##### Table of Contents



Exhibit 13




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Table of Contents
 Letter to Shareholders
    
    
    1Full Service Locations
    
    
    4Selected Consolidated Financial and Other Data
    
    
    6Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8Managements Annual Report on Internal Control over Financial Reporting
    
    
    21Report of Independent Registered Public Accounting Firm
    
    
    22




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To Our Shareholders
 W




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2




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Visit our web site at www.pvfsb.com. The site provides information about our products
and services, and provides access to current loan and deposit account rates, terms and
other information.
We invite all shareholders to attend the Annual Meeting of Stockholders of PVF Capital
Corp. on Monday, October 17, 2005 at 10:00 a.m., at PVF Capital Corp.s Corporate
Center, 30000 Aurora Road, Solon, Ohio. We look forward to another successful year of
service and dedication to the community, its members, our shareholders and our customers. John R. Male
Chairman of the Board
and Chief Executive Officer C. Keith Swaney
President, Chief Operating Officer
and Treasurer




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F U L L S E R V I C E L O C A T I O N S Aurora Office
215 W. Garfield Rd.
Aurora, OH 44202
Tel: 330-562-0620 Avon Office
36311 Detroit Rd.
Avon, OH 44011
Tel: 440-934-3580 Beachwood Office
La Place
2111 Richmond Rd.
Beachwood, OH 44122
Tel: 216-831-6373 Bainbridge Office
8500 Washington St.
Chagrin Falls, OH 44023
Tel: 440-543-8889 Corporate Center Office
30000 Aurora Rd.
Solon, OH 44139
Tel: 440-914-3900 Bedford Office
413 Northfield Rd.
Bedford, OH 44146
Tel: 440-439-2200 Chardon Office
408 Water St.
Chardon, OH 44024
Tel: 440-285-2343 Lakewood-Cleveland Office
11010 Clifton Blvd.
Cleveland, OH 44102
Tel: 216-631-8900 Macedonia Office
497 East Aurora Rd.
Macedonia, OH 44056
Tel: 330-468-0055 CLEVELAND
Lakewood Mentor 90 90
480 480 77 71
80 80 306
Chardon
Beachwood
Shaker Hts.
Mayfield Hts.
Bainbridge Bedford
North Royalton
Strongsville
Macedonia
Corporate Ctr. Solon
Medina
44
91
82
83
322
422
Streetsboro
Aurora
Avon
480 43
271




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##### Table of Contents



Mentor Office
Heisley Corners
6990 Heisley Rd.
Mentor, OH 44060
Tel: 440-944-0276 North Royalton Office
13901 Ridge Rd.
North Royalton, OH 44133
Tel: 440-582-7417 Shaker Heights Office
Shaker Towne Centre
16909 Chagrin Blvd.
Shaker Hts., OH 44120
Tel: 216-283-4003 Solon Office
Solar Shopping Center
34400 Aurora Rd.
Solon, OH 44139
Tel: 440-542-6070 Mayfield Heights Office
1244 SOM Center Rd.
Mayfield Hts., OH 44124
Tel: 440-449-8597 Medina Office
Reserve Square
3613 Medina Rd.
Medina, OH 44256
Tel: 330-721-7484 Streetsboro Office
9305 Market Square Dr.
Streetsboro, OH 44241
Tel: 330-626-9444 Strongsville Office
17780 Pearl Rd.
Strongsville, OH 44136
Tel: 440-878-6010 Park View Federals conveniently located fullservice
branch offices, with ample parking facilities
immediately adjacent to each office, are equipped
with state-of-the-art technology to process any
transaction quickly and efficiently. Our loan officers
and account representatives are available to answer
any questions about our financial products and
services.We pride ourselves on providing our
customers with the best in financial assistance
and personal service. Better service from a better bank. www.pvfsb.com




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Selected Consolidated Financial and Other Data
 Financial Condition Data:
 At June 30,(dollars in thousands)
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Total assets
    
    $
    823,899
    
    
    $
    755,687
    
    
    $
    743,404
    
    
    $
    679,620
    
    
    $
    736,525Loans receivable, net
    
    
    660,494
    
    
    
    610,681
    
    
    
    576,985
    
    
    
    560,577
    
    
    
    570,228Loans receivable held for sale, net
    
    
    9,060
    
    
    
    11,871
    
    
    
    33,604
    
    
    
    11,680
    
    
    
    6,152Mortgage-backed securities held to maturity
    
    
    31,720
    
    
    
    36,779
    
    
    
    2,931
    
    
    
    7,211
    
    
    
    17,912Cash and cash equivalents
    
    
    11,090
    
    
    
    17,470
    
    
    
    96,751
    
    
    
    14,314
    
    
    
    65,395Securities
    
    
    57,500
    
    
    
    27,500
    
    
    
    33
    
    
    
    55,121
    
    
    
    50,212Deposits
    
    
    591,226
    
    
    
    526,493
    
    
    
    526,429
    
    
    
    479,672
    
    
    
    480,532FHLB advances, notes payable and
subordinated debt
    
    
    146,413
    
    
    
    147,526
    
    
    
    125,938
    
    
    
    129,028
    
    
    
    190,567Stockholders equity
    
    
    66,453
    
    
    
    63,361
    
    
    
    58,603
    
    
    
    52,299
    
    
    
    48,006
 Operating Data:
 Year Ended June 30,(dollars in thousands except for earnings per share)
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Interest income
    
    $
    43,595
    
    
    $
    39,109
    
    
    $
    43,482
    
    
    $
    48,814
    
    
    $
    53,962Interest expense
    
    
    19,801
    
    
    
    16,739
    
    
    
    20,646
    
    
    
    27,060
    
    
    
    34,118Net interest income
before provision for loan losses
    
    
    23,794
    
    
    
    22,370
    
    
    
    22,836
    
    
    
    21,754
    
    
    
    19,844Provision for loan losses
    
    
    111
    
    
    
    597
    
    
    
    0
    
    
    
    558
    
    
    
    225Net interest income
after provision for loan losses
    
    
    23,683
    
    
    
    21,773
    
    
    
    22,836
    
    
    
    21,196
    
    
    
    19,619Non-interest income
    
    
    3,374
    
    
    
    6,130
    
    
    
    5,893
    
    
    
    3,751
    
    
    
    2,600Non-interest expense
    
    
    18,942
    
    
    
    17,571
    
    
    
    16,509
    
    
    
    14,139
    
    
    
    12,218Income before federal income taxes
    
    
    8,115
    
    
    
    10,332
    
    
    
    12,220
    
    
    
    10,808
    
    
    
    10,001Federal income taxes
    
    
    2,531
    
    
    
    3,422
    
    
    
    4,124
    
    
    
    3,635
    
    
    
    3,365Net income
    
    $
    5,584
    
    
    $
    6,910
    
    
    $
    8,096
    
    
    $
    7,173
    
    
    $
    6,636Basic earnings per share(1)
    
    $
    0.72
    
    
    $
    0.89
    
    
    $
    1.05
    
    
    $
    0.93
    
    
    $
    0.87Diluted earnings per share (1)
    
    $
    0.71
    
    
    $
    0.87
    
    
    $
    1.03
    
    
    $
    0.91
    
    
    $
    0.84
 
 (1)
    
    Adjusted for stock dividends. 
 6




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Other Data:
 At or For the Year Ended June 30,2005
    
    
    
    2004
    
    
    
    2003
    
    
    
    2002
    
    
    
    2001Return on average assets
    
    
    0.70
    %
    
    
    0.96
    %
    
    
    1.15
    %
    
    
    1.03
    %
    
    
    1.00
    %Return on average equity
    
    
    8.62
    %
    
    
    11.26
    %
    
    
    14.60
    %
    
    
    14.19
    %
    
    
    14.62
    %Interest rate spread
    
    
    3.07
    %
    
    
    3.12
    %
    
    
    3.13
    %
    
    
    2.95
    %
    
    
    2.75
    %Net interest margin
    
    
    3.19
    %
    
    
    3.31
    %
    
    
    3.37
    %
    
    
    3.26
    %
    
    
    3.09
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    104.81
    %
    
    
    107.62
    %
    
    
    108.10
    %
    
    
    107.64
    %
    
    
    106.45
    %Non-accruing loans and
repossessed assets to total assets
    
    
    1.59
    %
    
    
    1.42
    %
    
    
    1.06
    %
    
    
    1.23
    %
    
    
    0.91
    %Stockholders equity to total assets
    
    
    8.07
    %
    
    
    8.38
    %
    
    
    7.88
    %
    
    
    7.70
    %
    
    
    6.52
    %Ratio of average equity to
average assets
    
    
    8.16
    %
    
    
    8.49
    %
    
    
    7.86
    %
    
    
    7.24
    %
    
    
    6.79
    %Dividend payout ratio (cash dividends declared per
share divided by earnings per share)
    
    
    37.37
    %
    
    
    33.71
    %
    
    
    21.21
    %
    
    
    21.76
    %
    
    
    19.86
    %Bank Regulatory Capital Ratios:Ratio of tangible capital to
adjusted total assets
    
    
    8.77
    %
    
    
    7.97
    %
    
    
    7.73
    %
    
    
    7.88
    %
    
    
    6.46
    %Ratio of Tier-1 core capital to
adjusted total assets
    
    
    8.77
    %
    
    
    7.97
    %
    
    
    7.73
    %
    
    
    7.88
    %
    
    
    6.46
    %Ratio of Tier-1 risk-based capital to
risk-weighted assets
    
    
    10.41
    %
    
    
    9.54
    %
    
    
    9.92
    %
    
    
    10.84
    %
    
    
    9.56
    %Ratio of Total risk-based capital to
risk-weighted assets
    
    
    10.97
    %
    
    
    10.19
    %
    
    
    10.55
    %
    
    
    11.63
    %
    
    
    10.26
    %
 
 7




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Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
  Forward-Looking Statements
    Overview of Financial Condition
at June 30, 2005, 2004, and 2003
  
 8




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Capital
   Park View
    
    
    
    
    
    
    Requirement forFederal
    
    
    Percent of

    
    Well-Capitalized(dollars in thousands)
    
