ----------   ----------   ----------
                                                    274,045      325,940      326,576
                                                 ----------   ----------   ----------
           Income before federal income
             taxes and equity in undistributed
             net income of subsidiaries             147,299      167,500      162,238
Federal income taxes                                 50,266       57,146       55,160
                                                 ----------   ----------   ----------
           Income before equity in
             undistributed net income of
             subsidiaries                            97,033      110,354      107,078
Equity in undistributed net income of
  subsidiaries                                    4,830,873    3,536,485    3,679,078
                                                 ----------   ----------   ----------
           Net income                            $4,927,906    3,646,839    3,786,156
                                                 ==========   ==========   ==========
</TABLE>


                                                                     (Continued)

                                       39

<PAGE>   42
                       PVF CAPITAL CORP. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


<TABLE>
<CAPTION>
       Condensed Statements of Cash Flows             1998             1997           1996
       ----------------------------------             ----             ----           ----
<S>                                                <C>              <C>            <C>      
Operating activities
  Net income                                       $ 4,927,906      3,646,839      3,786,156
  Equity in undistributed net income
    of subsidiaries                                 (4,830,873)    (3,536,485)    (3,679,078)
  Other, net                                          (326,913)        50,443       (206,134)
                                                   -----------    -----------    -----------
           Net cash provided by (used in)
             operating activities                     (229,880)       160,797        (99,056)
                                                   -----------    -----------    -----------
Investing activities
  Investment in PVF Holdings Inc.                     (301,100)          --             --
  Purchase of servicing portfolio                         --             --       (2,154,535)
           Net cash used in investing activities      (301,100)          --       (2,154,535)
Financing activities
  Proceeds from notes payable                             --             --        1,200,000
  Repayment on note payable                           (600,000)      (400,000)      (200,000)
  Proceeds from exercise of stock options                9,529           --           25,000
  Cash paid in lieu of fractional shares                (2,141)        (1,349)        (1,098)
  Dividends received from subsidiaries               1,100,000        300,000      1,154,535
                                                   -----------    -----------    -----------
           Net cash provided by (used in)
             financing activities                      507,388       (101,349)     2,178,437
                                                   -----------    -----------    -----------
Net decrease in cash and cash
  equivalents                                          (23,592)       (59,448)       (75,154)
Cash and cash equivalents at beginning of year          51,541        110,989        186,143
                                                   -----------    -----------    -----------
Cash and cash equivalents at end of year           $    27,949         51,541        110,989
                                                   ===========    ===========    ===========
</TABLE>

(19)   401(K) SAVINGS PLAN

       Employees who have reached age 18 and have completed one year of
       eligibility service are eligible to participate in the Company's 401(k)
       Savings Plan. The plan allows eligible employees to contribute up to 7
       percent of their compensation, with the Company matching up to 50 percent
       of the first 4 percent contributed by the employee, as determined by the
       Company for the contribution period. The plan also permits the Company to
       make a profit sharing contribution at its discretion up to 4 percent of
       the employees compensation.
       Participants vest in the Company's contributions as follows:

<TABLE>
<CAPTION>
                                  Years of Service                      Percent Vested
                                  ----------------                      --------------
<S>                               <C>                                   <C>
                                  Less than 2                                  0%
                                  2 but less than 3                           20
                                  3 but less than 4                           40
                                  4 but less than 5                           60
                                  5 but less than 6                           80
                                  6 or more                                  100
</TABLE>

       The total of the Company's matching and profit sharing contribution cost
       related to the plan for the years ended June 30, 1998, 1997, and 1996 was
       $72,602; $76,300; and $68,100, respectively.

                                       40
<PAGE>   43

                                    NOTES
<PAGE>   44
                                     Park View Federal Savings Bank
                                       Office Locations and Hours
<TABLE>
<S>                                <C>                                                   <C>
MAIN OFFICE                         LOBBY                                                PARMA OFFICE      
2618 N. Moreland Blvd.              Mon., Tue., Thurs...........9:00 a.m. - 4:30 p.m.    7448 Ridge Road   
Cleveland, Ohio 44120               Fri.........................9:00 a.m. - 5:00 p.m.    Parma, Ohio 44129 
(216) 991-9600                      Sat.........................9:00 a.m. - 1:00 p.m.    (440) 845-5300    
                                                                                         
                                                                  Closed Wednesday  
                                    DRIVE-UP WINDOW                                               
                                    Mon., Tue., Thurs., Fri.....9:00 a.m. - 5:00 p.m.             
                                    Sat.........................9:00 a.m. - 1:00 p.m.             


