##### 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, 2007                    
OR
 o
    
    TRANSITIONAL 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 
of Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)30000 Aurora Road, Solon, Ohio
    
    44139(Address of Principal Executive Offices)
    
    (Zip Code)
 (440) 248-7171
  Title of each class
    
    Name of each exchange on which registeredCommon Stock (par value $.01 per share)
    
    NASDAQ Capital Market
 None
 o þ
 o þ
 þ o
 þ
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
 None.




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEX-10.3EX-10.6EX-21EX-23.1EX-31.1EX-31.2EX-32    Table of Contents  
 PART I
 
 Item 1. Business
 General
     Pending Merger Agreement
   Market Area
   1




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##### Table of Contents



Lending Activities
 Loan Portfolio Composition
   At June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Real estate loans receivable held for investment:One-to-four family residential
    
    $
    163,298
    
    
    
    22.89
    %
    
    $
    174,575
    
    
    
    23.72
    %
    
    $
    148,956
    
    
    
    22.55
    %
    
    $
    128,210
    
    
    
    20.99
    %
    
    $
    139,774
    
    
    
    24.22
    %Home equity line of credit
    
    
    85,093
    
    
    
    11.93
    
    
    
    94,450
    
    
    
    12.83
    
    
    
    97,692
    
    
    
    14.79
    
    
    
    83,505
    
    
    
    13.67
    
    
    
    67,822
    
    
    
    11.75Multifamily residential
    
    
    48,101
    
    
    
    6.74
    
    
    
    45,716
    
    
    
    6.21
    
    
    
    33,505
    
    
    
    5.07
    
    
    
    38,777
    
    
    
    6.35
    
    
    
    40,942
    
    
    
    7.10Commercial
    
    
    184,850
    
    
    
    25.91
    
    
    
    170,392
    
    
    
    23.15
    
    
    
    171,331
    
    
    
    25.94
    
    
    
    175,323
    
    
    
    28.71
    
    
    
    146,686
    
    
    
    25.42Commercial equity line of credit
    
    
    33,208
    
    
    
    4.66
    
    
    
    34,064
    
    
    
    4.63
    
    
    
    31,875
    
    
    
    4.83
    
    
    
    38,113
    
    
    
    6.24
    
    
    
    34,081
    
    
    
    5.91Land
    
    
    74,414
    
    
    
    10.43
    
    
    
    77,242
    
    
    
    10.49
    
    
    
    68,165
    
    
    
    10.32
    
    
    
    54,047
    
    
    
    8.85
    
    
    
    52,963
    
    
    
    9.18Construction  residential
    
    
    63,316
    
    
    
    8.88
    
    
    
    84,146
    
    
    
    11.43
    
    
    
    75,460
    
    
    
    11.42
    
    
    
    70,833
    
    
    
    11.60
    
    
    
    73,160
    
    
    
    12.68Construction  multi-family
    
    
    6,397
    
    
    
    0.90
    
    
    
    7,955
    
    
    
    1.08
    
    
    
    0
    
    
    
    0.00
    
    
    
    0
    
    
    
    0.00
    
    
    
    217
    
    
    
    0.04Construction  commercial
    
    
    31,610
    
    
    
    4.43
    
    
    
    33,757
    
    
    
    4.59
    
    
    
    24,355
    
    
    
    3.69
    
    
    
    15,679
    
    
    
    2.57
    
    
    
    16,496
    
    
    
    2.86Non-real estate
    
    
    30,455
    
    
    
    4.27
    
    
    
    21,824
    
    
    
    2.96
    
    
    
    17,300
    
    
    
    2.62
    
    
    
    13,951
    
    
    
    2.29
    
    
    
    11,761
    
    
    
    2.04720,742
    
    
    
    101.04
    
    
    
    744,121
    
    
    
    101.09
    
    
    
    668,639
    
    
    
    101.23
    
    
    
    618,438
    
    
    
    101.27
    
    
    
    583,902
    
    
    
    101.20Deferred loan fees
    
    
    (2,832
    )
    
    
    (0.40
    )
    
    
    (3,381
    )
    
    
    (0.46
    )
    
    
    (3,833
    )
    
    
    (0.58
    )
    
    
    (3,380
    )
    
    
    (0.55
    )
    
    
    (3,034
    )
    
    
    (0.53
    )Allowance for loan losses
    
    
    (4,581
    )
    
    
    (0.64
    )
    
    
    (4,675
    )
    
    
    (0.63
    )
    
    
    (4,312
    )
    
    
    (0.65
    )
    
    
    (4,377
    )
    
    
    (0.72
    )
    
    
    (3,883
    )
    
    
    (0.67
    )Total other items
    
    
    (7,413
    )
    
    
    (1.04
    )
    
    
    (8,056
    )
    
    
    (1.09
    )
    
    
    (8,145
    )
    
    
    (1.23
    )
    
    
    (7,757
    )
    
    
    (1.27
    )
    
    
    (6,917
    )
    
    
    (1.20
    )Total loans receivable, net
    
    $
    713,329
    
    
    
    100.00
    %
    
    $
    736,065
    
    
    
    100.00
    %
    
    $
    660,494
    
    
    
    100.00
    %
    
    $
    610,681
    
    
    
    100.00
    %
    
    $
    576,985
    
    
    
    100.00
    %Loans receivable held for sale, net
    
    $
    14,993
    
    
 
    
    
    
       $
    10,698
    
    
 
    
    
    
       $
    9,060
    
    
 
    
   
    
       $
    11,871
    
    
 
    
    
    
       $
    33,604
 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 30,2008
    
    
    2007
    
    
    2007(In thousands)Real estate construction loans
    
    $
    101,323
    
    
$
    0
    
    
$
    0Non-real estate loans
    
    
    17,394
    
    
    
    11,630
    
    
    
    1,431Total
    
    $
    118,717
    
    
    $
    11,630
    
    
    $
    1,431
  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.
  4




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##### Table of Contents



Construction Loans.
   Land Loans.
  Equity Line of Credit Loans.
 Commercial Non Real Estate Business Loans.
 5




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##### Table of Contents



Mortgage Banking Activity
     Non-Performing Loans and Other Problem Assets
  6




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##### Table of Contents



At June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)Non-accruing loans (1):Real estate
    
    $
    13,653
    
    
    $
    15,456
    
    
    $
    11,750
    
    
    $
    10,633
    
    
    $
    7,437Total
    
    $
    13,653
    
    
    $
    15,456
    
    
    $
    11,750
    
    
    $
    10,633
    
    
    $
    7,437Accruing loans which are contractually past due
90 days or more:Real estate
    
    $
    876
    
    
    $
    
    
    
    $
    608
    
    
    $
    503
    
    
    $
    275Total
    
    $
    876
    
    
    $
    
    
    
    $
    608
    
    
    $
    503
    
    
    $
    275Total nonaccrual and 90 days past due loans
    
    $
    14,529
    
    
    $
    15,456
    
    
    $
    12,358
    
    
    $
    11,136
    
    
    $
    7,712Ratio of non-performing loans to total loans
    
    
    2.02
    %
    
    
    2.08
    %
    
    
    1.85
    %
    
    
    1.80
    %
    
    
    1.32
    %Other non-performing assets (2)
    
    $
    2,622
    
    
    $
    817
    
    
    $
    1,319
    
    
    $
    70
    
    
    $
    449Total non-performing assets
    
    $
    17,151
    
    
    $
    16,273
    
    
    $
    13,677
    
    
    $
    11,206
    
    
    $
    8,161Total non-performing assets to total assets (3)
    
    
    1.90
    %
    
    
    1.80
    %
    
    
    1.66
    %
    
    
    1.48
    %
    
    
    1.10
    %
 
 (1)
    
    Non-accrual status denotes loans on which, in the opinion of management, the collection of
additional interest is unlikely, or loans that meet the non-accrual criteria established by
regulatory authorities. Non-accrual loans include all loans classified as doubtful or loss,
loans in foreclosure, and all loans greater than 90-days past due with a loan-to-value ratio
greater than 65%.(2)
    
    Other non-performing assets represent property acquired by the Bank through or in lieu of foreclosure or
repossession.(3)
    
    Includes loans past due more than 90 days, still on accrual status.  At June 30,2007
    
    2006(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
    
    $
    
    
    
    $
    835
    
    
    $
    2,611
    
    
    $
    3,446
    
    
    $
    
    
    
    $
    2,639
    
    
    $
    2,295
    
    
    $
    4,934Home equity line of credit
    
    
    
    
    
    
    1,162
    
    
    
    657
    
    
    
    1,819
    
    
    
    22
    
    
    
    1,560
    
    
    
    1,071
    
    
    
    2,653Multi-family residential
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    21Commercial real estate
    
    
    
    
    
    
    2,394
    
    
    
    1,331
    
    
    
    3,725
    
    
    
    
    
    
    
    1,289
    
    
    
    1,684
    
    
    
    2,973Land
    
    
    
    
    
    
    388
    
    
    
    327
    
    
    
    715
    
    
    
    
    
    
    
    1,137
    
    
    
    52
    
    
    
    1,189Residential construction
    
    
    
    
    
    
    1,331
    
    
    
    800
    
    
    
    2,131
    
    
    
    
    
    
    
    3,687
    
    
    
    
    
    
    
    3,687Commercial construction
    
    
    
    
    
    
    1,817
    
    
    
    
    
    
    
    1,817
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    
    
    
    $
    7,927
    
    
    $
    5,726
    
    
    $
    13,653
    
    
    $
    22
    
    
    $
    10,311
    
    
    $
    5,123
    
    
    $
    15,456
   7




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##### Table of Contents



Asset Classification and Allowance for Loan Losses.
 8




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##### Table of Contents



Year Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)Balance at beginning of year
    
    $
    4,675
    
    
    $
    4,312
    
    
    $
    4,377
    
    
    $
    3,883
    
    
    $
    3,902Charge-offs:Mortgage loans
    
    
    1,178
    
    
    
    462
    
    
    
    176
    
    
    
    113
    
    
    
    19Non-real estate (1)
    
    
    18
    
    
    
    1
    
    
    
    0
    
    
    
    19
    
    
    
    Total charge-offs
    
    
    1,196
    
    
    
    463
    
    
    
    176
    
    
    
    132
    
    
    
    19Recoveries:Mortgage loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    Non-real estate (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total recoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    Net charge-offs
    
    
    1,196
    
    
    
    463
    
    
    
    176
    
    
    
    103
    
    
    
    19Provision charged to income
    
    
    1,102
    
    
    
    826
    
    
    
    111
    
    
    
    597
    
    
    
    Balance at end of year
    
    $
    4,581
    
    
    $
    4,675
    
    
    $
    4,312
    
    
    $
    4,377
    
    
    $
    3,883Ratio of net charge-offs during
the year to average loans
outstanding during the year
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %
 
 (1)
    
    Consists primarily of line of credit loans. 9




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##### Table of Contents



At June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003% 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)
    
    $
    1,200
    
    
    
    43.05
    %
    
    $
    2,005
    
    
    
    47.25
    %
    
    $
    1,570
    
    
    
    47.84
    %
    
    $
    1,481
    
    
    
    45.68
    %
    
    $
    1,335
    
    
    
    48.09
    %Multi-family residential
    
    
    288
    
    
    
    7.57
    
    
    
    271
    
    
    
    7.22
    
    
    
    207
    
    
    
    5.07
    
    
    
    195
    
    
    
    6.27
    
    
    
    269
    
    
    
    7.05Commercial
    
    
    2,508
    
    
    
    34.68
    
    
    
    1,892
    
    
    
    32.07
    
    
    
    1,827
    
    
    
    34.15
    
    
    
    1,994
    
    
    
    37.05
    
    
    
    1,949
    
    
    
    33.78Land
    
    
    582
    
    
    
    10.43
    
    
    
    436
    
    
    
    10.50
    
    
    
    360
    
    
    
    10.32
    
    
    
    474
    
    
    
    8.74
    
    
    
    294
    
    
    
    9.07Unallocated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    
    
    
    
    0.00
    
    
    
    19
    
    
    
    Total mortgage loans
    
    
    4,578
    
    
    
    95.73
    
    
    
    4,604
    
    
    
    97.04
    %
    
    
    4,128
    
    
    
    97.38
    %
    
    
    4,144
    
    
    
    97.74
    
    
    
    3,866
    
    
    
    97.99Non-real estate
    
    
    3
    
    
    
    4.27
    
    
    
    71
    
    
    
    2.96
    %
    
    
    184
    
    
    
    2.62
    %
    
    
    233
    
    
    
    2.26
    
    
    
    17
    
    
    
    2.01Total allowance for
loan losses
    
    $
    4,581
    
    
    
    100.00
    %
    
    $
    4,675
    
    
    
    100.00
    %
    
    $
    4,312
    
    
    
    100.00
    %
    
    $
    4,377
    
    
    
    100.00
    %
    
    $
    3,883
    
    
    
    100.00
    %
 
 (1)
    
    Consists of one-to four-family residential and home equity line of credit.(2)
    
    Construction loans are included with their respective property type. 10




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##### Table of Contents



Investment Activities
     At June 30,2007
    
    
    2006
    
    
    2005(In thousands)Investment securities:U. S. Government Sponsored Enterprise Securities
    
    $
    58,000
    
    
    $
    58,000
    
    
    $
    57,500Mortgage-backed securities
    
    
    25,880
    
    
    
    27,578
    
    
    
    31,720Total securities
    
    
    83,880
    
    
    
    85,578
    
    
    
    89,220FHLB of Cincinnati stock
    
    
    12,312
    
    
    
    11,955
    
    
    
    11,316Total investments
    
    $
    96,192
    
    
    $
    97,533
    
    
    $
    100,536
 11




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##### Table of Contents



At June 30, 2007One 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
    
    $
    0
    
    
    
    0.00
    %
    
    $
    58,000
    
    
    
    4.74
    %
    
    $
    0
    
    
    
    0
    %
    
    $
    0
    
    
    
    0
    %
    
    $
    58,000
    
    
    $
    58,069
    
    
    
    4.74
    %Mortgage-backed securities
    
    
    511
    
    
    
    7.28
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    25,369
    
    
    
    5.16
    
    
    
    25,880
    
    
    
    24,557
    
    
    
