<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20552
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1998.
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from___________________ to________________
Commission File Number 0-24948
----------------------------------------------------------
PVF Capital Corp.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
United States 34-1659805
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25350 Rockside Road, Bedford Heights, Ohio 44146
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(440) 439-2200
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(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $0.01 Par Value 3,990,808
- ----------------------------- ---------------------------------
(Class) (Outstanding at October 30, 1998)
<PAGE> 2
PVF CAPITAL CORP.
INDEX
<TABLE>
<CAPTION>
Page
Part I Financial Information
<S> <C>
Item 1 Financial Statements
Consolidated Statements of Financial
Condition, September 30, 1998 (unaudited)
and June 30, 1998. 1
Consolidated Statements of Operations for
the three months ended September 30,
1998 and 1997 (unaudited). 2
Consolidated Statements of Cash Flows for
the three months ended September 30, 1998
and 1997 (unaudited). 3
Notes to Consolidated Financial
Statements (unaudited). 4
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 6
Item 3 Quantitative and Qualitative Disclosures
about Market Risk 11
Part II Other Information 11
</TABLE>
<PAGE> 3
PART I FINANCIAL INFORMATION
ITEM 1
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
ASSETS 1998 1998
------ ----------- ----------
<S> <C> <C>
Cash and cash equivalents:
Cash and amounts due from depository institutions $2,292,142 $2,447,631
Interest bearing deposits 444,086 394,331
Federal funds sold 12,375,000 20,375,000
----------- ----------
Total cash and cash equivalents 15,111,228 23,216,962
Investment securities held to maturity, at cost 18,433,000 27,800,000
Loans receivable, net 379,127,164 368,998,087
Loans receivable held for sale, net 1,680,497 1,644,735
Mortgage-backed securities held to maturity, net 2,687,150 2,950,856
Office properties and equipment, net 2,200,978 2,313,546
Real estate owned, net 490,156 699,236
Real estate in development 938,071 938,071
Investment required by law
Stock in the Federal Home Loan Bank of Cincinnati 3,571,625 3,507,564
Prepaid expenses and other assets 3,349,161 1,210,099
------------- ------------
Total Assets $427,589,030 $433,279,156
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities
Deposits $334,777,413 $344,228,729
Advances from the Federal Home Loan Bank of Cincinnati 51,303,438 46,324,456
Notes payable 0 1,060,000
Advances from borrowers for taxes and insurance 3,009,569 4,931,114
Accrued expenses and other liabilities 6,027,439 5,526,147
------------- ------------
Total Liabilities 395,117,859 402,070,446
Stockholders' Equity
Serial preferred stock, none issued - -
Common stock, $0.01 par value, 5,000,000 shares authorized;
3,990,808 issued and outstanding 39,908 39,908
Paid in capital 14,517,140 14,517,452
Retained earnings-substantially restricted 17,914,123 16,651,350
------------- ------------
Total Stockholders' Equity 32,471,171 31,208,710
------------- ------------
Total Liabilities and Stockholders' Equity $427,589,030 $433,279,156
============= ============
</TABLE>
See accompanying notes to consolidated financial statements
PAGE 1
<PAGE> 4
PART I FINANCIAL INFORMATION
ITEM 1
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------------
1998 1997
<S> <C> <C>
Interest income
Loans $8,267,357 $7,874,340
Mortgage-backed securities 44,492 9,773
Cash and investment securities 626,088 311,731
---------- ---------
Total interest income 8,937,937 8,195,844
---------- ---------
Interest expense
Deposits 4,438,975 4,160,745
Borrowings 726,254 522,312
---------- ---------
Total interest expense 5,165,229 4,683,057
---------- ---------
Net interest income 3,772,708 3,512,787
Provisions for loan losses 0 45,000
---------- ---------
Net interest income after provision for loan losses 3,772,708 3,467,787
---------- ---------
Noninterest income, net
Service and other fees 103,162 137,135
Mortgage banking activities, net 238,701 188,715
Other, net 21,658 99,586
---------- ---------
Total noninterest income, net 363,521 425,436
-------- -------
Noninterest expense
Compensation and benefits 1,193,461 1,105,322
Office, occupancy, and equipment 428,839 399,217
Other 618,529 501,395
---------- ---------
