Attached files
file | filename |
---|---|
EX-4.4 - EX-4.4 - PVF CAPITAL CORP | l37922aexv4w4.htm |
EX-3.3 - EX-3.3 - PVF CAPITAL CORP | l37922aexv3w3.htm |
EX-5.1 - EX-5.1 - PVF CAPITAL CORP | l37922aexv5w1.htm |
EX-1.2 - EX-1.2 - PVF CAPITAL CORP | l37922aexv1w2.htm |
EX-99.8 - EX-99.8 - PVF CAPITAL CORP | l37922aexv99w8.htm |
EX-99.5 - EX-99.5 - PVF CAPITAL CORP | l37922aexv99w5.htm |
EX-99.2 - EX-99.2 - PVF CAPITAL CORP | l37922aexv99w2.htm |
EX-23.2 - EX-23.2 - PVF CAPITAL CORP | l37922aexv23w2.htm |
EX-99.7 - EX-99.7 - PVF CAPITAL CORP | l37922aexv99w7.htm |
EX-99.1 - EX-99.1 - PVF CAPITAL CORP | l37922aexv99w1.htm |
EX-99.4 - EX-99.4 - PVF CAPITAL CORP | l37922aexv99w4.htm |
EX-99.3 - EX-99.3 - PVF CAPITAL CORP | l37922aexv99w3.htm |
EX-99.6 - EX-99.6 - PVF CAPITAL CORP | l37922aexv99w6.htm |
EX-10.20 - EX-10.20 - PVF CAPITAL CORP | l37922aexv10w20.htm |
Table of Contents
As filed with the Securities and Exchange Commission on December 9, 2009
Registration No. 333-163037
Registration No. 333-163037
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
UNDER THE SECURITIES ACT OF 1933
PVF CAPITAL CORP.
(Exact name of registrant as specified in its charter)
Ohio (State or other jurisdiction of incorporation or organization) |
6035 (Primary Standard Industrial Classification Code Number) |
34-1659805 (IRS Employer Identification No.) |
30000 Aurora Road
Solon, Ohio 44139
(440) 248-7171
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Solon, Ohio 44139
(440) 248-7171
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Robert J. King, Jr.
President and Chief Executive Officer
30000 Aurora Road
Solon, Ohio 44139
(440) 248-7171
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
President and Chief Executive Officer
30000 Aurora Road
Solon, Ohio 44139
(440) 248-7171
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Joel E. Rappoport, Esq. Sean P. Kehoe, Esq. Kilpatrick Stockton LLP 607 14th Street, NW, Suite 900 Washington, DC 20005 (202) 508-5854 |
Christopher M. Kelly, Esq. Jones Day North Point 901 Lakeside Avenue Cleveland, OH 44114 (216) 586-3939 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company þ |
Calculation of Registration Fee
Title of Each | Proposed Maximum | Proposed | ||||||||||||||||||||
Class of Securities | Amount to be | Offering Price Per | Maximum Aggregate | Amount of | ||||||||||||||||||
to be Registered | Registered | Share | Offering Price | Registration Fee | ||||||||||||||||||
Common Stock, $0.01
par value per share |
[ ] | (1) | $ | 30,000,000 | (1) | (2 | ) | |||||||||||||||
Rights to Purchase Shares of Common Stock |
[ ] | (3) | (3) | (3 | ) | |||||||||||||||||
(1) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended. | |
(2) | The registration fee of $1,674.00 was previously paid upon the initial filing of the Form S-1 on November 12, 2009. | |
(3) | Pursuant to Rule 457(g), no separate registration fee is required for the rights. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may determine.
Table of Contents
The
information in this preliminary prospectus is not complete and
may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This preliminary prospectus is not an
offer to sell these securities and it is not soliciting an offer
to buy these securities in any jurisdiction where the offer or
sale is not permitted. |
Subject
to completion, dated December 9, 2009.
PRELIMINARY PROSPECTUS
[MAXIMUM] Shares of Common
Stock
Up to [RIGHTS#] Shares of
Common Stock
Issuable upon the exercise of
Subscription Rights at $[SHARE PRICE] per share
We are distributing, at no charge to our shareholders,
non-transferable subscription rights to purchase up to
[RIGHTS#] shares of our common stock, par value
$0.01 per share. Subscription rights will be distributed to
persons who owned shares of our common stock as of
5:00 p.m. Eastern Time, on December 18, 2009, the
record date of the rights offering.
Each subscription right will entitle you to purchase
[Ratio] shares of our common stock at the
subscription price of $[SHARE PRICE] per share, which we
refer to as the basic subscription privilege. If you fully
exercise your basic subscription privilege and other
shareholders do not fully exercise their basic subscription
privileges, you will be entitled to exercise an
over-subscription privilege, subject to certain limitations and
subject to allotment, to purchase a portion of the unsubscribed
shares of our common stock at the same subscription price of
$[SHARE PRICE] per share. To the extent you properly
exercise your over-subscription privilege for an amount of
shares that exceeds the number of the unsubscribed shares
available to you, any excess subscription payments received by
the subscription agent will be returned to you, without
interest, as soon as practicable following the expiration of the
rights offering. Funds we receive from subscribers in the rights
offering will be held in escrow by the subscription agent until
the rights offering is completed or canceled.