    5.20Total
    
    $
    511
    
    
    
    7.28
    %
    
    $
    58,000
    
    
    
    4.74
    %
    
    $
    0
    
    
    
    0
    %
    
    $
    25,369
    
    
    
    0
    %
    
    $
    83,880
    
    
    $
    82,626
    
    
    
    4.88
    %
 12




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##### 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
    
    
    $
    40,780
    
    
    
    6.20
    %1.01
    %
    
    Passbook statement accounts
    
    
    5
    
    
    
    30,045
    
    
    
    4.564.75
    %
    
    Money market accounts
    
    
    1,000
    
    
    
    70,518
    
    
    
    10.720.00
    %
    
    Non-interest-earning demand accounts
    
    
    50
    
    
    
    21,845
    
    
    
    3.32$
    163,188
    
    
    
    24.80Certificates of Deposit5.10
    %
    
    3 months or less
    
    
    500
    
    
    $
    273,269
    
    
    
    41.535.03
    %
    
    3 - 6 months
    
    
    500
    
    
    
    66,109
    
    
    
    10.055.03
    %
    
    6 - 12 months
    
    
    500
    
    
    
    104,158
    
    
    
    15.834.77
    %
    
    1 - 3 years
    
    
    500
    
    
    
    39,893
    
    
    
    6.055.14
    %
    
    More than three years
    
    
    500
    
    
    
    11,436
    
    
    
    1.745.06
    %
    
    Total certificates of deposit
    
    
    
    
    
    $
    494,865
    
    
    
    75.204.49
    %
    
    Total deposits
    
    
    
    
    
    $
    658,053
    
    
    
    100.00
    %
 13




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##### Table of Contents



For the Year Ended June 30,2007
    
    2006
    
    2005Interest-
    
    
    
    
    
    
    
    
    
    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
    
    $
    120,897
    
    
    $
    31,283
    
    
    $
    509,230
    
    
    $
    71,791
    
    
    $
    39,857
    
    
    $
    485,755
    
    
    $
    58,437
    
    
    $
    45,513
    
    
    $
    421,209Average rate paid
    
    
    4.07
    %
    
    
    0.73
    %
    
    
    4.75
    %
    
    
    2.94
    %
    
    
    0.51
    %
    
    
    3.80
    %
    
    
    1.03
    %
    
    
    0.50
    %
    
    
    2.92
    %
 14




---



##### Table of Contents



CertificatesMaturity Period
    
    of Deposit(In thousands)Three months or less
    
    $
    42,562Three through six months
    
    
    41,316Six through 12 months
    
    
    55,796Over 12 months
    
    
    27,063Total
    
    $
    166,737
 Borrowings.
  At June 30,2007
    
    2006
    
    2005(In thousands)Amounts outstanding at end of period
    
    $
    75,000
    
    
    $
    95,000
    
    
    $
    135,012Weighted average rate
    
    
    5.35
    %
    
    
    4.95
    %
    
    
    4.16
    %Maximum amount outstanding at any
month end
    
    $
    95,000
    
    
    $
    170,001
    
    
    $
    180,033Approximate average outstanding balance
    
    $
    78,438
    
    
    $
    154,215
    
    
    $
    161,492Weighted average rate
    
    
    5.38
    %
    
    
    4.45
    %
    
    
    3.77
    %
  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.
   17




---



##### Table of Contents



At June 30, 2007Percent ofAmount
    
    
    Assets (1)(Dollars in Thousands)Tangible Capital
    
    $
    87,636
    
    
    
    9.72
    %Tangible Capital Requirement
    
    
    13,527
    
    
    
    1.50Excess
    
    $

    74,109
    
    
    
    8.22
    %Tier 1/Core Capital
    
    $
    87,636
    
    
    
    9.72
    %Tier 1/Core Capital Requirement
    
    
    36,073
    
    
    
    4.00Excess
    
    $
    51,563
    
    
    
    5.72
    %Tier 1 Risk-Based Capital
    
    $
    87,636
    
    
    
    12.56
    %Tier 1 Risk-Based Capital Requirement
    
    
    27,919
    
    
    
    4.00Excess
    
    $
    59,717
    
    
    
    8.56
    %Risk-Based Capital
    
    $
    91,323
    
    
    
    13.08
    %Risk-Based Capital Requirement
    
    
    55,838
    
    
    
    8.00Excess
    
    $
    35,485
    
    
    
    5.08
    %
 
 (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 total 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



Qualified Thrift Lender Test.
  Uniform Lending Standards.
 i.e e.g.
  20




---



##### Table of Contents



Insurance of Deposit Accounts.
      Dividend Limitations.
  21




---



##### Table of Contents



Federal Reserve System.
 Interstate Branching.
 Loans-to-One-Borrower Limitations.
 Enforcement .
 Transactions with Affiliates.
 22




---



##### Table of Contents



Regulation of the Company
 General.
 Activities Restrictions.
 23




---



##### Table of Contents



Restrictions on Acquisitions.
  Acquisition of the Company.
 Taxation
 General.
 24




---



##### Table of Contents



Federal Income Taxation.
     State Income Taxation.
 Executive Officers of the Registrant
  Age as ofName
    
    September 4, 2007
    
    TitleJohn R. Male
    
    
    59
    
    
    Chairman of the Board and Chief Executive Officer
of the Company and the BankC. Keith Swaney
    
    
    64
    
    
    President and Chief Operating Officer of the
Company and the Bank, Treasurer of the Company
and Chief Financial Officer of the BankJeffrey N. Male
    
    
    58
    
    
    Vice President and Secretary of the Company and
Executive Vice President and Chief Lending
Officer of the Bank
 25




---



##### Table of Contents



John R. Male.
 C. Keith Swaney.
 Jeffrey N. Male.
 
 Item 1A. Risk Factors
 Risks
Related to the Business of PVF Capital Corp
 Certain interest rate movements may hurt earnings and asset value.
   Strong competition within the Banks market area could hurt profits and slow growth.
  26




---



##### Table of Contents



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.
  Provisions in the Companys certificate of incorporation and bylaws and statutory provisions
could discourage a hostile acquisition of control.
  27




---



##### Table of Contents



Risks Related to the Merger with United Community Financial Corp.
 You might not receive the form of merger consideration that you elect.
   The number of shares of United Community common stock to be issued to Company stockholders in the
merger has essentially been fixed.
  United Community may experience greater than expected difficulties in integrating the Companys
businesses.
   
    
    the integration of the businesses of Home Savings and the Bank takes
longer, or is more difficult, time-consuming or costly than expected;
    
    the expected growth opportunities and cost savings from the merger are
not fully realized or take longer to realize than expected;
    
    economic conditions deteriorate; or
    
    operating costs, customer losses and business disruption following the
merger, including adverse effects on relationships with employees, are
greater than expected.
 28




---



##### Table of Contents



If you become a shareholder of United Community following the merger, you will have much less
influence as a shareholder of United Community than as a stockholder of the Company.
  Consummation of the merger is subject to conditions and is not assured.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  Year
    
    
    
    
    
    Net Book
    
    Owned or
    
    ApproximateOpened/
    
    Total
    
    Value at
    
    Leased/
    
    SquareLocation
    
    Acquired
    
    Deposits
    
    June 30, 2007
    
    Expiration
    
    Footage(Dollars in thousands)Main Office:30000 Aurora Road 
Solon, Ohio
    
    
    2000
    
    
    $
    24,189
    
    
    $
    5,289
    
    
    Owned
    
    
    51,635Branch Offices:2111 Richmond Road 
Beachwood, Ohio
    
    
    1967
    
    
    
    77,350
    
    
    
    0
    
    
    Lease
3/31/09
    
    
    2,750413 Northfield Road 
Bedford, Ohio
    
    
    2002
    
    
    
    47,041
    
    
    
    191
    
    
    Lease
10/31/12
    
    
    3,08411010 Clifton Boulevard 
Cleveland, Ohio
    
    
    1974
    
    
    
    25,974
    
    
    
    0
    
    
    Lease
8/1/05
    
    
    1,55013901 Ridge Road 
North Royalton, Ohio
    
    
    1999
    
    
    
    60,689
    
    
    
    0
    
    
    Lease
8/31/09
    
    
    3,2786990 Heisley Road 
Mentor, Ohio
    
    
    1994
    
    
    
    43,334
    
    
    
    6
    
    
    Lease
10/25/08
    
    
    2,4001244 SOM Center Road 
Mayfield Heights, Ohio
    
    
    2004
    
    
    
    42,892
    
    
    
    106
    
    
    Lease
6/30/14
    
    
    2,200497 East Aurora Road 
Macedonia, Ohio
    
    
    1994
    
    
    
    50,012
    
    
    
    6
    
    
    Lease
9/30/09
    
    
    2,4008500 Washington Street 
Chagrin Falls, Ohio
    
    
    1995
    
    
    
    46,348
    
    
    
    602
    
    
    Owned
    
    
    2,700408 Water Street 
Chardon, Ohio
    
    
    1998
    
    
    
    31,812
    
    
    
    468
    
    
    Owned
    
    
    2,800
 29




---



##### Table of Contents



Year
    
    
    
    
    
    Net Book
    
    Owned or
    
    ApproximateOpened/
    
    Total
    
    Value at
    
    Leased/
    
    SquareLocation
    
    Acquired
    
    Deposits
    
    June 30, 2007
    
    Expiration
    
    Footage(Dollars in thousands)3613 Medina Road 
Medina, Ohio
    
    
    2000
    
    
    
    27,837
    
    
    
    0
    
    
    Lease
2/28/08
    
    
    2,44034400 Aurora Road 
Solon, Ohio
    
    
    2000
    
    
    
    29,968
    
    
    
    31
    
    
    Lease
4/30/10
    
    
    3,00016909 Chagrin Boulevard 
Shaker Heights, Ohio
    
    
    2000
    
    
    
    30,169
    
    
    
    54
    
    
    Lease
6/30/10
    
    
    2,90436311 Detroit Road 
Avon, Ohio
    
    
    2002
    
    
    
    45,631
    
    
    
    153
    
    
    Lease
10/02/12
    
    
    3,37517780 Pearl Road 
Strongsville, Ohio
    
    
    2002
    
    
    
    41,030
    
    
    
    97
    
    
    Lease
8/31/12
    
    
    3,5009305 Market Square Drive 
Streetsboro, Ohio
    
    
    2003
    
    
    
    16,596
    
    
    
    1,011
    
    
    Owned
    
    
    3,700215 West Garfield Road 
Aurora, Ohio
    
    
    2005
    
    
    
    17,181
    
    
    
    47
    
    
    Lease
8/31/10
    
    
    4,700
   
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  30




---



##### Table of Contents



PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Securities
 Common Stock and Dividends
   (1)
 Fiscal 2007
    
    Fiscal 2006High Bid
    
    Low Bid
    
    High Bid
    
    Low BidFourth Quarter
    
    $
    13.82
    
    
    $
    12.35
    
    
    $
    10.22
    
    
    $
    9.00Third Quarter
    
    
    12.73
    
    
    
    9.97
    
    
    
    11.30
    
    
    
    9.73Second Quarter
    
    
    10.89
    
    
    
    9.33
    
    
    
    11.56
    
    
    
    10.38First Quarter
    
    
    10.48
    
    
    
    9.00
    
    
    
    13.33
    
    
    
    10.54
 
 (1)
    
    Quotations reflect inter-dealer prices without retail mark-up, mark-down or
commission, and may not represent actual transactions.  31




---



##### Table of Contents



Item 6. Selected Financial Data
 Selected Consolidated Financial and Other Data
 Financial Condition Data:
 At June 30,(dollars in thousands)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Total assets
    
    $
    900,816
    
    
    $
    906,081
    
    
    $
    823,899
    
    
    $
    755,687
    
    
    $
    743,404Loans receivable, net
    
    
    713,329
    
    
    
    736,065
    
    
    
    660,494
    
    
    
    610,681
    
    
    
    576,985Loans receivable held for sale, net
    
    
    14,993
    
    
    
    10,698
    
    
    
    9,060
    
    
    
    11,871
    
    
    
    33,604Mortgage-backed securities held to maturity
    
    
    25,880
    
    
    
    27,578
    
    
    
    31,720
    
    
    
    36,779
    
    
    
    2,931Cash and cash equivalents
    
    
    28,458
    
    
    
    19,738
    
    
    
    11,090
    
    
    
    17,470
    
    
    
    96,751Securities held to maturity
    
    
    58,000
    
    
    
    58,000
    
    
    
    57,500
    
    
    
    27,500
    
    
    
    33Deposits
    
    
    658,053
    
    
    
    656,864
    
    
    
    591,226
    
    
    
    526,493
    
    
    
    526,429Borrowings
    
    
    146,260
    
    
    
    156,773
    
    
    
    146,413
    
    
    
    147,526
    
    
    
    125,938Stockholders equity
    
    
    71,490
    
    
    
    68,973
    
    
    
    66,453
    
    
    
    63,361
    
    
    
    58,603
 Operating Data:
 Year Ended June 30,(dollars in thousands except for earnings per share)
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Interest income
    
    $
    62,020
    
    
    $
    55,651
    
    
    $
    43,963
    
    
    $
    39,429
    
    
    $
    43,931Interest expense
    
    
    36,705
    
    
    
    28,408
    
    
    
    19,801
    
    
    
    16,739
    
    
    
    20,646Net interest income
before provision for loan losses
    
    
    25,315
    
    
    
    27,243
    
    
    
    24,162
    
    
    
    22,690
    
    
    
    22,285Provision for loan losses
    
    
    1,103
    
    
    
    826
    
    
    
    111
    
    
    
    597
    
    
    
    0Net interest income
after provision for loan losses
    
    
    24,212
    
    
    
    26,417
    
    
    
    24,051
    
    
    
    22,093
    
    
    
    23,285Non-interest income
    
    
    3,376
    
    
    
    2,028
    
    
    
    3,006
    
    
    
    5,810
    
    
    
    5,444Non-interest expense
    
    
    21,634
    
    
    
    21,549
    
    
    
    18,942
    
    
    
    17,571
    
    
    
    16,509Income before federal income taxes
    
    
    5,954
    
    
    
    6,896
    
    
    
    8,115
    
    
    
