##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2008                 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-24948
 PVF CAPITAL CORP.
  Ohio
    
    34-1659805(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)30000 Aurora Road, Solon, Ohio
    
    44139(Address of principal executive offices)
    
    (Zip Code)
 (440) 248-7171
 Title of each class
    
    Name of each exchange on which registeredCommon Stock (par value $.01 per share)
    
    The Nasdaq Stock Market, Inc.
 None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer  o
    
    Accelerated filer  þ
    
    Non-accelerated filer  o
    
    Smaller reporting company  þ(Do not check if a smaller reporting company)
 o þ
 SM
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    25Item 1B. Unresolved Staff Comments
    
    
    28Item 2. Properties
    
    
    28Item 3. Legal Proceedings
    
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Securities
    
    
    30Item 6. Selected Financial Data
    
    
    31Item 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    33Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43Item 8. Financial Statements and Supplementary Data
    
    
    45Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
    
    
    83Item 9A. Controls and Procedures
    
    
    80Item 9B. Other Information
    
    
    83PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    85Item 11. Executive Compensation
    
    
    85Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    85Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    86Item 14. Principal Accounting Fees and Services
    
    
    86PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    86SIGNATURESEX-21EX-23.1EX-31.1EX-31.2EX-32




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##### Table of Contents



PART I
 
 Item 1. Business
 General
    
Regulation of the Bank
 Market Area
   1




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##### Table of Contents



Lending Activities
 Loan Portfolio Composition
   At June 30,2008
    
    
    2007
    
    
    2005
    
    
    2005
    
    
    2004Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Real estate loans receivable held for investment:One-to four-family residential
    
    $
    168,532
    
    
    
    23.59
    %
    
    $
    163,298
    
    
    
    22.89
    %
    
    $
    174,575
    
    
    
    23.72
    %
    
    $
    148,956
    
    
    
    22.55
    %
    
    $
    128,210
    
    
    
    20.99
    %Home equity line of credit
    
    
    87,876
    
    
    
    12.30
    
    
    
    85,093
    
    
    
    11.93
    
    
    
    94,450
    
    
    
    12.83
    
    
    
    97,692
    
    
    
    14.79
    
    
    
    83,505
    
    
    
    13.67Multi-family residential
    
    
    52,421
    
    
    
    7.34
    
    
    
    48,101
    
    
    
    6.74
    
    
    
    45,716
    
    
    
    6.21
    
    
    
    33,505
    
    
    
    5.07
    
    
    
    38,777
    
    
    
    6.35Commercial
    
    
    174,404
    
    
    
    24.41
    
    
    
    184,850
    
    
    
    25.91
    
    
    
    170,392
    
    
    
    23.15
    
    
    
    171,331
    
    
    
    25.94
    
    
    
    175,323
    
    
    
    28.71Commercial equity line of credit
    
    
    36,913
    
    
    
    5.17
    
    
    
    33,208
    
    
    
    4.66
    
    
    
    34,064
    
    
    
    4.63
    
    
    
    31,875
    
    
    
    4.83
    
    
    
    38,113
    
    
    
    6.24Land
    
    
    73,545
    
    
    
    10.29
    
    
    
    74,414
    
    
    
    10.43
    
    
    
    77,242
    
    
    
    10.49
    
    
    
    68,165
    
    
    
    10.32
    
    
    
    54,047
    
    
    
    8.85Construction  residential
    
    
    55,442
    
    
    
    7.76
    
    
    
    63,316
    
    
    
    8.88
    
    
    
    84,146
    
    
    
    11.43
    
    
    
    75,460
    
    
    
    11.42
    
    
    
    70,833
    
    
    
    11.60Construction  multi-family
    
    
    5,803
    
    
    
    0.81
    
    
    
    6,397
    
    
    
    0.90
    
    
    
    7,955
    
    
    
    1.08
    
    
    
    0
    
    
    
    0.00
    
    
    
    0
    
    
    
    0.00Construction  commercial
    
    
    38,303
    
    
    
    5.36
    
    
    
    31,610
    
    
    
    4.43
    
    
    
    33,757
    
    
    
    4.59
    
    
    
    24,355
    
    
    
    3.69
    
    
    
    15,679
    
    
    
    2.57Non-real estate
    
    
    33,592
    
    
    
    4.70
    
    
    
    30,455
    
    
    
    4.27
    
    
    
    21,824
    
    
    
    2.96
    
    
    
    17,300
    
    
    
    2.62
    
    
    
    13,951
    
    
    
    2.29726,831
    
    
    
    101.73
    
    
    
    720,742
    
    
    
    101.04
    
    
    
    744,121
    
    
    
    101.09
    
    
    
    668,639
    
    
    
    101.23
    
    
    
    618,438
    
    
    
    101.27Deferred loan fees
    
    
    (2,685
    )
    
    
    (0.38
    )
    
    
    (2,832
    )
    
    
    (0.40
    )
    
    
    (3,381
    )
    
    
    (0.46
    )
    
    
    (3,833
    )
    
    
    (0.58
    )
    
    
    (3,380
    )
    
    
    (0.55
    )Allowance for loan losses
    
    
    (9,654
    )
    
    
    (1.35
    )
    
    
    (4,581
    )
    
    
    (0.64
    )
    
    
    (4,675
    )
    
    
    (0.63
    )
    
    
    (4,312
    )
    
    
    (0.65
    )
    
    
    (4,377
    )
    
    
    (0.72
    )Total other items
    
    
    (12,339
    )
    
    
    (1.73
    )
    
    
    (7,413
    )
    
    
    (1.04
    )
    
    
    (8,056
    )
    
    
    (1.09
    )
    
    
    (8,145
    )
    
    
    (1.23
    )
    
    
    (7,757
    )
    
    
    (1.27
    )Total loans receivable, net
    
    
    714,492
    
    
    
    100.00
    %
    
    $
    713,329
    
    
    
    100.00
    %
    
    $
    736,065
    
    
    
    100.00
    %
    
    $
    660,494
    
    
    
    100.00
    %
    
    $
    610,681
    
    
    
    100.00
    %Loans receivable held for sale, net
    
    $
    7,831
    
    
    
    
    
    
    $
    14,993
    
    
    
    
    
    
    $
    10,698
    
    
    
    
    
    
    $
    9,060
    
    
    
    
    
    
    $
    11,871
 2




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##### Table of Contents



Due During
    
    
    Due After Onethe Year
    
    
    Through Five
    
    
    Due Five YearsEnding
    
    
    Years After
    
    
    or More AfterJune 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2008(In thousands)Real estate construction loans
    
    $
    99,548
    
    
    $
    
    
    
    $
    Non-real estate loans
    
    
    12,047
    
    
    
    11,162
    
    
    
    10,383Total
    
    $
    111,595
    
    
    $
    11,162
    
    
    $
    10,383
  Origination, Purchase and Sale of Loans
   Loan Underwriting Policies
   3




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##### Table of Contents



Residential Real Estate Lending.
  Commercial and Multi-Family Residential Real Estate Lending.
  Construction Loans.
 4




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##### Table of Contents



Land Loans.
  Equity Line of Credit Loans.
 Commercial Non Real Estate Business Loans.
 Mortgage Banking Activity
  5




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##### Table of Contents



Nonperforming Loans and Other Problem Assets
  6




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##### Table of Contents



At June 30,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Dollars in thousands)Non-accruing loans (1):Real estate
    
    $
    22,489
    
    
    $
    13,653
    
    
    $
    15,456
    
    
    $
    11,750
    
    
    $
    10,633Total
    
    $
    22,489
    
    
    $
    13,653
    
    
    $
    15,456
    
    
    $
    11,750
    
    
    $
    10,633Accruing loans which are contractually past
due 90 days or more:Real estate
    
    $
    2,977
    
    
    $
    876
    
    
    $
    
    
    
    $
    608
    
    
    $
    503Total
    
    $
    2,977
    
    
    $
    876
    
    
    $
    
    
    
    $
    608
    
    
    $
    503Total non accrual and 90 days past due loans
    
    $
    25,465
    
    
    $
    14,529
    
    
    $
    15,456
    
    
    $
    12,358
    
    
    $
    11,136Ratio of non performing loans to total loans
    
    
    3.51
    %
    
    
    1.99
    %
    
    
    2.08
    %
    
    
    1.85
    %
    
    
    1.80
    %Other non performing assets (2)
    
    $
    4,065
    
    
    $
    2,622
    
    
    $
    817
    
    
    $
    1,319
    
    
    $
    70Total non performing assets
    
    $
    29.531
    
    
    $
    17,151
    
    
    $
    16,273
    
    
    $
    13,677
    
    
    $
    11,206Total non performing assets to total assets
    
    
    3.40
    %
    
    
    1.90
    %
    
    
    1.80
    %
    
    
    1.66
    %
    
    
    1.48
    %
 
 (1)
    
    Non accrual status denotes loans on which, in the opinion of management, the collection of
additional interest is unlikely, or loans that meet the non-accrual criteria established by
regulatory authorities. Non accrual loans include all loans classified as doubtful or loss,
and all loans greater than 90-days past due with a loan-to-value ratio greater than 60%.(2)
    
    Other non performing assets represent property acquired by the Bank through foreclosure or
repossession.  At June 30,2008
    
    
    2007(In thousands)90 days
    
    
    91 to
    
    
    More than
    
    
    
    
    
    
    90 days
    
    
    91 to
    
    
    More thanor less
    
    
    365 days
    
    
    365 days
    
    
    Total
    
    
    or less
    
    
    365 days
    
    
    365 days
    
    
    TotalOne-to-four residential
    
    $
    
    
    
    $
    2,426
    
    
    $
    2,105
    
    
    $
    4,531
    
    
    $
    
    
    
    $
    835
    
    
    $
    2,611
    
    
    $
    3,446Home equity line of credit
    
    
    
    
    
    
    1,700
    
    
    
    1,455
    
    
    
    3,155
    
    
    
    
    
    
    
    1,162
    
    
    
    657
    
    
    
    1,819Multi-family residential
    
    
    
    
    
    
    152
    
    
    
    
    
    
    
    152
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial real estate
    
    
    
    
    
    
    1,618
    
    
    
    2,584
    
    
    
    4,202
    
    
    
    
    
    
    
    1,791
    
    
    
    1,331
    
    
    
    3,122Land
    
    
    
    
    
    
    2,850
    
    
    
    1,283
    
    
    
    4,133
    
    
    
    
    
    
    
    388
    
    
    
    1,077
    
    
    
    1,465Residential construction
    
    
    
    
    
    
    4,990
    
    
    
    1,952
    
    
    
    6,942
    
    
    
    
    
    
    
    1,331
    
    
    
    926
    
    
    
    2,257Commercial construction
    
    
    
    
    
    
    
    
    
    
    1,818
    
    
    
    1,818
    
    
    
    
    
    
    
    1,817
    
    
    
    
    
    
    
    1,817Non mortgage Total
    
    
    
    
    
    
    468
    
    
    
    65
    
    
    
    533
    
    
    
    
    
    
    
    603
    
    
    
    
    
    
    
    603Total
    
    $
    
    
    
    $
    14,204
    
    
    $
    11,262
    
    
    $
    25,466
    
    
    $
    
    
    
    $
    7,927
    
    
    $
    6,602
    
    
    $
    14,529
   7




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##### Table of Contents



Asset Classification and Allowance for Loan Losses. Regulation of the
Bank  Regulatory Capital Requirements
 8




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##### Table of Contents



Non-Performing Loans and Other Problem Assets
     Year Ended June 30,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Dollars in thousands)Balance at beginning of year
    
    $
    4,581
    
    
    $
    4,675
    
    
    $
    4,312
    
    
    $
    4,377
    
    
    $
    3,883Charge-offs:Mortgage loans
    
    
    984
    
    
    
    1,178
    
    
    
    462
    
    
    
    176
    
    
    
    113Non-real estate (1)
    
    
    2
    
    
    
    18
    
    
    
    1
    
    
    
    
    
    
    
    19Total charge-offs
    
    
    986
    
    
    
    1,196
    
    
    
    463
    
    
    
    176
    
    
    
    132Recoveries:Mortgage loans
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29Non-real estate (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total recoveries
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29Net charge-offs
    
    
    985
    
    
    
    1,196
    
    
    
    463
    
    
    
    176
    
    
    
    103Provision charged to income
    
    
    6,058
    
    
    
    1,102
    
    
    
    826
    
    
    
    111
    
    
    
    597Balance at end of year
    
    
    9,654
    
    
    $
    4,581
    
    
    $
    4,675
    
    
    $
    4,312
    
    
    $
    4,377Ratio of net charge-offs
during the year to average
loans outstanding during the year
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    
    %
    
    
    
    %
 
 (1)
    
    Consists primarily of line of credit loans. 9




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##### Table of Contents



At June 30,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004% of Loans in
    
    
    
    
    
    
    % of Loans in
    
    
    
    
    
    
    % of Loans in
    
    
    
    
    
    
    % of Loans in
    
    
    
    
    
    
    % of Loans inCategory to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category toTotal Loans
    
    
    
    
    
    
    Total Loans
    
    
    
    
    
    
    Total Loans
    
    
    
    
    
    
    Total Loans
    
    
    
    
    
    
    Total LoansAmount
    
    
    Outstanding
    
    
    Amount
    
    
    Outstanding
    
    
    Amount
    
    
    Outstanding
    
    
    Amount
    
    
    Outstanding
    
    
    Amount
    
    
    Outstanding(Dollars in thousands)Mortgage Loans:One-to four-family residential (1)
    