The subscription rights will expire if they are not exercised by
5:00 p.m., Eastern Time, on [EXPIRATION DATE]. We
reserve the right to extend the expiration date one or more
times, but in no event will we extend the rights offering beyond
[EXPIRATION #2].
We have separately entered into standby purchase agreements with
certain institutional investors and high net worth individuals,
pursuant to which these investors and individuals have severally
agreed to acquire from us, at the subscription price of
$[SHARE PRICE] per share, up to [STANDBY
MAX] shares of common stock. The number of shares
available for sale to standby purchasers will depend on the
number of shares subscribed for in the rights offering. However,
in no event will we issue fewer than [STANDBY
MINIMUM] shares to standby purchasers. If
[RIGHTS#] shares are purchased in the rights
offering, then only [STANDBY MINIMUM] shares will be
sold to the standby purchasers. The maximum number of shares
that may be sold in the rights offering and to standby
purchasers is [MAXIMUM].
We reserve the right to cancel the rights offering at any time.
In the event the rights offering is cancelled, all subscription
payments received by the subscription agent will be returned,
without interest or penalty, as soon as practicable.
You should carefully consider whether to exercise your
subscription rights prior to the expiration of the rights
offering. All exercises of subscription rights are irrevocable.
Our board of directors is making no recommendation regarding
your exercise of the subscription rights. The subscription
rights may not be sold, transferred or assigned and will not be
listed for trading on the Nasdaq Capital Market or any other
stock exchange or market.
Our common stock is traded on the Nasdaq Capital Market under
the trading symbol PVFC. The last reported sales
price of our shares of common stock on
,
2009 was $ per share.
OFFERING
SUMMARY
Price: $[SHARE PRICE] per share
Price: $[SHARE PRICE] per share
Minimum | Maximum | |||||||
[Minimum] | [Maximum] | |||||||
Number of shares
|
||||||||
Gross offering proceeds
|
$ | $ | ||||||
Estimated offering expenses excluding selling agent commissions
and expenses
|
$ | $ | ||||||
Selling agent commissions and expenses(1)
|
$ | $ | ||||||
Selling agent commissions and expenses per share
|
$ | $ | ||||||
Net proceeds(1)
|
$ | $ | ||||||
Net proceeds per share
|
$ | $ |
(1) | We have engaged Stifel, Nicolaus & Company, Incorporated as our financial and marketing advisor and information agent in connection with the rights offering and the offering to standby purchasers. This is not an underwritten offering. Stifel Nicolaus is not obligated to purchase any of the shares of common stock that are being offered for sale. See Plan of Distribution Financial Advisor for a discussion of Stifel Nicolaus compensation for the rights offering and the offering to standby purchasers. |
This
investment involves risks, including the possible loss of
principal.
Please read Risk Factors beginning on page .
Please read Risk Factors beginning on page .
These securities are not deposits, savings accounts or
other obligations of any bank and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other
government agency. Neither the Securities and Exchange
Commission, the Office of Thrift Supervision, nor any state
securities regulator has approved or disapproved of these
securities or determined if this prospectus is accurate or
complete. Any representation to the contrary is a criminal
offense.
Stifel Nicolaus
The date of this prospectus is
,
2009.
Table of Contents
Corporate Center Office
|
Chardon Office | North Royalton Office | ||
30000 Aurora Road
|
408 Water Street | 13901 Ridge Road | ||
Solon, OH 44139
|
Chardon, OH 44024 | North Royalton, OH 44133 | ||
Aurora Office
|
Lakewood Cleveland Office | Shaker Heights Office | ||
215 W. Garfield Road
|
11010 Clifton Blvd. | Shaker Towne Centre | ||
Aurora, OH 44202
|
Cleveland, OH 44102 | 16909 Chagrin Blvd. | ||
Shaker Heights, OH 44120 | ||||
Avon Office
|
Macedonia Office | Solon Office | ||
36311 Detroit Road
|
497 East Aurora Road | Solar Shopping Center | ||
Avon, OH 44011
|
Macedonia, OH 44056 | 34400 Aurora Road | ||
Solon, OH 44139 | ||||
Bainbridge Office
|
Mayfield Heights Office | Streetsboro Office | ||
8500 Washington Street
|
1244 SOM Center Road, | 9305 Market Squars Drive | ||
Chagrin Falls, OH 44023
|
Mayfield Heights OH 44124 | Streetsboro, OH 44241 | ||
Beachwood Office
|
Medina Office | Strongsville Office | ||
La Place
|
Reserve Square | 17780 Pearl Road | ||
2111 Richmond Road
|
3613 Medina Road | Strongsville, OH 44136, | ||
Beachwood, OH 44l22
|
Medina, 011 44256 | |||
Bedford Office
|
Mentor Office | |||
413 Northfield Road
|
Heisley Corners | |||
Bedford, OH 44146
|
6900 Heisley Road | |||
Mentor, OH 44060 |
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EX-23.2 | ||||||||
EX-99.1 | ||||||||
EX-99.2 | ||||||||
EX-99.3 | ||||||||
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EX-99.5 | ||||||||
EX-99.6 | ||||||||
EX-99.7 | ||||||||
EX-99.8 |
You should rely only on the information contained in this prospectus. We have not, and our
agent, Stifel Nicolaus, has not, authorized anyone to provide you with different information. The
information contained in this prospectus is accurate only as of the date of this prospectus
regardless of the time of delivery of this prospectus or any exercise of the subscription rights.