    10,332
    
    
    
    12,220Federal income taxes
    
    
    1,720
    
    
    
    2,053
    
    
    
    2,531
    
    
    
    3,422
    
    
    
    4,124Net income
    
    $
    4,234
    
    
    $
    4,843
    
    
    $
    5,584
    
    
    $
    6,910
    
    
    $
    8,096Basic earnings per share (1)
    
    $
    0.55
    
    
    $
    0.63
    
    
    $
    0.72
    
    
    $
    0.89
    
    
    $
    1.05Diluted earnings per share (1)
    
    $
    0.54
    
    
    $
    0.62
    
    
    $
    0.71
    
    
    $
    0.87
    
    
    $
    1.03
 
 (1)
    
    Adjusted for stock dividends. 32




---



##### Table of Contents



Other Data:
 At or For the Year Ended June 30,2007
    
    2006
    
    2005
    
    2004
    
    2003Return on average assets
    
    
    0.47
    %
    
    
    0.56
    %
    
    
    0.70
    %
    
    
    0.96
    %
    
    
    1.15
    %Return on average equity
    
    
    6.00
    %
    
    
    7.15
    %
    
    
    8.62
    %
    
    
    11.26
    %
    
    
    14.60
    %Interest rate spread
    
    
    2.77
    %
    
    
    3.15
    %
    
    
    3.12
    %
    
    
    3.16
    %
    
    
    3.19
    %Net interest margin
    
    
    2.98
    %
    
    
    3.34
    %
    
    
    3.24
    %
    
    
    3.35
    %
    
    
    3.44
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    104.84
    %
    
    
    105.38
    %
    
    
    104.81
    %
    
    
    107.62
    %
    
    
    108.10
    %Non-accruing loans and
repossessed assets to total assets
    
    
    1.81
    %
    
    
    1.80
    %
    
    
    1.59
    %
    
    
    1.42
    %
    
    
    1.06
    %Stockholders equity to total assets
    
    
    7.94
    %
    
    
    7.61
    %
    
    
    8.07
    %
    
    
    8.38
    %
    
    
    7.88
    %Ratio of average equity to
average assets
    
    
    7.76
    %
    
    
    7.78
    %
    
    
    8.16
    %
    
    
    8.49
    %
    
    
    7.86
    %Dividend payout ratio (cash dividends declared
divided by net income)
    
    
    54.04
    %
    
    
    47.13
    %
    
    
    37.37
    %
    
    
    33.71
    %
    
    
    21.21
    %Bank Regulatory Capital Ratios:Ratio of tangible capital to
adjusted total assets
    
    
    9.72
    %
    
    
    8.33
    %
    
    
    8.77
    %
    
    
    7.97
    %
    
    
    7.73
    %Ratio of Tier-1 core capital to
adjusted total assets
    
    
    9.72
    %
    
    
    8.33
    %
    
    
    8.77
    %
    
    
    7.97
    %
    
    
    7.73
    %Ratio of Tier-1 risk-based capital to
risk-weighted assets
    
    
    12.56
    %
    
    
    9.72
    %
    
    
    10.41
    %
    
    
    9.54
    %
    
    
    9.92
    %Ratio of Total risk-based capital to
risk-weighted assets
    
    
    13.08
    %
    
    
    10.28
    %
    
    
    10.97
    %
    
    
    10.19
    %
    
    
    10.55
    %
 33




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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, 2007, 2006 and 2005
   (dollars in thousands)
    
    2007
    
    
    2006
    
    
    2005One-to-four family residential
    
    $
    163,298
    
    
    $
    174,575
    
    
    $
    148,956Home equity line of credit
    
    
    85,093
    
    
    
    94,450
    
    
    
    97,692Multi-family residential
    
    
    48,101
    
    
    
    45,716
    
    
    
    33,504Commercial
    
    
    184,850
    
    
    
    170,392
    
    
    
    171,331Commercial equity line of credit
    
    
    33,208
    
    
    
    34,064
    
    
    
    31,875Land
    
    
    74,414
    
    
    
    77,242
    
    
    
    68,165Construction  residential
    
    
    63,316
    
    
    
    84,146
    
    
    
    75,460Construction  multi-family
    
    
    6,397
    
    
    
    7,956
    
    
    
    0Construction  commercial
    
    
    31,610
    
    
    
    33,756
    
    
    
    24,355Total real estate mortgages
    
    
    690,286
    
    
    
    722,297
    
    
    
    651,339Non real estate mortgages
    
    
    30,455
    
    
    
    21,824
    
    
    
    17,300Total loans receivable
    
    
    720,741
    
    
    
    744,121
    
    
    
    668,639Net deferred loan origination fees
    
    
    (2,832
    )
    
    
    (3,382
    )
    
    
    (3,833
    )Allowance for loan losses
    
    
    (4,581
    )
    
    
    (4,675
    )
    
    
    (4,312
    )Total loans receivable, net
    
    $
    713,329
    
    
    $
    736,065
    
    
    $
    660,494Loans receivable held for sale, net
    
    $
    14,993
    
    
    $
    10,698
    
    
    $
    9,060Mortgage-backed securities held to maturity
    
    $
    25,880
    
    
    $
    27,578
    
    
    $
    31,720




---



##### Table of Contents



(dollars in thousands)
    
    2007
    
    
    2006
    
    
    2005Now accounts
    
    $
    40,780
    
    
    $
    39,565
    
    
    $
    38,319Passbook savings
    
    
    30,045
    
    
    
    35,194
    
    
    
    43,415Money market accounts
    
    
    70,518
    
    
    
    60,900
    
    
    
    22,952Non-interest bearing
    
    
    21,845
    
    
    
    17,069
    
    
    
    16,958Certificates of deposit
    
    
    494,865
    
    
    
    504,316
    
    
    
    469,582Total deposits
    
    $
    658,053
    
    
    $
    656,864
    
    
    $
    591,226
  35




---



##### Table of Contents



Capital
   Park View
    
    
    
    
    
    Requirement forFederal
    
    Percent of
    
    Well-Capitalized(dollars in thousands)
    
    Capital
    
    Assets (1)
    
    InstitutionTangible capital
    
    $
    87,636
    
    
    
    9.72
    %
    
    
    N/ATier-1 core capital
    
    $
    87,636
    
    
    
    9.72
    %
    
    
    5.00
    %Tier-1 risk-based capital
    
    $
    87,636
    
    
    
    12.56
    %
    
    
    6.00
    %Total risk-based capital
    
    $
    91,323
    
    
    
    13.08
    %
    
    
    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
    Commitments, Contingencies and Off-Balance Sheet Risk
  36




---



##### Table of Contents



June 30,(dollars in thousands)
    
    2007
    
    2006Commitments to originate:Mortgage loans intended for sale
    
    $
    29,312
    
    
    $
    31,524Mortgage loans held for investment
    
    
    12,627
    
    
    
    48,287Unfunded home equity and
commercial real estate lines of credit
    
    
    99,257
    
    
    
    92,901Undisbursed portion of loan proceeds
    
    
    60,795
    
    
    
    66,749Commitments to sell loans held for sale
    
    
    20,105
    
    
    
    13,250Standby letters of credit
    
    
    4,051
    
    
    
    3,547
     Note
    
    Within
    
    1-3
    
    3-5
    
    >5(dollars in thousands)
    
    Reference
    
    1 Year
    
    Years
    
    Years
    
    Years
    
    TotalDeposits without a
stated maturity
    
    
    
    
    
    $
    163,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    163,188Certificates of deposit
    
    
    7
    
    
    
    443,536
    
    
    
    39,893
    
    
    
    11,436
    
    
    
    
    
    
    
    494,865Long-term advances from
the FHLB of Cincinnati
    
    
    8
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000Repurchase agreement
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    50,000Subordinated debt
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    20,000Operating leases
    
    
    11
    
    
    
    951
    
    
    
    1,469
    
    
    
    635
    
    
    
    213
    
    
    
    3,268
 Results of Operations
 General
   37




---



##### Table of Contents



Net Interest Income
    Table 1
    
    Average Balances, Interest, and Average Yields and Costs
For the Year Ended June 30,
 2007
    
    
    2006
    
    
    2005Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/(dollars in thousands)
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    CostInterest-earning assets:Loans
    
    $
    741,723
    
    
    $
    56,760
    
    
    
    7.65
    %
    
    $
    709,789
    
    
    $
    50,986
    
    
    
    7.18
    %
    
    $
    649,305
    
    
    $
    40,193
    
    
    
    6.19
    %Mortgage-backed securities
    
    
    26,879
    
    
    
    1,321
    
    
    
    4.91
    
    
    
    29,013
    
    
    
    1,386
    
    
    
    4.78
    
    
    
    34,199
    
    
    
    1,655
    
    
    
    4.84Securities and other interest-earning
assets
    
    
    80,876
    
    
    
    3,939
    
    
    
    4.87
    
    
    
    77,989
    
    
    
    3,279
    
    
    
    4.20
    
    
    
    61,747
    
    
    
    2,115
    
    
    
    3.43Total interest-earning assets
    
    
    849,478
    
    
    
    62,020
    
    
    
    7.30
    
    
    
    816,791
    
    
    
    56,651
    
    
    
    6.81
    
    
    
    745,251
    
    
    
    43,963
    
    
    
    5.90Non-interest-earning assets
    
    
    59,012
    
    
    
    
    
    
    
    
    
    
    
    53,338
    
    
    
    
    
    
    
    
    
    
    
    48,343Total assets
    
    $
    908,490
    
    
    
    
    
    
    
    
    
    
    $
    870,129
    
    
    
    
    
    
    
    
    
    
    $
    793,594Interest-bearing liabilities:Deposits
    
    $
    661,410
    
    
    $
    28,600
    
    
    
    4.32
    %
    
    $
    609,685
    
    
    $
    20,777
    
    
    
    3.41
    %
    
    $
    537,874
    
    
    $
    13,133
    
    
    
    2.44
    %Borrowings
    
    
    148,822
    
    
    
    8,105
    
    
    
    5.45
    
    
    
    165,441
    
    
    
    7,631
    
    
    
    4.61
    
    
    
    173,205
    
    
    
    6,668
    
    
    
    3.85Total interest-bearing liabilities
    
    
    810,232
    
    
    
    36,705
    
    
    
    4.53
    
    
    
    775,126
    
    
    
    28,408
    
    
    
    3.66
    
    
    
    711,079
    
    
    
    19,801
    
    
    
    2.78Non-interest-bearing liabilities
    
    
    27,724
    
    
    
    
    
    
    
    
    
    
    
    27,296
    
    
    
    
    
    
    
    
    
    
    
    17,723Total liabilities
    
    
    837,956
    
    
    
    
    
    
    
    
    
    
    
    802,422
    
    
    
    
    
    
    
    
    
    
    
    728,802Stockholders equity
    
    
    70,534
    
    
    
    
    
    
    
    
    
    
    
    67,707
    
    
    
    
    
    
    
    
    
    
    
    64,792Total liabilities and stockholders equity
    
    $
    908,490
    
    
    
    
    
    
    
    
    
    
    $
    870,129
    
    
    
    
    
    
    
    
    
    
    $
    793,594Net interest income
    
    
    
    
    
    $
    25,315
    
    
    
    
    
    
    
    
    
    
    $
    27,243
    
    
    
    
    
    
    
    
    
    
    $
    24,162Interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.77
    %
    
    
    
    
    
    
    
    
    
    
    3.15
    %
    
    
    
    
    
    
    
    
    
    
    3.12
    %Net yield on interest-earning assets
    
    
    
    
    
    
    
    
    
    
    2.98
    %
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.24
    %Ratio of average interest-earning assets
to average interest-bearing liabilities
    
    
    104.84
    %
    
    
    
    
    
    
    
    
    
    
    105.38
    %
    
    
    
    
    
    
    
    
    
    
    104.81
    %
 38




---



##### Table of Contents



Table 2
    
    Year Ended June 30,2007
    
    
    vs.
    
    
    2006
    
    
    2006
    
    
    vs.
    
    
    2005Increase (Decrease)
    
    
    Increase (Decrease)Due to
    
    
    Due to(dollars in thousands)
    
    Volume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalInterest income:Loans
    
    $
    2,355
    
    
    $
    3,419
    
    
    $
    5,774
    
    
    $
    3,965
    
    
    $
    6,828
    
    
    $
    10,793Mortgage-backed securities
    
    
    (106
    )
    
    
    41
    
    
    
    (65
    )
    
    
    (248
    )
    
    
    (21
    )
    
    
    (269
    )Securities and other interest-earning assets
    
    
    126
    
    
    
    534
    
    
    
    660
    
    
    
    624
    
    
    
    540
    
    
    
    1,164Total interest-earning assets
    
    
    2,375
    
    
    
    3,994
    
    
    
    6,369
    
    
    
    4,341
    
    
    
    7,347
    
    
    
    11,688Interest expense:Deposits
    
    
    1,875
    
    
    
    5,948
    
    
    
    7,823
    
    
    
    1,927
    
    
    
    5,717
    
    
    
    7,644Borrowings
    
    
    (538
    )
    
    
    1,012
    
    
    
    474
    
    
    
    (309
    )
    
    
    1,272
    
    
    
    963Total interest-bearing liabilities
    
    
    1,337
    
    
    
    6,960
    
    
    
    8,297
    
    
    
    1,618
    
    
    
    6,989
    
    
    
    8,607Net interest income
    
    $
    1,038
    
    
    $
    (2,966
    )
    
    $
    (1,928
    )
    
    $
    2,723
    
    
    $
    358
    
    
    $
    3,081
    Provision for Loan Losses
   39




---



##### Table of Contents



June 30,(dollars in thousands)
    
    2007
    
    
    2006Loans on non-accruing status(1)Real estate mortgages:One-to-four family residential
    
    $
    5,265
    
    
    $
    7,587Commercial
    
    
    3,725
    
    
    
    2,972Multi-family residential
    
    
    
    
    
    
    21Construction and land
    
    
    4,663
    
    
    
    4,876Total loans on non-accrual status
    
    $
    13,653
    
    
    $
    15,456Ratio of non-performing loans to total loans
    
    
    1.89
    %
    
    
    2.08
    %Other non-performing assets (2)
    