LA PLACE OFFICE                     LOBBY                                                 LAKEWOOD-CLEVELAND OFFICE         
2111 Richmond Road                  Mon., Tue., Thurs...........9:00 a.m. - 4:30 p.m.     11010 Clifton Blvd.               
Beachwood, Ohio 44122               Fri.........................9:00 a.m. - 5:30 p.m.     Cleveland, Ohio 44102             
(216) 831-6373                      Sat.........................9:00 a.m. - 1:00 p.m.     (216) 631-8900                    
                                                                   Closed Wednesday       
                                    DRIVE-UP WINDOW                                               
                                    Mon., Tue., Thurs...........9:00 a.m. - 5:00 p.m.             
                                    Fri.........................9:00 a.m. - 6:00 p.m.             
                                    Sat.........................9:00 a.m. - 1:00 p.m.             
                                    
BAINBRIDGE OFFICE                   LOBBY                                                 MACEDONIA OFFICE          
8500 Washington Street              Mon., Tue., Wed., Thurs.....9:00 a.m. - 4:30 p.m.     497 East Aurora Road      
Chagrin Falls, Ohio 44023           Fri.........................9:00 a.m. - 5:30 p.m.     Macedonia, Ohio 44056     
(440) 543-8889                      Sat.........................9:00 a.m. - 1:00 p.m.     (330) 468-0055            
                                    Drive-Up Window                                                                 
                                    Mon., Tue., Wed., Thurs. ...9:00 a.m. - 5:00 p.m.     MAYFIELD HEIGHTS OFFICE   
BEDFORD HEIGHTS OFFICE              Fri.........................9:00 a.m. - 6:00 p.m.     1456 SOM Center Road      
25350 Rockside Road                 Sat.........................9:00 a.m. - 1:00 p.m.     Mayfield Hts., Ohio 44124 
Bedford Hts., Ohio 44146                                                                  (440) 449-8597            
(440) 439-2200                                                                                                      
                                                                                          MENTOR OFFICE             
CHARDON OFFICE                                                                            6990 Heisley Road         
408 Water Street                                                                          Mentor, Ohio 44060        
Chardon, Ohio 44024                                                                       (440) 944-0276            
(440) 285-2343                                                                                                      
                                                                                          
</TABLE>


                             ADMINISTRATIVE OFFICES
                               25350 Rockside Road
                            Bedford Hts., Ohio 44146
                                 (440) 439-6790
                                 Monday - Friday
                              9:00 a.m. - 5:00 p.m.


<PAGE>   45
                                PVF CAPITAL CORP.



BOARD OF DIRECTORS

JAMES W. MALE
Chairman of the Board

JOHN R. MALE
President and
Chief Executive Officer

ROBERT K. HEALEY
Retired

STANLEY T. JAROS
Partner
Moriarty & Jaros, P.L.L.

CREIGHTON E. MILLER
Partner
Miller, Stillman & Bartel

STUART D. NEIDUS
Executive Vice President and
Chief Financial Officer
ESSEF Corporation

ROBERT F. URBAN
Retired


EXECUTIVE OFFICERS

JAMES W. MALE
Chairman of the Board

JOHN R. MALE
President and
Chief Executive Officer

C. KEITH SWANEY
Vice President and Treasurer

JEFFREY N. MALE
Vice President and
Corporate Secretary

                         PARK VIEW FEDERAL SAVINGS BANK

EXECUTIVE OFFICERS

JOHN R. MALE
President and
Chief Executive Officer

C. KEITH SWANEY
Executive Vice President and
Chief Financial Officer

JEFFREY N. MALE
Senior Vice President

CAROL S. PORTER
Corporate Secretary

EDWARD B. DEBEVEC
Treasurer


OTHER OFFICERS

ANNE M. JOHNSON
Vice President
Mortgage Loan Servicing

ADELINE NOVAK
Vice President
Human Resources

ROBERT J. PAPA
Vice President
Construction Lending

JOHN E. SCHIMMELMANN
Vice President
Savings Administration

KENNAIRD H. STEWART
Vice President
Commercial Real Estate Lending

ROBERT D. TOTH
Vice President
Data Processing



GENERAL INFORMATION
INDEPENDENT
CERTIFIED ACCOUNTANTS
KPMG Peat Marwick LLP
1500 National City Center
1900 East Ninth Street
Cleveland, Ohio 44114

GENERAL COUNSEL
Moriarty & Jaros, P.L.L.
30195 Chagrin Boulevard
Suite 110 North
Pepper Pike, Ohio 44124

TRANSFER AGENT AND REGISTRAR
Fifth Third Bank
Fifth Third Center
38 Fountain Square
Cincinnati, Ohio 45263

SPECIAL COUNSEL
Housley Kantarian & Bronstein, P.C.
1220 19th Street, N.W., Suite 700
Washington, D.C. 20036

ANNUAL MEETING
The 1998 Annual Meeting of
Stockholders will be held on
October 19, 1998 at 10:00 a.m. 
at the Cleveland Marriott East, 
3663 Park East Drive, Beachwood, Ohio.

ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the
Securities and Exchange Commission will be furnished without charge to
stockholders upon written request to the Corporate Secretary, PVF Capital Corp.,
2618 N. Moreland Boulevard, Cleveland, Ohio 44120.


<PAGE>   46





















                                  [PVF - LOGO]
                                 CAPITAL CORP.


        2618 North Moreland Blvd., Cleveland, Ohio 44120, (216) 991-9600