    
    3,797
    
    
    
    43.65
    %
    
    $
    1,200
    
    
    
    43.05
    
    
    $
    2,005
    
    
    
    47.25
    %
    
    $
    1,570
    
    
    
    47.84
    %
    
    $
    1,481
    
    
    
    45.68
    %Multi-family residential
    
    
    304
    
    
    
    8.15
    
    
    
    288
    
    
    
    7.57
    
    
    
    271
    
    
    
    7.22
    
    
    
    207
    
    
    
    5.07
    
    
    
    195
    
    
    
    6.27Commercial
    
    
    3,153
    
    
    
    34.94
    
    
    
    2,508
    
    
    
    34.68
    
    
    
    1,892
    
    
    
    32.07
    
    
    
    1,827
    
    
    
    34.15
    
    
    
    1,994
    
    
    
    37.05Land
    
    
    1,716
    
    
    
    10.29
    
    
    
    582
    
    
    
    10.43
    
    
    
    436
    
    
    
    10.50
    
    
    
    360
    
    
    
    10.32
    
    
    
    474
    
    
    
    8.74Unallocated
    
    
    189
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    
    
    
    
    Total mortgage loans
    
    
    9,159
    
    
    
    95.30
    
    
    
    4,578
    
    
    
    95.73
    
    
    
    4,604
    
    
    
    97.04
    
    
    
    4,128
    
    
    
    97.38
    
    
    
    4,144
    
    
    
    97.74Non-real estate
    
    
    495
    
    
    
    4.70
    
    
    
    3
    
    
    
    4.27
    
    
    
    71
    
    
    
    2.96
    
    
    
    184
    
    
    
    2.62
    
    
    
    233
    
    
    
    2.26Total allowance for loan losses
    
    
    9,654
    
    
    
    
    
    
    $
    4,581
    
    
    
    
    
    
    $
    4,675
    
    
    
    
    
    
    $
    4,312
    
    
    
    
    
    
    $
    4,377
 
 (1)
    
    Consists of one-to four-family residential and home equity lines of credit, including
owner-occupied and non-owner-occupied properties.(2)
    
    Construction loans are included with their respective property type. For additional
information, see Note 4 of Notes to Consolidated Financial Statements. 10




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##### Table of Contents



Investment Activities
     At June 30,2008
    
    
    2007
    
    
    2006(In thousands)Investment securities:Equity securities
    
    $
    1,890
    
    
    
    
    
    
    
    U. S. Government Sponsored Enterprise Securities
    
    
    7,580
    
    
    
    58,000
    
    
    
    58,000Mortgage-backed securities
    
    
    55,151
    
    
    
    25,880
    
    
    
    27,578Total securities
    
    
    64,621
    
    
    
    83,880
    
    
    
    85,578FHLB of Cincinnati stock
    
    
    12,641
    
    
    
    12,312
    
    
    
    11,955Total investments
    
    $
    77,262
    
    
    $
    96,192
    
    
    $
    97,533
 11




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##### Table of Contents



At June 30, 2008One Year
    
    
    One to Five
    
    
    Five to Ten
    
    
    More thanor Less
    
    
    Years
    
    
    Years
    
    
    Ten Years
    
    
    Total SecuritiesCarrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    Market
    
    
    AverageValue
    
    
    Yield
    
    
    Value
    
    
    Yield
    
    
    Value
    
    
    Yield
    
    
    Value
    
    
    Yield
    
    
    Value
    
    
    Value
    
    
    Yield(Dollars in thousands)U.S. Government Sponsored
Enterprise Securities
    
    $
    
    
    
    
    
    %
    
    $
    7,580
    
    
    
    5.30
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    7,580
    
    
    $
    7,604
    
    
    
    5.30
    %Mortgage-backed securities
    
    $
    316
    
    
    
    6.91
    %
    
    
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    54,835
    
    
    
    5.08
    %
    
    $
    55,151
    
    
    $
    53,260
    
    
    
    5.09
    %Total
    
    $
    316
    
    
    
    6.91
    %
    
    $
    7,580
    
    
    
    5.30
    %
    
    $
    
    
    
    
    
    %
    
    $
    54,835
    
    
    
    5.08
    %
    
    $
    62,731
    
    
    $
    60,864
    
    
    
    5.12
    %
 12




---



##### Table of Contents



Deposit Activity and Other Sources of Funds
 General.
 Deposits.
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    
    PercentageInterest
    
    
    
    Minimum
    
    
    Balance
    
    
    of TotalRate
    
    Category
    
    Balance
    
    
    (in thousands)
    
    
    Deposits2.26%
    
    NOW accounts
    
    $
    50
    
    
    $
    42,401
    
    
    
    6.43
    %1.01
    
    Passbook statement accounts
    
    
    5
    
    
    
    27,508
    
    
    
    4.172.40
    
    Money market accounts
    
    
    1,000
    
    
    
    74,939
    
    
    
    11.360.00
    
    Non-interest-earning demand accounts
    
    
    50
    
    
    
    17,459
    
    
    
    2.65162,307
    
    
    
    24.61Certificates of Deposit4.18
    
    3 months or less
    
    
    500
    
    
    
    324,062
    
    
    
    49.154.36
    
    3 - 6 months
    
    
    500
    
    
    
    51,550
    
    
    
    7.823.77
    
    6 - 12 months
    
    
    500
    
    
    
    68,232
    
    
    
    10.354.29
    
    1 - 3 years
    
    
    500
    
    
    
    39,183
    
    
    
    5.945.02
    
    More than three years
    
    
    500
    
    
    
    14,051
    
    
    
    2.134.18
    
    Total certificates of deposit
    
    
    
    
    
    
    497,078
    
    
    
    75.393.61
    
    Total deposits
    
    
    
    
    
    $
    659,385
    
    
    
    100.00
    %
 13




---



##### Table of Contents



For the Year Ended June 30,2008
    
    2007
    
    2006Interest-
    
    
    
    
    
    
    
    
    
    Interest-
    
    
    
    
    
    
    
    
    
    Interest-Bearing
    
    
    
    
    
    
    
    
    
    Bearing
    
    
    
    
    
    
    
    
    
    BearingDemand
    
    Savings
    
    Time
    
    Demand
    
    Savings
    
    Time
    
    Demand
    
    Savings
    
    TimeDeposits
    
    Deposits
    
    Deposits
    
    Deposits
    
    Deposits
    
    Deposits
    
    Deposits
    
    Deposits
    
    Deposits(Dollars in thousands)Average balance
    
    
    114,459
    
    
    $
    26,806
    
    
    $
    501,523
    
    
    $
    103,068
    
    
    $
    31,283
    
    
    $
    509,230
    
    
    $
    71,791
    
    
    $
    39,857
    
    
    $
    485,755Average rate paid
    
    
    2.98
    %
    
    
    1.11
    %
    
    
    4.81
    %
    
    
    4.07
    %
    
    
    0.73
    %
    
    
    4.75
    %
    
    
    2.94
    %
    
    
    0.51
    %
    
    
    3.80
    %
 14




---



##### Table of Contents



 Borrowings.
  CertificatesMaturity Period
    
    of Deposit(In thousands)Three months or less
    
    $
    42,827Three through six months
    
    
    59,480Six through 12 months
    
    
    51,879Over 12 months
    
    
    33,341Total
    
    $
    187,527
 Borrowings.
  At June 30,2008
    
    2007
    
    2006(In thousands)Amounts outstanding at end of period
    
    $
    44,000
    
    
    $
    75,000
    
    
    $
    95,000Weighted average rate
    
    
    2.83
    %
    
    
    5.35
    %
    
    
    4.95
    %Maximum amount outstanding at any month end
    
    $
    85,000
    
    
    $
    95,000
    
    
    $
    170,001Approximate average outstanding balance
    
    $
    53,130
    
    
    $
    78,438
    
    
    $
    154,215Weighted average rate
    
    
    4.41
    %
    
    
    5.38
    %
    
    
    4.45
    %
  15




---



##### Table of Contents



Subsidiary Activities
    PVF Service Corporation.
 Mid Pines Land Company.
 Competition
   Employees
  16




---



##### Table of Contents



Regulation of the Bank
 General.
 Regulatory Capital Requirements. Prompt
Corrective Regulatory Action.
   17




---



##### Table of Contents



At June 30, 2008Percent ofAmount
    
    
    Assets (1)(Dollars in Thousands)Tangible Capital
    
    $
    83,972
    
    
    
    9.69
    %Tangible Capital Requirement
    
    
    13,014
    
    
    
    1.50Excess
    
    
    70,958
    
    
    
    8.19
    %Tier 1/Core Capital
    
    $
    83,972
    
    
    
    9.69
    %Tier 1/Core Capital Requirement
    
    
    34,704
    
    
    
    4.00Excess
    
    
    49,268
    
    
    
    5.69
    %Tier 1 Risk-Based Capital
    
    $
    83,972
    
    
    
    12.09
    %Tier 1 Risk-Based Capital Requirement
    
    
    27,792
    
    
    
    4.00Excess
    
    
    56,180
    
    
    
    8.09
    %Risk-Based Capital
    
    $
    90,286
    
    
    
    12.99
    %Risk-Based Capital Requirement
    
    
    55,584
    
    
    
    8.00Excess
    
    
    34,702
    
    
    
    4.99
    %
 
 (1)
    
    Based upon adjusted total assets for
purposes of the tangible, core and Tier 1 capital
requirements, and risk-weighted assets for purposes of the
Tier 1 risk-based and risk-based capital requirements.  Prompt Corrective Regulatory Action.
 18




---



##### Table of Contents



Adequately
    
    
    
    SignificantlyWell Capitalized
    
    Capitalized
    
    Undercapitalized
    
    UndercapitalizedTotal risk-based

capital ratio
    
    10.0% or more
    
    8.0% or more
    
    Less than 8.0%
    
    Less than 6.0%Tier 1 risk-based

capital ratio
    
    6.0% or more
    
    4.0% or more
    
    Less than 4.0%
    
    Less than 3.0%Leverage ratio
    
    5.0% or more
    
    4.0% or more *
    
    Less than 4.0% *
    
    Less than 3.0%
 
 *
    
    3.0% if the institution has the highest examination rating.  Safety and Soundness Standards.
 Federal Home Loan Bank System.
  19




---



##### Table of Contents



Deposit
Activity and Other Sources of Funds  Borrowings.
 Qualified Thrift Lender Test.
  Uniform Lending Standards.
  Insurance of Deposit Accounts.
  20




---



##### Table of Contents



Dividend Limitations.
   Taxation.
 Federal Reserve System.
 Interstate Branching.
 21




---



##### Table of Contents



Loans to One Borrower Limitations.
 Enforcement .
 Transactions with Affiliates.
  22




---



##### Table of Contents



Regulation of the Company
 General.
 Activities Restrictions. Regulation of the Bank  Qualified Thrift Lender Test
  Restrictions on Acquisitions.
 23




---



##### Table of Contents



Acquisition of the Company.
 Taxation
 General.
 Federal Income Taxation.
     State Income Taxation.
 24




---



##### Table of Contents



Executive Officers of the Registrant
  Age as ofName
    
    September 4, 2008
    
    TitleJohn R. Male
    
    
    60
    
    
    Chairman of the Board and Chief Executive Officer
of the Company and the BankC. Keith Swaney
    
    
    65
    
    
    President and Chief Operating Officer of the
Company and the Bank, Treasurer of the Company
and Chief Financial Officer of the BankJeffrey N. Male
    
    
    59
    
    
    Vice President and Secretary of the Company and
Executive Vice President and Chief Lending
Officer of the Bank
 John R. Male.
 C. Keith Swaney.
 Jeffrey N. Male.
 