Our business, financial condition, results of operations and prospects may have changed since those
dates. We are not making an offer of these securities in any state or jurisdiction where the offer
is not permitted.
No action is being taken in any jurisdiction outside the United States to permit a public
offering of the common stock or possession or distribution of this prospectus in that jurisdiction.
Persons who come into possession of this prospectus in jurisdictions outside the United States are
required to inform themselves about and to observe any restrictions as to this offering and the
distribution of this prospectus applicable to those jurisdictions.
Unless the context indicates otherwise, all references in this prospectus to PVF, we,
our and us refer to PVF Capital Corp. and our subsidiaries, including Park View Federal Savings
Bank (Park View Federal); except that in the discussion of our subscription rights and capital
stock and related matters these terms refer solely to PVF Capital Corp. and not to any of our
subsidiaries. In this prospectus, we will refer to the rights offering and the offering to standby
purchasers collectively as the stock offering.
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Table of Contents
Questions and Answers Relating to the Rights Offering
What is the rights offering?
We are distributing, at no charge, to holders of our shares of common stock, non-transferable
subscription rights to purchase shares of our common stock. You will receive one subscription
right for each share of common stock you owned as of 5:00 p.m.,
Eastern Time, on December 18, 2009, the
record date. Each subscription right entitles the holder to a basic subscription privilege and an
over-subscription privilege, which are described below. The shares to be issued in the rights
offering, like our existing shares of common stock, will be traded on the Nasdaq Capital Market
under the symbol PVFC.
What is the offering to the standby purchasers?
We have entered into separate standby purchase agreements with certain institutional investors
and high net worth individuals, pursuant to which we have agreed to sell, and these investors and
individuals have severally agreed to purchase from us, up to [STANDBY MAX] shares of our common
stock. The standby purchase commitments are subject to certain conditions as set forth in the
standby purchase agreements. The number of shares available for sale to the standby purchasers
will depend on the number of shares subscribed for in the rights offering. The standby purchase
agreements assure that in no event will we issue fewer than [STANDBY MINIMUM] shares, in the
aggregate, to standby purchasers. The price per share paid by the standby purchasers for such
common stock will be equal to the subscription price paid by our shareholders in the rights
offering.
What is the basic subscription privilege?
The basic subscription privilege of each subscription right gives our shareholders the
opportunity to purchase [Ratio] shares of our common stock at a subscription price of $[SHARE
PRICE] per share. We have granted to you, as a shareholder of record as of 5:00 p.m., Eastern
Time, on the record date, one subscription right for each share of our common stock you owned at
that time. Fractional shares of our common stock resulting from the exercise of the basic
subscription privilege will be eliminated by rounding down to the nearest whole share. For
example, if you owned 100 shares of our common stock as of 5:00 p.m., Eastern Time, on the record
date, you would have received 100 subscription rights and would have the right to purchase
shares of common stock for $[SHARE PRICE] per share. You may exercise all or a portion of your
basic subscription privilege or you may choose not to exercise any subscription rights at all.
However, if you exercise less than your full basic subscription privilege, you will not be entitled
to purchase any additional shares by using your over-subscription privilege.
If you hold a PVF stock certificate, the number of rights you may exercise pursuant to your
basic subscription privilege is indicated on the enclosed rights certificate. If you hold your
shares in the name of a custodian bank, broker, dealer or other nominee, you will not receive a
rights certificate. Instead, the Depository Trust Company (DTC) will issue one subscription right
to the nominee record holder for each share of our common stock that you own at the record date.
If you are not contacted by your custodian bank, broker, dealer or other nominee, you should
contact your nominee as soon as possible.
What is the over-subscription privilege?
In the event that you purchase all of the shares of our common stock available to you pursuant
to your basic subscription privilege, you may also choose to purchase a portion of any shares of
our common stock that are not purchased by our other shareholders through the exercise of their
basic subscription privileges. You should indicate on your rights certificate how many additional
shares you would like to purchase pursuant to your over-subscription privilege.