    Capital
    
    
    Assets (1)

    
    InstitutionTangible capital
    
    $
    72,744
    
    
    
    8.77
    %
    
    
    N/ATier-1 core capital
    
    $
    72,744
    
    
    
    8.77
    %
    
    
    5.00
    %Tier-1 risk-based capital
    
    $
    72,744
    
    
    
    10.41
    %
    
    
    6.00
    %Total risk-based capital
    
    $
    76,661
    
    
    
    10.97
    %
    
    
    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
   
 9




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(1)
 Fiscal 2005
    
    

    Fiscal 2004High Bid
    
    Low Bid
    
    High Bid
    
    Low BidFourth Quarter
    
    $
    14.33
    
    
    $
    10.11
    
    
    $
    14.04
    
    
    $
    10.58Third Quarter
    
    
    12.73
    
    
    
    10.91
    
    
    
    14.50
    
    
    
    11.77Second Quarter
    
    
    13.22
    
    
    
    11.43
    
    
    
    13.61
    
    
    
    11.77First Quarter
    
    
    14.47
    
    
    
    12.50
    
    
    
    12.44
    
    
    
    10.30
 
 (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. Liquidity and Capital Resources
    Market Risk Management
    
 10




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Profile of Interest Earning Assets
 
     Profile of Interest Bearing Liabilities
 
 
 11




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(dollars inthousands)

    
    June 30, 2005
    
    
    June 30, 2004Change in

    
    Market Value of

    
    Dollar

    
    NPV

    
    Market Value of

    
    Dollar

    
    NPVInterest Rates

    
    Portfolio Equity

    
    Change

    
    Ratio

    
    Portfolio Equity

    
    Change

    
    Ratio+2
    %
    
    $
    87,343
    
    
    $
    (5,011
    )
    
    
    10.44
    %
    
    $
    74,999
    
    
    $
    (8,703
    )
    
    
    9.69
    %+1
    %
    
    
    91,084
    
    
    
    (1,270
    )
    
    
    10.79
    
    
    
    80,232
    
    
    
    (3,472
    )
    
    
    10.250
    
    
    
    92,354
    
    
    
    
    
    
    
    10.85
    
    
    
    83,703
    
    
    
    
    
    
    
    10.59-1
    %
    
    
    88,401
    
    
    
    (3,953
    )
    
    
    10.34
    
    
    
    83,477
    
    
    
    (226
    )
    
    
    10.49-2
    %
    
    
    80,987
    
    
    
    (11,367
    )
    
    
    9.45
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
      
 12




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Within
    
    
    1-3
    
    
    3-5
    
    
    >5(dollars in thousands)
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalTotal interest-rate-sensitive assets
    
    $
    391,808
    
    
    $
    120,776
    
    
    $
    200,763
    
    
    $
    68,225
    
    
    $
    781,572Total interest-rate-sensitive liabilities
    
    
    390,703
    
    
    
    168,592
    
    
    
    40,257
    
    
    
    121,128
    
    
    
    720,681Periodic GAP
    
    
    1,105
    
    
    
    (47,816
    )
    
    
    160,506
    
    
    
    (52,903
    )
    
    
    60,891Cumulative GAP
    
    
    1,105
    
    
    
    (46,711
    )
    
    
    113,795
    
    
    
    60,892Ratio of cumulative GAP to total assets
    
    
    0.1
    %
    
    
    (5.7
    %)
    
    
    13.8
    %
    
    
    7.4
    %
 Commitments, Contingencies and Off-Balance Sheet Risk
   June 30,(dollars in thousands)
    
    2005
    
    
    2004Commitments to originate:Mortgage loans intended for sale
    
    $
    43,912
    
    
    $
    29,805Mortgage loans held for investment
    
    
    29,798
    
    
    
    28,619Unfunded home equity and
commercial real estate lines of credit
    
    
    79,452
    
    
    
    82,028Undisbursed portion of loan proceeds
    
    
    69,715
    
    
    
    72,042Commitments to sell loans held for sale
    
    
    17,881
    
    
    
    10,842Standby letters of credit
    
    
    8,903
    
    
    
    4,329
   
 13




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Note

    
    Within
    
    
    1-3

    
    3-5

    
    >5(dollars in thousands)
    
    Reference

    
    1 Year
    
    
    Years

    
    Years

    
    Years

    
    TotalDeposits without a stated maturity
    
    
    7
    
    
    $
    121,645
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    121,645Certificates of deposit
    
    
    7
    
    
    
    371,246
    
    
    
    80,773
    
    
    
    17,563
    
    
    
    
    
    
    
    469,582Long-term advances from
the FHLB of Cincinnati
    
    
    8
    
    
    
    12
    
    
    
    20,000
    
    
    
    
    
    
    
    100,000
    
    
    
    120,012Notes payable and subordinated debt
    
    
    9
    
    
    
    93
    
    
    
    1,308
    
    
    
    
    
    
    
    10,000
    
    
    
    11,401Operating leases
    
    
    11
    
    
    
    872
    
    
    
    1,626
    
    
    
    1,216
    
    
    
    827
    
    
    
    4,541
 Results of Operations
 General
   Net Interest Income
   
 14




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Table 1
    
    Average Balances,
Interest, and Average Yields and RatesFor
the Year Ended June 30,2005
    
    
    2004
    
    
    2003Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/(dollars in thousands)
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    CostInterest-earning assets:Loans
    
    $
    649,305
    
    
    $
    39,825
    
    
    
    6.13
    %
    
    $
    610,081
    
    
    $
    36,605
    
    
    
    6.00
    %
    
    $
    601,122
    
    
    $
    40,690
    
    
    
    6.77
    %Mortgage-backed securities
    
    
    34,199
    
    
    
    1,655
    
    
    
    4.84
    
    
    
    39,180
    
    
    
    1,860
    
    
    
    4.75
    
    
    
    4,705
    
    
    
    285
    
    
    
    6.06Securities and other interest-earning assets
    
    
    61,747
    
    
    
    2,115
    
    
    
    3.43
    
    
    
    27,538
    
    
    
    645
    
    
    
    2.34
    
    
    
    70,861
    
    
    
    2,507
    
    
    
    3.54Total interest-earning assets
    
    
    745,251
    
    
    
    43,595
    
    
    
    5.85
    
    
    
    676,799
    
    
    
    39,110
    
    
    
    5.78
    
    
    
    676,688
    
    
    
    43,482
    
    
    
    6.43Non-interest-earning assets
    
    
    48,343
    
    
    
    
    
    
    
    
    
    
    
    46,232
    
    
    
    
    
    
    
    
    
    
    
    27,709Total assets
    
    $
    793,594
    
    
    
    
    
    
    
    
    
    
    $
    723,031
    
    
    
    
    
    
    
    
    
    
    $
    704,397Interest-bearing liabilities:Deposits
    
    $
    537,874
    
    
    $
    13,133
    
    
    
    2.44
    
    
    $
    497,803
    
    
    $
    11,351
    
    
    
    2.28
    
    
    $
    496,910
    
    
    $
    15,170
    
    
    
    3.05Borrowings
    
    
    173,205
    
    
    
    6,668
    
    
    
    3.85
    
    
    
    131,069
    
    
    
    5,389
    
    
    
    4.11
    
    
    
    129,094
    
    
    
    5,476
    
    
    
    4.24Total interest-bearing liabilities
    
    
    711,079
    
    
    
    19,801
    
    
    
    2.78
    
    
    
    628,872
    
    
    
    16,740
    
    
    
    2.66
    
    
    
    626,004
    
    
    
    20,646
    
    
    
    3.30Non-interest-bearing liabilities
    
    
    17,723
    
    
    
    
    
    
    
    
    
    
    
    32,780
    
    
    
    
    
    
    
    
    
    
    
    23,031Total liabilities
    
    
    728,802
    
    
    
    
    
    
    
    
    
    
    
    661,652
    
    
    
    
    
    
    
    
    
    
    
    649,035Stockholders equity
    
    
    64,792
    
    
    
    
    
    
    
    
    
    
    
    61,379
    
    
    
    
    
    
    
    
    
    
    
    55,362Total liabilities and stockholders equity
    
    $
    793,594
    
    
    
    
    
    
    
    
    
    
    $
    723,031
    
    
    
    
    
    
    
    
    
    
    $
    704,397Net interest income
    
    
    
    
    
    $
    23,794
    
    
    
    
    
    
    
    
    
    
    $
    22,370
    
    
    
    
    
    
    
    
    
    
    $
    22,836Interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.07
    %
    
    
    
    
    
    
    
    
    
    
    3.12
    %
    
    
    
    
    
    
    
    
    
    
    3.13
    %Net yield on interest-earning assets
    
    
    
    
    
    
    
    
    
    
    3.19
    %
    
    
    
    
    
    
    
    
    
    
    3.31
    %
    
    
    
    
    
    
    
    
    
    
    3.37
    %Ratio of average interest-earning assets
to average interest-bearing liabilities
    
    
    104.81
    %
    
    
    
    
    
    
    
    
    
    
    107.62
    %
    
    
    
    
    
    
    
    
    
    
    108.10
    %
 
 15




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Table 2
    
    Year Ended June 30,2005
    
    
    vs.
    
    
    2004
    
    
    2004
    
    
    vs.
    