Total noninterest expense 2,240,829 2,005,934
---------- ---------
Income before federal income tax provision 1,895,400 1,887,289
Federal income tax provision 632,000 626,000
---------- ---------
Net income $1,263,400 $1,261,289
=========== ==========
Basic earnings per share $0.32 $0.33
====== =====
Diluted earnings per share $0.30 $0.31
====== =====
</TABLE>
See accompanying notes to consolidated financial statements
PAGE 2
<PAGE> 5
PART I FINANCIAL INFORMATION
ITEM 1
PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $1,263,400 $1,261,289
Adjustments to reconcile net income to net cash provided by operating activities
Accretion of discount on marketable securities 0 (312)
Depreciation and amortization 149,830 113,880
Provision for losses on loans, net 0 45,000
Accretion of unearned discount and deferred loan origination fees, net (272,225) (207,750)
Gain on loans available for sale, net (129,881) (74,994)
Gain on disposal of real estate owned, net (1,514) 0
Change in accrued interest on investments, loans, and borrowings, net (8,868) (163,466)
Change in other assets and other liabilities, net (3,766,880) (1,763,553)
Change in loans receivable available for sale, net 94,119 (192,995)
----------- ---------
Net cash used in operating activities (2,672,019) (982,901)
----------- ---------
INVESTING ACTIVITIES
Loan and mortgage-backed securities repayments and originations, net (9,370,457) (14,470,767)
Disposals of real estate owned 209,080 0
Investment securities purchases (433,000) 0
Investment securities maturities 9,800,000 5,000,000
FHLB stock dividend, net (64,061) (53,608)
Additions to office properties and equipment, net (37,262) (69,663)
Change in real estate in development, net 0 (6,455)
----------- ---------
Net cash provided by (used in) investing activities 104,300 (9,600,493)
-------- -----------
FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW, and passbook savings (655,295) 783,888
Net increase in time deposits (8,800,763) 25,809,741
Net increase (decrease) in FHLB advances 4,978,982 (16,519,786)
Repayment of notes payable (1,060,000) (300,000)
Proceeds from exercise of stock options 0 4,507
Cash paid in lieu of fractional shares (939) (2,141)
----------- ---------
Net cash provided by (used in) financing activities (5,538,015) 9,776,209
----------- ---------
Net decrease in cash and cash equivalents (8,105,734) (807,185)
Cash and cash equivalents at beginning of period 23,216,962 9,580,430
----------- ---------
Cash and cash equivalents at end of period $15,111,228 $8,773,245
============ ==========
</TABLE>
See accompanying notes to consolidated financial statements
PAGE 3
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Part I Financial Information
Item 1
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
1. The accompanying consolidated interim financial statements were prepared in
accordance with regulations of the Securities and Exchange Commission for Form
10-Q. All information in the consolidated interim financial statements is
unaudited except for the June 30, 1998 consolidated statement of financial
condition which was derived from the Corporation's audited financial statements.
Certain information required for a complete presentation in accordance with
generally accepted accounting principles has been condensed or omitted. However,
in the opinion of management, these interim financial statements contain all
adjustments, consisting only of normal recurring accruals, necessary to fairly
present the interim financial information. The results of operations for the
three months ended September 30, 1998 are not necessarily indicative of the
results to be expected for the entire year ending June 30, 1999. The results of
operations for PVF Capital Corp. ("PVF" or the "Company") for the periods being
reported have been derived primarily from the results of operation of Park View
Federal Savings Bank (the "Bank"). PVF Capital Corp.'s common stock is traded on
the NASDAQ SMALL-CAP ISSUES under the symbol PVFC.
2. Recently Issued Accounting Standards
SFAS No. 130, "Reporting Comprehensive Income" was issued in June, 1997 and is
effective for fiscal years beginning after December 15, 1997. The Statement
requires additional reporting of items that affect comprehensive income but not
net income. Examples of these items relevant to the Company include unrealized
gains and losses on securities. The Company adopted SFAS No. 130 on July 1,
1998. At this time, the Company does not have other comprehensive income to be
reported.
