PVF Capital (PVFC) 10-Q 2006 Q1 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2005.

o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                                        to                                        

Commission File Number0-24948

PVF Capital Corp.

(Exact name of registrant as specified in its charter)

Ohio	34-1659805
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

30000 Aurora Road, Solon, Ohio	44139
(Address of principal executive offices)	(Zip Code)

(440) 248-7171

(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.

YESþ      NOo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YESþ      NOo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YESo      NOþ

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	7,715,561
(Class)	(Outstanding at November 4, 2005)

PVF CAPITAL CORP.

INDEX

		Page
Part I	Financial Information
Item 1	Financial Statements
	Consolidated Statements of Financial Condition, September 30, 2005 (unaudited) and June 30, 2005.		1
	Consolidated Statements of Operations for the three months ended September 30, 2005 and 2004 (unaudited).		2
	Consolidated Statements of Cash Flows for the three months ended September 30, 2005 and 2004 (unaudited).		3
	Notes to Consolidated Financial Statements (unaudited).		4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		7
	Liquidity and Capital Resources		12
Item 3	Quantitative and Qualitative Disclosures About Market Risk		12
Item 4	Controls and Procedures		13
Part II	Other Information		14
Exhibit 31.1 302 Certification for CEO
Exhibit 31.2 302 Certification for CFO
Exhibit 32 906 Certification for CEO and CFO

PART I FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

PVF CAPITAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	September 30,
	2005			June 30,
	unaudited				2005
ASSETS
Cash and cash equivalents:
Cash and amounts due from depository institutions	$	7,729,491		$	4,034,353
Interest bearing deposits		1,223,039			2,180,723
Federal funds sold		10,605,000			4,875,000
Total cash and cash equivalents		19,557,530			11,090,076
Securities held to maturity (fair values of $56,921,875 and $57,345,425, respectively)		57,500,000			57,500,000
Mortgage-backed securities held to maturity (fair values of $29,276,468 and $31,487,772, respectively)		29,777,496			31,720,033
Loans receivable held for sale, net		12,725,749			9,059,647
Loans receivable, net of allowance of $4,228,486 and $4,312,274		677,634,825			660,494,144
Office properties and equipment, net		13,439,524			13,413,231
Real estate owned, net		1,319,251			1,319,251
Federal Home Loan Bank stock		11,455,400			11,316,400
Prepaid expenses and other assets		27,919,378			27,985,916
Total Assets	$	851,329,153		$	823,898,698
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Deposits	$	599,813,693		$	591,226,478
Short-term advances from the Federal Home Loan Bank		30,000,000			15,000,000
Long-term advances from the Federal Home Loan Bank		120,008,073			120,012,018
Notes payable		1,077,950			1,400,780
Subordinated debentures		10,000,000			10,000,000
Advances from borrowers for taxes and insurance		5,161,920			3,184,981
Accrued expenses and other liabilities		18,120,654			16,621,262
Total Liabilities		784,182,290			757,445,519
Stockholders’ Equity
Serial preferred stock, none issued		—			—
Common stock, $0.01 par value, 15,000,000 shares authorized; 8,175,779 shares issued		81,758			81,758
Additional paid-in-capital		68,323,034			68,288,834
Retained earnings		2,442,908			1,663,992
Treasury Stock, at cost, 460,218 and 451,088 shares, respectively		(3,700,837	)		(3,581,405	)
Total Stockholders’ Equity		67,146,863			66,453,179
Total Liabilities and Stockholders’ Equity	$	851,329,153		$	823,898,698