    
    2003Increase (Decrease)
    
    
    Increase (Decrease)Due to
    
    
    Due to(dollars in thousands)
    
    Volume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalInterest income:Loans
    
    $
    2,392
    
    
    $
    829
    
    
    $
    3,220
    
    
    $
    537
    
    
    $
    (4,622
    )
    
    $
    (4,085
    )Mortgage-backed securities
    
    
    (241
    )
    
    
    35
    
    
    
    (205
    )
    
    
    1,637
    
    
    
    (62
    )
    
    
    1,575Securities and other interest-earning
assets
    
    
    1,071
    
    
    
    399
    
    
    
    1,470
    
    
    
    (1,014
    )
    
    
    (848
    )
    
    
    (1,862
    )Total
interest-earning assets
    
    
    3,222
    
    
    
    1,263
    
    
    
    4,485
    
    
    
    1,160
    
    
    
    (5,532
    )
    
    
    (4,372
    )Interest expense:Deposits
    
    
    949
    
    
    
    833
    
    
    
    1,782
    
    
    
    20
    
    
    
    (3,839
    )
    
    
    (3,819
    )Borrowings
    
    
    1,695
    
    
    
    (416
    )
    
    
    1,279
    
    
    
    93
    
    
    
    (180
    )
    
    
    (87
    )Total
interest-bearing liabilities
    
    
    2,644
    
    
    
    417
    
    
    
    3,061
    
    
    
    113
    
    
    
    (4,019
    )
    
    
    (3,906
    )Net interest income
    
    $
    578
    
    
    $
    846
    
    
    $
    1,424
    
    
    $
    1,047
    
    
    $
    (1,513
    )
    
    $
    (466
    )
    Provision for Loan Losses
  
 16




---



##### Table of Contents



Non-interest Income
  
 17




---



##### Table of Contents



Non-interest Expense
  Federal Income Taxes
  Impact of Inflation and Changing Prices
  Critical Accounting Policies and Estimates
   
 18




---



##### Table of Contents



PARK VIEW FEDERAL
SAVINGS BANK
O f f i c e L o c a t i o n s a n d Ho u r s Shaker Heights Office
Shaker Towne Centre
16909 Chagrin Blvd.
Shaker Hts., Ohio 44120
216-283-4003 Aurora Office
215 W. Garfield Road
Aurora, Ohio 44202
330-562-0620 Avon Office
36311 Detroit Road
Avon, Ohio 44011
440-934-3580 Bainbridge Office
8500 Washington Street
Chagrin Falls, Ohio 44023
440-543-8889 Beachwood Office
La Place
2111 Richmond Road
Beachwood, Ohio 44122 216-
831-6373 Bedford Office
413 Northfield Road
Bedford, Ohio 44146
440-439-2200 Chardon Office
408 Water Street
Chardon, Ohio 44024
440-285-2343 Lakewood-Cleveland Office
11010 Clifton Blvd.
Cleveland, Ohio 44102
216-631-8900 Macedonia Office
497 East Aurora Road
Macedonia, Ohio 44056
330-468-0055 Mayfield Heights Office
1244 SOM Center Road
Mayfield Hts., Ohio 44124
440-449-8597 Medina Office
Reserve Square
3613 Medina Road
Medina, Ohio 44256
330-721-7484 LOBBY Mon., Tues., Wed., Thurs.:
9:00 am  5:00 pm Friday :9:00 am  6:00 pm
Saturday:9:00 am  1:00 pm LOBBY & AUTO TELLER
Monday  Friday:
9:00 am  5:00 pm
Closed Saturday
Corporate Center Office
30000 Aurora Road
Solon, Ohio 44139
440-914-3900
Mentor Office
Heisley Corners
6990 Heisley Road
Mentor, Ohio 44060
440-944-0276
North Royalton Office
13901 Ridge Road
North Royalton, Ohio 44133
440-582-7417
Solon Office
Solar Shopping Center
34400 Aurora Road
Solon, Ohio 44139
440-542-6070
Streetsboro Office
9305 Market Square Drive
P.O. Box 2130
Streetsboro, Ohio 44241
330-626-9444
Strongsville Office
17780 Pearl Road
Strongsville, Ohio 44136
440-878-6010
LOBBY
Mon., Tues., Wed., Thurs.:
9:00 am  4:30 pm
Friday:9:00 am  5:30 pm
Saturday:9:00 am  1:00 pm
AUTO TELLER
Mon., Tues., Wed., Thurs.:
9:00 am  5:00 pm
Friday:9:00 am  6:00 pm
Saturday:9:00 am  1:00 pm 19




---



##### Table of Contents



P            ARK            V            IEW            F            EDERAL
S A V I N G S B A N K
John R. Male
Chairman of the Board and
Chief Executive Officer
C. Keith Swaney
President, Chief Operating Officer
and Chief Financial Officer
Gerald A. Fallon
Retired
Robert K. Healey
Retired
Ronald D. Holman, II
Partner
Cavitch, Familo, Durkin & Frutkin
Stanley T. Jaros
Partner
Moriarty & Jaros, P.L.L.
Raymond J. Negrelli
President
Raymond J. Negrelli, Inc.
Stuart D. Neidus
Chairman and
Chief Executive Officer
Anthony & Sylvan Pools Corporation
John R. Male
Chairman of the Board and
Chief Executive Officer
C. Keith Swaney
President, Chief Operating Officer
and Chief Financial Officer
Jeffrey N. Male
Executive Vice President
William J. Harr, Jr.
Senior Vice President
Lending
Anne M. Johnson
Senior Vice President
Operations
Carol S. Porter
Corporate Secretary and
Marketing Director
Edward B. Debevec
Treasurer
Mark E. Fosnaught
Vice President
Retail Banking
Robert L. Katitus
Vice President
Commercial Real Estate Lending
Adeline Novak
Vice President
Human Resources
Robert J. Papa
Vice President
Construction Lending John E. Schimmelmann
Vice President
Deposit Operations
Kennaird H. Stewart
Vice President
Commercial Real Estate Lending
2005 B o a r d o f D i r e c t o r s O f f i c e r s 20




---



##### Table of Contents



-s- John R. Male
    

-s- C. Keith SwaneyJohn R. Male
    
    C. Keith SwaneyChairman of the Board
    
    President, Chief Operating Officerand Chief Executive Officer
    
    and Treasurer
 21




---



##### Table of Contents



Internal Control  Integrated Framework
   22




---



##### Table of Contents



Internal Control  Integrated
Framework Internal
Control  Integrated Framework
 
 
 23




---



##### Table of Contents



2005
    
    
    2004ASSETSCash and amounts due from depository institutions
    
    $
    4,034,353
    
    
    $
    4,550,446Interest bearing deposits
    
    
    2,180,723
    
    
    
    894,327Federal funds sold
    
    
    4,875,000
    
    
    
    12,025,000Cash and cash equivalents
    
    
    11,090,076
    
    
    
    17,469,773Securities held to maturity (fair values of $57,345,425 and
$27,399,975, respectively)
    
    
    57,500,000
    
    
    
    27,500,000Mortgage-backed securities held to maturity (fair values
of $31,487,772 and $35,390,465, respectively)
    
    
    31,720,033
    
    
    
    36,779,289Loans receivable held for sale, net
    
    
    9,059,647
    
    
    
    11,870,775Loans receivable, net of allowance of
$4,312,274 and $4,376,704
    
    
    660,494,144
    
    
    
    610,680,821Office properties and equipment, net
    
    
    13,413,231
    
    
    
    13,888,392Real estate owned
    
    
    1,319,251
    
    
    
    70,000Federal Home Loan Bank stock
    
    
    11,316,400
    
    
    
    10,825,600Prepaid expenses and other assets
    
    
    27,985,916
    
    
    
    26,602,759Total assets
    
    $
    823,898,698
    
    
    $
    755,687,409LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    591,226,478
    
    
    $
    526,492,714Short-term advances from the FHLB
    
    
    15,000,000
    
    
    
    15,000,000Long-term advances from the FHLB
    
    
    120,012,018
    
    
    
    120,039,831Notes payable
    
    
    1,400,780
    
    
    
    2,486,250Subordinated debentures
    
    
    10,000,000
    
    
    
    10,000,000Advances from borrowers for taxes and insurance
    
    
    3,184,981
    
    
    
    2,376,872Accrued expenses and other liabilities
    
    
    16,621,262
    
    
    
    15,930,799Total liabilities
    
    
    757,445,519
    
    
    
    692,326,466Commitments and contingenciesStockholders equitySerial preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued
    
    
    
    
    
    
    Common stock, $.01 par value,
15,000,000 shares authorized;
8,175,779 and 7,420,045 shares issued, respectively
    
    
    81,758
    
    
    
    74,200Additional paid-in capital
    
    
    68,288,834
    
    
    
    58,378,089Retained earnings
    
    
    1,663,992
    
    
    
    8,035,847Treasury stock, at cost, 451,088 and
377,870 shares, respectively
    
    
    (3,581,405
    )
    
    
    (3,127,193
    )Total stockholders equity
    
    
    66,453,179
    
    
    
    63,360,943Total liabilities and stockholders equity
    
    $
    823,898,698
    
    
    $
    755,687,409
  24




---



##### Table of Contents



2005
    
    
    2004
    
    
    2003Interest and dividends incomeLoans
    
    $
    39,825,656
    
    
    $
    36,604,621
    
    
    $
    40,690,675Mortgage-backed securities
    
    
    1,654,537
    
    
    
    1,860,224
    
    
    
    285,167Federal Home Loan Bank stock dividends
    
    
    491,125
    
    
    
    429,402
    
    
    
    449,026Securities
    
    
    1,493,167
    
    
    
    111,443
    
    
    
    1,781,524Fed funds sold and interest-bearing deposits
    
    
    130,354
    
    
    
    103,951
    
    
    
    276,305Total interest income
    
    
    43,594,839
    
    
    
    39,109,641
    
    
    
    43,482,697Interest expenseDeposits
    
    
    13,133,468
    
    
    
    11,351,365
    
    
    
    15,169,502Short-term borrowings
    
    
    934,738
    
    
    
    124,651
    
    
    
    42,745Long-term borrowings
    
    
    5,229,070
    
    
    
    5,260,897
    
    
    
    5,434,028Subordinated debt
    
    
    503,190
    
    
    
    2,301
    
    
    
    Total interest expense
    
    
    19,800,466
    
    
    
    16,739,214
    
    
    
    20,646,275Net interest income
    
    
    23,794,373
    
    
    
    22,370,427
    
    
    
    22,836,422Provision for loan losses
    
    
    111,000
    
    
    
    597,300
    
    
    
    Net interest income after provision
for loan losses
    
    
    23,683,373
    
    
    
    21,773,127
    
    
    
    22,836,422Noninterest incomeService charges and other fees
    
    
    838,470
    
    
    
    660,646
    
    
    
    743,877Mortgage banking activities, net
    
    
    1,311,235
    
    
    