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" was issued in June, 1997 and is effective for fiscal years
beginning after December 15, 1997. The statement requires financial disclosure
and descriptive information about reportable operating segments. Also required
is certain information about products and services, geographic areas in which an
enterprise operates, and any major customers. Management does not expect the
implementation of SFAS No. 131 to have a material impact on the Company's
consolidated financial position or results of operations.
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was
issued in June 1998 and is effective for fiscal years beginning after June 15,
1999. This statement establishes comprehensive accounting and reporting
requirements for derivative instruments and hedging activities. This statement
requires entities
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Part I Financial Information
Item 1
to recognize all derivatives as either assets or liabilities, with the
instruments measured at fair value. The accounting for gains and losses
resulting from changes in fair value of the derivative instrument depends on the
use of the derivative and the type of risk being hedged. At the present time,
the Bank has not fully analyzed the effect or timing of the adoption of SFAS No.
133 on the Bank's consolidated financial statements.
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained after
Securitization of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise"
was issued in October 1998 and is effective for the first fiscal quarter
beginning after December 15, 1998. This statement amends SFAS No. 65 to require
that after the securitization of mortgage loans held for sale, an entity engaged
in mortgage banking activities must classify the resulting mortgage-backed
securities or other retained interests based on its ability and intent to sell
or hold those investments. After the securitization of a mortgage loan held for
sale, any retained mortgage-backed securities shall be classified in accordance
with the provisions of SFAS No. 115. However, a mortgage banking enterprise must
classify as trading any retained mortgage-backed securities that it commits to
sell before or after the securitization process. At the present time, the
Company has not fully analyzed the effect of the adoption of SFAS No. 134 on its
consolidated financial statements. However, Management does not believe that the
adoption of SFAS No. 134 will have a significant impact on the Corporation's
consolidated financial statements.
3. The following table discloses Earnings Per Share pursuant to SFAS No. 128 for
the three months ended September 30, 1998 and September 30, 1997.
<TABLE>
<CAPTION>
Three months ended September 30,
1998 1997
------------------------------------- --------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ---------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
BASIC EPS
Income available to
common stockholders $1,263,400 3,990,808 $ 0.32 $1,261,289 3,849,189 $ 0.33
EFFECT OF STOCK OPTIONS 160,368 0.02 237,339 0.02
DILUTED EPS
Income available to
common stockholders $1,263,400 4,151,176 $ 0.30 $1,261,289 4,086,528 $ 0.31
</TABLE>
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Part I Financial Information
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The following analysis discusses changes in financial condition and results of
operations at and for the three-month period ended September 30, 1998 for PVF
Capital Corp. ("PVF" or the "Company") and Park View Federal Savings Bank (the
"Bank"), its principal and wholly-owned subsidiary.
FORWARD-LOOKING STATEMENTS
When used in this Form 10-Q, the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties including changes in
economic conditions in the Company's market area, changes in policies by
regulatory agencies, fluctuations in interest rates, demand for loans in the
Company's market area, and competition that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements.
The Company does not undertake, and specifically disclaims any obligation, to
publicly release the results of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
FINANCIAL CONDITION
Consolidated assets of PVF were $427.6 million as of September 30, 1998, a
decrease of approximately $5.7 million or 1.3% as compared to June 30, 1998. The
Bank remained in regulatory capital compliance for tangible, core, and
risk-based capital on a fully phased-in basis with capital levels of 7.40%,
7.40% and 10.78% respectively at September 30, 1998.
During the three months ended September 30, 1998, the Company's cash and cash
equivalents, which consist of cash, interest-bearing deposits and federal funds
sold, decreased $8.1 million or 34.9% as compared to June 30, 1998. The change
in the Company's cash and cash equivalents consisted of a decrease in cash and
interest-bearing deposits of $0.1 million and a decrease in federal funds sold
of $8.0 million.