    $
    2,622
    
    
    $
    817Total
non-performing assets(3)
    
    $
    16,275
    
    
    $
    16,273Total non-performing assets to total assets
    
    
    1.81
    %
    
    
    1.80
    %
 
 (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 loans greater than
90 days past due for which interest accrual has been discontinued. Payments
received on a non-accrual loan are either applied to the outstanding principal balance or
recorded as interest income, depending on an assessment of the collectibility of the principal
balance of the loan.(2)
    
    Other non-performing assets represent property acquired by the Bank through
foreclosure or repossession.(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
  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, 2007
    
    June 30, 2006Change in
    
    
    
    Market Value of
    
    Dollar
    
    NPV
    
    Market Value of
    
    Dollar
    
    NPVInterest Rates
    
    
    
    Portfolio Equity
    
    Change
    
    Ratio
    
    Portfolio Equity
    
    Change
    
    Ratio+2
    %
    
    
    
    $
    99,263
    
    
    $
    (7,290
    )
    
    
    10.99
    %
    
    $
    85,142
    
    
    $
    (10,181
    )
    
    
    9.37
    %+1
    %
    
    
    
    
    103,233
    
    
    
    (3,320
    )
    
    
    11.33
    
    
    
    90,340
    
    
    
    (4,983
    )
    
    
    9.850
    
    
    
    
    
    106,553
    
    
    
    
    
    
    
    11.59
    
    
    
    95,323
    
    
    
    
    
    
    
    10.29-1
    %
    
    
    
    
    108,404
    
    
    
    1,851
    
    
    
    11.71
    
    
    
    98,892
    
    
    
    3,569
    
    
    
    10.59-2
    %
    
    
    
    
    107,908
    
    
    
    1,355
    
    
    
    11.60
    
    
    
    98,438
    
    
    
    3,115
    
    
    
    10.50
  43




---



##### Table of Contents



Within
    
    1-3
    
    3-5
    
    >5(dollars in thousands)
    
    1 Year
    
    Years
    
    Years
    
    Years
    
    TotalTotal interest-rate-sensitive assets
    
    $
    397,046
    
    
    $
    230,248
    
    
    $
    129,432
    
    
    $
    83,315
    
    
    $
    840,577Total interest-rate-sensitive liabilities
    
    
    499,785
    
    
    
    153,362
    
    
    
    100,968
    
    
    
    28,351
    
    
    
    782,467Periodic GAP
    
    
    (102,739
    )
    
    
    76,886
    
    
    
    28,464
    
    
    
    55,500
    
    
    
    58,110Cumulative GAP
    
    
    (102,739
    )
    
    
    (25,853
    )
    
    
    2,610
    
    
    
    58,110Ratio of cumulative GAP to total assets
    
    
    (11.4
    %)
    
    
    (2.9
    %)
    
    
    0.3
    %
    
    
    6.5
    %
 44




---



##### Table of Contents



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




---



##### Table of Contents



2007
    
    
    2006ASSETSCash and amounts due from depository institutions
    
    $
    20,293,042
    
    
    $
    6,614,171Interest bearing deposits
    
    
    622,537
    
    
    
    1,804,098Federal funds sold
    
    
    7,542,000
    
    
    
    11,320,000Cash and cash equivalents
    
    
    28,457,579
    
    
    
    19,738,269Securities held to maturity (fair values of $58,068,865 and
$57,256,642, respectively)
    
    
    58,000,000
    
    
    
    58,000,000Mortgage-backed securities held to maturity (fair values
of $24,302,048 and $25,761,813, respectively)
    
    
    25,879,520
    
    
    
    27,577,923Loans receivable held for sale, net
    
    
    14,993,380
    
    
    
    10,698,064Loans receivable, net of allowance of
$4,580,549 and $4,674,681
    
    
    713,328,818
    
    
    
    736,064,995Office properties and equipment, net
    
    
    10,588,375
    
    
    
    12,032,692Real estate owned
    
    
    2,621,555
    
    
    
    817,279Federal Home Loan Bank stock
    
    
    12,311,600
    
    
    
    11,955,000Bank-owned life insurance
    
    
    22,210,217
    
    
    
    16,339,385Prepaid expenses and other assets
    
    
    12,425,315
    
    
    
    12,857,774Total assets
    
    $
    900,816,359
    
    
    $
    906,081,381LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    658,052,649
    
    
    $
    656,864,201Short-term advances from the FHLB
    
    
    65,000,000
    
    
    
    75,000,000Line of credit
    
    
    1,260,000
    
    
    
    1,772,871Long-term advances from the FHLB
    
    
    10,000,000
    
    
    
    20,000,000Repurchase agreement
    
    
    50,000,000
    
    
    
    50,000,000Subordinated debentures
    
    
    20,000,000
    
    
    
    10,000,000Advances from borrowers for taxes and insurance
    
    
    8,546,669
    
    
    
    8,102,098Accrued expenses and other liabilities
    
    
    16,467,200
    
    
    
    15,369,071Total liabilities
    
    
    829,326,518
    
    
    
    837,108,241Commitments 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;
8,204,536 and 8,188,867 shares issued, respectively
    
    
    82,045
    
    
    
    81,889Additional paid-in capital
    
    
    68,743,626
    
    
    
    68,507,097Retained earnings
    
    
    6,501,317
    
    
    
    4,221,301Treasury stock at cost, 472,725 shares, respectively
    
    
    (3,837,147
    )
    
    
    (3,837,147
    )Total stockholders equity
    
    
    71,489,841
    
    
    
    68,973,140Total liabilities and stockholders equity
    
    $
    900,816,359
    
    
    $
    906,081,381
  46




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005Interest and dividends incomeLoans
    
    $
    56,759,624
    
    
    $
    50,985,531
    
    
    $
    40,193,540Mortgage-backed securities
    
    
    1,321,132
    
    
    
    1,385,572
    
    
    
    1,654,537Federal Home Loan Bank stock dividends
    
    
    749,727
    
    
    
    638,807
    
    
    
    491,125Securities
    
    
    2,612,547
    
    
    
    2,273,566
    
    
    
    1,493,167Fed funds sold and interest-bearing deposits
    
    
    576,882
    
    
    
    367,080
    
    
    
    130,354Total interest and dividend income
    
    
    62,019,912
    
    
    
    55,650,556
    
    
    
    43,962,723Interest expenseDeposits
    
    
    28,599,492
    
    
    
    20,776,397
    
    
    
    13,133,468Short-term borrowings
    
    
    3,165,122
    
    
    
    2,816,260
    
    
    
    934,738Long-term borrowings
    
    
    3,390,503
    
    
    
    4,121,641
    
    
    
    5,229,070Subordinated debt
    
    
    1,549,920
    
    
    
    693,292
    
    
    
    503,190Total interest expense
    
    
    36,705,037
    
    
    
    28,407,590
    
    
    
    19,800,466Net interest income
    
    
    25,314,875
    
    
    
    27,242,966
    
    
    
    24,162,257Provision for loan losses
    
    
    1,102,500
    
    
    
    826,300
    
    
    
    111,000Net interest income after provision
for loan losses
    
    
    24,212,375
    
    
    
    26,416,666
    
    
    
    24,051,257Noninterest incomeService charges and other fees
    
    
    815,395
    
    
    
    609,040
    
    
    
    470,586Mortgage banking activities, net
    
    
    1,270,998
    
    
    
    834,471
    
    
    
    1,311,235Gain (loss) on disposal of real estate owned
    
    
    259,537
    
    
    
    (35,330
    )
    
    
    165,575Increase in cash surrender value of
bank-owned life insurance
    
    
    870,832
    
    
    
    597,447
    
    
    
    554,405Other, net
    
    
    159,340
    
    
    
    22,606
    
    
    
    504,558Total noninterest income
    
    
    3,376,102
    
    
    
    2,028,234
    
    
    
    3,006,359Noninterest expenseCompensation and benefits
    
    
    12,149,480
    
    
    
    12,060,345
    
    
    
    10,835,446Office, occupancy, and equipment
    
    
    3,387,369
    
    
    
    3,815,592
    
    
    
    3,670,437Insurance
    
    
    278,324
    
    
    
    295,724
    
    
    
    235,692Professional and legal
    
    
    569,000
    
    
    
    492,061
    
    
    
    339,050Advertising
    
    
    688,878
    
    
    
    572,477
    
    
    
    382,689Outside services
    
    
    1,445,038
    
    
    
    1,430,915
    
    
    
    776,801Franchise tax
    
    
    982,737
    
    
    
    881,691
    
    
    
    773,308Other
    
    
    2,133,055
    
    
    
    2,000,595
    
    
    
    1,929,080Total noninterest expense
    
    
    21,633,881
    
    
    
    21,549,400
    
    
    
    18,942,503Income before federal income taxes
    
    
    5,954,596
    
    
    
    6,895,500
    
    
    
    8,115,113Federal income taxesCurrent
    
    
    2,219,821
    
    
    
    2,323,692
    
    
    
    2,413,291Deferred
    
    
    (499,549
    )
    
    
    (271,193
    )
    
    
    117,7011,720,272
    
    
    
    2,052,499
    
    
    
    2,530,992Net income
    
    $
    4,234,324
    
    
    $
    4,843,001
    
    
    $
    5,584,121Basic earnings per share
    
    $
    0.55
    
    
    $
    0.63
    
    
    $
    0.72Diluted earnings per share
    
    $
    0.54
    
    
    $
    0.62
    
    
    $
    0.71
  47




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##### Table of Contents



AdditionalCommon
    
    
    paid-in
    
    
    Retained
    
    
    Treasurystock
    
    
    capital
    
    
    earnings
    
    
    stock
    
    
    TotalBalance at June 30, 2004
    
    $
    74,200
    
    
    $
    58,378,089
    
    
    $
    8,035,847
    
    
    $
    (3,127,193
    )
    
    $
    63,360,943Net income
    
    
    
    
    
    
    
    
    
    
    5,584,121
    
    
    
    
    
    
    
    5,584,121Stock options exercised, including
income tax benefits, 21,712 shares
    
    
    217
    
    
    
    166,029
    
    
    
    
    
    
    
    
    
    
    
    166,246Stock purchased and retired,
9,024 shares
    
    
    (90
    )
    
    
    (122,934
    )
    
    
    
    
    
    
    
    
    
    
    (123,024
    )Cash paid in lieu of fractional shares
    
    
    
    
    
    
    
    
    
    
    (3,488
    )
    
    
    
    
    
    
    (3,488
    )Stock dividend issued, 743,046 shares
    
    
    7,431
    
    
    
    9,867,650
    
    
    
    (9,875,081
    )
    
    
    
    
    
    
    Cash dividend, $0.269 per share
    
    
    
    
    
    
    
    
    
    
    (2,077,407
    )
    
    
    
    
    
    
    (2,077,407
    )Purchase of 32,210 shares of
treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (454,212
    )
    
    
    (454,212
    )Balance at June 30, 2005
    
    $
    81,758
    
    
    $
    68,288,834
    
    
    $
    1,663,992
    
    
    $
    (3,581,405
    )
    
    $
    66,453,179Net 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
    )
    
    $
    71,489,841
  48




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##### Table of Contents



2007
    
    
    2006
    
    
    2005Operating activities:Net income
    
    $
    4,234,324
    
    
    $
    4,843,001
    
    
    $
    5,584,121Adjustments required to reconcile net
income to net cash from operating activitiesAmortization of premium on
mortgage-backed securities
    
    
    27,414
    
    
    
    46,883
    
    
    
    26,471Depreciation
    
    
    1,733,005
    
    
    
    1,816,028
    
    
    
    1,863,375Provision for loan losses
    
    
    1,102,500
    
    
    
    826,300
    
    
    
    111,000Change in deferred loan
origination fees, net
    
    
    (43,662
    )
    
    
    (450,748
    )
    
    
    (451,697
    )(Gain)/loss on disposal of real estate owned
    
    
    (259,537
    )
    
    
    35,330
    
    
    
    (165,575
    )Market adjustments for loans held for sale
    
    
    (105,600
    )
    
    
    156,000
    
    
    
    Change in fair value of mortgage
banking derivatives
    
    
    (131,300
    )
    
    
    239,000
    
    
    
    15,000Stock compensation
    
    
    218,690
    
    
    
    214,761
    
    
    
    FHLB stock dividends
    
    
    (356,600
    )
    
    
    (638,600
    )
    
    
    (490,800
    )Deferred income tax provision
    
    
    (499,549
    )
    
    
    (271,193
    )
    
    
    117,701Proceeds from loans held for sale
    
    
    92,325,628
    
    
    
    104,648,344
    
    
    
    118,420,611Originations of loans held for sale
    
    
    (97,071,408
    )
    
    
    (107,212,344
    )
    
    
    (115,813,850
    )Gain on the sale of loans, net
    
    
    (376,533
    )
    
    
    (633,782
    )
    
    
    (1,095,039
    )Increase in cash surrender value of
bank-owned life insurance
    
    
    (870,832
    )
    
    
    (597,447
    )
    
    
    (554,405
    )Net change in other assets
and other liabilities
    
    
    2,920,034
    
    
    
    348,671
    
    
    
    982,116Net cash from operating activities
    
    
    2,846,574
    
    
    
    2,672,854
    
    
    
    9,452,423Investing activities:Loans originated
    
    
    (159,977,902
    )
    
    
    (243,702,577
    )
    
    
    (216,290,237
    )Principal repayments on loans
    
    
    178,384,902
    
    
    
    166,437,367
    
    
    
    163,441,745Principal repayments on mortgage-backed
securities held to maturity
    
    
    3,248,086
    
    
    
    5,201,834
    
    
    
    6,085,195Purchase of mortgage-backed securities
held to maturity
    
    
    (1,577,097
    )
    
    
    (1,106,607
    )
    
    
    (1,052,410
    )Purchase of securities held to maturity
    
    
    
    
    
    
    (500,000
    )
    
    
    (35,000,000
    )Maturities and calls of securities held
to maturity
    
    
    
    
    
    
    
    
    
    
    5,000,000Additions to office properties and
equipment
    
    
    (288,688
    )
    
    
    (435,489
    )
    
    
    (1,388,214
    )Acquisition of bank-owned life insurance
    
    
    (5,000,000
    )
    
