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 December 31, 2004.

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

Commission File Number                                                            0-24948                                                                                

30000 Aurora Road, Solon, Ohio 44139

(440) 248-7171

Not Applicable

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.

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

PVF CAPITAL CORP.

INDEX

Part I Financial Information

PVF CAPITAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

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)

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)

See accompanying notes to consolidated financial statements

Page 3

Part I Financial Information
Item 1

PVF CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2004 and 2003
(Unaudited)

1. The accompanying condensed 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, 2004 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 and six months ended December 31, 2004 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2005. 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 operations 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.

Stock Compensation: Employee compensation expense under stock is reported using the intrinsic valuation method. No stock-based compensation cost is reflected in net income, as 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. The following table illustrates the effect on net income and earnings per share if expense was measured using the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock Based Compensation.”

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Part I Financial Information
Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued

The pro forma effects are computed using option pricing models, using the following weighted-average assumptions as of grant date for options awarded in fiscal year 2005 and 2004.

2. The following table discloses earnings per share for the three and six months ended December 31, 2004 and December 31, 2003.

There were 14,700 and 7,000 options not considered in the diluted Earnings Per Share calculation for the three- and six-month periods ended December 31, 2004 and 2003, respectively, because they were anti-dilutive.

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Part I Financial Information
Item 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued

3. Mortgage Banking Activities: The Company services real estate loans for investors that are not included in the accompanying condensed 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.”

 Mortgage banking activities, net consist of the following:

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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 and six-month periods ended December 31, 2004 for PVF Capital Corp. (“PVF” or the “Company”), Park View Federal Savings Bank (the “Bank”), its principal and wholly-owned subsidiary, PVF Service Corporation (“PVFSC”), a wholly-owned real estate subsidiary, Mid Pines Land Co., a wholly-owned real estate subsidiary, and PVF Holdings, Inc., a wholly-owned and currently inactive 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 $802.4 million as of December 31, 2004, an increase of approximately $46.7 million, or 6.2%, as compared to June 30, 2004. 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 8.75%, 10.41%, and 11.01%, respectively, at December 31, 2004.

During the six months ended December 31, 2004, the Company’s cash and cash equivalents, which consist of cash, interest-bearing deposits, and federal funds sold, remained at approximately $17.5 million, as compared to June 30, 2004. The change in the composition of the Company’s cash and cash equivalents consisted of an increase in cash and interest-bearing deposits of $7.0 million and a decrease in federal funds sold of $7.0 million. The net $25.9 million, or 3.9%, increase in loans receivable, loans receivable held for sale, and mortgage-backed securities during the six months ended December 31, 2004, resulted from an increase in loans receivable of $30.5 million, a decrease in loans receivable held for sale of $1.5 million, and a

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Part I Financial Information
Item 2

FINANCIAL CONDITION continued

decrease in mortgage-backed securities of $3.1 million. The increase of $30.5 million in loans receivable held for investment included increases of $9.8 million in home equity line of credit loans, $9.3 million in land loans, $9.2 million in one-to-four family and commercial construction loans, $8.6 million in one-to-four family residential loans, $1.8 million in non real-estate loans, and $1.7 million in multi-family loans, offset by decreases of $3.5 million in commercial line of credit loans and $6.4 million in commercial real estate loans. The decrease of $3.1 million in mortgage-backed securities resulted from principal payments received. The decrease of $1.5 million in loans receivable held for sale is attributable to the continued slowdown in refinancing activity resulting from rising interest rates during the period.

The increase of $20.0 million in securities held to maturity resulted from the purchase of $25.0 million in Federal Home Loan Bank agency securities and the maturity of $5.0 million in agency securities.

Management’s decision to attract new certificates of deposit by offering competitive market rates resulted in an increase of $22.7 million, or 4.3%, in deposits. The decrease in notes payable of $1.0 million, or 41.9%, is the result of principal payments made on notes payable. Advances increased by $18.0 million, or 13.3%, as a result of short-term borrowings from the Federal Home Loan Bank of Cincinnati. The increase in advances from borrowers for taxes and insurance of $6.4 million is attributable to timing differences between the collection and payment of taxes and insurance. The decrease in accrued expenses and other liabilities of $0.8 million, or 5.0%, is primarily the result of timing differences between the collection and remittance of payments received on loans serviced for investors.