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Part I Financial Information
Item 2
FINANCIAL CONDITION CONTINUED
The net $9.9 million, or 2.7%, increase in loans receivable and mortgage-backed
securities during the three months ended September 30, 1998, resulted from an
increase in loans receivable of $10.2 million and a decrease in mortgage-backed
securities of $0.3 million. The increase of $10.2 million in loans receivable
included increases of $5.5 million in land loans, $1.6 million in home equity
loans, $1.9 million in construction loans, $1.0 million in multi-family loans,
$0.5 million in commercial real estate loans, $0.2 million in installment loans,
and a decrease of $0.5 million in single family mortgage loans. The decrease in
mortgage-backed securities was the result of payments received of $0.3 million.
The growth of the loan portfolio was as anticipated and resulted in no material
change to the composition of the portfolio.
Investments decreased by $9.4 million, or 33.7%, as a result of scheduled
maturities of $9.8 million and the purchase of a $0.4 million municipal
security. The increase in prepaid expenses and other assets of $2.1 million is
primarily the result of adjustment to N.O.W. clearings accounts. The decrease of
$0.2 million in real estate owned ("REO") is the result of the disposal of
developed building lots.
During the three months ended September 30, 1998, management's decision not to
compete aggressively with market savings rates to retain deposits resulted in a
decrease of $9.5 million, or 2.7%, in deposits. The increase of $5.0 million, or
10.7%, in advances from the Federal Home Loan Bank of Cincinnati was a result of
the Bank's decision to take advantage of attractive borrowing rates. The
decrease in notes payable resulted from management's decision to payoff a $1.1
million note held by the Company.
The decrease in advances from borrowers for taxes and insurance of $1.9 million,
or 39.0%, is due to timing differences between the collection and payment of
escrow funds. The increase of $0.5 million in accrued expenses and other
liabilities is primarily the result of timing differences between the provision
for and actual payment of federal income tax.
The increase in Federal Home Loan Bank advances of $5.0 million along with a
reduction in cash and cash equivalents of $8.1 million and investment securities
of $9.4 million were used to fund the net increase in loans receivable and
mortgage-backed securities of $9.9 million, the reduction in deposits of $9.5
million, the reduction in advances from borrowers for taxes and insurance of
$1.9 million, and repay the note payable of $1.1 million.
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Part I Financial Information
Item 2
RESULTS OF OPERATIONS Three months ended September 30,
1998 Compared to the three months
ended September 30, 1997.
PVF's net income is dependent primarily on its net interest income, which is the
difference between interest earned on its loans and investments and interest
paid on interest-bearing liabilities. Net interest income also includes
amortization of loan origination fees, net of origination costs.
PVF's net income is also affected by the generation of non-interest income,
which primarily consists of loan servicing income, service fees on deposit
accounts, and gains on the sale of loans and mortgage-backed securities
available for sale. Net interest income is determined by (i) the difference
between yields earned on interest-earning assets and rates paid on
interest-bearing liabilities ("interest-rate spread") and (ii) the relative
amounts of interest-earning assets and interest-bearing liabilities. The
Company's interest-rate spread is affected by regulatory, economic and
competitive factors that influence interest rates, loan demand and deposit
flows. In addition, net income is affected by the level of operating expenses
and loan loss provisions.
The Company's net income for the three months ended September 30, 1998 was
$1,263,400. This represents a $2,111, or 0.2%, increase when compared with the
prior year comparable period.
Net interest income for the three months ended September 30, 1998
increased by $259,900, or 7.4%, as compared to the prior year comparable period,
primarily due to an increase of $742,100, or 9.0%, in interest income that
resulted from an increase of $27.1 million in the average balance of the loan
and mortgage-backed securities portfolios and an increase in the average balance
of the investment portfolio of $20.6 million. This increased balance was
partially offset by a 30 basis point decrease in the return on interest-earning
assets from the prior year comparable period. The average balance on deposits
and advances increased by $43.5 million from the prior year comparable period.
This increased balance was partially offset by an 8 basis point decrease in the
average cost of funds for the current period and resulted in an overall increase
in interest expense of $482,200, or 10.3%. The Company's net interest income
increased despite a decrease of 22 basis points in the Company's interest-rate
spread during the current period as compared to the prior year comparable period
because of balance sheet growth in both interest-earning assets and
interest-bearing liabilities.