    
    
    
    
    
    Proceeds from disposals of real estate owned
    
    
    2,231,674
    
    
    
    1,785,449
    
    
    
    1,418,796Investments in nonconsolidated affiliates
    
    
    
    
    
    
    (131,750
    )
    
    
    Net cash from investing activities
    
    
    17,020,975
    
    
    
    (72,451,773
    )
    
    
    (77,815,125
    )
  49




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##### Table of Contents



2007
    
    
    2006
    
    
    2005Financing Activities:Payments on long-term FHLB advances
    
    
    (10,000,000
    )
    
    
    (100,012,018
    )
    
    
    (27,813
    )Net change in short-term FHLB advances
    
    
    (10,000,000
    )
    
    
    60,000,000
    
    
    
    Proceeds from repurchase agreement
    
    
    
    
    
    
    50,000,000
    
    
    
    Net change in line of credit
    
    
    (512,871
    )
    
    
    1,772,871
    
    
    
    Repayment of note payable
    
    
    
    
    
    
    (1,400,780
    )
    
    
    (1,085,470
    )Net change in NOW and passbook savings
    
    
    10,459,030
    
    
    
    31,083,809
    
    
    
    (565,469
    )Proceeds from issuance of certificates
of deposit
    
    
    87,367,516
    
    
    
    130,717,293
    
    
    
    163,111,432Payments on maturing certificates of deposit
    
    
    (96,638,098
    )
    
    
    (96,163,379
    )
    
    
    (97,812,199
    )Proceeds from issuance of subordinated
debentures
    
    
    10,000,000
    
    
    
    
    
    
    
    Net increase (decrease) in advances
from borrowers
    
    
    444,571
    
    
    
    4,917,117
    
    
    
    808,109Payment of cash dividend
    
    
    (2,286,382
    )
    
    
    (2,235,692
    )
    
    
    (2,034,595
    )Purchase of treasury stock
    
    
    
    
    
    
    (255,742
    )
    
    
    (454,212
    )Proceeds from exercise of stock options
    
    
    308,272
    
    
    
    144,737
    
    
    
    160,468Income tax benefit from exercise of stock options
    
    
    3,264
    
    
    
    
    
    
    
    5,778Stock repurchased and retired
    
    
    (293,541
    )
    
    
    (141,104
    )
    
    
    (123,024
    )Net cash from financing activities
    
    
    (11,148,239
    )
    
    
    78,427,112
    
    
    
    61,983,005Net increase (decrease) in cash
and cash equivalents
    
    
    8,719,310
    
    
    
    8,648,193
    
    
    
    (6,379,697
    )Cash and cash equivalents at beginning
of year
    
    
    19,738,269
    
    
    
    11,090,076
    
    
    
    17,469,773Cash and cash equivalents at end of year
    
    $
    28,457,579
    
    
    $
    19,738,269
    
    
    $
    11,090,076Supplemental disclosures of cash flow
information:Cash payments of interest
    
    $
    36,659,064
    
    
    $
    28,546,235
    
    
    $
    19,766,150Cash payments of income taxes
    
    
    2,483,000
    
    
    
    2,316,000
    
    
    
    2,069,000Supplemental schedule of noncash
investing and financing activities:Transfers to real estate owned
    
    $
    3,776,413
    
    
    $
    1,318,807
    
    
    $
    2,502,472
  50




---



##### Table of Contents



NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  Principles of Consolidation
   Use of Estimates
 Cash Flows
  51




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  Interest-bearing Deposits:
 Securities
   Mortgage Banking Activities
    52




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
     Loans Receivable
   53




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED
MATTERS
 Allowance for Loan Losses
   Transfers of Financial Assets
 Office Properties and Equipment :
  54




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED
MATTERS
 Real Estate Owned
 Federal Home Loan Bank (FHLB) Stock
 Long-Term Assets
 Bank-Owned Life Insurance
 Income Taxes
 Stock Compensation :
   55




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
  2005Net income as reported
    
    $
    5,584,121Stock-based compensation expense
determined under fair value based method
    
    
    147,160Income tax effect
    
    
    (8,160
    )139,000Pro forma net income
    
    $
    5,445,121Basic earnings per share as reported
    
    $
    0.72Pro forma basic earnings per share
    
    $
    0.70Diluted earnings per share as reported
    
    $
    0.71Pro forma diluted earnings per share
    
    $
    0.69
 Comprehensive Income
 Earnings Per Share
  Loss Contingencies
 Loan Commitments and Related Financial Instruments
  56




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED
MATTERS
 Restrictions on Cash
 Stockholders Equity
 Dividend Restriction
 Fair Value of Financial Instruments :
 Operating Segments
 Reclassifications
 Adoption of New Accounting Standards
  57




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
    Effect of Newly Issued But Not Yet Effective Accounting Standards
   58




---



##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
       59




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##### Table of Contents



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED
MATTERS
 
 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
 2006Gross
    
    
    Gross
    
    
    EstimatedCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    FairAmount
    
    
    Gain
    
    
    Loss
    
    
    ValueU.S. government-sponsored enterprise
securities
    
    $
    58,000,000
    
    
    $
    
    
    
    $
    (743,358
    )
    
    $
    57,256,642Due after one year through five years
    
    $
    58,000,000
    
    
    $
    
    
    
    $
    (743,358
    )
    
    $
    57,256,642
    60




---



##### Table of Contents



NOTE 2 SECURITIES
  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
    )
 2006
    
    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
    
    $
    5,398,720
    
    
    $
    (101,280
    )
    
    $
    51,857,922
    
    
    $
    (642,078
    )
    
    $
    57,256,642
    
    
    $
    (743,358
    )
   61




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##### Table of Contents



NOTE 3 MORTGAGE-BACKED SECURITIES
  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
 2006Gross
    
    
    GrossCarrying
    
    
    Unrecognized
    
    
    Unrecognized
    
    
    EstimatedAmount
    
    
    Gain
    
    
    Loss
    
    
    Fair ValueFNMA mortgage-backed securities
    
    $
    27,023,693
    
    
    $
    
    
    
    $
    (1,823,784
    )
    
    $
    25,199,909FHLMC mortgage-backed securities
    
    
    554,230
    
    
    
    7,674
    
    
    
    
    
    
    
    561,904$
    27,577,923
    
    
    $
    7,674
    
    
    $
    (1,823,784
    )
    
    $
    25,761,813
   62




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##### Table of Contents



NOTE 3 MORTGAGE-BACKED SECURITIES
  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
    )
 2006
    
    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
    
    $
    1,985,731
    
    
    $
    (84,232
    )
    
    $
    23,214,178
    
    
    $
    (1,739,552
    )
    
    $
    25,199,909
    
    
    $
    (1,823,784
    )
   
 63




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##### Table of Contents



NOTE 4 LOANS RECEIVABLE
  2007
    
    
    2006Real estate mortgages:One-to-four family residential
    
    $
    163,297,830
    
    
    $
    174,574,861Home equity line of credit
    
    
    85,092,530
    
    
    
    94,449,845Multi-family residential
    
    
    48,100,726
    
    
    
    45,715,780Commercial
    
    
    184,849,852
    
    
    
    170,392,400Commercial equity line of credit
    
    
    33,207,626
    
    
    
    34,063,990Land
    
    
    74,414,426
    
    
    
    77,242,222Construction  residential
    
    
    63,315,868
    
    
    
    84,146,125Construction  commercial
    
    
    38,007,505
    
    
    
    41,712,042Total real estate mortgages
    
    
    690,286,363
    
    
    
    722,297,265Non real estate loans
    
    
    30,454,898
    
    
    
    21,824,041Total loans receivable
    
    
    720,741,261
    
    
    
    744,121,306Net deferred loan origination fees
    
    
    (2,831,894
    )
    
    
    (3,381,630
    )Allowance for loan losses
    
    
    (4,580,549
    )
    
    
    (4,674,681
    )Loans receivable, net
    
    $
    713,328,818
    
    
    $
    736,064,995
  2007
    
    
    2006
    
    
    2005Beginning balance
    
    $
    4,674,681
    
    
    $
    4,312,274
    
    
    $
    4,376,704Provision for loan losses
    
    
    1,102,500
    
    
    
    826,300
    
    
    
    111,000Charge-offs
    
    
    (1,196,632
    )
    
    
    (463,893
    )
    
    
    (175,430
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    4,580,549
    
    
    $
    4,674,681
    
    
    $
    4,312,274
  
 64




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NOTE 4 LOANS RECEIVABLE
  2007
    
    
    2006Loans on non-accrual status:Real estate mortgages:One-to-four family residential
    
    $
    5,265,002
    
    
    $
    7,586,930Commercial
    
    
    3,724,704
    
    
    
    2,972,146Multi-family residential
    
    
    
    
    
    
    21,300Construction and land
    
    
    4,663,095
    
    
    
    4,876,009Total loans on non-accrual status
    
    
    13,652,801
    
    
    
    15,456,385Loans past due 90 days, still on accrual status:Real estate mortgages:One-to-four family residential
    
    
    
    
    
    
    Construction and land
    
    
    875,593
    
    
    
    Total non-accrual and past due loans
    
    $
    14,528,394
    
    
    $
    15,456,385
    
 65




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##### Table of Contents



NOTE 5 MORTGAGE BANKING ACTIVITIES
  2007
    
    
    2006Loans held for sale
    
    $
    15,043,780
    
    
    $
    10,854,064Less: Allowance to adjust to lower of cost or market
    
    
    (50,400
    )
    
    
    (156,000
    )Loans held for sale, net
    
    $
    14,993,380
    
    
    $
    10,698,064
  2007
    
    
    2006
    
    
    2005Mortgage loan servicing fees
    
    $
    1,970,702
    
    
    $
    1,954,692
    
    
    $
    1,872,974Amortization of mortgage servicing rights
    
    
    (1,313,137
    )
    
    
    (1,359,003
    )
    
    
    (1,641,778
    )Market adjustment for loans held for sale
    
    
    105,600
    
    
    
    (156,000
    )
    
    
    Change in fair value of mortgage banking derivatives
    
    
    131,300
    
    
    
    (239,000
    )
    
    
    (15,000
    )Gross realized:Gains on sales of loans
    
    
    1,448,206
    
    
    
    1,830,073
    
    
    
    2,222,305Losses on sales of loans
    
    
    (1,071,673
    )
    
    
    (1,196,291
    )
    
    
    (1,127,266
    )$
    1,270,998
    
    
    $
    834,471
    
    
    $
    1,311,235
   2007
    
    
    2006
    
    
    2005Beginning balance
    
    $
    4,806,836
    
    
    $
    5,001,474
    
    
    $
    5,358,845Originated
    
    
    932,597
    
    
    
    1,164,365
    
    
    
    1,284,407Amortized
    
    
    (1,313,137
    )
    
    
    (1,359,003
    )
    
    
    (1,641,778
    )Ending balance
    
    $
    4,426,296
    
    
    $
    4,806,836
    
    
    $
    5,001,474
   
 66




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NOTE 6  OFFICE PROPERTIES AND EQUIPMENT
  2007
    
    
    2006Land and land improvements
    
    $
    1,034,892
    
    
    $
    1,034,892Building and building improvements
    
    
    5,553,076
    
    
    
    5,553,076Leasehold improvements
    
    
    5,949,232
    
    
    
    5,943,807Furniture and equipment
    
    
    12,408,119
    
    
    
    12,124,53924,945,319
    
    
    
    24,656,314Less accumulated depreciation and amortization
    
    
    (14,356,944
    )
    
    
    (12,623,622
    )$
    10,588,375
    
    
    $
    12,032,692
 NOTE 7 DEPOSITS
  2007
    
    
    2006Amount
    
    
    %
    
    
    Amount
    
    
    %12 months or less
    
    $
    443,536,475
    
    
    
    89.6
    %
    
    $
    441,726,006
    
    
    
    87.6
    %13 to 24 months
    
    
    26,314,568
    
    
    
    5.3
    
    
    
    38,845,591
    
    
    
    7.725 to 36 months
    
    
    13,578,346
    
    
    
    2.8
    
    
    
    8,087,568
    
    
    
    1.637 to 48 months
    
    
    11,435,837
    
    
    
    2.3
    
    
    
    15,476,643
    
    
    
    3.1$
    494,865,226
    
    
    
    100.0
    %
    
    $
    504,135,808
    
    
    
    100.0
    %Weighted average rate on certificates of deposit
    
    
    
    
    
    
    5.06
    %
    
    
    
    
    
    
    4.57
    %
    67




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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
    
    
    2007
    
    
    2006February 2008
    
    
    5.37
    %
    
    $
    
    
    
    $
    10,000,000March 2008
    
    
    5.64
    %
    
    
    10,000,000
    
    
    
    10,000,000$
    10,000,000
    
    
    $
    20,000,000Weighted average interest rate
    
    
    
    
    
    
    5.64
    %
    
    
    5.51
    %
   68




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NOTE 9  SUBORDINATED DEBENTURES, NOTES PAYABLE AND OTHER BORROWINGS
 Line of Credit
 Subordinated Debt
    Repurchase Agreement
  
 69




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##### Table of Contents



NOTE 10  FEDERAL INCOME TAXES
  2007
    
    
    2006
    
    
    2005Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Computed expected tax
    
    $
    2,084,109
    
    
    
    35.0
    %
    
    $
    2,413,425
    
    
    
    35.0
    %
    
    $
    2,840,290
    
    
    
    35.0
    %Increase (decrease) in tax
resulting from:Benefit of graduated rates
    
    
    (59,546
    )
    
    
    (1.0
    )
    
    
    (68,955
    )
    
    
    (1.0
    )
    
    
    (81,151
    )
    
    
    (1.0
    )Affordable housing tax credit
    
    
    (111,645
    )
    
    
    (1.9
    )
    
    
    (111,645
    )
    
    
    (1.6
    )
    
    
    (111,645
    )
    
    
    (1.4
    )Bank-owned life insurance
    
    
    (296,083
    )
    
    
    (5.0
    )
    
    
    (203,132
    )
    
    
    (2.9
    )
    
    
    (188,498
    )
    
    
    (2.3
    )Stock compensation
    
    
    57,076
    
    
    
    1.0
    
    
    
    51,757
    
    
    