If sufficient shares of common stock are available, we will seek to honor your
over-subscription request in full. If, however, over-subscription requests exceed the number of
shares of common stock available to be purchased pursuant to the over-subscription privilege, we
will allocate the available shares of common stock among shareholders who over-subscribed by
multiplying the number of shares requested by each shareholder through the exercise of their
over-subscription privileges by a fraction that equals (x) the number of shares available
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to be issued through over-subscription privileges divided by (y) the total number of shares
requested by all subscribers through the exercise of their over-subscription privileges. As
described above for the basic subscription privilege, we will not issue fractional shares through
the exercise of over-subscription privileges.
In order to properly exercise your over-subscription privilege, you must deliver the
subscription payment related to your over-subscription privilege at the time you deliver payment
related to your basic subscription privilege. Because we will not know the actual number of
unsubscribed shares prior to the expiration of the rights offering, if you wish to maximize the
number of shares you purchase pursuant to your over-subscription privilege, you will need to
deliver payment in an amount equal to the aggregate subscription price for the maximum number of
shares of our common stock that may be available to you. For that calculation, you must assume
that no other shareholder, other than you and the standby purchasers, who have agreed to exercise
their basic subscription privileges for an aggregate of shares, will subscribe for any
shares of our common stock pursuant to their basic subscription privilege. See The Rights
OfferingThe Subscription RightsOver-Subscription Privilege.
Why are we conducting the stock offering?
We are engaging in the stock offering to raise equity capital to improve Park View Federals
capital position, and to retain additional capital at PVF. See Use of Proceeds. Our board of
directors has chosen to raise capital through a rights offering to give our shareholders the
opportunity to limit ownership dilution by buying additional shares of common stock. Our board of
directors also considered several alternative capital raising methods prior to concluding that the
rights offering was the appropriate option under the current circumstances. We believe that the
rights offering will strengthen our financial condition by generating additional cash and
increasing our capital position; however, our board of directors is making no recommendation
regarding your exercise of the subscription rights. We cannot assure you that we will not need to
seek additional financing or engage in additional capital offerings in the future.
How was the $[SHARE PRICE] per share subscription price determined?
In determining the subscription price, our board of directors considered a number of factors,
including: the price at which our shareholders might be willing to participate in the rights
offering, historical and current trading prices for our common stock, the need for liquidity and
capital, negotiations with standby purchasers, and the desire to provide an opportunity to our
shareholders to participate in the rights offering on a pro rata basis. In conjunction with its
review of these factors, our board of directors also reviewed our history and prospects, including
our past and present earnings, our prospects for future earnings, our current financial condition
and regulatory status and a range of discounts to market value represented by the subscription
prices in various prior rights offerings. We may elect to receive a fairness opinion from our
financial advisor with respect to the consideration to be paid to PVF prior to the closing of the
stock offering, but we have not received a fairness opinion as of the date of this prospectus. The
subscription price is not necessarily related to our book value or any other established criteria
of value and may or may not be considered the fair value of our common stock to be offered in the
rights offering. You should not assume or expect that, after the stock offering, our shares of
common stock will trade at or above the $[SHARE PRICE] purchase price.
Am I required to exercise all of the subscription rights I receive in the rights offering?
No. You may exercise any number of your subscription rights, or you may choose not to
exercise any subscription rights. If you do not exercise any subscription rights, the number of
shares of our common stock you own will not change. However, if you choose not to exercise your
basic subscription rights in full, your ownership interest in PVF will be diluted as a result of
the stock offering, and even if you fully exercise your basic subscription rights, but do not
exercise a certain level of over-subscription rights, you will experience dilution as a result of
the sale of shares to standby purchasers. In addition, if you do not exercise your basic
subscription privilege in full, you will not be entitled to participate in the over-subscription
privilege.
How soon must I act to exercise my subscription rights?
If you received a rights certificate and elect to exercise any or all of your subscription
rights, the subscription agent must receive your completed and signed rights certificate and
payment prior to the expiration of
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the rights offering, which is [EXPIRATION DATE], at 5:00 p.m., Eastern Time. If you hold your
shares in the name of a custodian bank, broker, dealer or other nominee, your nominee may establish
a deadline prior to 5:00 p.m. Eastern Time, on [EXPIRATION DATE] by which you must provide it with
your instructions to exercise your subscription rights and payment for your shares. Our board of
directors may, in its discretion, extend the rights offering one or more times, but in no event
will the expiration date be later than [EXPIRATION DATE #2]. Our board of directors may cancel or
amend the rights offering at any time. In the event that the rights offering is cancelled, all
subscription payments received will be returned, without interest, as soon as practicable.
Although we will make reasonable attempts to provide this prospectus to holders of
subscription rights, the rights offering and all subscription rights will expire at 5:00 p.m.,
Eastern Time on [EXPIRATION DATE] (unless extended), whether or not we have been able to locate
each person entitled to subscription rights.
May I transfer my subscription rights?
No. You may not sell, transfer or assign your subscription rights to anyone. Subscription
rights will not be listed for trading on the Nasdaq Capital Market or any other stock exchange or
market. Rights certificates may only be completed by the shareholder who receives the certificate.