Proceeds from the increase in deposits of $22.7 million, the increase in advances of $18.0 million, the increase in advances from borrowers for tax and insurance of $6.4 million, the maturity of $5.0 million in securities, and earnings of $2.7 million, were used to fund the net increase of $25.9 million in loans receivable, loans receivable held for sale, and mortgage-backed securities, purchase $25.0 million in securities, repay $1.0 million in notes payable, pay cash dividends of $1.0 million, purchase treasury stock of $0.3 million, and fund the decrease in accrued expenses and other liabilities of $0.8 million.

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.

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Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

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 December 31, 2004 was $1,422,000 as compared to $1,349,700 for the prior year comparable period. This represents an increase of $72,300, or 5.4%, when compared with the prior year comparable period.

Net interest income for the three months ended December 31, 2004 increased by $30,100, or 0.5%, as compared to the prior year comparable period. This resulted from an increase of $689,100, or 7.0%, in interest income and an increase of $659,000, or 16.2%, in interest expense. The increase in interest income resulted primarily from an increase of $82.7 million in the average balance of interest-earning assets in the current period. The increase in the average balance of interest-earning assets was partially offset by a decrease of 9 basis points in the return on interest-earning assets and resulted in an overall increase to interest income of $689,100 in the current period. The average balance on interest-bearing liabilities increased by $94.5 million, while the average cost of funds on interest-bearing liabilities decreased by 2 basis points in the current period. This resulted in an overall increase in interest expense of $659,000. The Company’s net interest income increased by $30,100 due to an increase in the average balances of both interest-earning assets and interest-bearing liabilities offset partially by a decrease of 7 basis points in the Company’s interest-rate spread during the current period as compared to the prior year comparable period.

For the three months ended December 31, 2004, no provision for loan losses was recorded, while a provision for loan losses of $192,000 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, 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. During the three months ended December 31, 2004, management determined it was not necessary to record a provision for loan losses in the current period due to a decrease to classified assets. During the three months ended December 31, 2003, the Company experienced an increase in loans held for investment of $24.9 million and an increase in the level of non-accruing loans of $1.3 million. Due to the increase in loans held for investment along with an

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Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

increase in the level of non-accruing loans and recognition of specific loan losses, management determined it was necessary to record a provision for loan losses of $192,000 in the prior period. At June 30, 2004, the allowance for loan losses was $4.4 million, which represented 41.2% of non-accruing loans and 0.71% of net loans. At December 31, 2004, the allowance for loan losses was $4.4 million, which represented 40.7% of non-accruing loans and 0.68% of net loans.

For the three months ended December 31, 2004, non-interest income decreased by $8,600, or 1.0%, from the prior year comparable period. This resulted primarily from a decrease of $260,200, or 43.0%, in mortgage-banking activities that resulted from a decrease of $297,200 in profit on loan sales in the current period offset by an increase of $37,000 in loan servicing income. The increase in loan servicing income is attributable to an increase in the volume of loans serviced for others along with a slowdown in the amortization of mortgage loan servicing rights that resulted from increasing market interest rates and decreased prepayment speed on loans serviced for others. 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. The origination of these types of loans has slowed in current periods.

In addition, service and other fees increased by $13,200, or 8.4%, primarily due to increases in NOW account and late charge fee income. Other non-interest income, net, increased by $238,400, or 226.0%, in the current

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Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

period primarily due to gains on real estate owned and the Bank’s investment in bank-owned life insurance (“BOLI”).

Non-interest expense for the three months ended December 31, 2004 increased by $215,700, or 4.9%, from the prior year comparable period. This was primarily the result of an increase in compensation and benefits of $270,100, or 11.5%, as the result of increased staffing, incentive bonuses paid, and salary and wage adjustments. Office occupancy and equipment increased $62,800, or 7.8%, due to the operation of one additional branch office along with increases in office rental expenses. Other non-interest expense decreased $117,200, or 9.7%, as the result of decreases in outside services, stationery, printing and supplies, and legal fees.

The federal income tax provision for the three-month period ended December 31, 2004 decreased to an effective rate of 31.1% for the current period from an effective rate of 34.7% for the prior year comparable period. The effective tax rate was lower for the period ended December 31, 2004 due to tax-exempt income earned on BOLI.

The Company’s net income for the six months ended December 31, 2004 was $2,689,600 as compared to $4,281,800 for the prior year comparable period. This represents a decrease of $1,592,200, or 37.2%, when compared with the prior year comparable period.

