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[PVF CAPITAL CORP. LOGO]
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PRESS ANNOUNCEMENT
Date: October 29, 2009
Contact: Edward B. Debevec (440) 248-7171
PVF CAPITAL CORP. ANNOUNCES QUARTERLY EARNINGS
PVF Capital Corp., the parent company of Park View Federal Savings Bank,
announced net income of $4,200,000, or $0.54 basic and diluted earnings per
share for the quarter ended September 30, 2009 as compared to a net loss of
$901,300, or $0.12 basic and diluted earnings per share for the prior year
comparable period.
Net income for the current period resulted primarily from PVF Capital Corp.
entering into an exchange agreement whereby the Company paid $500,000 in cash,
and issued $500,000 in common stock and warrants valued at $800,000 in exchange
for the cancellation of $10.0 million of Trust Preferred Securities Obligations.
This transaction resulted in a pre-tax gain of $8.6 million, which included the
elimination of $400,000 in accrued interest due on this debt.
The Company has also entered into an agreement to redeem its remaining $10.0
million of Trust Preferred Securities Obligations. The transaction, pending
shareholder approval, is expected to be completed in December 2009 and to result
in a pre-tax gain of approximately $8.7 million.
President and Chief Executive Officer Robert J. King, Jr. commented, "These are
certainly positive steps for the Company that will result in a stronger balance
sheet and a substantial decrease in leverage. We continue to remain very focused
on improving our asset quality. We have undergone extensive outside loan review
and have assembled an experienced group of special assets workout executives.
Our board and management team are focused on strengthening the Company's capital
base and reducing the level of nonperforming assets."
NET INTEREST MARGIN
Net interest income was $4.5 million and $5.3 million for the quarters ended
September 30, 2009 and 2008, respectively. A reduction in interest income from
the prior year period was primarily caused by increases in nonperforming loans
and lower market rates on earning assets. The reduction in interest income was
partially offset by a decrease in interest expense due to the re-pricing of
certificates of deposit into lower cost funding. The Company also continued to
maintain higher levels of low-yielding, short-term liquid assets due to
uncertainties in the economy and financial markets.
Net interest margin for the current quarter was 2.16% compared to 2.60% at
September 30, 2008, and 2.46% for the quarter ended June 30, 2009.
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ASSET QUALITY
The provision for loan losses of $1.8 million reflects an increase of $1.1
million from the prior year comparable period and was driven largely by economic
conditions primarily impacting the Company's non-residential real estate and
construction loan portfolios. The Company continues to aggressively review and
monitor its loan portfolio. We believe the increase in the allowance for loan
losses to an overall total of $31.8 million is appropriate based on our analysis
and the direction of the economy of the market in which the Company conducts
business.
Non-performing loans totaled $74.9 million at September 30, 2009, compared with
$69.7 million at June 30, 2009.
NON-INTEREST INCOME
Non-interest income increased by $10.9 million for the quarter ended September
30, 2009 as compared to the prior year comparable period. In addition to the
previously mentioned gain of $8.6 million recorded on the exchange agreement,
non-interest income in the current period was impacted positively by increases
in mortgage banking activity resulting from high refinance activity and gains
posted on the sale of loans. The increase of $600,000 in mortgage banking
activities during the current period resulted from increased lending activity
attributable to historically low interest rates. In the three-month period ended
September 30, 2008, the Company recorded an impairment loss on FHLMC and FNMA
preferred stock totaling $1.7 million.
NON-INTEREST EXPENSE
The increase of $1.3 million in non-interest expense in the current three-month
period was primarily the result of increases in real estate owned expense, fees
for outside services, and the increase in FDIC premium rates. These increased
expenses were partially offset by a decline in compensation and benefits of
$300,000, or 12%.
BALANCE SHEET
As of September 30, 2009, PVF Capital Corp. reported assets of $887.1 million, a
decrease of $25.1 million, or 2.8%, from the prior fiscal year ended June 30,
2009. Total stockholders' equity of PVF Capital Corp. was $54.9 million, or 6.2%
of total assets at September 30, 2009. Tangible common equity was also 6.2% of
total assets at that date.
Park View Federal is a wholly-owned subsidiary of PVF Capital Corp. and operates
17 full-service offices located throughout the Greater Cleveland area. For
additional information, visit our web site at www.myparkview.com.
This press release contains statements that are forward-looking, as that term is
defined by the Private Securities Litigation Act of 1995 or the Securities and
Exchange Commission in its rules, regulations and releases. The Company intends
that such forward-looking statements be subject to the safe harbors created
thereby. All forward-looking statements are based on current expectation
regarding important risk factors including, but not limited to, real estate
values and the impact of interest rates on financing. Accordingly, actual
results may differ from those expressed in the forward-looking statements, and
the making of such statements should not be regarded as a representation by the
Company or any other person that results expressed therein will be achieved.
PVF Capital Corp.'s common stock trades on the NASDAQ Capital Market under the
symbol PVFC.
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PVF CAPITAL CORP.
30000 Aurora Road
Solon, OH 44139
440-248-7171
SUMMARY OF FINANCIAL HIGHLIGHTS
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
(Dollars in thousands) SEPTEMBER 30, JUNE 30,
2009 2009
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ASSETS
Cash and cash equivalents $ 29,004 $ 21,213
Securities 57,137 50,102
Loans receivable 653,224 668,460
Loans receivable held for sale 6,428 27,078
Mortgage-backed securities 60,630 64,178
Other assets 80,658 81,178
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Total Assets $887,081 $912,209
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LIABILITIES
Deposits $696,931 $724,932
Borrowed money 106,339 106,366
Other liabilities 28,916 31,406
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Total Liabilities 832,186 862,704
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Total Stockholders' Equity 54,895 49,505
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Total Liabilities and Stockholders' Equity $887,081 $912,209
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Book Value and Tangible Book Value Per Share $ 6.88 $ 6.37
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CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
(Dollars in thousands except per share data) SEPTEMBER 30,
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2009 2008
Loans $ 9,157 $ 11,412
Mortgage-backed securities 663 700
Investments 177 379
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Interest income 9,997 12,491
Deposits 4,358 5,943
Borrowings 1,162 1,245
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Interest expense 5,520 7,188
Net interest income 4,477 5,303
Provision for loan losses 1,760 691
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Net interest income after provision for loan losses 2,717 4,612
Mortgage banking activities 1,055 458
Impairment of securities 0 (1,739)
Gain on liquidation of debt 8,561 0
Gain (loss) on real estate owned (90) (13)
Increase in cash surrender value of bank owned life insurance 20 53
Other, net 318 200
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Total noninterest income 9,864 (1,041)
Compensation and benefits 2,242 2,558
Office occupancy and equipment 678 707
Federal deposit insurance premium 566 141
Outside services 852 387
Real estate owned expense 782 189
Other 1,116 954
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Total noninterest expense 6,236 4,936
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Income (loss) before federal income tax provision 6,345 (1,365)
Federal income tax provision 2,145 (464)
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Net income (loss) $ 4,200 ($901)
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BASIC EARNINGS (LOSS) PER SHARE $ 0.54 ($0.12)
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DILUTED EARNINGS (LOSS) PER SHARE $ 0.54 ($0.12)
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