See accompanying notes to consolidated financial statements

Page 1

PART I FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

PVF CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended
	September 30,
	2005		2004
Interest and dividends income
Loans	$	11,487,566	$	9,296,982
Mortgage-backed securities		359,011		419,760
Federal Home Loan Bank stock dividends		139,052		115,651
Securities		518,188		189,451
Fed funds sold and interest-bearing deposits		78,730		12,586
Total interest income		12,582,547		10,034,430
Interest expense
Deposits		4,384,078		2,885,550
Short-term borrowings		211,439		130,386
Long-term borrowings		1,298,334		1,298,882
Subordinated debt		153,876		109,269
Total interest expense		6,047,727		4,424,087
Net interest income		6,534,820		5,610,343
Provision for loan losses		37,300		136,000
Net interest income after provision for loan losses		6,497,520		5,474,343
Noninterest income
Service and other fees		255,531		197,214
Mortgage banking activities, net		321,154		318,790
Increase in cash surrender value of bank-owned life insurance		167,136		117,700
Other, net		35,356		51,521
Total noninterest income		779,177		685,225
Noninterest expense
Compensation and benefits		3,141,881		2,441,032
Office properties and equipment		1,036,225		865,980
Other		1,196,090		1,017,028
Total noninterest expense		5,374,196		4,324,040
Income before federal income tax provision		1,902,501		1,835,528
Federal income tax provision		550,900		567,900
Net income	$	1,351,601	$	1,267,628
Basic earnings per share	$	0.18	$	0.16
Diluted earnings per share	$	0.17	$	0.16
Dividends declared per common share	$	0.074	$	0.067

See accompanying notes to consolidated financial statements

Page 2

PART I FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

PVF CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	September 30,
	2005			2004
Operating Activities
Net Income	$	1,351,601		$	1,267,628
Adjustments to reconcile net income to net cash from operating activities
Amortization of premium on mortgage-backed securities		20,386			19,745
Depreciation		459,932			452,972
Provision for loan losses		37,300			136,000
Accretion of unearned discount and deferred loan origination fees, net		(358,375	)		(254,433	)
Gain on sale of loans, net		(299,218	)		(297,301	)
Mortgage banking provision		67,000			0
Stock compensation		34,200			0
Federal Home Loan Bank stock dividends		(139,000	)		(115,600	)
Change in accrued interest on investments, loans, and borrowings, net		(145,944	)		(182,025	)
Origination of loans receivable held for sale, net		(37,374,523	)		(29,360,388	)
Sale of loans receivable held for sale, net		33,583,575			32,495,530
Net change in other assets and other liabilities, net		3,995,877			3,274,602
Net cash from operating activities		1,232,811			7,436,730
Investing Activities
Loan repayments and originations, net		(16,969,606	)		(22,253,495	)
Repayment of mortgage-backed securities		1,922,151			1,583,655
Proceeds from sale of real estate owned		150,000			0
Securities maturities		0			5,000,000
Securities purchased		0			(5,000,000	)
Additions to office properties and equipment, net		(486,225	)		(869,915	)
Net cash from investing activities		(15,383,680	)		(21,539,755	)
Financing activities
Net increase (decrease) in demand deposits, NOW, and passbook savings		(2,012,350	)		(4,071,015	)
Net decrease in time deposits		10,599,565			(10,002,414	)
Repayment of long-term Federal Home Loan Bank advances		(3,945	)		(5,436	)
Net increase in Federal Home Loan Bank advances		15,000,000			30,000,000
Net decrease in notes payable		(322,830	)		(521,075	)
Proceeds from exercise of stock options		0			18,984
Purchase of treasury stock		(119,432	)		(196,175	)
Cash dividend paid		(522,685	)		(477,329	)
Net cash from financing activities		22,618,323			14,745,540
Net decrease in cash and cash equivalents		8,467,454			642,515
Cash and cash equivalents at beginning of period		11,090,076			17,469,773
Cash and cash equivalents at end of period	$	19,557,530		$	18,112,288
Supplemental disclosures of cash flow information:
Cash payments of interest expense	$	6,031,673		$	4,410,175
Cash payments of income taxes	$	0		$	0
Supplemental schedule of noncash investing activities:
Transfer to real estate owned	$	150,000		$	724,613

See accompanying notes to consolidated financial statements

Page 3

PVF CAPITAL CORP.

Notes to Consolidated Financial Statements

September 30, 2005 and 2004

(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, 2005 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 accounting principles generally accepted in the United States of America 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, 2005 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2006. PVF Capital Corp.’s common stock is traded on the NASDAQ SMALL-CAP ISSUES under the symbol PVFC.

Stock Compensation: Employee compensation expense under stock options are reported using the fair value recognition provisions of FASB Statement 123 (revised 2004) (FAS 123R),Share Based Payment. The Company has adopted FAS 123R using the modified prospective method. Under this method, compensation expense will be recognized for the unvested portion of previously issued awards that remained outstanding as of July 1, 2005 and for any future awards. Prior interim periods and fiscal year results will not be restated. For the quarter ended September 30, 2005, compensation expense of $34,200 was recognized in the income statement related to the vesting of previously issued awards. No income tax benefit is recognized related to this expense.