Net interest income for the six months ended December 31, 2004 decreased by $107,000, or 0.9%, due to an increase of $665,100, or 3.3%, in interest income and a $772,100, or 9.2%, increase in interest expense. The increase in interest income resulted primarily from an increase of $53.8 million in the average balance of interest-earning assets in the current period. The increase in the average balance of interest-earning assets was offset by a decrease of 15 basis points in the return on interest-earning assets and resulted in an overall increase to interest income of $665,100 in the current period. The average balance of interest-bearing liabilities increased by $76.4 million, while the average cost of funds on interest-bearing liabilities decreased by 8 basis points in the current period, resulting in an overall increase in interest expense of $772,100. The Company’s net interest income decreased by $107,000 due to a decrease of 7 basis points in the Company’s interest-rate spread during the current period as compared to the prior year comparable period.

For the six months ended December 31, 2004, a provision for loan losses of $136,000 was recorded, while a provision for loan losses of $292,000 was recorded in the prior year comparable period. During the six months ended December 31, 2004, the Company experienced an increase in loans receivable held for investment of $30.5 million. In addition, the level of non-accruing loans increased by $156,000 and the level of classified assets decreased by $1.5 million. Management determined it was necessary to record a provision for loan losses in the current period due to increases in loans receivable

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Part I Financial Information
Item 2

RESULTS OF OPERATIONS continued

held for investment, specific loan loss allocations, and non-accruing loans. During the six months ended December 31, 2003, the Company experienced an increase in loans held for investment of $17.1 million and an increase in the level of non-accruing loans of $1.5 million. Due to the increase in loans receivable held for investment along with an increase in the level of non-accruing loans and recognition of specific loan losses, management determined it was necessary to record a provision for loan losses of $292,000 in the prior period.

For the six months ended December 31, 2004, non-interest income decreased by $2,634,700, or 63.0%, from the prior year comparable period. This resulted primarily from a decrease of $2,614,700, or 79.8%, in mortgage-banking activities that resulted from a decrease of $3,116,200 in profit on loan sales in the current period offset by an increase of $501,500 in loan servicing income. The increase in loan servicing income is attributable to a decrease in the amortization of mortgage loan servicing rights that resulted from a slowdown in prepayment speed on loans serviced for others.

In addition, other non-interest income, net, decreased by $83,800, or 14.0%, in the current period primarily due to decreased gains on the sale of real estate owned. Service and other fees increased by $63,800, or 21.0%, primarily due to increases in savings and NOW account fee income and late charge fee income.

Non-interest expense for the six months ended December 31, 2004 increased by $1,700, from the prior year comparable period. This was primarily the result of an increase in compensation and benefits of $204,700, or 4.2%, as the result of increased staffing, incentive bonuses paid, and salary and wage adjustments. Office occupancy and equipment increased by $131,100, or 8.2%, due to the operation of one additional branch office along with increases in office rental expenses. Other non-interest expense decreased by $334,100, or 13.7%, primarily as the result of decreases in advertising, outside services, stationery, printing and supplies, and charitable contributions.

The federal income tax provision for the six-month period ended December 31, 2004 decreased to an effective rate of 31.0% for the current period from an effective rate of 34.0% for the prior year comparable period. The effective tax rate was lower for the period ended December 31, 2004 due to tax-exempt income earned on BOLI.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s liquidity measures its ability to generate adequate amounts of funds to meet its 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

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Part I Financial Information
Item 2

LIQUIDITY AND CAPITAL RESOURCES continued

amortization of 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 investing 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 current 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, 2004. 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.

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.

Page 13

Part I Financial Information
Item 4

CONTROLS AND PROCEDURES continued

There have been no changes in the Company’s internal control over financial reporting (to the extent that elements of internal control over financial reporting are subsumed within disclosure controls and procedures) identified in connection with the evaluation described in the above paragraph 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.

Part II Other Information

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 and 2004. The plan is renewable on an annual basis and will expire in August 2005, if not renewed.

Item 3. Defaults Upon Senior Securities. N/A

Item 4. Submission of Matters to a Vote of Security Holders.

The Company’s Annual Meeting of Stockholders was held on October 18, 2004. A total of 6,191,827 shares of the Company’s common stock were represented at the Annual Meeting in person or by proxy.

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Part II Other Information
Item 4. continued

Stockholders voted in favor of the election of four nominees for director. The voting results for each nominee were as follows:

The following directors continued in office with terms ending October 2005.

John R. Male

Stanley T. Jaros

Raymond J. Negrelli

Ronald D. Holman, II

Proposal to ratify the appointment of Crowe Chizek and Company LLC as independent certified public accountants of the Company for the fiscal year ending June 30, 2005.

Page 15

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: February 7, 2005	/s/ C. Keith Swaney
	C. Keith Swaney
	President, Chief Operating Officer and Treasurer (Only authorized officer and   Principal Financial Officer)