    4,632,561
    
    
    
    4,922,069Gain on sale of real estate owned
    
    
    165,575
    
    
    
    488,839
    
    
    
    Increase in cash surrender value of
bank-owned life insurance
    
    
    554,405
    
    
    
    187,533
    
    
    
    Other, net
    
    
    504,558
    
    
    
    160,177
    
    
    
    227,057Total noninterest income
    
    
    3,374,243
    
    
    
    6,129,756
    
    
    
    5,893,003Noninterest expenseCompensation and benefits
    
    
    10,835,446
    
    
    
    9,590,924
    
    
    
    8,694,397Office, occupancy, and equipment
    
    
    3,670,437
    
    
    
    3,394,285
    
    
    
    3,151,956Insurance
    
    
    235,692
    
    
    
    232,926
    
    
    
    262,366Professional and legal
    
    
    339,050
    
    
    
    397,179
    
    
    
    518,648Advertising
    
    
    382,689
    
    
    
    373,702
    
    
    
    499,438Outside services
    
    
    776,801
    
    
    
    876,799
    
    
    
    857,050Franchise tax
    
    
    773,308
    
    
    
    728,400
    
    
    
    647,890Other
    
    
    1,929,080
    
    
    
    1,977,065
    
    
    
    1,877,460Total noninterest expense
    
    
    18,942,503
    
    
    
    17,571,280
    
    
    
    16,509,205Income before federal income taxes
    
    
    8,115,113
    
    
    
    10,331,603
    
    
    
    12,220,220Federal income taxesCurrent
    
    
    2,413,291
    
    
    
    2,287,524
    
    
    
    3,966,092Deferred
    
    
    117,701
    
    
    
    1,134,025
    
    
    
    157,6722,530,992
    
    
    
    3,421,549
    
    
    
    4,123,764Net income
    
    $
    5,584,121
    
    
    $
    6,910,054
    
    
    $
    8,096,456Basic earnings per share
    
    $
    0.72
    
    
    $
    0.89
    
    
    $
    1.05Diluted earnings per share
    
    $
    0.71
    
    
    $
    0.87
    
    
    $
    1.03
  25




---



##### Table of Contents



AdditionalCommon
    
    
    paid-in
    
    
    Retained
    
    
    Treasurystock
    
    
    Capital
    
    
    Earnings
    
    
    stock
    
    
    TotalBalance at June 30, 2002
    
    $
    60,648
    
    
    $
    37,412,482
    
    
    $
    17,627,665
    
    
    $
    (2,802,217
    )
    
    $
    52,298,578Net income
    
    
    
    
    
    
    
    
    
    
    8,096,456
    
    
    
    
    
    
    
    8,096,456Stock options exercised, 41,909 shares
    
    
    419
    
    
    
    187,502
    
    
    
    
    
    
    
    
    
    
    
    187,921Cash paid in lieu of fractional shares
    
    
    
    
    
    
    
    
    
    
    (2,159
    )
    
    
    
    
    
    
    (2,159
    )Stock dividend issued, 610,565 shares
    
    
    6,106
    
    
    
    9,576,712
    
    
    
    (9,582,818
    )
    
    
    
    
    
    
    Cash dividend, $0.222 per share
    
    
    
    
    
    
    
    
    
    
    (1,652,684
    )
    
    
    
    
    
    
    (1,652,684
    )Purchase of 28,615 shares of
Treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (324,976
    )
    
    
    (324,976
    )Balance at June 30, 2003
    
    
    67,173
    
    
    
    47,176,696
    
    
    
    14,486,460
    
    
    
    (3,127,193
    )
    
    
    58,603,136Net income
    
    
    
    
    
    
    
    
    
    
    6,910,054
    
    
    
    
    
    
    
    6,910,054Stock options exercised, 34,580 shares
    
    
    346
    
    
    
    256,447
    
    
    
    
    
    
    
    
    
    
    
    256,793Stock purchased and retired,
6,373 shares
    
    
    (64
    )
    
    
    (94,147
    )
    
    
    
    
    
    
    
    
    
    
    (94,211
    )Cash paid in lieu of fractional shares
    
    
    
    
    
    
    
    
    
    
    (2,814
    )
    
    
    
    
    
    
    (2,814
    )Stock dividend issued, 674,555 shares
    
    
    6,745
    
    
    
    11,039,093
    
    
    
    (11,045,838
    )
    
    
    
    
    
    
    Cash dividend, $0.300 per share
    
    
    
    
    
    
    
    
    
    
    (2,312,015
    )
    
    
    
    
    
    
    (2,312,015
    )Balance at June 30, 2004
    
    
    74,200
    
    
    
    58,378,089
    
    
    
    8,035,847
    
    
    
    (3,127,193
    )
    
    
    63,360,943Net income
    
    
    
    
    
    
    
    
    
    
    5,584,121
    
    
    
    
    
    
    
    5,584,121Stock options exercised, 21,712 shares
    
    
    217
    
    
    
    166,029
    
    
    
    
    
    
    
    
    
    
    
    166,246Stock purchased and retired,
9,024 shares
    
    
    (90
    )
    
    
    (122,934
    )
    
    
    
    
    
    
    
    
    
    
    (123,024
    )Cash paid in lieu of fractional shares
    
    
    
    
    
    
    
    
    
    
    (3,488
    )
    
    
    
    
    
    
    (3,488
    )Stock dividend issued, 743,046 shares
    
    
    7,431
    
    
    
    9,867,650
    
    
    
    (9,875,081
    )
    
    
    
    
    
    
    Cash dividend, $0.269 per share
    
    
    
    
    
    
    
    
    
    
    (2,077,407
    )
    
    
    
    
    
    
    (2,077,407
    )Purchase of 32,210 shares of
Treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (454,212
    )
    
    
    (454,212
    )Balance at June 30, 2005
    
    $
    81,758
    
    
    $
    68,288,834
    
    
    $
    1,663,992
    
    
    $
    (3,581,405
    )
    
    $
    66,453,179
  26




---



##### Table of Contents



2005
    
    
    2004
    
    
    2003Operating activities:Net income
    
    $
    5,584,121
    
    
    $
    6,910,054
    
    
    $
    8,096,456Adjustments required to reconcile net
income to net cash from operating
activities:Amortization of premium on
mortgage-backed securities
    
    
    26,471
    
    
    
    72,548
    
    
    
    1,771Depreciation
    
    
    1,863,375
    
    
    
    1,658,958
    
    
    
    1,407,503Provision for loan losses
    
    
    111,000
    
    
    
    597,300
    
    
    
    Accretion of deferred loan
origination fees, net
    
    
    (1,007,937
    )
    
    
    (1,108,263
    )
    
    
    (1,244,214
    )Gain on disposal of real estate owned
    
    
    (165,575
    )
    
    
    (488,839
    )
    
    
    FHLB stock dividends
    
    
    (490,800
    )
    
    
    (429,201
    )
    
    
    (448,775
    )Deferred income tax provision
    
    
    117,701
    
    
    
    1,134,025
    
    
    
    157,672Proceeds from loans held for sale
    
    
    118,420,611
    
    
    
    301,018,063
    
    
    
    453,735,624Originations of loans held for sale
    
    
    (115,813,850
    )
    
    
    (277,787,331
    )
    
    
    (475,659,784
    )Gain on the sale of loans, net
    
    
    (1,080,039
    )
    
    
    (5,260,163
    )
    
    
    (6,727,015
    )Net change in other assets
and other liabilities
    
    
    433,489
    
    
    
    (7,841,279
    )
    
    
    12,410,926Net cash from operating activities
    
    
    7,998,567
    
    
    
    18,475,872
    
    
    
    (8,269,836
    )Investing activities:Loans originated
    
    
    (216,290,237
    )
    
    
    (137,580,380
    )
    
    
    (170,534,726
    )Principal repayments on loans
    
    
    164,871,379
    
    
    
    104,195,639
    
    
    
    162,351,576Principal repayments on mortgage-backed securities held to maturity
    
    
    6,085,195
    
    
    
    5,932,009
    
    
    
    4,364,892Purchase of mortgage-backed securities
held to maturity
    
    
    (1,052,410
    )
    
    
    (39,853,303
    )
    
    
    Purchase of securities held to maturity
    
    
    (35,000,000
    )
    
    
    (27,500,000
    )
    
    
    (30,000,000
    )Maturities and calls of securities held
to maturity
    
    
    5,000,000
    
    
    
    33,252
    
    
    
    85,087,959Additions to office properties and
equipment
    
    
    (1,388,214
    )
    
    
    (3,991,431
    )
    
    
    (3,146,074
    )Acquisition of bank-owned life insurance
    
    
    
    
    
    
    (15,000,000
    )
    
    
    Disposals of real estate owned
    
    
    1,418,796
    
    
    
    1,166,703
    
    
    
    114,259Acquisition of real estate owned
    
    
    
    
    
    
    (70,000
    )
    
    
    (Additions) disposal of real estate held
for investment, net
    
    
    
    
    
    
    525,000
    
    
    
    (50,000
    )Net cash from investing activities
    
    
    (76,355,491
    )
    
    
    (112,142,511
    )
    
    
    48,187,886
  27




---



##### Table of Contents



2005
    
    
    2004
    
    
    2003Financing Activities:Payments on long-term FHLB advances
    
    
    (27,813
    )
    
    
    (83,389
    )
    
    
    (616,476
    )Net change in short-term FHLB advances
    
    
    
    
    
    
    15,000,000
    
    
    
    Repayment of notes payable
    
    
    (1,085,470
    )
    
    
    (3,328,900
    )
    
    
    (2,472,870
    )Net change in NOW and passbook savings
    
    
    (565,469
    )
    
    
    (2,052,829
    )
    
    
    16,190,703Proceeds from issuance of certificates
of deposit
    
    
    163,111,432
    
    
    
    107,020,928
    
    
    
    135,463,914Payments on maturing certificates of deposit
    
    
    (97,812,199
    )
    
    
    (104,904,312
    )
    
    
    (104,897,908
    )Proceeds from issuance of subordinated
debentures
    
    
    
    
    
    
    10,000,000
    
    
    