For the three months ended September 30, 1998 no provision for loan losses was
recorded as compared to a $45,000 provision that was recorded in the prior year
comparable period. The Company uses a systematic approach to determine the
adequacy of its loan loss allowance and the necessary provision for loan losses.
The loan portfolio is reviewed and delinquent loan accounts are analyzed
individually on a monthly basis, with respect to payment history, ability to
repay, probability of repayment, and loan-to-value
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Part I Financial Information
Item 2
RESULTS OF OPERATIONS CONTINUED
percentage. Consideration is given to the types of loans in the portfolio and
the overall risk inherent in the portfolio. After reviewing current economic
conditions, changes to the size and composition of the loan portfolio, changes
in delinquency status, levels of non-accruing loans, non-performing assets,
impaired loans, and actual loan losses incurred by the Company, management
establishes an appropriate reserve percentage applicable to each category of
loans, and a provision for loan losses is recorded when necessary to bring the
allowance to a level consistent with this analysis. Management believes it uses
the best information available to make a determination as to the adequacy of the
allowance for loan losses.
During the three months ended September 30, 1998, the Company experienced an
increase in the level of impaired loans of $44,000 and an increase of $3.1
million in classified assets. Despite the increase in classified assets and
growth in the loan portfolio of $10.2 million it was not necessary to record a
provision for loan losses due to lower charge-offs in the current period. For
the three months ended September 30, 1997, the Company experienced decreases in
the levels of impaired loans and classified assets of $1.7 million and $1.1
million, respectively. The decrease in impaired loans and classified assets was
offset by growth in the loan portfolio of $13.6 million and net charge-offs of
$12,000 made it necessary to record a provision for loan losses of $45,000 in
the period. At September 30, 1998, the allowance for loan losses was $2.7
million, which represented 79.0% of nonperforming loans and 0.7% of net loans.
For the three months ended September 30, 1998, noninterest income decreased
$61,900, or 14.5%, from the prior year comparable period. This resulted from an
increase of $50,000, or 26.5%, in income from mortgage-banking activities that
resulted from an increase in profit on loan sales in the current period. During
these periods, PVF pursued a strategy of originating long-term, fixed-rate loans
pursuant to Federal Home Loan Mortgage Corporation ("FHLMC") and Federal
National Mortgage Association ("FNMA") guidelines and selling such loans to the
FHLMC or the FNMA, while retaining the servicing. Loan and other fees decreased
by $34,000, or 24.8%, from the prior year comparable period, primarily due to
decreases in NOW account fee income. Other noninterest income, net, decreased by
$77,900, or 78.2%, from the previous year's comparable period, primarily due to
a decline in rental income of $60,000 in the current period.
Noninterest expense for the three months ended September 30, 1998 increased by
$234,900, or 11.7%, from the prior year comparable period. This was primarily
the result of an $88,200, or 8.0%, increase in compensation and benefits
attributable to increased staffing, employee 401K benefits, incentive bonuses
paid, and salary and wage adjustments. In addition, office, occupancy and
equipment increased by $29,600, or 7.4%, due to the opening of a new branch
office. Other noninterest expense increased by $117,100,
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Part I Financial Information
Item 2
RESULTS OF OPERATIONS CONTINUED
or 23.4%, primarily attributable to an increase in legal expenses of $45,000,
the write-off of $24,000 in the current period attributable to the Bank's
participation as a limited partner in an affordable housing partnership, and an
increase in charitable contributions of $19,000 in the current period. The
increase in legal expenses is the result of costs incurred in defending lawsuits
filed against the Bank and two other entities, PVF Financial Planning Inc. and
Emissary Financial Group, Inc., which are majority-owned subsidiaries of the
Company's wholly owned subsidiary, PVF Holdings, Inc. Information pertaining to
these lawsuits is set forth in Item 3 of Form 10-K for the year ended June 30,
1998. There have been no significant changes to these lawsuits for the three
month period ended September 30, 1998.
The federal income tax provision for the three month period ended September 30,
1998 increased to an effective rate of 33.3% for the current period from an
effective rate of 33.2% for the prior year comparable period.