    0.8
    
    
    
    0
    
    
    
    0.0Other, net
    
    
    46,361
    
    
    
    0.8
    
    
    
    (28,951
    )
    
    
    (0.5
    )
    
    
    71,996
    
    
    
    0.9$
    1,720,272
    
    
    
    28.9
    %
    
    $
    2,052,499
    
    
    
    29.8
    %
    
    $
    2,530,992
    
    
    
    31.2
    %
  2007
    
    
    2006Deferred tax assets:Loan loss reserves
    
    $
    1,317,348
    
    
    $
    1,500,803Deferred compensation
    
    
    1,081,068
    
    
    
    836,743Mortgage banking reserves
    
    
    58,854
    
    
    
    139,400Other
    
    
    168,783
    
    
    
    135,847Total gross deferred tax assets
    
    
    2,626,053
    
    
    
    2,612,793Deferred tax liabilities:Deferred loan costs
    
    
    (304,861
    )
    
    
    (337,289
    )FHLB stock dividend
    
    
    (1,871,513
    )
    
    
    (1,750,269
    )Originated mortgage servicing asset
    
    
    (1,504,941
    )
    
    
    (1,634,324
    )Fixed assets
    
    
    (848,122
    )
    
    
    (1,184,677
    )Prepaid franchise tax
    
    
    (171,972
    )
    
    
    (163,549
    )Unrealized losses on loans held for sale
    
    
    (440
    )
    
    
    (75,971
    )Other
    
    
    (100,549
    )
    
    
    (142,608
    )Total gross deferred tax liabilities
    
    
    (4,802,398
    )
    
    
    (5,288,687
    )Net deferred tax liability
    
    $
    (2,176,345
    )
    
    $
    (2,675,894
    )
   70




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NOTE 10  FEDERAL INCOME TAXES
  NOTE 11  LEASES
  Leases With
    
    
    Leases WithUnrelated
    
    
    Related
    
    
    TotalYear ending June 30,
    
    Parties
    
    
    Parties
    
    
    Leases2008
    
    $
    732,636
    
    
    $
    218,632
    
    
    $
    951,2682009
    
    
    620,135
    
    
    
    218,632
    
    
    
    838,7672010
    
    
    412,058
    
    
    
    218,632
    
    
    
    630,6902011
    
    
    206,774
    
    
    
    175,200
    
    
    
    381,9742012
    
    
    99,503
    
    
    
    153,484
    
    
    
    252,987Thereafter
    
    
    29,071
    
    
    
    183,728
    
    
    
    212,799Total minimum lease payments
    
    $
    2,100,177
    
    
    $
    1,168,308
    
    
    $
    3,268,485
   71




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NOTE 12  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
      2007
    
    2006Commitments to fund variable-rate mortgage loans
    
    $
    12,626,900
    
    
    $
    48,287,000Commitments to fund equity lines of credit
    
    
    99,257,000
    
    
    
    92,901,000Undisbursed portion of loan proceeds
    
    
    60,795,479
    
    
    
    66,749,000
   72




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##### Table of Contents



NOTE 12  LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
  NOTE 13  REGULATORY CAPITAL
      73




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NOTE 13  REGULATORY CAPITAL
  To Be WellRequired
    
    Capitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action Regulations iAmount
    
    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
 To Be WellRequired
    
    Capitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action Regulations iAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio2006Total Capital to risk
weighted assets
    
    
    80,241
    
    
    
    10.28
    %
    
    
    62,416
    
    
    
    8.00
    %
    
    
    78,020
    
    
    
    10.00
    %Tier 1 (Core) Capital to risk
weighted assets
    
    
    75,827
    
    
    
    9.72
    %
    
    
    31,208
    
    
    
    4.00
    %
    
    
    46,812
    
    
    
    6.00
    %Tier 1 (Core) Capital to
adjusted total assets
    
    
    75,827
    
    
    
    8.33
    %
    
    
    36,431
    
    
    
    4.00
    %
    
    
    45,538
    
    
    
    5.00
    %Tangible Capital to adjusted
total assets
    
    
    75,827
    
    
    
    8.33
    %
    
    
    13,662
    
    
    
    1.50
    %
    
    
    NA
    
    
    
    NA
  74




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NOTE 14 RELATED PARTY TRANSACTIONS
  Beginning balance
    
    $
    8,623,000New Loans
    
    
    2,240,000Repayments
    
    
    (3,283,673
    )Ending balance
    
    $
    7,579,327
 NOTE 15 STOCK OPTIONS
     Outstanding
    
    
    ExercisableWeighted Average
    
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    
    Remaining
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Contractual
    
    
    
    
    
    
    ExercisePrice
    
    
    Number
    
    
    Life
    
    
    Number
    
    
    Price$5.49
    
    
        $  6.10
    
    
    
    93,355
    
    
    
    2.63
    
    
    
    93,355
    
    
    $
    5.73$6.75
    
    
        $  7.76
    
    
    
    164,482
    
    
    
    2.94
    
    
    
    164,482
    
    
    $
    7.27$8.32
    
    
        $13.64
    
    
    
    324,313
    
    
    
    7.10
    
    
    
    180,144
    
    
    $
    10.85Total
    
    
    
    
    
    
    582,150
    
    
    
    5.21
    
    
    
    437,981
    
    
    $
    8.41
   75




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##### Table of Contents



NOTE 15 STOCK OPTIONS
  2007WeightedAverageExerciseShares
    
    
    PriceOutstanding beginning of year
    
    
    558,474
    
    
    $
    8.77Forfeited
    
    
    
    
    
    
    Exercised
    
    
    (43,099
    )
    
    
    7.15Granted
    
    
    66,775
    
    
    
    10.82Outstanding end of year
    
    
    582,150
    
    
    $
    9.12Exercisable end of year
    
    
    437,981
    
    
    $
    8.41
      2007
    
    2006
    
    2005Risk-free interest rate
    
    
    4.56
    %
    
    
    4.57
    %
    
    
    3.75
    %Dividend yield
    
    
    2.74
    %
    
    
    2.67
    %
    
    
    2.21
    %Expected volatility
    
    
    24.95
    %
    
    
    31.56
    
    
    
    29.29Expected life in years
    
    
    9.14
    
    
    
    9.72
    
    
    
    7.00
  2007
    
    2006
    
    2005$2.83
    
    $3.69
    
    $3.57
  76




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##### Table of Contents



NOTE 16  EARNINGS PER SHARE
  2007Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic EPS: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 EPS:Income available to common shareholders
    
    $
    4,234,324
    
    
    
    7,823,007
    
    
    $
    0.54
 2006Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic EPS: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 EPS:Income available to common shareholders
    
    $
    4,843,001
    
    
    
    7,845,969
    
    
    $
    0.62
 2005Per-ShareNet Income
    
    
    Shares
    
    
    AmountBasic EPS:Income available to common shareholders
    
    $
    5,584,121
    
    
    
    7,734,136
    
    
    $
    0.72Dilutive effect of assumed exercises of stock options
    
    
    
    
    
    
    172,610
    
    
    
    (0.01
    )Diluted EPS:Income available to common shareholders
    
    $
    5,584,121
    
    
    
    7,906,746
    
    
    $
    0.71
   77




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NOTE 17  FAIR VALUE OF FINANCIAL INSTRUMENTS
  June 30, 2007
    
    June 30, 2006Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(in thousands)Assets:Cash and amounts due from
depository institutions
    
    $
    20,293
    
    
    $
    20,293
    
    
    $
    6,614
    
    
    $
    6,614Interest-bearing deposits
    
    
    622
    
    
    
    622
    
    
    
    1,804
    
    
    
    1,804Federal funds sold
    
    
    7,542
    
    
    
    7,542
    
    
    
    11,320
    
    
    
    11,320Securities held to maturity
    
    
    58,000
    
    
    
    58,069
    
    
    
    58,000
    
    
    
    57,257Mortgage-backed securities held to
maturity
    
    
    25,880
    
    
    
    24,557
    
    
    
    27,578
    
    
    
    25,762Loans receivable
    
    
    713,329
    
    
    
    719,711
    
    
    
    731,997
    
    
    
    725,155Loans receivable held for sale, net
    
    
    14,993
    
    
    
    14,993
    
    
    
    10,698
    
    
    
    10,698Federal Home Loan Bank stock
    
    
    12,312
    
    
    
    12,312
    
    
    
    11,955
    
    
    
    11,955Accrued interest receivable
    
    
    4,197
    
    
    
    4,197
    
    
    
    4,068
    
    
    
    4,068Mandatory forward sales contracts
    
    
    244
    
    
    
    244
    
    
    
    67
    
    
    
    67Liabilities:Demand deposits and passbook
savings
    
    
    (163,187
    )
    
    
    (163,187
    )
    
    
    (152,728
    )
    
    
    (152,728
    )Time deposits
    
    
    (494,865
    )
    
    
    (495,641
    )
    
    
    (504,136
    )
    
    
    (500,537
    )Line of credit
    
    
    (1,260
    )
    
    
    (1,260
    )
    
    
    (1,773
    )
    
    
    (1,773
    )Advances from the Federal Home
Loan Bank of Cincinnati
    
    
    (75,000
    )
    
    
    (75,019
    )
    
    
    (95,000
    )
    
    
    (95,021
    )Repurchase agreement
    
    
    (50,000
    )
    
    
    (49,096
    )
    
    
    (50,000
    )
    
    
    (50,000
    )Subordinated debentures
    
    
    (20,000
    )
    
    
    (20,000
    )
    
    
    (10,000
    )
    
    
    (10,000
    )Accrued interest payable
    
    
    (304
    )
    
    
    (304
    )
    
    
    (350
    )
    
    
    (350
    )Commitments to make loans
intended to be sold
    
    
    (367
    )
    
    
    (367
    )
    
    
    (321
    )
    
    
    (321
    )
  Cash and amounts due from depository institutions, interest- bearing deposits, and federal funds
sold
  78




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##### Table of Contents



NOTE 17 FAIR VALUE OF FINANCIAL INSTRUMENTS
 Securities and mortgage-backed securities
 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
  79




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##### Table of Contents



NOTE 17 FAIR VALUE OF FINANCIAL INSTRUMENTS
 Commitments to make loans intended for sale
 Off-balance-sheet instruments.
  80




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##### Table of Contents



NOTE 18  PARENT COMPANY
  CONDENSED STATEMENTS OF FINANCIAL CONDITION
 2007
    
    
    2006Cash and amounts due from depository institutions
    
    $
    30,368
    
    
    $
    55,404Prepaid expenses and other assets
    
    
    2,028,039
    
    
    
    1,823,057Investment in Bank subsidiary
    
    
    87,635,883
    
    
    
    75,827,227Investment in non-Bank subsidiaries
    
    
    3,122,905
    
    
    
    2,887,345Total assets
    
    $
    92,817,195
    
    
    $
    80,593,033Accrued expenses and other liabilities
    
    $
    1,327,354
    
    
    $
    1,619,893Subordinated debentures
    
    
    20,000,000
    
    
    
    10,000,000Stockholders equity
    
    
    71,489,841
    
    
    
    68,973,140Total liabilities and stockholders equity
    
    $
    92,817,195
    
    
    $
    80,593,033
 CONDENSED STATEMENTS OF OPERATIONS
 2007
    
    
    2006
    
    
    2005Income:Mortgage banking activities
    
    $
    24,572
    
    
    $
    9,055
    
    
    $
    11,811Dividends from Bank subsidiary
    
    
    
    
    
    
    2,400,000
    
    
    
    1,000,000Interest Income
    
    
    38
    
    
    
    
    
    
    
    43224,610
    
    
    
    2,409,055
    
    
    
    1,012,243Expenses:Interest expense
    
    
    1,549,920
    
    
    
    693,292
    
    
    
    503,190General and administrative
    
    
    374,487
    
    
    
    213,035
    
    
    
    195,5701,924,407
    
    
    
    906,327
    
    
    
    698,760Income (loss) before federal income taxes and
equity in undistributed net income of subsidiaries
    
    
    (1,899,797
    )
    
    
    1,502,728
    
    
    
    313,483Federal income tax benefit
    
    
    645,931
    
    
    
    304,956
    
    
    
    233,018Income (loss) before equity in undistributed
net income of subsidiaries
    
    
    (1,253,866
    )
    
    
    1,807,684
    
    
    
    546,501Equity in undistributed net income of subsidiaries
    
    
    5,488,190
    
    
    
    3,035,317
    
    
    
    5,037,620Net income
    
    $
    4,234,324
    
    
    $
    4,843,001
    
    
    $
    5,584,121
  81




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##### Table of Contents



NOTE 18  PARENT COMPANY
 CONDENSED STATEMENTS OF CASH FLOWS
 2007
    
    
    2006
    
    
    2005Operating activities:Net income
    
    $
    4,234,324
    
    
    $
    4,843,001
    
    
    $
    5,584,121Equity in undistributed net income of subsidiaries
    
    
    (5,488,190
    )
    
    
    (3,035,317
    )
    
    
    (5,037,620
    )Other, net
    
    
    (450,283
    )
    
    
    (285,743
    )
    
    
    (194,216
    )Net cash from (used in) operating activities
    
    
    (1,704,149
    )
    
    
    1,521,941
    
    
    
    352,3285Investing activities:Advance to subsidiary
    
    
    (52,500
    )
    
    
    800,000
    
    
    
    (805,500
    )Investment in subsidiary
    
    
    (6,000,000
    )
    
    
    
    
    
    
    (7,001,000
    )Net decrease in cash from investing activities
    
    
    (6,052,500
    )
    
    
    800,000
    
    
    
    (7,806,500
    )Financing activities:Repayment on note payable
    
    
    
    
    
    
    
    
    
    
    Proceeds from subordinated debentures
    
    
    10,000,000
    
    
    
    
    
    
    
    Proceeds and income tax benefit from exercise
of stock options
    
    
    311,536
    
    
    
    144,737
    
    
    
    160,468Stock purchased and retired
    
    
    (293,541
    )
    
    
    (141,104
    )
    
    
    (123,024
    )Dividends paid
    
    
    (2,286,382
    )
    
    
    (2,235,692
    )
    
    
    (2,034,595
    )Purchase of treasury stock
    
    
    
    
    