    Net increase (decrease) in advances
from borrowers
    
    
    808,109
    
    
    
    (5,587,781
    )
    
    
    644,040Payment of cash dividend
    
    
    (2,034,595
    )
    
    
    (1,841,130
    )
    
    
    (1,654,844
    )Purchase of treasury stock
    
    
    (454,212
    )
    
    
    
    
    
    
    (324,975
    )Proceeds from exercise of stock options
    
    
    160,251
    
    
    
    256,793
    
    
    
    187,921Stock repurchased and retired
    
    
    (123,024
    )
    
    
    (94,211
    )
    
    
    Net cash from financing activities
    
    
    61,977,227
    
    
    
    14,385,169
    
    
    
    42,519,505Net increase (decrease) in cash
and cash equivalents
    
    
    (6,379,697
    )
    
    
    (79,281,470
    )
    
    
    82,437,555Cash and cash equivalents at beginning
of year
    
    
    17,469,773
    
    
    
    96,751,243
    
    
    
    14,313,688Cash and cash equivalents at end of year
    
    $
    11,090,076
    
    
    $
    17,469,773
    
    
    $
    96,751,243Supplemental disclosures of cash flow
information:Cash payments of interest
    
    $
    19,766,150
    
    
    $
    16,740,542
    
    
    $
    20,733,040Cash payments of income taxes
    
    
    2,069,000
    
    
    
    2,760,000
    
    
    
    4,020,000Supplemental schedule of noncash
investing and financing activities:Transfers to real estate owned
    
    $
    2,502,472
    
    
    $
    200,000
    
    
    $
    Income tax benefit from exercise of stock options
    
    
    5,778
    
    
    
    
    
    
    
    
  28




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  Principles of Consolidation
   Use of Estimates
 Securities
  29




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED
MATTERS
   Loans Receivable
  Allowance for Loan Losses
   30




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  Mortgage Banking Activities
       31




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
 Office Properties and Equipment
 Bank-Owned Life Insurance
 Income Taxes
 Real Estate Owned
 Long-Term Assets
 Statements of Cash Flows
 Stock Compensation
  32




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
 Accounting for
Stock-Based Compensation
 2005
    
    
    2004
    
    
    2003Net income as reported
    
    $
    5,584,121
    
    
    $
    6,910,054
    
    
    $
    8,096,456Deduct: Stock-based compensation expense
determined under fair value based method
    
    
    139,000
    
    
    
    100,135
    
    
    
    124,135Pro forma net income
    
    $
    5,445,121
    
    
    $
    6,809,919
    
    
    $
    7,972,321Basic earnings per share as reported
    
    $
    0.72
    
    
    $
    0.89
    
    
    $
    1.05Pro forma basic earnings per share
    
    $
    0.70
    
    
    $
    0.88
    
    
    $
    1.03Diluted earnings per share as reported
    
    $
    0.71
    
    
    $
    0.87
    
    
    $
    1.03Pro forma diluted earnings per share
    
    $
    0.69
    
    
    $
    0.86
    
    
    $
    1.02
  2005
    
    
    2004
    
    
    2003Risk-free interest rate
    
    
    3.75
    %
    
    
    3.76
    %
    
    
    3.50
    %Expected option life
    
    7 years
    
    7 years
    
    7 yearsExpected stock price volatility
    
    
    29.29
    %
    
    
    29.78
    %
    
    
    35.00
    %Dividend yield
    
    
    2.21
    %
    
    
    1.99
    %
    
    
    2.50
    %Weighted average fair value of options
granted during the year
    
    $
    3.57
    
    
    $
    3.69
    
    
    $
    3.23
 Comprehensive Income
 Earnings Per Share
   33




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
 Loss Contingencies
 Loan Commitments and Related Financial Instruments
 Restrictions on Cash
 Stockholders Equity
 Dividend Retention:
 Fair Value of Financial Instruments
 Operating Segments
  34




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
 Recently Issued But Not Yet Effective Accounting Standards:
 Reclassifications
  35




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##### Table of Contents



NOTE 2  SECURITIES
  2005Gross
    
    
    Gross
    
    
    EstimatedCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairAmount
    
    
    Gain
    
    
    Loss
    
    
    ValueU.S. government-sponsored enterprise
securities
    
    $
    57,500,000
    
    
    $
    43,750
    
    
    $
    (198,325
    )
    
    $
    57,345,425Due after one year through five years
    
    $
    57,500,000
    
    
    $
    43,750
    
    
    $
    (198,325
    )
    
    $
    57,345,425
 2004Gross
    
    
    Gross
    
    
    EstimatedCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairAmount
    
    
    Gain
    
    
    Loss
    
    
    ValueU.S. government-sponsored enterprise
securities
    
    $
    27,500,000
    
    
    $
    
    
    
    $
    (100,025
    )
    
    $
    27,399,975Due after one year through five years
    
    $
    27,500,000
    
    
    $
    
    
    
    $
    (100,025
    )
    
    $
    27,399,975
    2005
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrecognized
    
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    UnrecognizedDescription of Securities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. government-
sponsored enterprise
securities
    
    $
    34,843,100
    
    
    $
    (156,900
    )
    
    $
    17,458,575
    
    
    $
    (41,425
    )
    
    $
    52,301,675
    
    
    $
    (198,325
    )
  36




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##### Table of Contents



NOTE 2  SECURITIES
  2004
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrecognized
    
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    UnrecognizedDescription of Securities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. government -
sponsored enterprise
securities
    
    $
    27,399,975
    
    
    $
    (100,025
    )
    
    $
    
    
    
    $
    
    
    
    $
    27,399,975
    
    
    $
    (100,025
    )
   37




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##### Table of Contents



NOTE 3  MORTGAGE-BACKED SECURITIES
  2005Gross
    
    
    GrossCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    EstimatedAmount
    
    
    Gain
    
    
    Loss
    
    
    Fair ValueFNMA mortgage-backed securities
    
    $
    30,964,609
    
    
    $
    16,375
    
    
    $
    (266,192
    )
    
    $
    30,714,792FHLMC mortgage-backed securities
    
    
    755,424
    
    
    
    17,556
    
    
    
    
    
    
    
    772,980$
    31,720,033
    
    
    $
    33,931
    
    
    $
    (266,192
    )
    
    $
    31,487,772
 2004Gross
    
    
    GrossCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    EstimatedAmount
    
    
    Gain
    
    
    Loss
    
    
    Fair ValueFNMA mortgage-backed securities
    
    $
    35,774,087
    
    
    $
    5,350
    
    
    $
    (1,400,267
    )
    
    $
    34,379,170FHLMC mortgage-backed securities
    
    
    1,005,202
    
    
    
    6,093
    
    
    
    
    
    
    
    1,011,295$
    36,779,289
    
    
    $
    11,443
    
    
    $
    (1,400,267
    )
    
    $
    35,390,465
   38




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##### Table of Contents



NOTE 3  MORTGAGE-BACKED SECURITIES
  2005
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalDescription of
    
    
    
    
    
    Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossMortgage-backed
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    UnrecognizedSecurities
    

Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossFNMA mortgage-
backed securities
    
    $
    
    
    
    $
    
    
    
    $
    23,234,790
    
    
    $
    (266,192
    )
    
    $
    23,234,790
    
    
    $
    (266,192
    )
 2004
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalDescription of
    
    
    
    
    
    Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossMortgage-backed
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    UnrecognizedSecurities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossFNMA mortgage-
backed securities
    
    $
    34,286,991
    
    
    $
    (1,400,267
    )
    
    $
    
    
    
    $
    
    
    
    $
    34,286,991
    
    
    $
    (1,400,267
    )
   39




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##### Table of Contents



NOTE 4  LOANS RECEIVABLE
  2005
    
    
    2004Real estate mortgages:One-to-four family residential
    
    $
    148,955,669
    
    
    $
    128,209,918Home equity line of credit
    
    
    97,691,917
    
    
    
    83,505,220Multi-family residential
    
    
    33,504,667
    
    
    
    38,776,777Commercial
    
    
    171,331,117
    
    
    
    175,323,234Commercial equity line of credit
    
    
    31,875,316
    
    
    
    38,113,453Land
    
    
    68,164,662
    
    
    
    54,047,091Construction  residential
    
    
    75,459,676
    
    
    
    70,832,624Construction  commercial
    
    
    24,355,272
    
    
    
    15,678,754Total real estate mortgages
    
    
    651,338,296
    
    
    
    604,487,071Non real estate loans
    
    
    17,300,500
    
    
    
    13,951,135Total loans receivable
    
    
    668,638,796
    
    
    
    618,438,206Net deferred loan origination fees
    
    
    (3,832,378
    )
    
    
    (3,380,681
    )Allowance for loan losses
    
    
    (4,312,274
    )
    
    
    (4,376,704
    )Loans receivable, net
    
    $
    660,494,144
    
    
    $
    610,680,821
  2005
    
    
    2004
    
    
    2003Beginning balance
    
    $
    4,376,704
    
    
    $
    3,882,839
    
    
    $
    3,901,839Provision for loan losses
    
    
    111,000
    
    
    
    597,300
    
    
    
    Charge-offs
    
    
    (175,430
    )
    
    
    (132,435
    )
    
    
    (19,000
    )Recoveries
    
    
    
    
    
    
    29,000
    
    
    
    Ending balance
    
    $
    4,312,274
    
    
    $
    4,376,704
    
    
    $
    3,882,839
  40




---



##### Table of Contents



NOTE 4  LOANS RECEIVABLE
  2005
    
    
    2004Loans on nonaccrual status:Real estate mortgages:One-to-four family residential
    
    $
    7,459,761
    
    
    $
    4,707,428Commercial
    
    
    3,518,484
    
    
    
    4,455,529Multi-family residential
    
    
    21,300
    
    
    
    Construction and land
    
    
    750,650
    
    
    
    1,469,754Total loans on nonaccrual status
    
    
    11,750,195
    
    
    
    10,632,711Loans past due 90 days, still on accrual status:Real estate mortgages:One-to-four family residential
    
    
    162,975
    
    
    
    69,703Commercial
    
    
    
    
    