 Item 1A. Risk Factors
 Certain interest rate movements may hurt earnings and asset value.
  25




---



##### Table of Contents



Strong competition within the Banks market area could hurt profits and slow growth.
  The Company and the Bank operate in a highly regulated environment and may be adversely
affected by changes in laws and regulations.
  Our emphasis on construction and commercial real estate lending and land loans may expose us
to increased lending risks.
  The Companys financial condition and results of operations are dependant on the economy in
the Banks market area.
  26




---



##### Table of Contents



Provisions in the Companys certificate of incorporation and bylaws and statutory provisions
could discourage a hostile acquisition of control.
    The Company may have to record a charge to earnings representing other-than-temporary
impairment with respect to its holdings of U.S. government-sponsored enterprise preferred stock.
   27




---



##### Table of Contents



Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  Year
    
    
    
    
    
    Net Book
    
    Owned or
    
    ApproximateOpened/
    
    Total
    
    Value at
    
    Leased/
    
    SquareLocation
    
    Acquired
    
    Deposits
    
    June 30, 2008
    
    Expiration
    
    Footage(Dollars in thousands)Main Office:30000 Aurora Road 
Solon, Ohio
    
    
    2000
    
    
    $
    59,197
    
    
    $
    5,061
    
    
    Owned
    
    
    51,635Branch Offices:2111 Richmond Road 
Beachwood, Ohio
    
    
    1967
    
    
    
    71,433
    
    
    
    0
    
    
    Lease
12/31/19
    
    
    2,750413 Northfield Road 
Bedford, Ohio
    
    
    2002
    
    
    
    43,665
    
    
    
    155
    
    
    Lease
10/31/12
    
    
    3,08411010 Clifton Boulevard 
Cleveland, Ohio
    
    
    1974
    
    
    
    23,654
    
    
    
    0
    
    
    Lease
10/21/11
    
    
    1,55013901 Ridge Road 
North Royalton, Ohio
    
    
    1999
    
    
    
    58,774
    
    
    
    0
    
    
    Lease
8/31/09
    
    
    3,2786990 Heisley Road 
Mentor, Ohio
    
    
    1994
    
    
    
    42,145
    
    
    
    0
    
    
    Lease
10/25/08
    
    
    2,4001244 SOM Center Road 
Mayfield Heights, Ohio
    
    
    2004
    
    
    
    44,055
    
    
    
    89
    
    
    Lease
6/30/14
    
    
    2,200497 East Aurora Road 
Macedonia, Ohio
    
    
    1994
    
    
    
    51,099
    
    
    
    3
    
    
    Lease
9/30/09
    
    
    2,4008500 Washington Street 
Chagrin Falls, Ohio
    
    
    1995
    
    
    
    44,592
    
    
    
    5
    
    
    Owned
    
    
    2,700408 Water Street 
Chardon, Ohio
    
    
    1998
    
    
    
    31,075
    
    
    
    457
    
    
    Owned
    
    
    2,8003613 Medina Road 
Medina, Ohio
    
    
    2000
    
    
    
    27,720
    
    
    
    0
    
    
    Lease
2/28/13
    
    
    2,44034400 Aurora Road 
Solon, Ohio
    
    
    2000
    
    
    
    25,558
    
    
    
    21
    
    
    Lease
4/30/10
    
    
    3,000
 28




---



##### Table of Contents



Year
    
    
    
    
    
    Net Book
    
    Owned or
    
    ApproximateOpened/
    
    Total
    
    Value at
    
    Leased/
    
    SquareLocation
    
    Acquired
    
    Deposits
    
    June 30, 2008
    
    Expiration
    
    Footage(Dollars in thousands)16909 Chagrin Boulevard 
Shaker Heights, Ohio
    
    
    2000
    
    
    
    27,605
    
    
    
    36
    
    
    Lease
6/30/10
    
    
    2,90436311 Detroit Road 
Avon, Ohio
    
    
    2002
    
    
    
    39,487
    
    
    
    123
    
    
    Lease
10/02/12
    
    
    3,37517780 Pearl Road 
Strongsville, Ohio
    
    
    2002
    
    
    
    39,741
    
    
    
    78
    
    
    Lease
8/31/12
    
    
    3,5009305 Market Square Drive 
Streetsboro, Ohio
    
    
    2003
    
    
    
    12,995
    
    
    
    984
    
    
    Owned
    
    
    3,700215 West Garfield Road 
Aurora, Ohio
    
    
    2005
    
    
    
    16,591
    
    
    
    30
    
    
    Lease
8/31/10
    
    
    4,700
  Item 1. Business  Subsidiary
Activities
 
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  29




---



##### Table of Contents



PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Securities
    Fiscal 2007
    
    Fiscal 2008High Sales
    
    Low Sales
    
    High Sales
    
    Low SalesFourth Quarter
    
    $
    13.82
    
    
    $
    12.35
    
    
    $
    10.81
    
    
    $
    7.26Third Quarter
    
    
    12.73
    
    
    
    9.97
    
    
    
    12.08
    
    
    
    7.00Second Quarter
    
    
    10.89
    
    
    
    9.33
    
    
    
    15.80
    
    
    
    10.53First Quarter
    
    
    10.48
    
    
    
    9.00
    
    
    
    16.03
    
    
    
    9.00
 
 (1)
    
    Quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may
not represent actual transactions.  30




---



##### Table of Contents



Item 6. Selected Financial Data
 Selected Consolidated Financial and Other Data
 Financial Condition Data:
 At June 30,(Dollars in Thousands)
    
    2008
    
    2007
    
    2006
    
    2005
    
    2004Total assets
    
    $
    867,402
    
    
    $
    900,816
    
    
    $
    906,081
    
    
    $
    823,899
    
    
    $
    755,687Loans receivable, net
    
    
    714,492
    
    
    
    713,329
    
    
    
    736,065
    
    
    
    660,494
    
    
    
    610,681Loans receivable held for sale, net
    
    
    7,831
    
    
    
    14,993
    
    
    
    10,698
    
    
    
    9,060
    
    
    
    11,871Mortgage-backed securities held to maturity
    
    
    55,151
    
    
    
    25,880
    
    
    
    27,578
    
    
    
    31,720
    
    
    
    36,779Cash and cash equivalents
    
    
    17,804
    
    
    
    28,458
    
    
    
    19,738
    
    
    
    11,090
    
    
    
    17,470Securities held to maturity
    
    
    7,580
    
    
    
    58,000
    
    
    
    58,000
    
    
    
    57,500
    
    
    
    27,500Securities available for sale
    
    
    1,890
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Deposits
    
    
    659,386
    
    
    
    658,053
    
    
    
    656,864
    
    
    
    591,226
    
    
    
    526,493Borrowings
    
    
    114,950
    
    
    
    146,260
    
    
    
    156,773
    
    
    
    146,413
    
    
    
    147,526Stockholders equity
    
    
    69,075
    
    
    
    71,490
    
    
    
    68,973
    
    
    
    66,453
    
    
    
    63,361
 Operating Data:
 Year Ended June 30,(Dollars in thousands except for earnings per share)
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Interest income
    
    $
    56,485
    
    
    $
    62,020
    
    
    $
    55,651
    
    
    $
    43,963
    
    
    $
    39,429Interest expense
    
    
    34,275
    
    
    
    36,705
    
    
    
    28,408
    
    
    
    19,801
    
    
    
    16,739Net interest income before provision for loan losses
    
    
    22,210
    
    
    
    25,315
    
    
    
    27,243
    
    
    
    24,162
    
    
    
    22,690Provision for loan losses
    
    
    6,058
    
    
    
    1,103
    
    
    
    826
    
    
    
    111
    
    
    
    597Net interest income after provision for loan losses
    
    
    16,152
    
    
    
    24,212
    
    
    
    26,417
    
    
    
    24,051
    
    
    
    22,093Non-interest income
    
    
    2,458
    
    
    
    3,376
    
    
    
    2,028
    
    
    
    3,006
    
    
    
    5,810Non-interest expense
    
    
    20,806
    
    
    
    21,634
    
    
    
    21,549
    
    
    
    18,942
    
    
    
    17,571Income (loss) before federal income taxes
    
    
    (2,196
    )
    
    
    5,954
    
    
    
    6,896
    
    
    
    8,115
    
    
    
    10,332Federal income taxes
    
    
    (1,095
    )
    
    
    1,720
    
    
    
    2,053
    
    
    
    2,531
    
    
    
    3,422Net income (loss)
    
    $
    (1,101
    )
    
    $
    4,234
    
    
    $
    4,843
    
    
    $
    5,584
    
    
    $
    6,910Basic earnings (loss) per share (1)
    
    $
    (0.14
    )
    
    $
    0.55
    
    
    $
    0.63
    
    
    $
    0.72
    
    
    $
    0.89Diluted earnings (loss) per share (1)
    
    $
    (0.14
    )
    
    $
    0.54
    
    
    $
    0.62
    
    
    $
    0.71
    
    
    $
    0.87
 
 (1)
    
    Adjusted for stock dividends. 31




---



##### Table of Contents



Other Data:
 At or For the Year Ended June 30,2008
    
    2007
    
    2006
    
    2005
    
    2004Return on average assets
    
    
    (0.13
    )%
    
    
    0.47
    %
    
    
    0.56
    %
    
    
    0.70
    %
    
    
    0.96
    %Return on average equity
    
    
    (1.55
    )%
    
    
    6.00
    %
    
    
    7.15
    %
    
    
    8.62
    %
    
    
    11.26
    %Interest rate spread
    
    
    2.48
    %
    
    
    2.77
    %
    
    
    3.15
    %
    
    
    3.12
    %
    
    
    3.16
    %Net interest margin
    
    
    2.70
    %
    
    
    2.98
    %
    
    
    3.34
    %
    
    
    3.24
    %
    
    
    3.35
    %Average interest-earning assets to average
interest-bearing liabilities
    
    
    105.33
    %
    
    
    104.84
    %
    
    
    105.38
    %
    
    
    104.81
    %
    
    
    107.62
    %Non-accruing loans and repossessed assets
to total assets
    
    
    3.06
    %
    
    
    1.81
    %
    
    
    1.80
    %
    
    
    1.59
    %
    
    
    1.42
    %Stockholders equity to total assets
    
    
    7.96
    %
    
    
    7.94
    %
    
    
    7.61
    %
    
    
    8.07
    %
    
    
    8.38
    %Ratio of average equity to average assets
    
    
    8.09
    %
    
    
    7.76
    %
    
    
    7.78
    %
    
    
    8.16
    %
    
    
    8.49
    %Dividend payout ratio (cash dividends declared
divided by net income (loss))
    
    
    (208.82
    )%
    
    
    54.04
    %
    
    
    47.13
    %
    
    
    37.37
    %
    
    
    33.71
    %Bank Regulatory Capital Ratios:Ratio of tangible capital to adjusted total assets
    
    
    9.69
    %
    
    
    9.72
    %
    
    
    8.33
    %
    
    
    8.77
    %
    
    
    7.97
    %Ratio of Tier-1 core capital to adjusted total assets
    
    
    9.69
    %
    
    
    9.72
    %
    
    
    8.33
    %
    
    
    8.77
    %
    
    
    7.97
    %Ratio of Tier-1 risk-based capital to risk-weighted assets
    
    
    12.09
    %
    
    
    12.56
    %
    
    
    9.72
    %
    
    
    10.41
    %
    
    
    9.54
    %Ratio of total risk-based capital to risk-weighted assets
    
    
    12.99
    %
    
    
    13.08
    %
    
    
    10.28
    %
    
    
    10.97
    %
    
    
    10.19
    %
 32




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 General
  Forward-Looking Statements
   Overview of Financial Condition at June 30, 2008, 2007 and 2006
  33




---



##### Table of Contents



(dollars in thousands)
    
    2008
    
    
    2007
    
    
    2006One-to four-family residential
    
    $
    168,532
    
    
    $
    163,298
    
    
    $
    174,575Home equity line of credit
    
    
    87,876
    
    
    
    85,093
    
    
    
    94,450Multi-family residential
    
    
    52,421
    
    
    
    48,101
    
    
    
    45,716Commercial
    
    
    174,404
    
    
    
    184,850
    
    
    
    170,392Commercial equity line of credit
    
    
    36,913
    
    
    
    33,208
    
    
    
    34,064Land
    
    
    73,545
    
    
    
    74,414
    
    
    
    77,242Construction
 residential
    
    
    55,442
    
    
    
    63,316
    
    
    
    84,146Construction
 multi-family
    
    
    5,803
    
    
    
    6,397
    
    
    
    7,956Construction
 commercial
    
    
    38,303
    
    
    
    31,610
    
    
    
    33,756Total real estate mortgages
    
    
    693,239
    
    
    
    690,286
    
    
    
    722,297Non-real estate mortgages
    
    
    33,593
    
    
    
    30,455
    
    
    
    21,824Total loans receivable
    
    
    726,832
    
    
    
    720,741
    
    
    
    744,121Net deferred loan origination fees
    
    
    (2,686
    )
    
    
    (2,832
    )
    
    
    (3,382
    )Allowance for loan losses
    
    
    (9,654
    )
    
    
    (4,581
    )
    
    
    (4,675
    )Total loans receivable, net
    
    $
    714,492
    
    
    $
    713,329
    
    
    $
    736,065Loans receivable held for sale, net
    
    $
    7,831
    
    
    $
    14,993
    
    
    $
    10,698Mortgage-backed securities held to maturity
    
    $
    55,151
    
    
    $
    25,880
    
    
    $
    27,578
    (dollars in thousands)
    
    2008
    
    
    2007
    
    
    2006Now accounts
    
    $
    42,402
    
    
    $
    40,780
    
    
    $
    39,565Passbook savings
    
    
    27,508
    
    
    
    30,045
    
    
    
    35,194Money market accounts
    
    
    74,939
    
    
    
    70,518
    
    
    
    60,900Non-interest-bearing
    
    
    17,459
    
    
    
    21,845
    
    
    
    17,069Certificates of deposit
    
    
    497,078
    
    
    
    494,865
    
    
    
    504,316Total deposits
    
    $
    659,386
    
    
    $
    658,053
    
    
    $
    656,864
  34




---



##### Table of Contents



Capital
   Park View
    
    
    
    
    
    Requirement forFederal
    
    Percent of
    
    Well-Capitalized(dollars in thousands)
    
    Capital
    
    Assets (1)
    
    InstitutionTangible capital
    
    $
    83,972
    
    
    
    9.69
    %
    
    
    N/ATier-1 core capital
    
    $
    83,972
    
    
    
    9.69
    
    
    
    5.00
    %Tier-1 risk-based capital
    
    $
    83,972
    
    
    
    12.09
    
    
    
    6.00Total risk-based capital
    
    $
    90,286
    
    
    
    12.99
    
    
    
    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. Liquidity and Capital Resources
   35




---



##### Table of Contents



Commitments, Contingencies and Off-Balance Sheet Risk
   June 30,(dollars in thousands)
    
    2008
    
    2007Commitments to originate:Mortgage loans intended for sale
    
    $
    16,755
    
    
    $
    29,312Mortgage loans held for investment
    
    
    6,412
    
    
    
    12,627Unfunded home equity and commercial real estate lines of
credit
    
    
    91,781
    
    
    
    99,257Undisbursed portion of loan proceeds
    
    
    46,367
    
    
    
    60,795Commitments to sell loans held for sale
    
    
    10,218
    
    
    