    
    (255,742
    )
    
    
    (454,212
    )Net cash from (used in) financing activities
    
    
    7,731,613
    
    
    
    (2,487,801
    )
    
    
    (2,451,363
    )Net increase (decrease) in cash and
cash-equivalents
    
    
    (25,036
    )
    
    
    (165,859
    )
    
    
    (9,905,578
    )Cash and cash equivalents at beginning of year
    
    
    55,404
    
    
    
    221,263
    
    
    
    10,126,841Cash and cash equivalents at end of year
    
    $
    30,368
    
    
    $
    55,404
    
    
    $
    221,263
  82




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NOTE 19 EMPLOYEE BENEFIT PLANS
 401(k) Savings Plan
  Supplemental Executive Retirement Plan
  83




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##### Table of Contents



NOTE 20  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
 (1)
 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
 Quarters for the year ended June 30, 2006First
    
    
    Second
    
    
    Third
    
    
    FourthInterest income
    
    $
    12,723
    
    
    $
    13,391
    
    
    $
    14,451
    
    
    $
    15,087Interest expense
    
    
    6,048
    
    
    
    6,676
    
    
    
    7,392
    
    
    
    8,292Net interest income
    
    
    6,675
    
    
    
    6,715
    
    
    
    7,059
    
    
    
    6,795Provision for loan losses
    
    
    37
    
    
    
    257
    
    
    
    352
    
    
    
    180Non-interest income
    
    
    639
    
    
    
    453
    
    
    
    412
    
    
    
    524Non-interest expense
    
    
    5,374
    
    
    
    5,443
    
    
    
    5,297
    
    
    
    5,436Income before Federal income taxes
    
    
    1,903
    
    
    
    1,468
    
    
    
    1,822
    
    
    
    1,703Federal income taxes
    
    
    551
    
    
    
    441
    
    
    
    555
    
    
    
    506Net Income
    
    $
    1,352
    
    
    $
    1,027
    
    
    $
    1,267
    
    
    $
    1,197Basic earnings per share
    
    $
    0.18
    
    
    $
    0.13
    
    
    $
    0.16
    
    
    $
    0.16Diluted earnings per share
    
    $
    0.17
    
    
    $
    0.13
    
    
    $
    0.16
    
    
    $
    0.16
 
 (1)
    
    The total of the four quarterly amounts may not equal the full year
amount due to rounding. 84




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NOTE 21 DEFINITIVE AGREEMENT
   85




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
    Managements Annual Report on Internal Control Over Financial Reporting
         /s/ John R. Male
    
    
    
    /s/ C. Keith SwaneyChairman of the Board
    
    
    
    President, Chief Operatingand Chief Executive Officer
    
    
    
    Officer and Treasurer
 86




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##### Table of Contents



Internal ControlIntegrated Framework
     Internal ControlIntegrated Framework Internal ControlIntegrated Framework
    
 Changes in Internal Control Over Financial Reporting
  87




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##### Table of Contents



Item 9B. Other Information
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant
 Directors of the Registrant
   Age
    
    Year First Elected
    
    Currentas of
    
    as Director of the
    
    TermName
    
    September 4, 2007
    
    Company or the Bank
    
    to ExpireJohn R. Male
    
    59
    
    1981
    
    2007Stanley T. Jaros
    
    62
    
    1997
    
    2007Raymond J. Negrelli
    
    55
    
    2002
    
    2007Ronald D. Holman, II
    
    47
    
    2003
    
    2007Robert K. Healey
    
    82
    
    1973
    
    2008Stuart D. Neidus
    
    56
    
    1996
    
    2008C. Keith Swaney
    
    64
    
    2000
    
    2008Gerald A. Fallon
    
    58
    
    2002
    
    2008
 Presented below is certain information concerning the directors of the Company. Unless
otherwise stated, all directors have held the positions indicated for at least the past five years.
 John R. Male.
 88




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##### Table of Contents



Stanley T. Jaros.
 Raymond J. Negrelli.
 Ronald D. Holman, II.
 Robert K. Healey.
 Stuart D. Neidus.
 C. Keith Swaney.
 Gerald A. Fallon.
 89




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##### Table of Contents



Executive Officers of the Registrant
  Age as ofName
    
    September 4, 2007
    
    TitleJohn R. Male
    
    
    59
    
    
    Chairman of the Board and Chief Executive Officer
of the Company and the BankC. Keith Swaney
    
    
    64
    
    
    President and Chief Operating Officer of the
Company and the Bank, Treasurer of the Company
and Chief Financial Officer of the BankJeffrey N. Male
    
    
    58
    
    
    Vice President and Secretary of the Company and
Executive Vice President and Chief Lending
Officer of the Bank
 Jeffrey N. Male.
  Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics
  Audit Committee
  90




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##### Table of Contents



Item 11. Executive Compensation
 Compensation Discussion and Analysis
  The Objectives of the Executive Compensation Program
  Elements Used to Implement Our Compensation Objectives
  
    
    Base Salary
    
    Discretionary Bonus Program
    
    Management Incentive Compensation Plan
    
    Long-term Equity Incentive Plan
    
    Supplemental Executive Retirement Agreements
    
    Severance Agreements
  Base Salary. Summary Compensation
Table
 Management Incentive Compensation Plan. Grants of Plan-Based Awards
 Discretionary Bonus Program. Summary Compensation Table
 Long-Term Equity Incentive Compensation Program.
 91




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##### Table of Contents



Grants of Plan Based Awards
 Supplemental Executive Retirement Agreements. Pension Benefits Potential Post-Termination
Benefits
 Severance Agreements. Executive Compensation-Severance Agreements and Executive Compensation Potential
Post-Termination Benefits
 Role of Compensation Committee
    Role of Management
  92




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##### Table of Contents



Tax and Accounting Considerations
  Retirement Benefits; Employee Welfare Benefits
  Perquisites
  Stock Compensation Grant and Award Practices
    93




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##### Table of Contents



Stock Ownership Requirements
 Voting Securities
and Security Ownership
 Compensation for the Named Executive Officers During the 2007 Fiscal Year
 Chief Executive Officer Compensation Grants of Plan
Based Awards
 Compensation for our Other Named Executive Officers. Grants of Plan Based Awards
 94




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##### Table of Contents



Executive Compensation
 Summary Compensation Table
  Change inPension Valueand NonqualifiedDeferredName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Option
    
    
    Compensation
    
    
    All OtherPrincipal
Position(s)
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    Awards (1)
    
    
    Earnings (2)
    
    
    Compensation (3)
    
    
    TotalJohn R. Male
    
    
    2007
    
    
    $
    226,021
    
    
    $
    67,807
    
    
    $
    12,036
    
    
    $
    179,255
    
    
    $
    54,688
    
    
    $
    539,807Chairman of the Board
and Chief Executive Officer of
the Company and the BankC. Keith Swaney
    
    
    2007
    
    
    
    200,000
    
    
    
    50,000
    
    
    
    15,687
    
    
    
    434,892
    
    
    
    45,950
    
    
    
    746,529President and Chief
Operating
Officer of the Company and
the Bank, Treasurer of the
Company and Chief Financial
Officer of the BankJeffrey N. Male
    
    
    2007
    
    
    
    145,000
    
    
    
    36,250
    
    
    
    7,935
    
    
    
    109,217
    
    
    
    27,156
    
    
    
    325,558Vice President and Secretary
of the Company and Executive
Vice President of the Bank
 
 (1)
    
    Reflects the dollar amount recognized for financial statement reporting purposes in
accordance with FAS 123(R) during the year ended June 30, 2007, based upon a fair value of
$3.55, $3.73, $3.60, $1.99 and $1.61 for options granted in 2002, 2003, 2004, 2005 and 2006,
respectively, to Messrs. John R. Male and Jeffrey N. Male, and $3.55, $4.13, $4.00, $3.79 and
$3.08 for options granted to Mr. C. Keith Swaney in 2002, 2003, 2004, 2005 and 2006,
respectively, using the Black-Scholes option pricing model. For further information regarding
the assumptions used to compute fair value, see footnote 15 to the Notes to the Consolidated
Financial Statements contained in Item 8 of this Annual Report as Form 10-K.(2)
    
    Represents the aggregate change in the present value of the accumulated benefits under each
executives SERP during the year ended June 30, 2007. See   Pension Benefits and 
Post-Termination Benefits contained in Item 11 of this Annual Report on Form 10-K and Note 19 to the Notes to the Consolidated Financial Statements contained in Item 8 of this Annual
Report on Form 10-K for a discussion of the SERPs.(3)
    
    Details of the amounts reported in the All Other Compensation column for 2007 are provided
in the table below. John Male
    
    C. Keith Swaney
    
    Jeffrey MaleDirector Compensation
    
    $
    25,200
    
    
    $
    25,200
    
    
    $
    Employer Contributions to 401(k) Plan
    
    
    4,520
    
    
    
    1,808
    
    
    
    2,900Disability Insurance Premiums
    
    
    2,979
    
    
    
    3,756
    
    
    
    2,713Life Insurance Premiums
    
    
    6,900
    
    
    
    11,340
    
    
    
    5,470Employment Anniversary Incentive
    
    
    4,346
    
    
    
    3,846
    
    
    
    2,789Perquisites
    
    
    10,743
    (a)
    
    
    
    (b)
    
    
    13,284
    (c)
 
 (a)
    
    Consists of an automobile allowance of $5,830, tax consulting fees of $1,950 and
country club dues of $2,963.(b)
    
    Mr. Swaneys aggregate perquisite amount was less than $10,000.(c)
    
    Consists of an automobile allowance of $4,164, tax consulting fees of $1,450 and
country club dues of $7,670. 
 95




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##### Table of Contents



Grants of Plan-Based Awards
  2000 Incentive Stock Option and Deferred Compensation Plan.
 All Other OptionAwards: Number ofSecurities
    
    Exercise or Base
    
    Grant Date FairUnderlying Options
    
    Price of Option
    
    Value of OptionName
    
    Grant Date
    
    (#)(1)
    
    Awards (2)
    
    Awards (3)John R. Male
    
    11/01/06
    
    
    7,000
    
    
    $
    11.70
    
    
    $
    11,270C. Keith Swaney
    
    11/01/06
    
    
    6,200
    
    
    
    10.64
    
    
    
    19,096Jeffrey N. Male
    
    11/01/06
    
    
    4,500
    
    
    
    11.70
    
    
    
    7,245
 
 (1)
    
    The option awards vest in five (5) annual installments beginning on the date of grant.(2)
    
    Option exercise price was the average of the bid and asked prices at the market close on the
date of grant. The exercise price for options granted to John R. Male and Jeffrey N. Male is
110% of the fair market value of the Company common stock on the date of grant.(3)
    
    The grant date fair value of each option award in the table is computed in accordance with
FAS 123(R) and is therefore based upon the fair value of each option of $1.61 for Messrs. John
R. Male and Jeffrey N. Male and $3.08 for Mr. C. Keith Swaney, using the Black-Scholes option
pricing model. For further information on the assumptions used to compute the fair value, see
Note 15 to the Notes to the Consolidated Financial Statements contained in Item 8 of this
Annual Report on Form 10-K. Management Incentive Compensation Plan
  Estimated Future Payouts Under Non-EquityIncentive Plan Awards (1)Threshold(2)
    
    Target
    
    MaximumJohn Male
    
    $
    
    
    
    $
    67,807
    
    
    $
    271,225Jeffrey Male
    
    
    
    
    
    
    50,000
    
    
    
    250,000C. Keith Swaney
    
    
    
    
    
    
    36,250
    
    
    
    181,50
 
 (1)
    
    Represents non-equity incentive award opportunity levels for the 2007 fiscal year under the
Companys Management Incentive Compensation Plan. Award opportunity levels were determined by
the Compensation Committee as a percentage of the executives base salary. The Company did
not reach the minimum threshold requirement under the plan during the 2007 fiscal year,
therefore, no awards were made for the 2007 plan year.(2)
    
    No payment is made unless threshold performance is exceeded. 96




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##### Table of Contents



Severance Agreements
 Potential Post-Termination Benefits
  Pension Benefits
 Potential Post-Termination Benefits
 Present ValueNumber of Years of
    
    of AccumulatedName
    
    Plan Name
    
    Credited Service
    
    Benefit (1)John R. Male
    
    SERP
    
    9 years
    
    $
    918,814C. Keith Swaney
    
    SERP
    
    9 years
    
    
    1,549,326Jeffrey N. Male
    
    SERP
    
    9 years
    
    
    471,841
 
 (1)
    
    The accumulated benefit is calculated in accordance with Accounting Principles Board No.
12, as amended by Statement of Financial Accounting Standards No. 106, using a 6.00% discount
rate and assuming payment at normal retirement age (65). 97




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Outstanding Equity Awards at Fiscal Year End
  Option AwardsNumber ofSecuritiesUnderlyingNumber of Securities
    
    Unexercised
    
    OptionUnderlying Unexercised
    
    Options (#)
    
    Exercise Price
    
    Option ExpirationOptions (#) Exercisable
    
    Exercisable
    
    ($)
    
    DateJohn R. Male
    
    
    4,064
    
    
    
    1,018
    (1)
    
    $
    13.55
    
    
    
    11/1/20082,772
    
    
    
    1,848
    (2)
    
    
    13.64
    
    
    
    11/1/20091,680
    
    
    
    2,520
    (3)
    
    
    12.21
    
    
    
    11/1/20101,400
    
    
    
    5,600
    (4)
    
    
    11.70
    
    
    
    11/1/2011C. Keith Swaney
    
    
    7,015
    
    
    
    
    
    
    
    5.78
    
    
    
    11/1/20086,377
    
    
    
    
    
    
    
    6.96
    
    
    
    11/1/20095,797
    
    
    
    
    
    
    
    6.12
    
    
    
    11/1/20105,270
    
    
    
    
    
    
    
    7.07
    
    
    
    11/1/20114,791
    
    
    
    
    
    
    
    8.32
    
    
    
    11/1/20123,484
    
    
    
    872
    (1)
    
    
    12.32
    
    
    
    11/1/20132,376
    
    
    
    1,584
    (2)
    
    
    12.40
    
    
    
    11/1/20141,440
    
    
    
    2,160
    (3)
    