    
    432,941Construction and land
    
    
    445,000
    
    
    
    Total nonaccrual and past due loans
    
    $
    12,358,170
    
    
    $
    11,135,355
    41




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##### Table of Contents



NOTE 5  MORTGAGE BANKING ACTIVITIES
 :
 2005
    
    
    2004
    
    
    2003Mortgage loan servicing fees
    
    $
    1,872,974
    
    
    $
    1,761,286
    
    
    $
    1,446,168Amortization and changes in valuation allowance
for mortgage servicing rights
    
    
    (1,641,778
    )
    
    
    (2,388,888
    )
    
    
    (3,251,114
    )Unrealized losses on sale of loans
    
    
    (15,000
    )
    
    
    
    
    
    
    Gross realized:Gains on sales of loans
    
    
    2,222,305
    
    
    
    6,930,590
    
    
    
    8,214,611Losses on sales of loans
    
    
    (1,127,266
    )
    
    
    (1,670,427
    )
    
    
    (1,487,596
    )$
    1,311,235
    
    
    $
    4,632,561
    
    
    $
    4,922,069
   2005
    
    
    2004
    
    
    2003Beginning balance
    
    $
    5,358,845
    
    
    $
    4,655,182
    
    
    $
    3,255,147Originated
    
    
    1,284,406
    
    
    
    3,762,551
    
    
    
    3,981,149Amortized
    
    
    (1,641,778
    )
    
    
    (3,058,888
    )
    
    
    (2,581,114
    )Ending balance
    
    $
    5,001,474
    
    
    $
    5,358,845
    
    
    $
    4,655,182Valuation AllowanceBeginning balance
    
    $
    
    
    
    $
    670,000
    
    
    $
    Additions expensed
    
    
    
    
    
    
    
    
    
    
    670,000Reductions credited to expense
    
    
    
    
    
    
    (670,000
    )
    
    
    Ending balance
    
    $
    
    
    
    $
    
    
    
    $
    670,000
   42




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##### Table of Contents



NOTE 6  OFFICE PROPERTIES AND EQUIPMENT
  2005
    
    
    2004Land and land improvements
    
    $
    1,034,892
    
    
    $
    1,034,892Building and building improvements
    
    
    5,563,598
    
    
    
    5,576,225Leasehold improvements
    
    
    5,862,620
    
    
    
    5,699,721Furniture and equipment
    
    
    11,758,159
    
    
    
    10,471,40324,219,269
    
    
    
    22,782,241Less accumulated depreciation and amortization
    
    
    (10,806,038
    )
    
    
    (8,893,849
    )$
    13,413,231
    
    
    $
    13,888,392
  43




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##### Table of Contents



NOTE 7  DEPOSITS
  2005
    
    
    2004Amount
    
    
    %
    
    
    Amount
    
    
    %NOW and money market
accountsNoninterest bearing
    
    
          
    
    
    $
    16,958,199
    
    
    
    2.8
    %
    
    $
    16,429,334
    
    
    
    3.1
    %Interest bearing
    
    
    0.245 - 4.00
    %
    
    
    61,271,160
    
    
    
    10.4
    
    
    
    59,054,708
    
    
    
    11.278,229,359
    
    
    
    13.2
    
    
    
    75,484,042
    
    
    
    14.3Passbook savings
    
    
    0.50 - 0.50
    %
    
    
    43,415,225
    
    
    
    7.4
    
    
    
    46,726,011
    
    
    
    8.9Certificates of deposit
    
    
    0.50 - 1.99
    %
    
    
    28,060,196
    
    
    
    4.7
    
    
    
    109,995,876
    
    
    
    20.92.00 - 2.99
    
    
    
    148,276,341
    
    
    
    25.1
    
    
    
    155,925,736
    
    
    
    29.63.00 - 3.99
    
    
    
    238,585,350
    
    
    
    40.4
    
    
    
    66,107,497
    
    
    
    12.64.00 - 4.99
    
    
    
    40,398,157
    
    
    
    6.8
    
    
    
    50,336,514
    
    
    
    9.65.00 - 5.99
    
    
    
    12,466,322
    
    
    
    2.1
    
    
    
    15,459,083
    
    
    
    2.96.00 - 6.99
    
    
    
    1,066,168
    
    
    
    0.2
    
    
    
    4,837,859
    
    
    
    0.97.00 - 7.99
    
    
    
    729,360
    
    
    
    0.1
    
    
    
    1,533,292
    
    
    
    0.38.00 - 8.99
    
    
    
    
    
    
    
    
    
    
    
    86,804
    
    
    
    0.0469,581,894
    
    
    
    79.4
    
    
    
    404,282,661
    
    
    
    76.8$
    591,226,478
    
    
    
    100.0
    %
    
    $
    526,492,714
    
    
    
    100.0
    %Weighted average rate on deposits
    
    
    
    
    
    
    
    
    
    
    2.84
    %
    
    
    
    
    
    
    2.19
    %
 2005
    
    
    2004Amount
    
    
    %
    
    
    Amount
    
    
    %Remaining term to maturity of
certificates of deposit:12 months or less
    
    $
    371,245,515
    
    
    
    79.1
    %
    
    $
    304,107,729
    
    
    
    75.3
    %13 to 24 months
    
    
    56,248,773
    
    
    
    12.0
    
    
    
    60,283,357
    
    
    
    14.925 to 36 months
    
    
    24,524,716
    
    
    
    5.2
    
    
    
    22,398,689
    
    
    
    5.537 to 48 months
    
    
    17,562,890
    
    
    
    3.7
    
    
    
    17,492,886
    
    
    
    4.3$
    469,581,894
    
    
    
    100.0
    %
    
    $
    404,282,661
    
    
    
    100.0
    %Weighted average rate on certificates of deposit
    
    
    
    
    
    
    3.33
    %
    
    
    
    
    
    
    2.78
    %
    44




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##### Table of Contents



NOTE 7  DEPOSITS
  2005
    
    
    2004
    
    
    2003NOW accounts
    
    $
    599,305
    
    
    $
    276,456
    
    
    $
    899,621Passbook accounts
    
    
    226,663
    
    
    
    227,222
    
    
    
    470,504Certificates of deposit
    
    
    12,307,500
    
    
    
    10,847,687
    
    
    
    13,799,377$
    13,133,468
    
    
    $
    11,351,365
    
    
    $
    15,169,502
 NOTE 8  ADVANCES FROM THE FEDERAL HOME LOAN BANK OF CINCINNATI
  Maturity
    
    Interest rate
    
    
    2005
    
    
    2004February 2006
    
    
    6.05
    %
    
    $
    12,018
    
    
    $
    39,831February 2008
    
    
    5.37
    
    
    
    10,000,000
    
    
    
    10,000,000March 2008
    
    
    5.64
    
    
    
    10,000,000
    
    
    
    10,000,000March 2011
    
    
    3.94
    
    
    
    50,000,000
    
    
    
    50,000,000May 2011
    
    
    4.16
    
    
    
    50,000,000
    
    
    
    50,000,000$
    120,012,018
    
    
    $
    120,039,831Weighted average interest rate
    
    
    
    
    
    
    4.29
    %
    
    
    4.29
    %
    45




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##### Table of Contents



NOTE 9  SUBORDINATED DEBENTURES AND NOTES PAYABLE
   2006
    
    $
    92,5202007
    
    
    1,308,260$
    1,400,780
    46




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##### Table of Contents



NOTE 10  FEDERAL INCOME TAXES
  2005
    
    
    2004
    
    
    2003Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Computed expected tax
    
    $
    2,840,290
    
    
    
    35.0
    %
    
    $
    3,616,061
    
    
    
    35.0
    %
    
    $
    4,277,077
    
    
    
    35.0
    %Increase (decrease) in tax
resulting from:Benefit of graduated rates
    
    
    (81,151
    )
    
    
    (1.0
    )
    
    
    (103,316
    )
    
    
    (1.0
    )
    
    
    (100,000
    )
    
    
    (1.0
    )Affordable housing tax
credit
    
    
    (111,645
    )
    
    
    (1.4
    )
    
    
    (111,646
    )
    
    
    (1.1
    )
    
    
    (111,646
    )
    
    
    (0.9
    )Bank-owned life insurance
    
    
    (188,498
    )
    
    
    (2.3
    )
    
    
    (63,761
    )
    
    
    (0.6
    )
    
    
    
    
    
    
    Other, net
    
    
    71,996
    
    
    
    0.9
    
    
    
    84,211
    
    
    
    0.8
    
    
    
    58,333
    
    
    
    0.6$
    2,530,992
    
    
    
    31.2
    %
    
    $
    3,421,549
    
    
    
    33.1
    %
    
    $
    4,123,764
    
    
    
    33.7
    %
  2005
    
    
    2004Deferred tax assets:Loan loss reserves
    
    $
    1,331,863
    
    
    $
    1,420,079Deferred compensation
    
    
    716,310
    
    
    
    566,264Unrealized gains on loans held for sale
    
    
    31,308
    
    
    
    Other
    
    
    61,310
    
    
    
    47,637Total gross deferred tax assets
    
    
    2,140,791
    
    
    
    2,033,980Deferred tax liabilities:Deferred loan fees, net
    
    
    (364,432
    )
    
    
    (357,693
    )FHLB stock dividend
    
    
    (1,533,145
    )
    
    
    (1,366,273
    )Originated mortgage servicing asset
    
    
    (1,700,501
    )
    
    
    (1,822,007
    )Fixed assets
    
    
    (1,245,855
    )
    
    
    (962,627
    )Prepaid franchise tax
    
    
    (133,400
    )
    
    
    (119,516
    )Other
    
    
    (110,545
    )
    
    
    (235,250
    )Total gross deferred tax liabilities
    
    
    (5,087,878
    )
    
    
    (4,863,366
    )Net deferred tax liability
    
    $
    (2,947,087
    )
    
    $
    (2,829,386
    )
   47




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##### Table of Contents



NOTE 10  FEDERAL INCOME TAXES
  NOTE 11  LEASES
  Leases With
    
    
    Leases WithUnrelated
    
    
    Related
    
    
    TotalYear ending June 30,
    
    Parties
    
    
    Parties
    
    
    Leases2006
    
    $
    671,198
    
    
    $
    200,683
    
    
    $
    871,8812007
    
    
    669,198
    
    
    