YEAR 2000
The Company has assembled a project team to review the effects the century
change has on current systems and to assess the potential risks that it
presents. A formal plan of action was developed to address and correct this
issue and has been approved by the Bank's Board of Directors with the full
support of senior management. A plan is in place to educate our staff personnel
and to inform our customer base of the year 2000 issue. An inventory of internal
systems, both computer and non-computer related, was completed in this process.
Relationships with third-party vendors were also analyzed. Potential weaknesses
were then documented and prioritized as to their effect on critical business
functions. Our major software supplier has dedicated tremendous resources to
help in addressing this issue. They recently released the remediated version of
the system that has undergone extensive beta testing. All user departments are
involved in the testing process in-house to assure validation of the changes.
Our software supplier has advised us that this testing is expected to reveal any
potential problems well in advance of the impending deadline. At the same time,
testing will take place of those external relationships with which the Bank
exchanges information. Additional testing is also expected to take place on all
mission-critical information systems. It is believed that this preparation will
increase the likelihood of uninterrupted operation of Bank functions.
In addressing this issue, the Bank has used its current internal staffing with
little reliance on outside resources. Major vendors have provided remediated
software at no expense to the Bank. No major system had to be replaced and none
is expected to be replaced in the coming years. As a result, expenses were
approximately $5,000 for fiscal year 1997 and $20,000 for fiscal year 1998, with
anticipated expenses of $5,000 for fiscal year 1999. These
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Part I Financial Information
Item 2
RESULTS OF OPERATIONS CONTINUED
expenditures are in the areas of customer awareness and additional software
tools for testing.
Rapid and accurate data processing is essential to Company operations. If
testing reveals that any system critical to continued business operation should
fail, all internal and external resources available will be directed toward
correcting these systems. System delays, mistakes, or failures could have an
adverse impact on the Company. We are currently under contract with an external
consulting service should a system failure occur. End-user contingencies are
also being developed. It is expected that these plans will be in place during
the fourth quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Bank is required by federal regulations to maintain specific levels of
"liquid" assets consisting of cash and other eligible investments. The current
level of liquidity required by the Office of Thrift Supervision is 4% of the sum
of net withdrawable savings and borrowings due within one year. The Bank's
liquidity at September 30, 1998 was 9.0%. Management believes the Bank has
sufficient liquidity to meet its operational needs.
Part I Financial Information
Item 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no significant changes to the Company's interest rate risk
position or any changes to how the Company manages its Asset/Liability position
since June 30, 1998.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) PVF did not file any reports on Form 8-K during the quarter ended
September 30, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PVF Capital Corp.
-----------------
(Registrant)
Date: November 10, 1998 /s/ C. Keith Swaney
------------------- --------------------
C. Keith Swaney
Vice President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Condition and the Statement of Operation for the period ended
September 30, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,292
<INT-BEARING-DEPOSITS> 444
<FED-FUNDS-SOLD> 12,375
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 18,433
<INVESTMENTS-MARKET> 18,487
<LOANS> 380,808
<ALLOWANCE> 2,687
<TOTAL-ASSETS> 427,589
<DEPOSITS> 334,777
<SHORT-TERM> 10,000
<LIABILITIES-OTHER> 9,038
<LONG-TERM> 41,303
0
0
<COMMON> 40
<OTHER-SE> 32,431
<TOTAL-LIABILITIES-AND-EQUITY> 427,589
<INTEREST-LOAN> 8,312
<INTEREST-INVEST> 626
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 8,938
<INTEREST-DEPOSIT> 4,439
<INTEREST-EXPENSE> 5,165
<INTEREST-INCOME-NET> 3,773
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,241
<INCOME-PRETAX> 1,895
<INCOME-PRE-EXTRAORDINARY> 1,895
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,263
<EPS-PRIMARY> $0.32
<EPS-DILUTED> $0.30
<YIELD-ACTUAL> 3.240
<LOANS-NON> 3,413
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,687
<CHARGE-OFFS> 6
<RECOVERIES> 6
<ALLOWANCE-CLOSE> 2,687
<ALLOWANCE-DOMESTIC> 2,687
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,604
</TABLE>