    20,105Standby letters of credit
    
    
    2,486
    
    
    
    4,051
   36




---



##### Table of Contents



GreatNote
    
    Within
    
    1-3
    
    3-5
    
    Than 5(Dollars in thousands)
    
    Reference
    
    1 Year
    
    Years
    
    Years
    
    Years
    
    TotalDeposits without a stated maturity
    
    
    
    
    
    $
    162,308
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    162,308Certificates of deposit
    
    
    7
    
    
    
    443,844
    
    
    
    39,183
    
    
    
    14,051
    
    
    
    
    
    
    
    497,078Long-term advances from
the FHLB of Cincinnati
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,000
    
    
    
    35,000Repurchase agreement
    
    
    9
    
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    50,000Subordinated debt
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    20,000Operating leases
    
    
    11
    
    
    
    893
    
    
    
    1,136
    
    
    
    556
    
    
    
    80
    
    
    
    2,665
 Results
of Operations
 General
   Net Interest Income
   37




---



##### Table of Contents



Table 1
    
    Average Balances, Interest, and Average Yields and CostsFor the Year Ended June 30,
 2008
    
    
    2007
    
    
    2006Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average

    
    
    
    
    
    
    Yield/(dollars in thousands)
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    CostInterest-earning assets:Loans
    
    $
    726,034
    
    
    $
    51,655
    
    
    
    7.11
    %
    
    $
    741,723
    
    
    $
    56,760
    
    
    
    7.65
    %
    
    $
    709,789
    
    
    $
    50,986
    
    
    
    7.18
    %Mortgage-backed securities
    
    
    33,825
    
    
    
    1,686
    
    
    
    4.98
    
    
    
    26,879
    
    
    
    1,321
    
    
    
    4.91
    
    
    
    29,013
    
    
    
    1,386
    
    
    
    4.78Securities and other interest-earning assets
    
    
    63,807
    
    
    
    3,144
    
    
    
    4.93
    
    
    
    80,876
    
    
    
    3,939
    
    
    
    4.87
    
    
    
    77,989
    
    
    
    3,279
    
    
    
    4.20Total interest-earning assets
    
    
    823,666
    
    
    
    56,485
    
    
    
    6.86
    
    
    
    849,478
    
    
    
    62,020
    
    
    
    7.30
    
    
    
    816,791
    
    
    
    56,651
    
    
    
    6.81Non-interest-earning assets
    
    
    56,649
    
    
    
    
    
    
    
    
    
    
    
    59,012
    
    
    
    
    
    
    
    
    
    
    
    53,338Total assets
    
    
    880,315
    
    
    
    
    
    
    
    
    
    
    $
    908,490
    
    
    
    
    
    
    
    
    
    
    $
    870,129Interest-bearing liabilities:Deposits
    
    $
    657,189
    
    
    $
    27,829
    
    
    
    4.23
    
    
    $
    661,410
    
    
    $
    28,600
    
    
    
    4.32
    %
    
    $
    609,685
    
    
    $
    20,777
    
    
    
    3.41
    %Borrowings
    
    
    124,827
    
    
    
    6,446
    
    
    
    5.16
    
    
    
    148,822
    
    
    
    8,105
    
    
    
    5.45
    
    
    
    165,441
    
    
    
    7,631
    
    
    
    4.61Total interest-bearing liabilities
    
    
    782,016
    
    
    
    34,275
    
    
    
    4.38
    
    
    
    810,232
    
    
    
    36,705
    
    
    
    4.53
    
    
    
    775,126
    
    
    
    28,408
    
    
    
    3.66Non-interest-bearing liabilities
    
    
    27,095
    
    
    
    
    
    
    
    
    
    
    
    27,724
    
    
    
    
    
    
    
    
    
    
    
    27,296Total liabilities
    
    
    809,111
    
    
    
    
    
    
    
    
    
    
    
    837,956
    
    
    
    
    
    
    
    
    
    
    
    802,422Stockholders equity
    
    
    71,204
    
    
    
    
    
    
    
    
    
    
    
    70,534
    
    
    
    
    
    
    
    
    
    
    
    67,707Total liabilities and stockholders equity
    
    $
    880,315
    
    
    
    
    
    
    
    
    
    
    $
    908,490
    
    
    
    
    
    
    
    
    
    
    $
    870,129Net interest income
    
    
    
    
    
    $
    22,210
    
    
    
    
    
    
    
    
    
    
    $
    25,315
    
    
    
    
    
    
    
    
    
    
    $
    27,243Interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.48
    %
    
    
    
    
    
    
    
    
    
    
    2.77
    %
    
    
    
    
    
    
    
    
    
    
    3.15
    %Net yield on interest-earning assets
    
    
    
    
    
    
    
    
    
    
    2.70
    %
    
    
    
    
    
    
    
    
    
    
    2.98
    %
    
    
    
    
    
    
    
    
    
    
    3.34
    %Ratio of average interest-earning assets
to average interest-bearing liabilities
    
    
    
    
    
    
    105.33
    %
    
    
    
    
    
    
    
    
    
    
    104.84
    %
    
    
    
    
    
    
    
    
    
    
    105.38
    %
 38




---



##### Table of Contents



Table 2
    
    Year Ended June 30,2008
    
    
    vs.
    
    

2007
    
    

2007
    
    
    vs.
    
    

2006Increase (Decrease)
    
    
    Increase (Decrease)Due to
    
    
    Due to(dollars in thousands)
    
    Volume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalInterest income:Loans
    
    $
    (1,181
    )
    
    $
    (3,924
    )
    
    $
    (5,105
    )
    
    $
    2,355
    
    
    $
    3,419
    
    
    $
    5,774Mortgage-backed securities
    
    
    346
    
    
    
    19
    
    
    
    365
    
    
    
    (106
    )
    
    
    41
    
    
    
    (65
    )Securities and other interest-earning assets
    
    
    (840
    )
    
    
    45
    
    
    
    (795
    )
    
    
    126
    
    
    
    534
    
    
    
    660Total interest-earning assets
    
    
    (1,675
    )
    
    
    (3,860
    )
    
    
    (5,535
    )
    
    
    2,375
    
    
    
    3,994
    
    
    
    6,369Interest expense:Deposits
    
    
    (182
    )
    
    
    (589
    )
    
    
    (771
    )
    
    
    1,875
    
    
    
    5,948
    
    
    
    7,823Borrowings
    
    
    (1,173
    )
    
    
    (486
    )
    
    
    (1,659
    )
    
    
    (538
    )
    
    
    1,012
    
    
    
    474Total interest-bearing liabilities
    
    
    (1,355
    )
    
    
    (1,075
    )
    
    
    (2,430
    )
    
    
    1,337
    
    
    
    6,960
    
    
    
    8,297Net interest income
    
    $
    (320
    )
    
    $
    (2,785
    )
    
    $
    (3,105
    )
    
    $
    1,038
    
    
    $
    (2,966
    )
    
    $
    (1,928
    )
    Provision for Loan Losses
    39




---



##### Table of Contents



June 30,(dollars in thousands)
    
    2008
    
    
    2007Loans on non-accruing status (1)Real estate mortgages:One-to four-family residential
    
    $
    6,453
    
    
    $
    5,265Commercial
    
    
    3,001
    
    
    
    3,122Multi-family residential
    
    
    152
    
    
    
    Construction and land
    
    
    12,350
    
    
    
    4,663Non real estate
    
    
    533
    
    
    
    603Total loans on nonaccrual status
    
    $
    22,489
    
    
    $
    13,653Ratio of nonperforming loans total loans
    
    
    3.09
    %
    
    
    1.89
    %Other nonperforming assets (2)
    
    $
    4,065
    
    
    $
    2,622Total nonperforming assets (3)
    
    $
    26,554
    
    
    $
    16,275Total nonperforming assets to total assets
    
    
    3.06
    %
    
    
    1.81
    %
 
 (1)
    
    Nonaccrual status denotes loans on which, in the opinion of management, the collection of
additional interest is unlikely, or loans that meet the nonaccrual criteria established by
regulatory authorities. Nonaccrual loans include all loans classified as doubtful or loss, and
loans greater than 90 days past due for which interest accrual has been discontinued. Payments
received on a nonaccrual loan are either applied to the outstanding principal balance or
recorded as interest income, depending on an assessment of the collectibility of the principal
balance of the loan.(2)
    
    Other nonperforming assets represent property acquired by the Bank through foreclosure or
repossession.(3)
    
    Excludes loans past due more than 90 days, still on accrual status. 
 40




---



##### Table of Contents



Non-interest
Income
  41




---



##### Table of Contents



Non-interest Expense
  Federal Income Taxes
  Impact of Inflation and Changing Prices
 Market Risk Management.
 Critical Accounting Policies and Estimates
   42




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Market Risk Management
       (Dollars in thousands)
    
    June 30, 2008
    
    June 30, 2007Change in
    
    Market Value of
    
    Dollar
    
    NPV
    
    Market Value of
    
    Dollar
    
    NPVInterest Rates
    
    Portfolio Equity
    
    Change
    
    Ratio
    
    Portfolio Equity
    
    Change
    
    Ratio+2%
    
    $
    93,478
    
    
    $
    (3,800
    )
    
    
    10.68
    %
    
    $
    99,263
    
    
    $
    (7,290
    )
    
    
    10.99
    %+1%
    
    
    96,001
    
    
    
    (1,277
    )
    
    
    10.88
    
    
    
    103,233
    
    
    
    (3,320
    )
    
    
    11.330
    
    
    97,278
    
    
    
    
    
    
    
    10.94
    
    
    
    106,553
    
    
    
    
    
    
    
    11.59-1%
    
    
    97,328
    
    
    
    50
    
    
    
    10.88
    
    
    
    108,404
    
    
    
    1,851
    
    
    
    11.71-2%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,908
    
    
    
    1,355
    
    
    
    11.60
  43




---



##### Table of Contents



Within
    
    1-3
    
    3-5
    
    >5(dollars in thousands)
    
    1 Year
    
    Years
    
    Years
    
    Years
    
    TotalTotal interest rate-sensitive assets
    
    $
    363,844
    
    
    $
    159,385
    
    
    $
    129,731
    
    
    $
    167,342
    
    
    $
    820,302Total interest rate-sensitive liabilities
    
    
    416,656
    
    
    
    220,586
    
    
    
    55,595
    
    
    
    64,040
    
    
    
    756,877Periodic GAP
    
    
    (52,812
    )
    
    
    (61,201
    )
    
    
    74,136
    
    
    
    103,302
    
    
    
    63,425Cumulative GAP
    
    
    (52,812
    )
    
    
    (114,013
    )
    
    
    (39,876
    )
    
    
    63,425Ratio of cumulative GAP to total assets
    
    
    (6.1
    )%
    
    
    (13.1
    )%
    
    
    (4.6
    )%
    
    
    7.3
    %
 44




---



##### Table of Contents



Item 8.  Financial Statements and Supplementary Data
 
 
 
    Internal Control - Integrated Framework
  
 45




---



##### Table of Contents



2008
    
    
    2007ASSETSCash and amounts due from depository institutions
    
    $
    7,455,720
    
    
    $
    20,293,042Interest bearing deposits
    
    
    700,674
    
    
    
    622,537Federal funds sold
    
    
    9,648,000
    
    
    
    7,542,000Cash and cash equivalents
    
    
    17,804,394
    
    
    
    28,457,579Securities available for sale
    
    
    1,890,000
    
    
    
    Securities held to maturity (fair values of $7,603,907 and
$58,068,865, respectively)
    
    
    7,580,000
    
    
    
    58,000,000Mortgage-backed securities held to maturity (fair values
of $53,259,867 and $24,302,048, respectively)
    
    
    55,151,069
    
    
    
    25,879,520Loans receivable held for sale, net
    
    
    7,830,994
    
    
    
    14,993,380Loans receivable, net of allowance of
$9,653,972 and $4,580,549
    
    
    714,492,406
    
    
    
    713,328,818Office properties and equipment, net
    
    
    9,232,711
    
    
    
    10,588,375Real estate owned
    
    
    4,064,708
    
    
    
    2,621,555Federal Home Loan Bank stock
    
    
    12,640,600
    
    
    
    12,311,600Bank-owned life insurance
    
    
    23,009,038
    
    
    
    22,210,217Prepaid expenses and other assets
    
    
    13,706,218
    
    
    
    12,425,315Total assets
    
    $
    867,402,138
    
    
    $
    900,816,359LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    659,385,765
    
    
    $
    658,052,649Short-term advances from the FHLB
    
    
    9,000,000
    
    
    
    65,000,000Line of credit
    
    
    950,000
    
    
    
    1,260,000Long-term advances from the FHLB
    
    
    35,000,000
    
    
    
    10,000,000Repurchase agreement
    
    
    50,000,000
    
    
    
    50,000,000Subordinated debentures
    
    
    20,000,000
    
    
    
    20,000,000Advances from borrowers for taxes and insurance
    
    
    8,973,604
    
    
    
    8,546,669Accrued expenses and other liabilities
    
    
    15,017,435
    
    
    
    16,467,200Total liabilities
    
    
    798,326,804
    
    
    
    829,326,518Commitments 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;
8,246,548 and 8,204,536 shares issued, respectively
    
    
    82,465
    
    
    
    82,045Additional paid-in capital
    
    
    69,155,729
    
    
    
    68,743,626Retained earnings
    
    
    3,674,287
    
    
    
    6,501,317Treasury stock at cost, 472,725 shares, respectively
    
    
    (3,837,147
    )
    