    161,209
    
    
    
    830,4072008
    
    
    654,198
    
    
    
    141,472
    
    
    
    795,6702009
    
    
    555,684
    
    
    
    141,472
    
    
    
    697,1562010
    
    
    377,381
    
    
    
    141,472
    
    
    
    518,853Thereafter
    
    
    379,276
    
    
    
    447,768
    
    
    
    827,044Total minimum lease payments
    
    $
    3,306,935
    
    
    $
    1,234,076
    
    
    $
    4,541,011




---



##### Table of Contents



NOTE 12  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
      2005
    
    
    2004Commitments to fund variable-rate mortgage loans
    
    $
    10,130,000
    
    
    $
    28,619,000Commitments to fund equity lines of credit
    
    
    79,452,000
    
    
    
    82,028,000Undisbursed portion of loan proceeds
    
    
    69,715,000
    
    
    
    72,042,000




---



##### Table of Contents



NOTE 13  REGULATORY CAPITAL




---



##### Table of Contents



NOTE
13  REGULATORY CAPITAL
  Tier-1
    
    
    Tier-1
    
    
    TotalTangible
    
    
    Core
    
    
    Risk- Based
    
    
    Risk- BasedCapital
    
    
    Capital
    
    
    Capital
    
    
    CapitalJune 30, 2005:GAAP capital
    
    $
    72,751
    
    
    $
    72,751
    
    
    $
    72,751
    
    
    $
    72,751Nonallowable component
    
    
    (7
    )
    
    
    (7
    )
    
    
    (7
    )
    
    
    (7
    )General loan valuation allowances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,917Regulatory capital
    
    $
    72,744
    
    
    $
    72,744
    
    
    $
    72,744
    
    
    $
    76,661Total assets
    
    $
    829,818
    
    
    $
    829,818
    
    
    $
    829,818
    
    
    $
    829,818Adjusted total assets
    
    
    829,811
    
    
    
    829,811
    
    
    
    
    
    
    
    Risk-weighted assets
    
    
    
    
    
    
    
    
    
    
    698,777
    
    
    
    698,777Actual capital ratio
    
    
    8.77
    %
    
    
    8.77
    %
    
    
    10.41
    %
    
    
    10.97
    %Regulatory requirement for capital
adequacy purposes
    
    
    1.50
    %
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    8.00
    %Regulatory
capital category 
well-capitalized 
equal to or greater than
    
    
    N/A
    
    
    
    5.00
    %
    
    
    6.00
    %
    
    
    10.00
    %
 Tier-1
    
    
    Tier-1
    
    
    TotalTangible
    
    
    Core
    
    
    Risk- Based
    
    
    Risk- BasedCapital
    
    
    Capital
    
    
    Capital
    
    
    CapitalJune 30, 2004:GAAP capital
    
    $
    60,716
    
    
    $
    60,716
    
    
    $
    60,716
    
    
    $
    60,716Nonallowable component
    
    
    (58
    )
    
    
    (58
    )
    
    
    (58
    )
    
    
    (58
    )General loan valuation allowances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,177Regulatory capital
    
    $
    60,658
    
    
    $
    60,658
    
    
    $
    60,658
    
    
    $
    64,835Total assets
    
    $
    761,443
    
    
    $
    761,443
    
    
    $
    761,443
    
    
    $
    761,443Adjusted total assets
    
    
    761,385
    
    
    
    761,385
    
    
    
    
    
    
    
    Risk-weighted assets
    
    
    
    
    
    
    
    
    
    
    636,040
    
    
    
    636,040Actual capital ratio
    
    
    7.97
    %
    
    
    7.97
    %
    
    
    9.54
    %
    
    
    10.19
    %Regulatory requirement for capital
adequacy purposes
    
    
    1.50
    %
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    8.00
    %Regulatory
capital category 
well-capitalized 
equal to or greater than
    
    
    NA
    
    
    
    5.00
    %
    
    
    6.00
    %
    
    
    10.00
    %




---



##### Table of Contents



NOTE 14  RELATED PARTY TRANSACTIONS
  Beginning balance
    
    $
    6,298,000New Loans
    
    
    2,124,700Repayments
    
    
    (1,404,700
    )Ending balance
    
    $
    7,018,000
 NOTE 15  STOCK OPTIONS
     2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding beginning of
year
    
    
    451,177
    
    
    $
    7.50
    
    
    
    445,191
    
    
    $
    6.83
    
    
    
    466,818
    
    
    $
    6.21Exercised
    
    
    (24,124
    )
    
    
    6.58
    
    
    
    (41,930
    )
    
    
    6.07
    
    
    
    (79,975
    )
    
    
    4.55Expired
    
    
    (296
    )
    
    
    7.59
    
    
    
    
    
    
    
    
    
    
    
    (6,072
    )
    
    
    8.03Granted
    
    
    43,120
    
    
    
    12.62
    
    
    
    47,916
    
    
    
    12.53
    
    
    
    64,420
    
    
    
    8.52Outstanding end of year
    
    
    469,877
    
    
    $
    8.01
    
    
    
    451,177
    
    
    $
    7.50
    
    
    
    445,191
    
    
    $
    6.83Exercisable end of year
    
    
    388,096
    
    
    $
    7.41
    
    
    
    351,673
    
    
    $
    7.06
    
    
    
    320,193
    
    
    $
    6.60
  52




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##### Table of Contents



NOTE 15  STOCK OPTIONS
  Outstanding
    
    
    ExercisableWeighted Average
    
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    Remaining
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Contractual
    
    
    
    
    
    
    ExercisePrice
    
    Number
    
    
    Life
    
    
    Number
    
    
    Price$4.67 - $6.11
    
    
    115,851
    
    
    
    3.99
    
    
    
    115,851
    
    
    $
    5.53$6.72 - $7.77
    
    
    201,365
    
    
    
    4.31
    
    
    
    186,227
    
    
    $
    7.21$8.32 - $13.64
    
    
    152,661
    
    
    
    7.39
    
    
    
    86,018
    
    
    $
    10.38Total
    
    
    469,877
    
    
    
    5.23
    
    
    
    388,096
    
    
    $
    7.41
  NOTE 16  EARNINGS PER SHARE
  2005Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic EPS:Income available to common shareholders
    
    $
    5,584,121
    
    
    
    7,734,136
    
    
    $
    0.72Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    172,610
    
    
    
    (0.01
    )Diluted EPS:Income available to common shareholders
    
    $
    5,584,121
    
    
    
    7,906,746
    
    
    $
    0.71
 2004Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic EPS:Income available to common shareholders
    
    $
    6,910,054
    
    
    
    7,723,543
    
    
    $
    0.89Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    187,006
    
    
    
    (0.02
    )Diluted EPS:Income available to common shareholders
    
    $
    6,910,054
    
    
    
    7,910,549
    
    
    $
    0.87
 2003Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic EPS:Income available to common shareholders
    
    $
    8,096,456
    
    
    
    7,705,559
    
    
    $
    1.05Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    121,785
    
    
    
    (0.02
    )Diluted EPS:Income available to common shareholders
    
    $
    8,096,456
    
    
    
    7,827,344
    
    
    $
    1.03
  53




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##### Table of Contents



NOTE 17  FAIR VALUE OF FINANCIAL INSTRUMENTS
   June 30, 2005
    
    
    June 30, 2004Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair Value(in thousands)Assets:Cash and amounts due from
depository institutions
    
    $
    4,034
    
    
    $
    4,034
    
    
    $
    4,550
    
    
    $
    4,550Interest-bearing deposits
    
    
    2,181
    
    
    
    2,181
    
    
    
    894
    
    
    
    894Federal funds sold
    
    
    4,875
    
    
    
    4,875
    
    
    
    12,025
    
    
    
    12,025Securities held to maturity
    
    
    57,500
    
    
    
    57,345
    
    
    
    27,500
    
    
    
    27,400Mortgage-backed securities held to
maturity
    
    
    31,720
    
    
    
    31,488
    
    
    
    36,779
    
    
    
    35,390Loans receivable
    
    
    660,494
    
    
    
    671,554
    
    
    
    610,681
    
    
    
    625,210Loans receivable held for sale, net
    
    
    9,060
    
    
    
    9,165
    
    
    
    11,871
    
    
    
    11,871Federal Home Loan Bank stock
    
    
    11,316
    
    
    
    11,316
    
    
    
    10,826
    
    
    
    10,826Accrued interest receivable
    
    
    3,682
    
    
    
    3,682
    
    
    
    2,664
    
    
    
    2,664Liabilities:Demand deposits and passbook
savings
    
    
    (121,644
    )
    
    
    (121,644
    )
    
    
    (122,210
    )
    
    
    (122,210
    )Time deposits
    
    
    (469,582
    )
    
    
    (468,816
    )
    
    
    (404,283
    )
    
    
    (405,977
    )Advances from the Federal Home
Loan Bank of Cincinnati
    
    
    (135,012
    )
    
    
    (137,719
    )
    
    
    (135,040
    )
    
    
    (139,328
    )Subordinated debentures
    
    
    (10,000
    )
    
    
    (10,000
    )
    
    
    (10,000
    )
    
    
    (10,000
    )Notes payable
    
    
    (1,401
    )
    
    
    (1,401
    )
    
    
    (2,486
    )
    
    
    (2,486
    )Accrued interest payable
    
    
    (489
    )
    
    
    (489
    )
    
    
    (465
    )
    
    
    (465
    )
 Cash and amounts due from depository institutions, interest- bearing deposits, and federal funds
sold.
 Securities and mortgage-backed securities
  54




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##### Table of Contents



NOTE 17  FAIR VALUE OF FINANCIAL INSTRUMENTS
 Loans receivable and loans receivable held for sale
  Federal Home Loan Bank stock
 Demand deposits and time deposits
 Advances
from the Federal Home Loan Bank of Cincinnati.
 Notes payable and subordinated debentures
 Accrued interest receivable and accrued interest payable
 Off-balance-sheet instruments
  55