As of September 30, 2005, there was $273,413 of compensation expense related to unvested awards not yet recognized in the financial statements. The weighted-average period over which this expense is to be recognized is 1.49 years.

No stock-based compensation cost is reflected in net income for the period ended September 30, 2004, as the Company reported stock compensation using the intrinsic value method during that period, and all options granted had an exercise price equal to or greater than the market price of the underlying common stock at the date of grant.

Page 4

The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value recognition provisions of FAS 123R.

	Three Months Ended
	September 30, 2004
Net Income as reported	$	1,267,628
Less: Pro forma compensation expense, net of tax	$	25,034
Pro forma net income	$	1,242,594
Basic earnings per share	$	0.16
Pro forma basic earnings per share	$	0.16
Diluted earnings per share	$	0.16
Pro forma diluted earnings per share	$	0.16

2. The following table discloses earnings per share for the three months ended September 30, 2005 and September 30, 2004.

	Three months ended September 30,
	2005						2004
	Income		Shares		Per-Share		Income		Shares		Per-Share
	(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Basic EPS
Income available to common stockholders	$	1,351,601		7,719,026	$	0.18	$	1,267,628		7,740,087	$	0.16
Effect of Stock Options				163,893	$	0.01				195,216	$	0.00
Diluted EPS
Income available to common stockholders	$	1,351,601		7,882,919	$	0.17	$	1,267,628		7,935,303	$	0.16

Page 5

3. Mortgage Banking Activities: The Company services real estate loans for investors that are not included in the accompanying consolidated financial statements. Mortgage servicing rights are established based on the allocated fair value of servicing rights retained on loans originated by the Bank and subsequently sold in the secondary market. Mortgage servicing rights are included in the consolidated statements of financial condition under the caption “Prepaid expenses and other assets.”

	2005			2004
Servicing rights:
Beginning balance	$	5,001,474		$	5,358,845
Originated		357,064			353,743
Amortized		(397,544	)		(437,349	)
End of period	$	4,960,994		$	5,275,239

Mortgage banking activities, net consists of the following:

	Three Months Ended
	September 30,
	2005			2004
Mortgage loan servicing fees	$	486,480		$	458,838
Amortization of mortgage servicing rights		(397,544	)		(437,349	)
Unrealized losses on sales of loans		(67,000	)		—
Gain on sales of loans		299,218			297,301
Mortgage banking activities, net	$	321,154		$	318,790

Page 6

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, 2005 for PVF Capital Corp. (“PVF” or the “Company”), Park View Federal Savings Bank (the “Bank”), its principal and wholly-owned subsidiary, PVF Service Corporation, a wholly-owned real estate subsidiary, Mid Pines Land Co., a wholly-owned real estate subsidiary, and three other wholly-owned subsidiaries which are currently inactive.

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

During the quarter, the Company continued its strategy of expanding the loan portfolio, while maintaining sufficient liquidity to fund its cash flow needs. The Company seeks to fund loan growth and liquidity by generating deposits through its branch network. Because first quarter loan growth and other cash needs exceeded deposit growth, the company utilized short-term borrowings from the Federal Home Loan Bank of Cincinnati for additional funding needs.

In addition, the Company continued the origination of fixed-rate single-family loans for sale in the secondary market. The origination and sale of fixed-rate loans has historically generated gains on sale and allowed the Company to increase its investment in loans serviced for others.

Page 7

Part I Financial Information
Item 2

FINANCIAL CONDITION continued

Consolidated assets of PVF were $851.3 million as of September 30, 2005, an increase of approximately $27.4 million, or 3.3%, as compared to June 30, 2005. The Bank remained in regulatory capital compliance for tier one core capital, tier one risk-based capital, and total risk-based capital with capital levels of 8.57%, 10.05% and 10.58%, respectively, at September 30, 2005.

During the three months ended September 30, 2005, the Company’s cash and cash equivalents, which consist of cash, interest-bearing deposits and federal funds sold, increased $8.5 million, or 76.4%, as compared to June 30, 2005. The increase was necessary to meet the Company’s short-term liquidity needs.

Loans receivable, net increased $17.1 million during the quarter ended September 30, 2005. The increase in loans receivable included increases of $8.3 million in construction loans, $11.1 million in land loans, $1.4 million in non-real estate loans, $1.2 million in single-family loans, $2.3 million in commercial equity line of credit loans and $0.7 million in multi-family loans. These increases were partially offset by decreases of $5.4 million in commercial real estate loans and $2.5 million in home equity line of credit loans. Loan activity for the quarter ended September 30, 2005 resulted in no material change to the overall composition of the portfolio.