    
    (3,837,147
    )Total stockholders equity
    
    
    69,075,334
    
    
    
    71,489,841Total liabilities and stockholders equity
    
    $
    867,402,138
    
    
    $
    900,816,359
 46




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Interest and dividends incomeLoans
    
    $
    51,654,829
    
    
    $
    56,759,624
    
    
    $
    50,985,531Mortgage-backed securities
    
    
    1,686,115
    
    
    
    1,321,132
    
    
    
    1,385,572Federal Home Loan Bank stock dividends
    
    
    747,998
    
    
    
    749,727
    
    
    
    638,807Securities
    
    
    1,736,182
    
    
    
    2,612,547
    
    
    
    2,273,566Fed funds sold and interest-bearing deposits
    
    
    660,275
    
    
    
    576,882
    
    
    
    367,080Total interest and dividend income
    
    
    56,485,399
    
    
    
    62,019,912
    
    
    
    55,650,556Interest expenseDeposits
    
    
    27,829,011
    
    
    
    28,599,492
    
    
    
    20,776,397Short-term borrowings
    
    
    1,552,673
    
    
    
    3,165,122
    
    
    
    2,816,260Long-term borrowings
    
    
    3,430,015
    
    
    
    3,390,503
    
    
    
    4,121,641Subordinated debt
    
    
    1,463,602
    
    
    
    1,549,920
    
    
    
    693,292Total interest expense
    
    
    34,275,301
    
    
    
    36,705,037
    
    
    
    28,407,590Net interest income
    
    
    22,210,098
    
    
    
    25,314,875
    
    
    
    27,242,966Provision for loan losses
    
    
    6,058,400
    
    
    
    1,102,500
    
    
    
    826,300Net interest income after provision
for loan losses
    
    
    16,151,698
    
    
    
    24,212,375
    
    
    
    26,416,666Noninterest incomeService charges and other fees
    
    
    823,251
    
    
    
    815,395
    
    
    
    609,040Mortgage banking activities, net
    
    
    1,461,249
    
    
    
    1,270,998
    
    
    
    834,471Gain (loss) on disposal and write downs of real estate
owned
    
    
    (762,961
    )
    
    
    259,537
    
    
    
    (35,330
    )Other than temporary impairment of securities
    
    
    (195,140
    )
    
    
    
    
    
    
    Increase in cash surrender value of
bank-owned life insurance
    
    
    798,821
    
    
    
    870,832
    
    
    
    597,447Other, net
    
    
    333,131
    
    
    
    159,340
    
    
    
    22,606Total noninterest income
    
    
    2,458,351
    
    
    
    3,376,102
    
    
    
    2,028,234Noninterest expenseCompensation, benefits and directors fees
    
    
    10,530,464
    
    
    
    12,149,480
    
    
    
    12,060,345Office, occupancy, and equipment
    
    
    3,120,566
    
    
    
    3,387,369
    
    
    
    3,815,592Insurance
    
    
    587,639
    
    
    
    278,324
    
    
    
    295,724Professional and legal
    
    
    808,000
    
    
    
    569,000
    
    
    
    492,061Advertising
    
    
    384,071
    
    
    
    688,878
    
    
    
    572,477Outside services
    
    
    1,408,177
    
    
    
    1,445,038
    
    
    
    1,430,915Franchise tax
    
    
    1,069,911
    
    
    
    982,737
    
    
    
    881,691Real estate owned expense
    
    
    996,113
    
    
    
    306,783
    
    
    
    187,824Other
    
    
    1,900,630
    
    
    
    1,826,272
    
    
    
    1,812,771Total noninterest expense
    
    
    20,805,571
    
    
    
    21,633,881
    
    
    
    21,549,400Income (loss) before federal income taxes
    
    
    (2,195,522
    )
    
    
    5,954,596
    
    
    
    6,895,500Federal income taxesCurrent
    
    
    598,656
    
    
    
    2,219,821
    
    
    
    2,323,692Deferred
    
    
    (1,693,521
    )
    
    
    (499,549
    )
    
    
    (271,193
    )(1,094,865
    )
    
    
    1,720,272
    
    
    
    2,052,499Net income (loss)
    
    $
    (1,100,657
    )
    
    $
    4,234,324
    
    
    $
    4,843,001Basic earnings (loss) per share
    
    $
    (0.14
    )
    
    $
    0.55
    
    
    $
    0.63Diluted earnings (loss) per share
    
    $
    (0.14
    )
    
    $
    0.54
    
    
    $
    0.62
 47




---



##### Table of Contents



AdditionalCommon
    
    
    paid-in
    
    
    Retained
    
    
    Treasurystock
    
    
    capital
    
    
    earnings
    
    
    stock
    
    
    TotalBalance at July 1, 2005
    
    $
    81,758
    
    
    $
    68,288,834
    
    
    $
    1,663,992
    
    
    $
    (3,581,405
    )
    
    $
    66,453,179Net income
    
    
    
    
    
    
    
    
    
    
    4,843,001
    
    
    
    
    
    
    
    4,843,001Stock options exercised,
26,038 shares
    
    
    260
    
    
    
    144,477
    
    
    
    
    
    
    
    
    
    
    
    144,737Stock purchased and retired,
12,950 shares
    
    
    (129
    )
    
    
    (140,975
    )
    
    
    
    
    
    
    
    
    
    
    (141,104
    )Cash paid in lieu of fractional shares
    
    
    
    
    
    
    
    
    
    
    (3,022
    )
    
    
    
    
    
    
    (3,022
    )Cash dividend, $0.296 per share
    
    
    
    
    
    
    
    
    
    
    (2,282,670
    )
    
    
    
    
    
    
    (2,282,670
    )Purchase of 21,637 shares
of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (255,742
    )
    
    
    (255,742
    )Paid in capital related to stock
based compensation
    
    
    
    
    
    
    214,761
    
    
    
    
    
    
    
    
    
    
    
    214,761Balance at June 30, 2006
    
    $
    81,889
    
    
    $
    68,507,097
    
    
    $
    4,221,301
    
    
    $
    (3,837,147
    )
    
    $
    68,973,140Cumulative adjustment related to
SAB 108 adoption
    
    
    
    
    
    
    
    
    
    
    334,074
    
    
    
    
    
    
    
    334,074Net income
    
    
    
    
    
    
    
    
    
    
    4,234,324
    
    
    
    
    
    
    
    4,234,324Stock options exercised, including
income tax benefits, 43,099 shares
    
    
    431
    
    
    
    311,105
    
    
    
    
    
    
    
    
    
    
    
    311,536Stock purchased and retired,
27,430 shares
    
    
    (275
    )
    
    
    (293,266
    )
    
    
    
    
    
    
    
    
    
    
    (293,541
    )Cash dividend, $0.296 per share
    
    
    
    
    
    
    
    
    
    
    (2,288,382
    )
    
    
    
    
    
    
    (2,288,382
    )Paid in capital related to stock
based compensation
    
    
    
    
    
    
    218,690
    
    
    
    
    
    
    
    
    
    
    
    218,690Balance at June 30, 2007
    
    $
    82,045
    
    
    $
    68,743,626
    
    
    $
    6,501,317
    
    
    $
    (3,837,147
    )
    
    $
    71,489,841Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (1,100,657
    )
    
    
    
    
    
    
    (1,100,657
    )Stock options exercised, including
income tax benefits, 48,424 share
    
    
    484
    
    
    
    395,697
    
    
    
    
    
    
    
    
    
    
    
    396,181Stock purchased and retired,
6,412 shares
    
    
    (64
    )
    
    
    (96,362
    )
    
    
    
    
    
    
    
    
    
    
    (96,426
    )Cash dividend, $0.222 per share
    
    
    
    
    
    
    
    
    
    
    (1,726,373
    )
    
    
    
    
    
    
    (1,726,373
    )Paid in capital related to stock
based compensation
    
    
    
    
    
    
    112,768
    
    
    
    
    
    
    
    
    
    
    
    112,768Balance at June 30, 2008
    
    $
    82,465
    
    
    $
    69,155,729
    
    
    $
    3,674,287
    
    
    $
    (3,837,147
    )
    
    $
    69,075,334
 48




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Operating activities:Net income (loss)
    
    $
    (1,100,657
    )
    
    $
    4,234,324
    
    
    $
    4,843,001Adjustments required to reconcile net
income (loss) to net cash from operating
activitiesNet amortization of premium (accretion of
Discount) on mortgage-backed securities
    
    
    20,394
    
    
    
    27,414
    
    
    
    46,883Depreciation
    
    
    1,480,069
    
    
    
    1,733,005
    
    
    
    1,816,028Provision for loan losses
    
    
    6,058,400
    
    
    
    1,102,500
    
    
    
    826,300Other than temporary impairment of
securities
    
    
    195,140
    
    
    
    
    
    
    
    Change in deferred loan
origination fees, net
    
    
    (146,585
    )
    
    
    (43,662
    )
    
    
    (450,748
    )(Gain)/loss on disposal of real estate owned
    
    
    762,961
    
    
    
    (259,537
    )
    
    
    35,330Market adjustments for loans held for sale
    
    
    (9,239
    )
    
    
    (105,600
    )
    
    
    156,000Change in fair value of mortgage
banking derivatives
    
    
    (205,226
    )
    
    
    (131,300
    )
    
    
    239,000Stock compensation
    
    
    112,768
    
    
    
    218,690
    
    
    
    214,761FHLB stock dividends
    
    
    (329,000
    )
    
    
    (356,600
    )
    
    
    (638,600
    )Deferred income tax provision
    
    
    (1,693,521
    )
    
    
    (499,549
    )
    
    
    (271,193
    )Proceeds from loans held for sale
    
    
    137,120,839
    
    
    
    92,325,628
    
    
    
    104,648,344Originations of loans held for sale
    
    
    (130,667,228
    )
    
    
    (97,071,408
    )
    
    
    (107,212,344
    )Gain on the sale of loans, net
    
    
    (779,821
    )
    
    
    (376,533
    )
    
    
    (633,782
    )Increase in cash surrender value of
bank-owned life insurance
    
    
    (798,821
    )
    
    
    (870,832
    )
    
    
    (597,447
    )Net change in other assets
and other liabilities
    
    
    1,237,914
    
    
    
    2,920,034
    
    
    
    348,671Net cash from operating activities
    
    
    11,258,387
    
    
    
    2,846,574
    
    
    
    2,672,854Investing activities:Loans originated
    
    
    (112,293,235
    )
    
    
    (159,977,902
    )
    
    
    (243,702,577
    )Principal repayments on loans
    
    
    99,373,837
    
    
    
    178,384,902
    
    
    
    166,437,367Principal repayments on mortgage-
backed securities held to maturity
    
    
    3,264,230
    
    
    
    3,248,086
    
    
    
    5,201,834Purchase of mortgage-backed securities
held to maturity
    
    
    (32,556,173
    )
    
    
    (1,577,097
    )
    
    
    (1,106,607
    )Purchase of securities held to maturity
    
    
    (48,580,000
    )
    
    
    
    
    
    
    (500,000
    )Maturities and calls of securities held
to maturity
    
    
    99,000,000
    
    
    
    
    
    
    
    Purchase of securities available for sale
    
    
    (2,085,140
    )
    
    
    
    
    
    
    Additions to office properties and
Equipment
    
    
    (124,405
    )
    
    
    (288,688
    )
    
    
    (435,489
    )Acquisition of bank-owned life insurance
    
    
    
    
    
    
    (5,000,000
    )
    
    
    Proceeds from disposals of real estate owned
    
    
    3,637,881
    
    
    
    2,231,674
    
    
    
    1,785,449Investments in nonconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    (131,750
    )Net cash from investing activities
    
    
    9,636,995
    
    
    
    17,020,975
    
    
    
    (72,451,773
    )
 49




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Financing Activities:Proceeds from long-term FHLB advances
    
    
    35,000,000
    
    
    
    
    
    
    
    Payments on long-term FHLB advances
    
    
    (10,000,000
    )
    
    
    (10,000,000
    )
    
    
    (100,012,018
    )Net change in short-term FHLB advances
    
    
    (56,000,000
    )
    
    
    (10,000,000
    )
    
    
    60,000,000Proceeds from repurchase agreement
    
    
    
    
    
    
    
    
    
    
    50,000,000Net change in line of credit
    
    
    (310,000
    )
    
    
    (512,871
    )
    
    
    1,772,871Repayment of note payable
    
    
    
    
    
    
    
    
    
    
    (1,400,780
    )Net change in NOW and passbook savings
    
    
    (880,007
    )
    
    
    10,459,030
    
    
    
    31,083,809Proceeds from issuance of certificates
of deposit
    
    
    152,309,566
    
    
    
    87,367,516
    
    
    
    130,717,293Payments on maturing certificates of deposit
    
    
    (150,096,443
    )
    
    
    (96,638,098
    )
    
    
    (96,163,379
    )Proceeds from issuance of subordinated
Debentures
    
    
    
    
    
    
    10,000,000
    
    
    
    Net increase (decrease) in advances
from borrowers
    
    
    426,935
    
    
    
    444,571
    
    
    
    4,917,117Payment of cash dividend
    
    
    (2,298,373
    )
    
    
    (2,286,382
    )
    
    
    (2,235,692
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (255,742
    )Proceeds from exercise of stock options
    
    
    336,170
    
    
    
    308,272
    
    
    
    144,737Income tax benefit from exercise of stock options
    
    
    60,011
    
    
    
    3,264
    
    
    
    Stock repurchased and retired
    
    
    (96,426
    )
    
    
    (293,541
    )
    