Are we requiring a minimum subscription to complete the stock offering?
There is no individual minimum purchase requirement in the rights offering. However, we
cannot complete the stock offering unless we receive aggregate subscriptions of at least $___
million ([MINIMUM] shares) of common stock in the stock offering. This includes purchases by the
standby purchasers of up to [STANDBY MAX] shares of our common stock.
Has our board of directors made a recommendation to our shareholders regarding the rights offering?
No. Our board of directors is making no recommendation regarding your exercise of the
subscription rights. Shareholders who exercise subscription rights risk investment loss on new
money invested. We cannot predict the price at which our shares of common stock will trade;
therefore, we cannot assure you that the market price for our common stock will be above the
subscription price or that anyone purchasing shares at the subscription price will be able to sell
those shares in the future at the same price or a higher price. You are urged to make your
decision based on your own assessment of our business and the rights offering. Please see Risk
Factors for a discussion of some of the risks involved in investing in our common stock.
Are there any limits on the number of shares I may purchase in the rights offering or own as a
result of the rights offering?
Persons, together with certain related affiliates, may purchase up to a number of shares such
that upon completion of the stock offering the person owns up to 4.9% of PVFs common stock
outstanding. If a person, together with certain affiliates, intends to purchase a number of shares
such that upon completion of the stock offering the person owns in excess of 4.9% of PVFs common
stock outstanding (including persons who currently own in excess of 4.9% of PVFs common stock
outstanding and intend to maintain stock ownership in excess of 4.9%), the board of directors
retains the discretion to limit such purchases in order to maintain compliance with the ownership
change provisions of Section 382 of the Internal Revenue Code. See Risk FactorsPVF could, as a
result of the stock offering or future investments in our common stock by 5% holders, experience
an ownership change for tax purposes that could cause PVF to permanently lose a significant
portion of its U.S. federal deferred tax assets.
In addition, with the exception of the issuance of shares to certain of our standby
purchasers, we will not issue shares of our common stock pursuant to the exercise of basic
subscription rights or over-subscription rights, or to any shareholder or standby purchaser who, in
our sole opinion, could be required to obtain prior clearance or approval from or submit a notice
to any state or federal bank regulatory authority to acquire, own or control such shares if, as of
[EXPIRATION DATE], such clearance or approval has not been obtained and/or any applicable waiting
period has not expired. If we elect not to issue shares in such a case, the unissued shares will
become
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available to satisfy over-subscriptions by other shareholders pursuant to their subscription rights
and will thereafter be available to standby purchasers.
How do I exercise my subscription rights if I own shares in certificate form?
If you hold a PVF stock certificate and you wish to participate in the rights offering, you
must take the following steps:
| deliver a properly completed and signed rights certificate, and related subscription documents, to the subscription agent before 5:00 p.m., Eastern Time, on [EXPIRATION DATE]; and | ||
| deliver payment to the subscription agent before 5:00 p.m., Eastern Time, on [EXPIRATION DATE]. |
In certain cases, you may be required to provide additional documentation or signature
guarantees.
Please follow the delivery instructions on the rights certificate. Do not deliver documents
to PVF. You are solely responsible for completing delivery to the subscription agent of your
subscription documents, rights certificate and payment. We urge you to allow sufficient time for
delivery of your subscription materials to the subscription agent so that they are received by the
subscription agent by 5:00 p.m. Eastern Time, on [EXPIRATION DATE].
If you send a payment that is insufficient to purchase the number of shares you requested, or
if the number of shares you requested is not specified in the forms, the payment received will be
applied to exercise your subscription rights to the fullest extent possible based on the amount of
the payment received, subject to the availability of shares under the over-subscription privilege
and the elimination of fractional shares. Any excess subscription payments received by the
subscription agent will be returned, without interest, as soon as practicable following the
expiration of the rights offering.
What form of payment is required to purchase the shares of our common stock?
As described in the instructions accompanying the rights certificate, payments submitted to
the subscription agent must be made in full United States currency by:
| check payable to Computershare Trust Company, N.A.; | ||
| bank check or bank draft payable to Computershare Trust Company, N.A., drawn upon a United States bank; or | ||
| money order payable to Computershare Trust Company, N.A. | ||
Payment will be deemed to have been received by the subscription agent only upon the
subscription agents receipt of any certified check, bank check or bank draft drawn upon a United
States bank or money order or, in the case of an uncertified personal check, receipt and clearance
of such check.
Please note that funds paid by uncertified personal check may take at least seven business
days to clear. Accordingly, if you wish to pay by means of an uncertified personal check, we urge
you to make payment sufficiently in advance of the expiration date to ensure that the subscription
agent receives cleared funds before that time. We also urge you to consider payment by means of a
certified check, bank check, bank draft or money order.
What should I do if I want to participate in the rights offering, but my shares are held in the
name of a custodian bank, broker, dealer or other nominee?