The $3.7 million increase in loans receivable held for sale is the result of timing differences between the origination and sale of loans.

The $1.9 million decrease in mortgage-backed securities resulted from payments received of $1.9 million.

Short-term advances increased by $15.0 million, or 100.0%, as a result of short-term borrowings from the Federal Home Loan Bank of Cincinnati. Deposits increased by $8.6 million, or 1.5%, as a result of managements decision to offer competitive savings rates. The increase in advances from borrowers for taxes and insurance of $2.0 million, or 62.1%, is due to timing differences between the collection and payment of escrow funds. The increase in accrued expenses and other liabilities of $1.5 million, or 9.0% is the result of timing differences between the collection and remittance of payments received on loans serviced for investors. The decrease in notes payable of $0.3 million, or 2.8%, is the result of principal prepayments made.

Page 8

Part I Financial Information
Item 2

RESULTS OF OPERATIONS Three months ended September 30, 2005 compared to the three months ended September 30, 2004.

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 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. Net interest income also includes accretion 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 held for sale. 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, 2005 was $1,351,600 as compared to $1,267,600 for the prior year comparable period. This represents an increase of $84,000, or 6.6%, when compared with the prior year comparable period.

Net interest income for the three months ended September 30, 2005 increased by $924,500, or 16.5%, as compared to the prior year comparable period. This resulted from an increase of $2,548,100, or 25.4% in interest income and an increase of $1,623,600 million, or 36.7% in interest expense. The increase in interest income resulted primarily from an increase of $73.5 million in the average balance of interest-earning assets in the current period. The increase of $73.5 million in the average balance of interest-earning assets along with an increase of 76 basis points in the return on interest earning assets resulted in an overall increase to interest income of $2,548,100 in the current period. The average balance on interest-bearing liabilities increased by $66.4 million, while the average cost of funds on interest-bearing liabilities increased by 62 basis points in the current period. This resulted in an overall increase in interest expense of $1,623,600.

For the three months ended September 30, 2005, a provision for loan losses of $37,300 was recorded, while a provision for loan losses of $136,000 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,

Page 9

Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

ability to repay, probability of repayment, and loan-to-value 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.

Non-accruing loans decreased during the three months ended September 30, 2005. At June 30, 2005, non-accruing loans included current loans to borrowers who had filed for bankruptcy protection. At September 30, 2005, these loans were excluded from non-accruing loans. Accounting for this change, the Company experienced a decrease in the level of non-accruing loans of $2.8 million. Additionally, classified assets decreased by $1.6 million. Despite decreases to non-accruing loans and classified assets, management determined it was necessary to record a provision for loan losses of $37,300 in the current period due to an increase in loans receivable of $17.1 million and the recognition of specific loan losses in the current period. During the three months ended September 30, 2004, the Company experienced decreases in the level of non-accruing loans and classified assets of $1.3 million and $1.0 million, respectively. Despite decreases to non-accruing loans and classified assets, management determined it was necessary to record a provision for loan losses of $136,000 in the prior period due to an increase in loans receivable of $21.6 million and the recognition of specific loan losses in the prior period. At June 30, 2005, the allowance for loan losses was $4.3 million, which represented 36.7% of non-accruing loans and 0.65% of net loans. At September 30, 2005, the allowance for loan losses was $4.2 million, which represented 55.7% of non-accruing loans and 0.62% of net loans.

Page 10

Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

	At September 30,			June 30,
	2005			2005
	(Dollars in thousands)
Non-accruing loans(1):
Real estate	$	7,592		$	11,750
Accruing loans which are contractually past due 90 days or more:
Real estate	$	60		$	608
Total non-accrual and 90 days past due loans	$	7,652		$	12,358
Ratio of non-performing loans to total loans		1.12	%		1.85	%
Other non-performing assets(2)	$	1,319		$	1,319
Total non-performing assets	$	8,971		$	13,677
Total non-performing assets to total assets		1.05	%		1.66	%

(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. 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.