    
    (141,104
    )Net cash from financing activities
    
    
    (31,548,567
    )
    
    
    (11,148,239
    )
    
    
    78,427,112Net increase (decrease) in cash
and cash equivalents
    
    
    (10,653,185
    )
    
    
    8,719,310
    
    
    
    8,648,193Cash and cash equivalents at beginning
of year
    
    
    28,457,579
    
    
    
    19,738,269
    
    
    
    11,090,076Cash and cash equivalents at end of year
    
    $
    17,804,394
    
    
    $
    28,457,579
    
    
    $
    19,738,269Supplemental disclosures of cash flow
information:Cash payments of interest
    
    $
    34,275,694
    
    
    $
    36,659,064
    
    
    $
    28,546,235Cash payments of income taxes
    
    
    954,000
    
    
    
    2,483,000
    
    
    
    2,316,000Supplemental schedule of noncash
investing and financing activities:Transfers to real estate owned
    
    $
    5,843,995
    
    
    $
    3,776,413
    
    
    $
    1,318,807
 50




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  Principles of Consolidation
   Use of Estimates
 Cash Flows
 Interest-bearing Deposits:
 Securities
  51




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  Mortgage Banking Activities
      52




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS (
  Loans Receivable
  Allowance for Loan Losses
   53




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS (
 Transfers of Financial Assets
 Office Properties and Equipment
 Real Estate Owned
 Federal Home Loan Bank (FHLB) Stock
 Long-Term Assets
 Bank-Owned Life Insurance
 Accounting for Purchases of Life Insurance 
Determining the Amount That Can Be Realized in Accordance with FASB Technical Bulletin No. 85-4
(Accounting for Purchases of Life Insurance).
 Income Taxes
 Accounting for Uncertainty in Income Taxes
 54




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS (
  Stock Compensation :
 Comprehensive Income
 Earnings Per Share :
 Loss Contingencies :
 Loan Commitments and Related Financial Instruments
 Restrictions on Cash
 Stockholders Equity
 Dividend Restriction
 Fair Value of Financial Instruments
 55




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS (
 Operating Segments
 Reclassifications
 Effect of Newly Issued But Not Yet Effective Accounting Standards
   56




---



##### Table of Contents



NOTE 2  SECURITIES
  2008Gross
    
    
    Gross
    
    
    EstimatedCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairAmount
    
    
    Gain
    
    
    Loss
    
    
    ValueEquity securities
    
    $
    1,890,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,890,000
  2008Gross
    
    
    Gross
    
    
    EstimatedCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairAmount
    
    
    Gain
    
    
    Loss
    
    
    ValueU.S.
government-sponsored
enterprise securities
    
    $
    7,580,000
    
    
    $
    23,907
    
    
    $
    
    
    
    $
    7,603,907
  57




---



##### Table of Contents



NOTE 2  SECURITIES
 2007Gross
    
    
    Gross
    
    
    EstimatedCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairAmount
    
    
    Gain
    
    
    Loss
    
    
    ValueU.S. government-sponsored enterprise
securities
    
    $
    58,000,000
    
    
    $
    194,376
    
    
    $
    (125,511
    )
    
    $
    58,068,865Due after one year through five years
    
    $
    58,000,000
    
    
    $
    194,376
    
    
    $
    (125,511
    )
    
    $
    58,068,865
    2007
    
    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
    
    $
    
    
    
    $
    
    
    
    $
    15,374,489
    
    
    $
    (125,511
    )
    
    $
    15,374,489
    
    
    $
    (125,511
    )
   58




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##### Table of Contents



NOTE 3  MORTGAGE-BACKED SECURITIES
  2008Gross
    
    
    GrossCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    EstimatedAmount
    
    
    Gain
    
    
    Loss
    
    
    Fair ValueFNMA mortgage-backed securities
    
    $
    54,835,052
    
    
    $
    6,562
    
    
    $
    (1,900,089
    )
    
    
    52,941,525FHLMC mortgage-backed securities
    
    
    316,017
    
    
    
    2,548
    
    
    
    (223
    )
    
    
    318,342$
    55,151,069
    
    
    $
    9,110
    
    
    $
    (1,900,312
    )
    
    $
    53,259,867
 2007Gross
    
    
    GrossCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    EstimatedAmount
    
    
    Gain
    
    
    Loss
    
    
    Fair ValueFNMA mortgage-backed securities
    
    $
    25,368,425
    
    
    $
    
    
    
    $
    (1,582,196
    )
    
    
    23,786,229FHLMC mortgage-backed securities
    
    
    511,095
    
    
    
    4,724
    
    
    
    
    
    
    
    515,819$
    25,879,520
    
    
    $
    4,724
    
    
    $
    (1,582,196
    )
    
    $
    24,302,048
  59




---



##### Table of Contents



NOTE 3  MORTGAGE-BACKED SECURITIES
  2008
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrecognized
    
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    UnrecognizedDescription of Mortgage-backed Securities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossFHLMC mortgage-backed
securities
    
    $
    37,810
    
    
    $
    (223
    )
    
    
    
    
    
    $
    
    
    
    $
    37,810
    
    
    $
    (223
    )FNMA mortgage-backed
securities
    
    
    29,334,236
    
    
    
    (950,413
    )
    
    
    19,624,061
    
    
    
    (949,676
    )
    
    
    48,958,297
    
    
    
    (1,900,089
    )$
    29,399,856
    
    
    $
    (950,636
    )
    
    $
    19,624,061
    
    
    $
    (949,676
    )
    
    $
    48,996,330
    
    
    $
    (1,900,312
    )2007
    
    Less than 12 Months
    
    
    More than 12 Months
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrecognized
    
    
    Fair
    
    
    Unrecognized
    
    
    Fair
    
    
    UnrecognizedDescription of Mortgage-backed Securities
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossFNMA
mortgage-backed
securities
    
    $
    1,496,409
    
    
    $
    (45,478
    )
    
    $
    22,289,820
    
    
    $
    (1,536,718
    )
    
    $
    23,786,229
    
    
    $
    (1,582,196
    )
  60




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##### Table of Contents



NOTE 4  LOANS RECEIVABLE
  2008
    
    
    2007Real estate mortgages:One-to-four family residential
    
    $
    168,532,008
    
    
    $
    163,297,830Home equity line of credit
    
    
    87,876,182
    
    
    
    85,092,530Multi-family residential
    
    
    52,420,774
    
    
    
    48,100,726Commercial
    
    
    174,403,925
    
    
    
    184,849,852Commercial equity line of credit
    
    
    36,913,491
    
    
    
    33,207,626Land
    
    
    73,544,594
    
    
    
    74,414,426Construction  residential
    
    
    55,442,114
    
    
    
    63,315,868Construction  commercial
    
    
    44,106,070
    
    
    
    38,007,505Total real estate mortgages
    
    
    693,239,158
    
    
    
    690,286,363Non real estate loans
    
    
    33,592,529
    
    
    
    30,454,898Total loans receivable
    
    
    726,831,687
    
    
    
    720,741,261Net deferred loan origination fees
    
    
    (2,685,309
    )
    
    
    (2,831,894
    )Allowance for loan losses
    
    
    (9,653,972
    )
    
    
    (4,580,549
    )Loans receivable, net
    
    $
    714,492,406
    
    
    $
    713,328,818
  2008
    
    
    2007
    
    
    2006Beginning balance
    
    $
    4,580,549
    
    
    $
    4,674,681
    
    
    $
    4,312,274Provision for loan losses
    
    
    6,058,400
    
    
    
    1,102,500
    
    
    
    826,300Charge-offs
    
    
    (985,756
    )
    
    
    (1,196,632
    )
    
    
    (463,893
    )Recoveries
    
    
    779
    
    
    
    
    
    
    
    Ending balance
    
    $
    9,653,972
    
    
    $
    4,580,549
    
    
    $
    4,674,681
 61




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NOTE 4  LOANS RECEIVABLE
  2008
    
    
    2007Loans on non-accrual status:Real estate mortgages:One-to-four family residential
    
    $
    6,452,812
    
    
    $
    5,265,002Commercial
    
    
    3,001,192
    
    
    
    3,121,632Multi-family residential
    
    
    152,187
    
    
    
    Construction and land
    
    
    12,349,846
    
    
    
    4,663,095Non real estate loans
    
    
    533,113
    
    
    
    603,072Total loans on non-accrual status
    
    
    22,489,150
    
    
    
    13,652,801Loans past due 90 days, still on accrual status:Real estate mortgages:One-to-four family residential
    
    
    1,233,058
    
    
    
    Commercial
    
    
    1,200,894
    
    
    
    Construction and land
    
    
    542,699
    
    
    
    875,593Total non-accrual and past due loans
    
    $
    25,465,801
    
    
    $
    14,528,394
   62




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##### Table of Contents



NOTE 5  MORTGAGE BANKING ACTIVITIES
  2008
    
    
    2007Loans held for sale
    
    $
    7,872,155
    
    
    $
    15,043,780Less: Allowance to adjust to lower of cost or market
    
    
    (41,161
    )
    
    
    (50,400
    )Loans held for sale, net
    
    $
    7,830,994
    
    
    $
    14,993,380
  2008
    
    
    2007
    
    
    2006Mortgage loan servicing fees
    
    $
    1,992,311
    
    
    $
    1,970,702
    
    
    $
    1,954,692Amortization of mortgage servicing rights
    
    
    (1,525,348
    )
    
    
    (1,313,137
    )
    
    
    (1,359,003
    )Market adjustment for loans held for sale
    
    
    9,239
    
    
    
    105,600
    
    
    
    (156,000
    )Change in fair value of mortgage banking derivatives
    
    
    205,226
    
    
    
    131,300
    
    
    
    (239,000
    )Gross realized:Gains on sales of loans
    
    
    2,251,791
    
    
    
    1,448,206
    
    
    
    1,830,073Losses on sales of loans
    
    
    (1,471,970
    )
    
    
    (1,071,673
    )
    
    
    (1,196,291
    )$
    1,461,249
    
    
    $
    1,270,998
    
    
    $
    834,471
   2008
    
    
    2007
    
    
    2006Beginning balance
    
    $
    4,426,296
    
    
    $
    4,806,836
    
    
    $
    5,001,474Originated
    
    
    1,497,835
    
    
    
    932,597
    
    
    
    1,164,365Amortized
    
    
    (1,525,348
    )
    
    
    (1,313,137
    )
    
    
    (1,359,003
    )Ending balance
    
    $
    4,398,783
    
    
    $
    4,426,296
    
    
    $
    4,806,836
  63




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NOTE 6  OFFICE PROPERTIES AND EQUIPMENT
  2008
    
    
    2007Land and land improvements
    
    $
    1,034,892
    
    
    $
    1,034,892Building and building improvements
    
    
    5,553,076
    
    
    
    5,553,076Leasehold improvements
    
    
    5,949,232
    
    
    
    5,949,232Furniture and equipment
    
    
    12,532,524
    
    
    
    12,408,11925,069,724
    
    
    
    24,945,319Less accumulated depreciation and amortization
    
    
    (15,837,013
    )
    
    
    (14,356,944
    )$
    9,232,711
    
    
    $
    10,588,375
 NOTE 7  DEPOSITS
  2008
    
    
    2007Amount
    
    
    %
    
    
    Amount
    
    
    %12 months or less
    
    $
    443,844,021
    
    
    
    89.3
    %
    
    $
    443,536,475
    
    
    
    89.6
    %13 to 24 months
    
    
    30,125,497
    
    
    
    6.1
    
    
    
    26,314,568
    
    
    
    5.325 to 36 months
    
    
    9,058,070
    
    
    
    1.8
    
    
    
    13,578,346
    
    
    
    2.837 to 48 months
    
    
    14,050,761
    
    
    
    2.8
    
    
    
    11,435,837
    
    
    
    2.3$
    497,078,349
    
    
    
    100.0
    %
    
    $
    494,865,226
    
    
    
    100.0
    %Weighted average rate on certificates
of deposit
    
    
    
    
    
    
    4.18
    %
    
    
    
    
    
    
    5.06
    %
    64




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##### Table of Contents



NOTE 8  ADVANCES FROM THE FEDERAL HOME LOAN BANK OF CINCINNATI
 Short-Term Advances
  Long-Term Advances
 Maturity
    
    Interest rate
    
    
    2008
    
    
    2007March 2008
    
    
    5.64
    %
    
    
    
    
    
    
    10,000,000January 2015
    
    
    2.82
    %
    
    
    15,000,000
    
    
    
    January 2015
    
    
    3.04
    %
    
    
    15,000,000
    
    
    
    April 2018
    
    
    3.17
    %
    
    
    5,000,000
    
    
    
    $
    35,000,000
    
    
    $
    10,000,000Weighted average interest rate
    
    
    
    
    
    
    2.96
    %
    
    
    5.64
    %
   65




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##### Table of Contents



NOTE 9  SUBORDINATED DEBENTURES, NOTES PAYABLE AND OTHER BORROWINGS
 Line of Credit
 Subordinated Debt
    Repurchase Agreement
 66




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##### Table of Contents



NOTE 10  FEDERAL INCOME TAXES
  2008
    
    
    2007
    
    
    2006Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Computed expected tax
    
    $
    (768,433
    )
    
    
    (35.0
    %)
    
    $
    2,084,109
    
    
    
    35.0
    %
    
    $
    2,413,425
    
    
    
    35.0
    %Increase (decrease) in tax
resulting from:Benefit of graduated rates
    
    
    21,955
    
    
    
    1.0
    
    
    
    (59,546
    )
    