    
    11.10
    
    
    
    11/1/20151,240
    
    
    
    4,960
    (4)
    
    
    10.64
    
    
    
    11/1/2016Jeffrey N. Male
    
    
    2,708
    
    
    
    680
    (1)
    
    
    13.55
    
    
    
    11/1/20081,848
    
    
    
    1,232
    (2)
    
    
    13.64
    
    
    
    11/1/20091,120
    
    
    
    1,680
    (3)
    
    
    12.21
    
    
    
    11/1/2010900
    
    
    
    3,600
    (4)
    
    
    11.70
    
    
    
    11/1/2011
 
 (1)
    
    These options vest on November 1, 2007.(2)
    
    50% of these options vest on each of November 1, 2007 and 2008.(3)
    
    33.3% of these options vest on each of November 1, 2007, 2008 and 2009.(2)
    
    25% of these options vest on each of November 1, 2007, 2008, 2009 and 2010. Option Exercises
  Option AwardsNumber of SharesAcquired on Exercise
    
    Value Realized onName
    
    (#)
    
    Exercise ($) (1)John R. Male
    
    
    11,739
    
    
    $
    25,060C. Keith Swaney
    
    
    10,523
    
    
    
    39,812Jeffrey N. Male
    
    
    7,825
    
    
    
    18,734
 
 (1)
    
    Calculated based on the product of: (a) the number of shares acquired on exercise, and (b)
the difference between the market price of the underlying Common Stock on the exercise date,
determined based on the closing sale price on the exercise date, and the exercise price of the
options. Potential Post-Termination Benefits
 SERP.
 98




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##### Table of Contents



 Severance Agreements
  Severance Agreements.
 99




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##### Table of Contents



Director Compensation
  Fees Earned or
    
    OptionName
    
    Paid in Cash ($)
    
    Awards ($)(1)
    
    Total ($)Gerald A. Fallon
    
    $
    30,200
    
    
    $
    9,240
    
    
    $
    39,440Robert K. Healey
    
    
    30,200
    
    
    
    7,700
    
    
    
    37,900Ronald D. Holman, II
    
    
    30,200
    
    
    
    9,240
    
    
    
    39,440Stanley T. Jaros
    
    
    30,200
    
    
    
    6,160
    
    
    
    36,360Raymond J. Negrelli
    
    
    30,200
    
    
    
    6,160
    
    
    
    36,360Stuart D. Neidus
    
    
    30,200
    
    
    
    12,320
    
    
    
    42,520
 
 (1)
    
    Reflects the dollar amount recognized for financial statement reporting purposes in
accordance with FAS 123(R) during the year ended June 30, 2007, based upon a fair value of
$3.08 for options granted in 2006 using the Black-Scholes option pricing model. For further
information regarding the assumptions used to compute fair value, see footnote 15 to the Notes
to the Consolidated Financial Statements contained in Item 8 of this Annual Report as Form
10-K. Cash Retainer and Meeting Fees for Directors.
 Annual Retainer
    
    $
    25,200Daily Fee per Special Board Event or Retreat
    
    $
    2,500
 Compensation Committee Interlocks And Insider Participation
   
    
    No executive officer of the Company or the Bank served as a member of the compensation
committee of another entity, one of whose executive officers served on the Compensation
Committee of the Company or the Bank;
    
    No executive officer of the Company or the Bank served as a director of another entity,
one of whose executive officers served on the Compensation Committee of the Company or the
Bank; and
    
    No executive officer of the Company or the Bank served as a member of the compensation
committee of another entity, one of whose executive officers served as a director of the
Company or the Bank.
 Compensation Committee Report
  100




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The Compensation Committee of the Board of Directors
of PVF Capital Corp.
 Gerald A. Fallon
Robert K. Healey
Stuart D. Neidus
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
 Equity Compensation Plan Information
  (a)
    
    
    (b)
    
    
    (c)Number of securities remainingavailable for future issuanceNumber of securities to be issued
    
    
    Weighted-average exercise
    
    
    under equity compensationupon exercise of outstanding
    
    
    price of outstanding
    
    
    plans (excluding securitiesoptions,
warrants and rights(1)
    
    
    options, warrants and rights
    
    
    reflected in column (a))(1)Equity compensation plans
approved by security holders
    
    
    582,150
    
    
    $
    9.12
    
    
    
    116,166Equity compensation plans not
approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    582,150
    
    
    $
    9.12
    
    
    
    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. Security Ownership of Certain Beneficial Owners and Management
  Percent of SharesName and Address
    
    Amount and Nature of
    
    of Common Stockof Beneficial Owner
    
    Beneficial Ownership (1)
    
    OutstandingPersons Owning Greater Than 5%:John R. Male
    
    
    656,389
    
    
    
    (2
    )
    
    
    8.44
    %30000 Aurora Road 
Solon, Ohio 44139
 101




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##### Table of Contents



Percent of SharesName and Address
    
    Amount and Nature of
    
    of Common Stockof Beneficial Owner
    
    Beneficial Ownership (1)
    
    OutstandingJeffrey L. Gendell
    
    
    605,023
    
    
    
    (3
    )
    
    
    7.79Tontine Financial Partners, L.P.Tontine Management, L.L.C. 
Tontine Overseas Associates, L.L.C.  
55 Railroad Avenue  
Greenwich, Connecticut 06830Umberto Fedeli
    
    
    465,000
    
    
    
    (4
    )
    
    
    5.995005 Rockside Road, Suite 500 
Independence, Ohio 44131Richard A. Barone
    
    
    572,595
    
    
    
    (5
    )
    
    
    7.38Ancora Capital, Inc.  
Ancora Securities, Inc.  
Ancora Advisors, LLC  
One Chagrin Highlands  
2000 Auburn Drive, Suite 300 
Cleveland, Ohio 44122Name of Directors  
and Executive Officers:Directors:John R. Male
    
    
    656,389
    
    
    
    (2
    )
    
    
    8.44Robert K. Healey
    
    
    58,098
    
    
    
    (6
    )
    
    
    *Gerald A. Fallon
    
    
    16,296
    
    
    
    
    
    
    
    *Raymond J. Negrelli
    
    
    29,296
    
    
    
    
    
    
    
    *Stuart D. Neidus
    
    
    61,148
    
    
    
    (7
    )
    
    
    *Stanley T. Jaros
    
    
    31,316
    
    
    
    
    
    
    
    *C. Keith Swaney
    
    
    241,193
    
    
    
    (8
    )
    
    
    3.09Ronald D. Holman, II
    
    
    14,360
    
    
    
    
    
    
    
    *Executive Officer:Jeffrey N. Male
    
    
    294,083
    
    

    (9
    )
    
    
    3.78All Executive Officers and Directors
    
    
    1,402,179
    
    
    
    
    
    
    
    17.67as a Group (9 persons)
 
 *
    
    Less than 1%.(1)
    
    In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial
owner, for purposes of this table, of any shares of Common Stock if he has or shares voting or
investment power with respect to such Common Stock or has a right to acquire beneficial
ownership at any time within 60 days from September 4, 2007. As used herein, voting power
is the power to vote or direct the voting of shares and investment power is the power to
dispose or direct the disposition of shares. Unless otherwise indicated, the beneficial owner
has sole voting and investment power with respect to the listed shares. The amounts shown
include 14,098, 17,191, 16,296, 14,296, 24,620, 20,620, 41,414, 14,360, 9,332 and 172,227
shares that Directors John R. Male, Robert K. Healey, Gerald A. Fallon, Raymond J. Negrelli,
Stuart D. Neidus, Stanley T. Jaros, C. Keith Swaney and Ronald D. Holman, II, Mr. Jeffrey N.
Male and all executive officers and directors as a group, respectively, have the right to
acquire pursuant to options exercisable within 60 days of September 4, 2007.(2)
    
    Includes 34,769 shares held by the Banks 401(k) Plan, as to which shares Mr. John R. Male
has sole voting and shared investment power. Also includes 409,341 shares held by trusts of
which Mr. John R. Male serves as trustee and as such has sole voting and investment power over
such shares. The amount shown includes 119,323 shares owned by a family limited partnership;
Mr. Male is the sole general partner of the family limited partnership and in such capacity
has sole voting and dispositive power over such shares. Mr. Male has a pecuniary interest in
24.75% of the shares owned by the family limited partnership.(3)
    
    According to their statement on Schedule 13G, as amended, filed on February 13, 2007, Jeffrey
L. Gendell shares voting and dispositive power over the listed shares, Tontine Financial
Partners, L.P. and Tontine Management, L.L.C. share voting and dispositive power with respect
to 551,316 shares and Tontine Overseas Associates, L.L.C. shares voting and dispositive power
with respect to 53,707 shares.(4)
    
    According to his Amendment No. 4 to Schedule 13D filed on June 1, 2007. 102




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##### Table of Contents



(5)
    
    According to their Amendment No. 2 to Schedule 13D, filed on September 5, 2007, Ancora
Securities, Inc. has sole voting and dispositive power with respect to 10,103 shares and
shared dispositive power with respect to 469,111 shares, Ancora
Advisors, LLC has sole voting and dispositive power with respect to 90,381 shares, and Richard
A. Barone has sole voting and dispositive power with respect to 3,000 shares.(6)
    
    Includes 26,216 shares held by a revocable trust for the benefit of Mr. Healey; Mr. Healey
does not have or share voting or investment power over such shares. Does not include 97,313
shares held by an irrevocable trust for the benefit of Mr. Healeys wife, as to which shares
Mr. Healey does not have or share voting or investment power.(7)
    
    Includes 149 shares as to which Mr. Neidus wife has voting and investment power.(8)
    
    Includes 29,597 shares held by the Banks 401(k) Plan, as to which shares Mr. Swaney has sole
voting and shared investment power.(9)
    
    Includes 27,182 shares held by the Banks 401(k) Plan, as to which shares Mr. Jeffrey N. Male
has sole voting and shared investment power. Includes 148,030 shares held by a revocable
trust for the benefit of Mr. Jeffrey N. Male and 33,423 shares held by a revocable trust for
the benefit of Mr. Jeffrey N. Males wife; Mr. Jeffrey N. Male is co-trustee of such trusts
and shares voting and investment power over such shares. Also includes 13,489 shares as to
which Mr. Jeffrey N. Males wife has voting and investment power. The amount shown does not
include 29,231 shares in which Jeffrey N. Male has a pecuniary interest through this ownership
of a limited partnership interest in a family limited partnership; he does not have or share
voting or dispositive power over such shares. Changes in Control
  
 Item 13. Certain Relationships and Related Transactions
 Indebtedness of Management
 i.e.
  Certain Business Relationships
   103




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##### Table of Contents



Director Independence
  
 Item 14. Principal Accountant Fees and Services
  Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
  Pre-Approval of Services by the Independent Auditor
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)
    1.
    Report of Independent Registered Public Accounting Firm (incorporated by reference to the Annual Report)Consolidated Financial Statements (incorporated by reference to the Annual Report)
 (a)
    
    Consolidated Statements of Financial Condition, at June 30,
2007 and 2006
 104




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##### Table of Contents



(b)
    
    Consolidated Statements of Operations for the Years Ended June
30, 2007, 2006 and 2005(c)
    
    Consolidated Statements of Stockholders Equity for the Years
Ended June 30, 2007, 2006 and 2005(d)
    
    Consolidated Statements of Cash Flows for the Years Ended June
30, 2007, 2006 and 2005(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.
    
    Description2
    
    Agreement and Plan of Merger by and among United Community Financial
Corp., The Home Savings and Loan Company of Youngstown, Ohio, PVF
Capital Corp., and Park View Federal Savings Bank, dated July 24, 2007
    
    *****3.1
    
    Articles of Incorporation, as amended and restated
    
    **3.2
    
    Code of Regulations, as amended and restated
    
    *3.3
    
    Bylaws, as amended and restated
    
    ****4
    
    Specimen Common Stock Certificate
    
    *10.1
    
    Park View Federal Savings Bank Conversion Stock Option Plan 
    
    *10.2
    
    PVF Capital Corp. 1996 Incentive Stock Option Plan 
    
    *10.3
    
    Severance Agreements between PVF Capital Corporation and
each of John R. Male, C. Keith Swaney and Jeffrey N. Male 10.4
    
    Park View Federal Savings Bank Supplemental Executive Retirement Plan as
amended and restated
    
    ******10.5
    
    PVF Capital Corp. 2000 Incentive Stock Option Plan and Deferred
Compensation
Plan
    
    ***10.6
    
    Management Incentive Compensation Plan14
    
    Code of Ethics
    
    ****21
    
    Subsidiaries of the Registrant23.1
    
    Consent of Crowe Chizek and Company LLC31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer32
    
    Section 1350 Certifications
 
 *
    
    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).**
    
    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).***
    
    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).***
    
    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).****
    
    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).*****
    
    Incorporated by reference to the Registrants Current Report on Form 8-K for the event on
July 24, 2007 and filed on July 30, 2007 (Commission File
No. 0-24948).******
    
    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).
    
    Management contract or compensory 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.
 105




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##### Table of Contents



(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.
 106




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##### Table of Contents



SIGNATURES
  PVF CAPITAL CORP.September 13, 2007
    By:
    /s/ John R. MaleJohn R. MaleChairman of the Board of Directors
and Chief Executive Officer  /s/ John R. Male
    
    
    
    September 13, 2007John R. MaleChairman of the Board of Directors andChief Executive Officer(Principal Executive Officer)/s/ C. Keith Swaney
    
    
    
    September 13, 2007C. Keith SwaneyPresident, Chief OperatingOfficer and Treasurer(Principal Financial and Accounting Officer)/s/ Robert K. Healey
    
    
    
    September 13, 2007Robert K. HealeyDirector/s/ Stanley T. Jaros
    
    
    
    September 13, 2007Stanley T. JarosDirector/s/ Stuart D. Neidus
    
    
    
    September 13, 2007Stuart D. NeidusDirector/s/ Gerald A. Fallon
    
    
    
    September 13, 2007Gerald A. FallonDirector/s/ Raymond J. Negrelli
    
    
    
    September 13, 2007Raymond J. NegrelliDirector/s/ Ronald D. Holman, II
    
    
    
    September 13, 2007Ronald D. Holman, IIDirector