For the three months ended September 30, 2005, non-interest income increased by $94,000 or 13.7%, from the prior year comparable period. The increase was primarily the result of an increase of $58,300, or 29.6%, in income from service and other fees due to increases in loan prepayment and late charge fee income in the current period. In addition, other income, net increased by $16,200, or 31.4%, in the current period. BOLI income increased by $49,400 in the current period. Income from mortgage banking activities increased by $2,400, as an increase in servicing income was offset by a decrease in gains on sales of loans receivable held for sale.

Non-interest expense for the three months ended September 30, 2005 increased by $1,050,200 or 24.3%, from the prior year comparable period. This was primarily the result of an increase in compensation and benefits of $700,900, or 28.7%, as a result of increased staffing, incentive bonuses accrued, and salary and wage adjustments. Other non-interest expense increased by $179,100 or 17.6% due primarily to increases in advertising expense, costs for outside services, postage and special mail, and stationery, printing and supplies. Office properties and equipment expense increased by $170,200, or 19.7%, primarily due to increases in office rental expense and depreciation expense on furniture and equipment.

Page 11

Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

The federal income tax provision for the three-month periods ended September 30, 2005 and September 30, 2004 was at an effective rate of 29.0% and 30.9%, respectively. The effective tax rate was lowered due to the affect of tax-exempt income earned on bank-owned life insurance and the Company’s investment in a low income housing project which qualified for tax credits.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s liquidity measures its ability to generate adequate amounts of funds to meet cash needs. Adequate liquidity guarantees that sufficient funds are available to meet deposit withdrawals, fund loan commitments, purchase securities, maintain adequate reserve requirements, pay operating expenses, provide funds for debt service, pay dividends to stockholders and meet other general commitments in a cost-effective manner. Our primary source of funds are deposits, principal and interest payments on loans, proceeds from the sale of loans, and advances from the Federal Home Loan Bank of Cincinnati (“FHLB”). While maturities and scheduled amortization on loans are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and local competition.

Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investment activities during any given period. Additional sources of funds include lines of credit available from the FHLB.

Management believes the Company maintains 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, 2005. This is attributable to the Company’s Asset/Liability Management policy of monitoring and matching the maturity and re-pricing characteristics of its interest-earning assets and interest-bearing liabilities, while remaining short-term with the weighted average maturity and re-pricing periods.

Page 12

Part I Financial Information

Item 4

CONTROLS AND PROCEDURES

As of the end of the period covered by this report, management of the Company carried out an evaluation, under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. It should be noted that the design of the Company’s disclosure controls and procedures is based in part upon certain reasonable assumptions about the likelihood of future events, and there can be no reasonable assurance that any design of disclosure controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote, but the Company’s principal executive and financial officers have concluded that the Company’s disclosure controls and procedures are, in fact, effective at a reasonable assurance level.

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation described in paragraph (d) of SEC Rule 240.13a-15 that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II Other Information

Item 1.	Legal Proceedings. N/A
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.

(a)	N/A
(b)	N/A
(c)	The following table illustrates the repurchase of the Company’s common stock during the period ended September 30, 2005:

					(c) Total Number of		(d) Maximum Number
					Shares Purchased as		of Shares that May
					Part of Publicly		Yet Be Purchased
	(a) Total Number of		(b) Average Price		Announced Plans or		Under the Plans or
Period	Shares Purchased		Paid per Share		Programs		Programs
July 1 through
July 31, 2005		4,730	$	12.94		4,730		282,509
August 1 through
August 31, 2005		4,400	$	13.23		4,400		278,109
September 1 through
September 30, 2005		—		—		—		—
Total		9,130	$	13.08		9,130		278,109

In August 2002 the Company announced a stock repurchase program to acquire up to 5% of the Company’s common stock. This plan was renewed for an additional year in August 2003, 2004 and 2005. The plan is renewable on an annual basis and will expire in August 2006, if not renewed.

Item 3.	Defaults Upon Senior Securities. N/A
Item 4.	Submission of Matters to a Vote of Security Holders. N/A
Item 5.	Other Information. N/A
Item 6.	Exhibits

The following exhibits are filed herewith:
	31.1	Rule 13a-14(a) Certification of Chief Executive Officer
	31.2	Rule 13a-14(a) Certification of Chief Financial Officer
	32	Section 1350 Certification

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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 8, 2005	/s/ C. Keith Swaney
	C. Keith Swaney President, Chief Operating Officer and Treasurer
	(Only authorized officer and
	Principal Financial Officer)