    
    (1.0
    )
    
    
    (68,955
    )
    
    
    (1.0
    )Affordable housing tax credit
    
    
    (81,758
    )
    
    
    (3.7
    )
    
    
    (111,645
    )
    
    
    (1.9
    )
    
    
    (111,645
    )
    
    
    (1.6
    )Bank-owned life insurance
    
    
    (271,599
    )
    
    
    (12.4
    )
    
    
    (296,083
    )
    
    
    (5.0
    )
    
    
    (203,132
    )
    
    
    (2.9
    )Stock compensation
    
    
    38,341
    
    
    
    1.7
    
    
    
    57,076
    
    
    
    1.0
    
    
    
    51,757
    
    
    
    0.8Other, net
    
    
    (33,371
    )
    
    
    (1.5
    )
    
    
    46,361
    
    
    
    0.8
    
    
    
    (28,951
    )
    
    
    (0.5
    )$
    (1,094,865
    )
    
    
    (49.9
    %)
    
    $
    1,720,272
    
    
    
    28.9
    %
    
    $
    2,052,499
    
    
    
    29.8
    %
  2008
    
    
    2007Deferred tax assets:Loan loss reserves
    
    $
    2,283,673
    
    
    $
    1,317,348Deferred compensation
    
    
    1,279,844
    
    
    
    1,081,068Deferred loan fees, net
    
    
    131,806
    
    
    
    Other
    
    
    167,251
    
    
    
    227,637Total gross deferred tax assets
    
    
    3,862,574
    
    
    
    2,626,053Deferred tax liabilities:Deferred loan costs
    
    
    
    
    
    
    (304,861
    )FHLB stock dividend
    
    
    (1,983,373
    )
    
    
    (1,871,513
    )Originated mortgage servicing asset
    
    
    (1,495,586
    )
    
    
    (1,504,941
    )Fixed assets
    
    
    (607,216
    )
    
    
    (848,122
    )Prepaid franchise tax
    
    
    (189,663
    )
    
    
    (171,972
    )Unrealized losses on loans held for sale
    
    
    (26,426
    )
    
    
    (440
    )Other
    
    
    (109,482
    )
    
    
    (100,549
    )Total gross deferred tax liabilities
    
    
    (4,411,746
    )
    
    
    (4,802,398
    )Net deferred tax liability
    
    $
    (549,172
    )
    
    $
    (2,176,345
    )
  67




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NOTE 10  FEDERAL INCOME TAXES
  NOTE 11  LEASES
  Leases With
    
    
    Leases WithUnrelated
    
    
    Related
    
    
    TotalYear ending June 30,
    
    Parties
    
    
    Parties
    
    
    Leases2009
    
    $
    671,427
    
    
    $
    222,268
    
    
    $
    893,6952010
    
    
    471,111
    
    
    
    222,268
    
    
    
    693,3792011
    
    
    265,827
    
    
    
    176,676
    
    
    
    442,5032012
    
    
    220,002
    
    
    
    153,880
    
    
    
    373,8822013
    
    
    77,396
    
    
    
    104,320
    
    
    
    181,716Thereafter
    
    
    
    
    
    
    79,540
    
    
    
    79,540Total minimum lease payments
    
    $
    1,705,763
    
    
    $
    958,952
    
    
    $
    2,664,715
  NOTE 12  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
  68




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NOTE
12  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
     2008
    
    2007Commitments to fund variable-rate mortgage loans
    
    $
    6,412,000
    
    
    $
    12,626,900Commitments to fund equity lines of credit
    
    
    91,781,000
    
    
    
    99,257,000Undisbursed portion of loan proceeds
    
    
    46,367,000
    
    
    
    60,795,479Standby letters of credit
    
    
    2,486,000
    
    
    
    4,051,000
  69




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##### Table of Contents



NOTE
13  REGULATORY CAPITAL
     70




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##### Table of Contents



NOTE
13  REGULATORY CAPITAL
  To Be WellRequired
    
    Capitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action RegulationsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio2008Total Capital to risk weighted assets
    
    
    90,286
    
    
    
    12.99
    %
    
    
    55,584
    
    
    
    8.00
    %
    
    
    69,480
    
    
    
    10.00
    %Tier 1 (Core) Capital to risk weighted assets
    
    
    83,972
    
    
    
    12.09
    %
    
    
    27,792
    
    
    
    4.00
    %
    
    
    41,688
    
    
    
    6.00
    %Tier 1 (Core) Capital to adjusted total assets
    
    
    83,972
    
    
    
    9.69
    %
    
    
    34,704
    
    
    
    4.00
    %
    
    
    43,380
    
    
    
    5.00
    %Tangible Capital to adjusted total assets
    
    
    83,972
    
    
    
    9.69
    %
    
    
    13,014
    
    
    
    1.50
    %
    
    
    N/A
    
    
    
    N/A
 To Be WellRequired
    
    Capitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action RegulationsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio2007Total Capital to risk weighted assets
    
    
    91,323
    
    
    
    13.08
    %
    
    
    55,838
    
    
    
    8.00
    %
    
    
    69,798
    
    
    
    10.00
    %Tier 1 (Core) Capital to risk weighted assets
    
    
    87,636
    
    
    
    12.56
    %
    
    
    27,919
    
    
    
    4.00
    %
    
    
    41,879
    
    
    
    6.00
    %Tier 1 (Core) Capital to adjusted total assets
    
    
    87,636
    
    
    
    9.72
    %
    
    
    36,073
    
    
    
    4.00
    %
    
    
    45,091
    
    
    
    5.00
    %Tangible Capital to adjusted total assets
    
    
    87,636
    
    
    
    9.72
    %
    
    
    13,527
    
    
    
    1.50
    %
    
    
    NA
    
    
    
    NA
 71




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##### Table of Contents



NOTE
14  RELATED PARTY TRANSACTIONS
  Beginning balance
    
    
    $  7,579,327New Loans
    
    
    Repayments
    
    
    (2,350,539
    )Ending balance
    
    
    $  5,228,788
 NOTE
15  STOCK OPTIONS
     Outstanding
    
    
    ExercisableWeighted Average
    
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    
    
    
    
    Remaining
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    
    
    
    Contractual
    
    
    
    
    
    
    ExercisePrice
    
    
    
    
    
    Number
    
    
    Life
    
    
    Number
    
    
    Price$5.49
    
    
    
    
    $
    6.10
    
    
    
    87,635
    
    
    
    1.64
    
    
    
    87,635
    
    
    $
    5.72$6.75
    
    
    
    
    $
    7.76
    
    
    
    121,778
    
    
    
    2.22
    
    
    
    121,778
    
    
    $
    7.34$8.32
    
    
    
    
    $
    13.64
    
    
    
    324,013
    
    
    
    6.09
    
    
    
    211,944
    
    
    $
    10.97Total
    
    
    
    
    
    
    
    
    
    533,426
    
    
    
    4.48
    
    
    
    421,357
    
    
    $
    8.83
  72




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##### Table of Contents



NOTE
15  STOCK OPTIONS
  2008WeightedAverageExerciseShares
    
    
    PriceOutstanding beginning of year
    
    
    582,150
    
    
    $
    9.12Forfeited
    
    
    (300
    )
    
    
    10.64Exercised
    
    
    (48,424
    )
    
    
    6.94Granted
    
    
    
    
    
    
    Outstanding end of year
    
    
    533,426
    
    
    $
    9.32Exercisable end of year
    
    
    421,357
    
    
    $
    8.83
       2007
    
    2006Risk-free interest rate
    
    
    4.56
    %
    
    
    4.57
    %Dividend yield
    
    
    2.74
    %
    
    
    2.67
    %Expected volatility
    
    
    24.95
    %
    
    
    31.56Expected life in years
    
    
    9.14
    
    
    
    9.72
  73




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##### Table of Contents



NOTE
16  EARNINGS (LOSS) PER SHARE
  2008Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic earnings (loss) per share:Income available to common shareholders
    
    $
    (1,100,657
    )
    
    
    7,765,780
    
    
    $
    (0.14
    )Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    
    
    
    
    (0.00
    )Diluted earnings (loss) per share:Income available to common shareholders
    
    $
    (1,100,657
    )
    
    
    7,765,780
    
    
    $
    (0.14
    )
 2007Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic earnings (loss) per share:Income available to common shareholders
    
    $
    4,234,324
    
    
    
    7,724,436
    
    
    $
    0.55Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    98,571
    
    
    
    (0.01
    )Diluted earnings (loss) per share::Income available to common shareholders
    
    $
    4,234,324
    
    
    
    7,823,007
    
    
    $
    0.54
 2006Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic earnings (loss) per share:Income available to common shareholders
    
    $
    4,843,001
    
    
    
    7,716,770
    
    
    $
    0.63Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    129,199
    
    
    
    (0.01
    )Diluted earnings (loss) per share:Income available to common shareholders
    
    $
    4,843,001
    
    
    
    7,845,969
    
    
    $
    0.62
  74




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NOTE
17  FAIR VALUE OF FINANCIAL INSTRUMENTS
  June 30, 2008
    
    June 30, 2007Carrying
    
    Estimated Fair
    
    Carrying
    
    Estimated FairAmount
    
    Value
    

Amount
    
    Value(in thousands)Assets:Cash and amounts due from
depository institutions
    
    $
    7,456
    
    
    $
    7,456
    
    
    $
    20,293
    
    
    $
    20,293Interest-bearing deposits
    
    
    701
    
    
    
    701
    
    
    
    622
    
    
    
    622Federal funds sold
    
    
    9,648
    
    
    
    9,648
    
    
    
    7,542
    
    
    
    7,542Securities held to maturity
    
    
    7,580
    
    
    
    7,604
    
    
    
    58,000
    
    
    
    58,069Equity securities
    
    
    1,890
    
    
    
    1,890
    
    
    
    
    
    
    
    Mortgage-backed securities held to
maturity
    
    
    55,151
    
    
    
    53,259
    
    
    
    25,880
    
    
    
    24,557Loans receivable
    
    
    714,492
    
    
    
    716,047
    
    
    
    713,329
    
    
    
    719,711Loans receivable held for sale, net
    
    
    7,831
    
    
    
    7,831
    
    
    
    14,993
    
    
    
    14,993Federal Home Loan Bank stock
    
    
    12,641
    
    
    NA
        
    
    12,312
    
    
    NAAccrued interest receivable
    
    
    4,345
    
    
    
    4,345
    
    
    
    4,197
    
    
    
    4,197Mandatory forward sales contracts
    
    
    75
    
    
    
    75
    
    
    
    244
    
    
    
    244Liabilities:Demand deposits and passbook
savings
    
    
    (162,307
    )
    
    
    (162,307
    )
    
    
    (163,187
    )
    
    
    (163,187
    )Time deposits
    
    
    (497,078
    )
    
    
    (503,694
    )
    
    
    (494,865
    )
    
    
    (495,641
    )Line of credit
    
    
    (950
    )
    
    
    (950
    )
    
    
    (1,260
    )
    
    
    (1,260
    )Advances from the Federal Home
Loan Bank of Cincinnati
    
    
    (44,000
    )
    
    
    (43,998
    )
    
    
    (75,000
    )
    
    
    (75,019
    )Repurchase agreement
    
    
    (50,000
    )
    
    
    (51,455
    )
    
    
    (50,000
    )
    
    
    (49,096
    )Subordinated debentures
    
    
    (20,000
    )
    
    
    (20,000
    )
    
    
    (20,000
    )
    
    
    (20,000
    )Accrued interest payable
    
    
    (444
    )
    
    
    (444
    )
    
    
    (444
    )
    
    
    (444
    )Commitments to make loans
intended to be sold
    
    
    8
    
    
    
    8
    
    
    
    (367
    )
    
    
    (367
    )
  Cash and amounts due from depository institutions, interest- bearing deposits, and federal funds
sold
 Securities and mortgage-backed securities.
 75




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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.
 Mandatory forward sales contracts.
 Demand deposits and time deposits.
 Line of credit.
 Advances from the Federal Home Loan Bank of Cincinnati
 Notes payable and subordinated debentures
 Accrued interest receivable and accrued interest payable
 Commitments to make loans intended for sale
 Off-balance-sheet instruments.
 76




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##### Table of Contents



NOTE
18  PARENT COMPANY
  CONDENSED STATEMENTS OF FINANCIAL CONDITION
 2008
    
    
    2007Cash and amounts due from depository institutions
    
    $
    10,944
    
    
    $
    30,368Prepaid expenses and other assets
    
    
    2,690,787
    
    
    
    2,028,039Investment in Bank subsidiary
    
    
    83,971,772
    
    
    
    87,635,883Investment in non-Bank subsidiaries
    
    
    3,293,222
    
    
    
    3,122,905Total assets
    
    $
    89,966,725
    
    
    $
    92,817,195Accrued expenses and other liabilities
    
    $
    891,391
    
    
    $
    1,327,354Subordinated debentures
    
    
    20,000,000
    
    
    
    20,000,000Stockholders equity
    
    
    69,075,334
    
    
    
    71,489,841Total liabilities and stockholders equity
    
    $
    89,966,725
    
    
    $
    92,817,195
 CONDENSED STATEMENTS OF OPERATIONS
 2008
    
    
    2007
    
    
    2006Income:Mortgage banking activities
    
    $
    9,521
    
    
    $
    24,572
    
    
    $
    9,055Dividends from Bank subsidiary
    
    
    4,000,000
    
    
    
    
    
    
    
    2,400,000Interest Income
    
    
    26
    
    
    
    38
    
    
    