If you hold your shares of common stock through a custodian bank, broker, dealer or other
nominee, then your nominee is the record holder of the shares you own. If you are not contacted by
your nominee, you should contact your nominee as soon as possible. Your nominee must exercise the
subscription rights on your behalf for
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the shares of common stock you wish to purchase. You will not receive a rights certificate.
Please follow the instructions of your nominee. Your nominee may establish a deadline that may be
before the 5:00 p.m., Eastern Time, [EXPIRATION DATE] expiration date that we have established for
the rights offering.
What should I do if I want to participate in the rights offering, but my shares are held in my
account under the PVF 401(k) plan?
If shares of our common stock
are held in your account under our 401(k) plan as of 5:00 p.m.,
Eastern Time, on December 18, 2009, you are eligible to participate in the offering. If you wish to
exercise some or all of your subscription rights, you will need to notify the trustee of the 401(k)
plan of your decision and the trustee will act for you. The trustee must receive your properly
completed form entitled 401(k) Plan Participant Election Form
no later than
, 2010.
If
you elect to exercise some or all of your subscription rights, you must ensure that the total
amount of the funds required for such exercise is maintained in
the Merrill Lynch Retirement Preservation Trust Fund (an existing
investment fund under the 401(k) plan) at or prior to 5:00 p.m., on
,
2010. The trustee,
in order to exercise subscription rights on your behalf, will transfer funds from your
Merrill Lynch Retirement Preservation Trust Fund account one business day before the expiration date. If these funds are
insufficient to exercise all of your rights in accordance with your election, or if you transfer
amounts out of the Merrill Lynch Retirement Preservation Trust Fund, including after
,
2010 (due to, for example, a fund
transfer, loan, withdrawal or distribution), the subscription rights will be exercised to the
maximum extent possible with the amount you have invested in your
Merrill Lynch Retirement Preservation Trust Fund account. Your
401(k) Plan Participant Election Form accompanies this prospectus. Once you elect to exercise
your rights you cannot revoke your election.
When will I receive my new shares?
If you purchase stock in the rights offering by submitting a rights certificate and payment,
we will mail you a stock certificate as soon as practicable after the expiration date of the rights
offering. If your shares as of December 18, 2009 were held by a custodian bank, broker, dealer or
other nominee, and you participate in the rights offering, you will not receive stock certificates
for your new shares. Your nominee will be credited with the shares of common stock you purchase in
the rights offering as soon as practicable after the expiration of the rights offering.
After I send in my payment and rights certificate, may I cancel my exercise of subscription rights?
No. All exercises of subscription rights are irrevocable unless the rights offering is
terminated, even if you later learn information that you consider to be unfavorable to the exercise
of your subscription rights. You should not exercise your subscription rights unless you are
certain that you wish to purchase shares of our common stock in the rights offering.
Are there any conditions to completing the rights offering?
Yes. We must meet the following conditions to complete the rights offering:
| We must sell the minimum offering amount of at least $ million ([MINIMUM] shares) of common stock in the stock offering, which includes the purchases by the standby purchasers of between [STANDBY MINIMUM] and [STANDBY MAX] shares of our common stock. | ||
| Our shareholders must approve an amendment to our First Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock to 65,000,000. Our First Amended and Restated Articles of Incorporation currently authorize us to issue up to 15,000,000 shares of common stock, which is less than the sum of our current outstanding shares plus the number of shares we are offering for sale in the stock offering. At our upcoming annual meeting of shareholders, which is scheduled to be held on , 2009, we are submitting a proposal to shareholders to amend the First Amended and Restated Articles of Incorporation. | ||
| Our shareholders must approve the issuance of shares to standby purchasers. At our upcoming annual meeting of shareholders, we are submitting a proposal to our shareholders to approve the issuance of shares to the standby purchasers. |
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| Our shareholders must approve the exchange of outstanding trust preferred securities with an aggregate liquidation amount of $10.0 million for $400,000 in cash, common stock valued at $600,000 and warrants to acquire shares of common stock. |
Will our directors and officers participate in the rights offering?
Yes. We expect our directors and officers will subscribe for, in the aggregate, approximately
shares of common stock, or $3.5 million, in the rights offering. The purchase price paid by
them will be $[SHARE PRICE] per share, the same paid by all other persons who purchase shares of
our common stock in the stock offering. Following the stock offering and assuming completion of
the exchange of the PVF Capital Trust II trust preferred securities, our directors and executive
officers, together with their affiliates, are expected to own approximately shares of common
stock, or % and % of our total outstanding shares of common stock, assuming the sale at
the minimum and maximum of the offering range, respectively.
Are the standby purchasers receiving any compensation for the standby commitments?
No. The standby purchasers are not receiving compensation for their standby commitments.
What agreements do we have with the standby purchasers?
Each of the standby purchasers executed a non-disclosure agreement and accordingly gained
access to limited nonpublic information about the stock offering. Subsequently, the standby
purchasers negotiated and executed standby purchase agreements.
How many shares will the standby purchasers own after the stock offering?