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##### Table of Contents



NOTE 18  PARENT COMPANY
  CONDENSED STATEMENTS OF FINANCIAL CONDITION
 2005
    
    
    2004Cash and amounts due from depository institutions
    
    $
    221,263
    
    
    $
    10,126,841Prepaid expenses and other assets
    
    
    1,564,558
    
    
    
    1,396,246Investment in Bank subsidiary
    
    
    72,750,959
    
    
    
    60,715,669Investment in non-Bank subsidiaries
    
    
    2,713,536
    
    
    
    2,704,429Total assets
    
    $
    77,250,316
    
    
    $
    74,943,185Accrued expenses and other liabilities
    
    $
    797,137
    
    
    $
    1,582,242Subordinated debentures
    
    
    10,000,000
    
    
    
    10,000,000Stockholders equity
    
    
    66,453,179
    
    
    
    63,360,943Total liabilities and stockholders equity
    
    $
    77,250,316
    
    
    $
    74,943,185
 CONDENSED STATEMENTS OF OPERATIONS
 2005
    
    
    2004
    
    
    2003Income:Mortgage banking activities
    
    $
    11,811
    
    
    $
    16,210
    
    
    $
    88,602Dividends from Bank subsidiary
    
    
    1,000,000
    
    
    
    3,500,000
    
    
    
    3,950,000Interest Income
    
    
    432
    
    
    
    
    
    
    
    1,012,243
    
    
    
    3,516,210
    
    
    
    4,038,602Expenses:Interest expense
    
    
    503,190
    
    
    
    46,847
    
    
    
    137,483General and administrative
    
    
    195,570
    
    
    
    278,931
    
    
    
    284,890698,760
    
    
    
    325,778
    
    
    
    422,373Income before federal income taxes and
equity in undistributed net income of subsidiaries
    
    
    313,483
    
    
    
    3,190,432
    
    
    
    3,616,229Federal income tax benefit
    
    
    233,018
    
    
    
    105,204
    
    
    
    112,615Income before equity in undistributed
net income of subsidiaries
    
    
    546,501
    
    
    
    3,295,636
    
    
    
    3,728,844Equity in undistributed net income of subsidiaries
    
    
    5,037,620
    
    
    
    3,614,418
    
    
    
    4,367,612Net income
    
    $
    5,584,121
    
    
    $
    6,910,054
    
    
    $
    8,096,456
  56




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##### Table of Contents



NOTE 18  PARENT COMPANY (continued)
 CONDENSED STATEMENTS OF CASH FLOWS
 2005
    
    
    2004
    
    
    2003Operating activities:Net income
    
    $
    5,584,121
    
    
    $
    6,910,054
    
    
    $
    8,096,456Equity in undistributed net income of subsidiaries
    
    
    (5,037,620
    )
    
    
    (3,614,418
    )
    
    
    (4,367,612
    )Advance to subsidiary
    
    
    (805,500
    )
    
    
    1,140,000
    
    
    
    440,000Other, net
    
    
    (194,216
    )
    
    
    (149,706
    )
    
    
    (38,471
    )Net cash from (used in) operating activities
    
    
    (453,215
    )
    
    
    4,285,930
    
    
    
    4,130,373Investing activities:Investment in subsidiary
    
    
    (7,001,000
    )
    
    
    
    
    
    
    Net decrease in cash from investing activities
    
    
    (7,001,000
    )
    
    
    
    
    
    
    Financing activities:Repayment on note payable
    
    
    
    
    
    
    (2,500,000
    )
    
    
    (2,400,000
    )Proceeds from subordinated debentures
    
    
    
    
    
    
    10,000,000
    
    
    
    Proceeds from exercise of stock options
    
    
    160,468
    
    
    
    256,793
    
    
    
    162,307Stock purchased and retired
    
    
    (123,024
    )
    
    
    (94,211
    )
    
    
    Dividends paid
    
    
    (2,034,595
    )
    
    
    (1,841,130
    )
    
    
    (1,654,844
    )Purchase of treasury stock
    
    
    (454,212
    )
    
    
    
    
    
    
    (324,975
    )Net cash from (used in) financing activities
    
    
    (2,451,363
    )
    
    
    5,821,452
    
    
    
    (4,217,512
    )Net increase (decrease) in cash and
cash-equivalents
    
    
    (9,905,578
    )
    
    
    10,107,382
    
    
    
    (87,139
    )Cash and cash equivalents at beginning of year
    
    
    10,126,841
    
    
    
    19,459
    
    
    
    106,598Cash and cash equivalents at end of year
    
    $
    221,263
    
    
    $
    10,126,841
    
    
    $
    19,459Supplemental schedule of non-cash
financing activities:Income tax benefit from exercise of options
    
    $
    5,778
    
    
    $
    
    
    
    $
    
  57




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##### Table of Contents



NOTE 19  EMPLOYEE BENEFIT PLANS
     58




---



##### Table of Contents



NOTE 20  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 (1)
 Quarters for the year ended June 30, 2005First
    
    
    Second
    
    
    Third
    
    
    FourthInterest income
    
    $
    10,034
    
    
    $
    10,519
    
    
    $
    10,941
    
    
    $
    12,101Interest expense
    
    
    4,424
    
    
    
    4,737
    
    
    
    5,103
    
    
    
    5,537Net interest income
    
    
    5,610
    
    
    
    5,782
    
    
    
    5,838
    
    
    
    6,564Provision
for loan
losses(2)
    
    
    136
    
    
    
    
    
    
    
    75
    
    
    
    (100
    )Non-interest income
    
    
    685
    
    
    
    859
    
    
    
    939
    
    
    
    891Non-interest expense
    
    
    4,324
    
    
    
    4,577
    
    
    
    4,787
    
    
    
    5,254Income before Federal income taxes
    
    
    1,835
    
    
    
    2,064
    
    
    
    1,915
    
    
    
    2,301Federal income taxes
    
    
    568
    
    
    
    642
    
    
    
    602
    
    
    
    719Net income
    
    $
    1,267
    
    
    $
    1,422
    
    
    $
    1,313
    
    
    $
    1,582Basic earnings per share(3)
    
    $
    0.16
    
    
    $
    0.18
    
    
    $
    0.17
    
    
    $
    0.20Diluted earnings per share (3)
    
    $
    0.16
    
    
    $
    0.18
    
    
    $
    0.17
    
    
    $
    0.20
 Quarters for the year ended June 30, 2004First
    
    
    Second
    
    
    Third
    
    
    FourthInterest income
    
    $
    10,058
    
    
    $
    9,830
    
    
    $
    9,576
    
    
    $
    9,646Interest expense
    
    
    4,311
    
    
    
    4,078
    
    
    
    4,097
    
    
    
    4,254Net interest income
    
    
    5,747
    
    
    
    5,752
    
    
    
    5,479
    
    
    
    5,392Provision for loan losses
    
    
    100
    
    
    
    192
    
    
    
    140
    
    
    
    165Non-interest income
    
    
    3,312
    
    
    
    868
    
    
    
    837
    
    
    
    1,113Non-interest expense
    
    
    4,538
    
    
    
    4,362
    
    
    
    4,425
    
    
    
    4,246Income before Federal income taxes
    
    
    4,421
    
    
    
    2,066
    
    
    
    1,751
    
    
    
    2,094Federal income taxes
    
    
    1,489
    
    
    
    716
    
    
    
    565
    
    
    
    652Net Income
    
    $
    2,932
    
    
    $
    1,350
    
    
    $
    1,186
    
    
    $
    1,442Basic earnings per share (3)
    
    $
    0.38
    
    
    $
    0.17
    
    
    $
    0.15
    
    
    $
    0.19Diluted earnings per share (3)
    
    $
    0.37
    
    
    $
    0.17
    
    
    $
    0.15
    
    
    $
    0.18
 
 (1)
    
    The total of the four quarterly amounts may not equal the full year amount due
to rounding.(2)
    
    The Company reported a benefit in the fourth quarter of 2005 as a result of a
reduction in classified loans during the quarter.(3)
    
    After giving effect to a 10% stock dividend, declared on June 22, 2004 and issued
on August 31, 2004 and a 10% stock dividend, declared on June 28, 2005 and issued August
31, 2005.  59




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B o a r d o f D i r e c t o r s Ge n e r a l I n f o r m a t i o n
E x e c u t i v e O f f i c e r s
Independent
Certified Accountants
Crowe Chizek and Company LLC
Landerbrook Corporate Center One
5900 Landerbrook Drive
Suite 205
Cleveland, Ohio 44124
General Counsel
Moriarty & Jaros, P.L.L.
30000 Chagrin Boulevard
Suite 200
Pepper Pike, Ohio 44124
Transfer Agent and Registrar
National City Bank, Dept. 5352
Corporate Trust Operations
P.O. Box 92301
Cleveland, Ohio 44193-0900
Special Counsel
Muldoon Murphy & Aguggia LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Stock Listing
NASDAQ Small-Cap Market
Symbol: PVFC
Annual Meeting
The 2005 Annual Meeting of Stockholders
will be held on October 17, 2005 at
10:00 a.m. at the Companys Corporate
Center, 30000 Aurora Road, Solon, 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, 2005 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., 30000 Aurora Road,
Solon, Ohio 44139.
John R. Male
Chairman of the Board and
Chief Executive Officer
C. Keith Swaney
President, Chief Operating Officer
and Treasurer
Gerald A. Fallon
Retired
Robert K. Healey
Retired
Ronald D. Holman, II
Partner
Cavitch, Familo, Durkin & Frutkin
Stanley T. Jaros
Partner
Moriarty & Jaros, P.L.L.
Raymond J. Negrelli President
Raymond J. Negrelli, Inc.
Stuart D. Neidus
Chairman and
Chief Executive Officer
Anthony & Sylvan Pools Corporation
John R. Male
Chairman of the Board and
Chief Executive Officer
C. Keith Swaney
President, Chief Operating Officer
and Treasurer
Jeffrey N. Male
Vice President and Secretary
2005




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Corporate Center
30000 Aurora Road
Solon, OH 44139
440-248-7171
www.pvfsb.com