    4,009,547
    
    
    
    24,610
    
    
    
    2,409,055Expenses:Interest expense
    
    
    1,463,602
    
    
    
    1,549,920
    
    
    
    693,292General and administrative
    
    
    718,800
    
    
    
    374,487
    
    
    
    213,0352,182,402
    
    
    
    1,924,407
    
    
    
    906,327Income (loss) before federal income taxes and
equity in undistributed net income of subsidiaries
    
    
    1,827,145
    
    
    
    (1,899,797
    )
    
    
    1,502,728Federal income tax benefit
    
    
    738,771
    
    
    
    645,931
    
    
    
    304,956Income (loss) before equity in undistributed
net income of subsidiaries
    
    
    2,565,916
    
    
    
    (1,253,866
    )
    
    
    1,807,684Equity in undistributed net income of subsidiaries
    
    
    (3,666,573
    )
    
    
    5,488,190
    
    
    
    3,035,317Net income (loss)
    
    $
    (1,100,657
    )
    
    $
    4,234,324
    
    
    $
    4,843,001
 77




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NOTE
18  PARENT COMPANY
 CONDENSED STATEMENTS OF CASH FLOWS
 2008
    
    
    2007
    
    
    2006Operating activities:Net income (loss)
    
    $
    (1,100,657
    )
    
    $
    4,234,324
    
    
    $
    4,843,001Equity in undistributed net income of subsidiaries
    
    
    3,666,573
    
    
    
    (5,488,190
    )
    
    
    (3,035,317
    )Other, net
    
    
    (818,722
    )
    
    
    (450,283
    )
    
    
    (285,743
    )Net cash from (used in) operating activities
    
    
    1,747,194
    
    
    
    (1,704,149
    )
    
    
    1,521,941Investing activities:Advance to subsidiary
    
    
    232,000
    
    
    
    (52,500
    )
    
    
    800,000Investment in subsidiary
    
    
    
    
    
    
    (6,000,000
    )
    
    
    Net decrease in cash from investing activities
    
    
    232,000
    
    
    
    (6,052,500
    )
    
    
    800,000Financing activities:Repayment on note payable
    
    
    
    
    
    
    
    
    
    
    Proceeds from subordinated debentures
    
    
    
    
    
    
    10,000,000
    
    
    
    Proceeds and income tax benefit from exercise
of stock options
    
    
    396,181
    
    
    
    311,536
    
    
    
    144,737Stock purchased and retired
    
    
    (96,426
    )
    
    
    (293,541
    )
    
    
    (141,104
    )Dividends paid
    
    
    (2,298,373
    )
    
    
    (2,286,382
    )
    
    
    (2,235,692
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (255,742
    )Net cash from (used in) financing activities
    
    
    (1,998,618
    )
    
    
    7,731,613
    
    
    
    (2,487,801
    )Net increase (decrease) in cash and
cash-equivalents
    
    
    (19,424
    )
    
    
    (25,036
    )
    
    
    (165,859
    )Cash and cash equivalents at beginning of year
    
    
    30,368
    
    
    
    55,404
    
    
    
    221,263Cash and cash equivalents at end of year
    
    $
    10,944
    
    
    $
    30,368
    
    
    $
    55,404
 78




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NOTE 19  EMPLOYEE BENEFIT PLANS
 401(k) Savings Plan
  Supplemental Executive Retirement Plan
 79




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##### Table of Contents



NOTE 20  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 (1)
 Quarters for the year ended June 30, 2008First
    
    
    Second
    
    
    Third
    
    
    FourthInterest income
    
    $
    15,292
    
    
    $
    14,467
    
    
    $
    13,573
    
    
    $
    13,154Interest expense
    
    
    9,435
    
    
    
    9,201
    
    
    
    8,382
    
    
    
    7,257Net interest income
    
    
    5,857
    
    
    
    5,266
    
    
    
    5,191
    
    
    
    5,897Provision for loan losses (2)
    
    
    593
    
    
    
    82
    
    
    
    819
    
    
    
    4,564Non-interest income
    
    
    798
    
    
    
    834
    
    
    
    1,214
    
    
    
    388Non-interest expense
    
    
    5,286
    
    
    
    5,025
    
    
    
    5,193
    
    
    
    5,302Income before Federal income taxes
    
    
    776
    
    
    
    993
    
    
    
    393
    
    
    
    (4,357
    )Federal income taxes
    
    
    165
    
    
    
    261
    
    
    
    92
    
    
    
    (1,612
    )Net income
    
    $
    611
    
    
    $
    732
    
    
    $
    301
    
    
    $
    (2,745
    )Basic earnings per share
    
    $
    0.08
    
    
    $
    0.09
    
    
    $
    0.04
    
    
    $
    (0.35
    )Diluted earnings per share
    
    $
    0.08
    
    
    $
    0.09
    
    
    $
    0.04
    
    
    $
    (0.35
    )
 Quarters for the year ended June 30, 2007First
    
    
    Second
    
    
    Third
    
    
    FourthInterest income
    
    $
    15,710
    
    
    $
    15,659
    
    
    $
    15,196
    
    
    $
    15,455Interest expense
    
    
    8,917
    
    
    
    9,227
    
    
    
    9,101
    
    
    
    9,461Net interest income
    
    
    6,793
    
    
    
    6,432
    
    
    
    6,095
    
    
    
    5,994Provision for loan losses
    
    
    (160
    )
    
    
    252
    
    
    
    (1
    )
    
    
    1,012Non-interest income
    
    
    795
    
    
    
    938
    
    
    
    853
    
    
    
    790Non-interest expense
    
    
    5,471
    
    
    
    5,484
    
    
    
    5,302
    
    
    
    5,376Income before Federal income taxes
    
    
    2,277
    
    
    
    1,634
    
    
    
    1,647
    
    
    
    396Federal income taxes
    
    
    714
    
    
    
    497
    
    
    
    470
    
    
    
    39Net Income
    
    $
    1,563
    
    
    $
    1,137
    
    
    $
    1,177
    
    
    $
    357Basic earnings per share
    
    $
    0.20
    
    
    $
    0.15
    
    
    $
    0.15
    
    
    $
    0.05Diluted earnings per share
    
    $
    0.20
    
    
    $
    0.15
    
    
    $
    0.15
    
    
    $
    0.05
 
 (1)
    
    The total of the four quarterly amounts may not equal the full year amount due to
rounding.(2)
    
    In the fourth quarter of the fiscal year ended June 30, 2008, the Company provided
$4,731,000 for loan losses. This provision was based on managements judgment about credit
risk in the loan portfolio and additional specific reserves established for impaired loans. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
  80




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Managements Annual Report on Internal Control Over Financial Reporting
     /s/ John R. Male
    
    /s/ C. Keith SwaneyChairman of the Board
    
    President, Chief Operating Officerand Chief Executive Officer
    
    and Treasurer
 81




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82




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant
 Directors
 Proposal I  Election of Directors
 Executive Officers
 Description of Business  Executive Officers of the Company
 Corporate Governance
 Corporate GovernanceMeetings and
Committees of the Board of DirectorsAudit Committee
 Compliance with Section 16(a) of the Exchange Act
 Section 16(a) Beneficial Ownership
Reporting Compliance
 Code of Ethics
  
 Item 11. Executive Compensation
 Executive Compensation Director
Compensation
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
 (a) and (b)
    
    The information required by this item is incorporated herein by reference to the
sections captioned Proposal I  Election of Directorsand Voting Securities and Principal
Holders Thereofof the Proxy Statement.(c)
    
    Management knows of no arrangements, including any pledge by any person of securities of the
Bank, the operation of which may at a subsequent date result in a change in control of the
registrant.(d)
    
    The following table sets forth certain information with respect to the Companys equity
compensation plans as of June 30, 2008.
 83




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##### Table of Contents



(c)Number of securities remaining(a)
    
    
    (b)

  
    
    available for future issuanceNumber of securities to be issued
    
    
    Weighted-average exercise
    
    
    under equity compensationupon exercise of outstanding
    
    
    price of outstanding
    
    
    plans (excluding securitiesoptions, warrants & rights (1)
    
    
    options, warrants and rights
    
    
    reflected in column (a))(1)Equity compensation plans
approved by security holders
    
    
    533,426
    
    
    $
    9.32
    
    
    
    116,166Equity compensation plans not
approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    533,426
    
    
    
    9.32
    
    
    
    116,166
 
 (1)
    
    Adjusted for a 10% stock dividend paid on the Common Stock on September 1, 1997, a 50% stock
dividend paid on the Common Stock on August 17, 1998, a 10% stock dividend paid on the Common
Stock on September 7, 1999, a 10% stock dividend paid on the Companys Common Stock on
September 1, 2000, a 10% stock dividend paid on the Common Stock on August 31, 2001, a 10%
stock dividend paid on the Common Stock on August 30, 2002, a 10% dividend paid on the Common
Stock on August 29, 2003, a 10% dividend paid on the Common Stock on August 31, 2004 and a 10%
dividend paid on the Common Stock on August 31, 2005. 
 Item 13. Certain Relationships and Related Transactions, and Director Independence
 Certain Relationships and Related Transactions
 Proposal 1  Election of Directors
 Corporate Governance
 Other Information Relating to Directors and Executive Officers
 
 Item 14. Principal Accounting Fees and Services
 Independent Registered Public Accounting Firm
 
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)
    1.
    
    Report of Independent Registered Public Accounting Firm (incorporated by reference
to Item 8 of this Annual Report).Consolidated Financial Statements (incorporated by reference to Item 8 of this
Annual Report).
 (a)
    
    Consolidated Statements of Financial Condition, at June 30,
2008 and 2007(b)
    
    Consolidated Statements of Operations for the Years Ended June
30, 2008, 2007 and 2006(c)
    
    Consolidated Statements of Stockholders Equity for the Years
Ended June 30, 2008, 2007 and 2006(d)
    
    Consolidated Statements of Cash Flows for the Years Ended June
30, 2008, 2007 and 2006
 84




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##### Table of Contents



(e)
    

   Notes to Consolidated Financial Statements.
 2.
    
    All schedules have been omitted as the required information is either inapplicable or
included in the Notes to Consolidated Financial Statements.3.
    
    Exhibits and Index to ExhibitsThe following exhibits are either attached to or incorporated by reference in this Annual Report on Form 10-K.
 No.
    
    Description3.1
    
    Articles of Incorporation, as amended and restated
    
    
    (2
    )3.2
    
    Code of Regulations, as amended and restated
    
    
    (6
    )3.3
    
    Bylaws, as amended and restated
    
    
    (5
    )4
    
    Specimen Common Stock Certificate
    
    
    (1
    )10.1
    
    Park View Federal Savings Bank Conversion Stock Option Plan 
    
    
    (1
    )10.2
    
    PVF Capital Corp. 1996 Incentive Stock Option Plan 
    
    
    (1
    )10.3
    
    Severance Agreements between PVF Capital Corporation and
each of John R. Male, C. Keith Swaney and Jeffrey N. Male 
    
    
    (7
    )10.4
    
    Park View Federal Savings Bank Supplemental Executive Retirement Plan as
amended and restated
    
    
    (8
    )10.5
    
    PVF Capital Corp. 2000 Incentive Stock Option Plan and Deferred Compensation
Plan
    
    
    (3
    )10.6
    
    Management Incentive Compensation Plan
    
    
    (9
    )14
    
    Code of Ethics
    
    
    (4
    )21
    
    Subsidiaries of the Registrant23.1
    
    Consent of Crowe Horwath LLP31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer32
    
    Section 1350 Certifications
 
 (1)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 1996 (Commission File No. 0-24948).(2)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2002 (Commission File No. 0-24948).(3)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2003 (Commission File No. 0-24948).(4)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2004 (Commission File No. 0-24948).(5)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2005 (Commission File No. 0-24948).(6)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K filed on February 6,
2008 (Commission File No. 0-24948).(7)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the quarter
ended March 31, 2008 (Commission File No. 0-24948).(8)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2006 (Commission File No. 0-24948).(9)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended
June 30, 2007 (Commission File No. 0-24948).
    
    Management contract or compensatory plan or arrangement.(b)
    
    Exhibits.The exhibits required by Item 601 of Regulation S-K are either filed as
part of this Annual Report on Form 10-K or incorporated herein by reference.(c)
    
    Financial Statements and Schedules Excluded from Annual Report.There are no other
financial statements and financial statement schedules which were excluded from the Annual
Report to Stockholders pursuant to Rule 14a-3(b) which are required to be included herein. 85




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SIGNATURES
  PVF CAPITAL CORP.September 11, 2008
    By:

/s/
John R. MaleJohn R. MaleChairman of the Board of Directors
and 
Chief Executive Officer  /s/ John R. Male

John R. Male
    
    September 11, 2008Chairman of the Board of Directors andChief Executive Officer(Principal Executive Officer)/s/ C. Keith Swaney

C. Keith Swaney
    
    September 11, 2008President, Chief Operating Officer andTreasurer(Principal Financial and Accounting Officer)/s/ Robert K. Healey

Robert K. Healey
    
    September 11, 2008Director/s/ Stanley T. Jaros

Stanley T. Jaros
    
    September 11, 2008Director/s/ Stuart D. Neidus

Stuart D. Neidus
    
    September 11, 2008Director/s/ Gerald A. Fallon

Gerald A. Fallon
    
    September 11, 2008Director/s/ Raymond J. Negrelli

Raymond J. Negrelli
    
    September 11, 2008Director/s/ Ronald D. Holman, II

Ronald D. Holman, II
    
    September 11, 2008Director