After the stock offering, the standby purchasers will own between shares of our common
stock ( % of our outstanding shares) and shares of our common stock ( % of our
outstanding shares), depending on how many shares of common stock we sell in the stock offering.
What effects will the stock offering have on our outstanding common stock?
As
of December 18, 2009, we had shares of our common stock issued and outstanding. Assuming
no options are exercised prior to the expiration of the rights offering and assuming all shares are
sold in the rights offering and to standby purchasers, we expect approximately shares of our
common stock will be outstanding immediately after completion of the stock offering.
The issuance of shares of our common stock in the stock offering will dilute, and thereby
reduce, your proportionate ownership in our shares of common stock unless you fully exercise your
basic subscription privilege and a certain level of your over-subscription privilege. In addition,
the issuance of shares of our common stock at the subscription price, which is less than the market
price as of , 2009, will likely reduce the price per share of shares held by you prior
to the stock offering.
How much will we receive in net proceeds from the stock offering?
We expect that the aggregate stock offering proceeds, net of expenses, to be between $
million and $ million. Subject to Office of Thrift Supervision approval of or non-objection
to the capital plan and business plan we have adopted, we intend to invest $ million of the
net proceeds in Park View Federal to improve its regulatory capital position, and retain the
remainder of the net proceeds. The net proceeds we retain may be used for general corporate
purposes. Please see Use of Proceeds.
Are there risks in exercising my subscription rights?
Yes. The exercise of your subscription rights involves risks. Exercising your subscription
rights involves the purchase of additional shares of our common stock and should be considered as
carefully as you would consider
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any other equity investment. Among other things, you should carefully consider the risks described
under the heading Risk Factors in this prospectus.
If the rights offering is not completed, will my subscription payment be refunded to me?
Yes. The subscription agent will hold all funds it receives in a segregated bank account
until completion of the rights offering. If the rights offering is not completed, all subscription
payments received by the subscription agent will be returned, without interest, as soon as
practicable. If your shares are held in the name of a custodian bank, broker, dealer or other
nominee, it may take longer for you to receive the refund of your subscription payment because the
subscription agent will return payments through the record holder of your shares.
What fees or charges apply if I purchase shares of the common stock in the rights offering?
We are not charging any fee or sales commission to issue subscription rights to you or to
issue shares to you if you exercise your subscription rights (other than the subscription price).
If you exercise your subscription rights through a custodian bank, broker, dealer or other nominee,
you are responsible for paying any fees your nominee may charge you.
What is the role of Stifel Nicolaus in the stock offering?
We have entered into an agreement with Stifel Nicolaus, pursuant to which Stifel Nicolaus is
acting as our financial advisor and marketing and information agent in connection with the stock
offering and will use its best efforts to assist us in soliciting the exercise of subscription
rights for the purchase of shares of our common stock and in soliciting the standby purchasers.
Stifel Nicolaus is not acting as an underwriter and is not obligated to purchase any shares of our
common stock in the stock offering. We have agreed to pay certain fees to, and expenses of, Stifel
Nicolaus.
Who should I contact if I have other questions?
If you have other questions regarding PVF, Park View Federal or the stock offering, or if you
have any questions regarding completing a rights certificate or submitting payment in the rights
offering, please contact our information agent, Stifel Nicolaus, at (___) ___- (toll free),
Monday through Friday (except bank holidays), between 9:00 a.m. and 4:00 p.m., Eastern Time.
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Summary
The following summary contains basic information about us and the rights offering. Because it
is a summary, it may not contain all of the information that is important to you. For additional
information before making a decision to invest in our shares of common stock, you should read this
prospectus carefully, including the sections entitled The Rights Offering and Risk Factors and
the information incorporated by reference in this prospectus, including our audited consolidated
financial statements and the accompanying notes included in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2009, and our unaudited consolidated financial statements in our
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.
PVF Capital Corp.
PVF is the holding company for Park View Federal. PVF owns and operates Park View Federal,
PVF Service Corporation, a real estate subsidiary, and Mid Pines Land Company, a real estate
subsidiary. In addition, PVF owns PVF Holdings, Inc., a financial services subsidiary, currently
inactive, and two other subsidiaries chartered for future operation, but which are also currently
inactive. The business of PVF consists primarily of the business of Park View Federal. Park View
Federal is a federal stock savings bank operating through 17 offices located in Cleveland and
surrounding communities. Park View Federal has operated continuously for 89 years, having been
founded as an Ohio chartered savings and loan association in 1920. PVF Capital Corp.s main office
is located at 30000 Aurora Road, Solon, Ohio 44139 and its telephone number is (440) 248-7171.
Park View Federals principal business consists of attracting deposits from the general public
and investing these funds primarily in loans secured by first mortgages on real estate located in
Park View Federals market area, which consists of Portage, Lake, Geauga, Cuyahoga, Summit, Medina
and Lorain Counties in Ohio. Park View Federal emphasizes the origination of loans for the
purchase or construction of residential real estate, commercial real estate and multi-family
residential property and land loans. To a lesser extent, Park View Federal originates commercial
business loans, loans secured by second mortgages, including home equity lines of credit, and loans
secured by savings deposits.
Park View Federal derives its income principally from interest earned on loans and, to a
lesser extent, loan servicing and other fees, gains on the sale of loans and interest earned on
investments. Park View Federals principal expenses are interest expense on deposits and
borrowings and noninterest expense such as compensation and employee benefits, office occupancy
expenses and other miscellaneous expenses. Funds for these activities are provided principally by
deposits, Federal Home Loan Bank advances and other borrowings, repayments of outstanding loans,
sales of loans and operating revenues.
At September 30, 2009, we had total consolidated assets of $887.1 million, total deposits of
$696.9 million and total shareholders equity of $54.9 million.
Recent Operational Challenges
Deterioration in Asset Quality. Like many financial institutions across the United States,
our operations have been significantly negatively impacted by the current economic crisis. During
our fiscal years ended June 30, 2008 and 2009 and continuing into our current fiscal year, the
economic crisis that was initially confined to residential real estate and subprime lending has
evolved into a global economic crisis that has negatively impacted not only liquidity and credit
quality but also the general economic environment, including the labor market, the capital markets
and real estate values. As a result of this significant downturn, we have been adversely affected
by declines in the residential and commercial real estate market in our market area. Declining
home prices, slowing economic conditions and increasing levels of delinquencies and foreclosures
have negatively affected the credit performance of our residential real estate, commercial real
estate and construction and land loans, resulting in a significant increase in our level of
nonperforming assets and charge-offs of problem loans. At the same time, competition among
depository institutions in our markets for deposits and quality loans has increased significantly.
These market conditions, the tightening of credit and widespread reduction in general business
activity have led to increased deficiencies in our loan portfolio, a decreased interest margin and
increased market volatility.
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As a result of the deterioration in our asset quality, we recorded provisions for loan losses
of $1.8 million during the quarter ended September 30, 2009 and $31.3 million and $6.1 million
during the years ended June 30, 2009 and 2008, respectively, which significantly negatively
impacted our earnings. Due in part to the deterioration in our asset quality, and resulting
provisions for loans losses, our regulatory capital ratios also were negatively impacted.
Our restructured management team has taken several significant steps to improve our asset
quality, including establishing a Special Asset Management Department, obtaining an independent
loan review and applying more conservative underwriting practices. See Business Strategy of our
Restructured Management TeamImprove Our Asset Quality. As a result of these initiatives, our
management believes that the deterioration in our asset quality has slowed and that improvement
will be seen over the next year.
PVF Debt. At June 30, 2009, PVF had $20.0 million aggregate amount of outstanding
subordinated debentures, consisting of two issuances of subordinated debentures in the aggregate
amount of $10.0 million each. The subordinated debentures were issued to two trust subsidiaries,
PVF Capital Trust I and PVF Capital Trust II, each of which, in turn, issued and sold trust
preferred securities with an aggregate liquidation amount of $10.0 million. The trust preferred
securities carried interest rates of 3.70% and 7.462% at June 30, 2009. In December 2008, PVF
determined to defer interest payment on these trust preferred securities. PVF accrued interest
expense of $937,000 on the trust preferred securities during the year ended June 30, 2009.
Since June 30, 2009, our restructured management team has made significant strides in
strengthening our balance sheet and capital structure by entering into exchange agreements that
have eliminated or will eliminate, subject to shareholder approval, all of our trust preferred
obligations. See Business Strategy of our Restructured Management TeamComplete the Early
Extinguishment of PVF Debt. As a result of the elimination of these trust preferred obligations,
we expect, in the aggregate, to record an after-tax gain in consolidated shareholders equity of
approximately $11.6 million and to reduce our annual debt servicing requirements by approximately
$922,000.
Regulatory Restrictions. On October 19, 2009, PVF and Park View Federal each entered into a
Stipulation and Consent to the Issuance of Order to Cease and Desist with the Office of Thrift
Supervision whereby PVF and Park View Federal each consented to the issuance of an Order to Cease
and Desist without admitting or denying that grounds exist for the Office of Thrift Supervision to
initiate an administrative proceeding against PVF or Park View Federal.
The Park View Federal Cease and Desist Order requires Park View Federal to take several
actions, including, but not limited to:
| by December 31, 2009, meet and maintain (i) a tier one (core) capital ratio of at least 8.0% and (ii) a total risk-based capital ratio of at least 12.0% after the funding of an adequate allowance for loan and lease losses and submit for Office of Thrift Supervision approval a detailed plan to accomplish this; as a result of this requirement Park View Federal may not be deemed to be well-capitalized under applicable regulations; | ||
| if Park View Federal fails to meet these capital requirements at any time after December 31, 2009, within 15 days thereafter prepare a written contingency plan detailing actions to be taken, with specific time frames, providing for (i) a merger with another federally insured depository institution or holding company thereof, or (ii) voluntary liquidation; | ||
| adopt revisions to Park View Federals liquidity policy to, among other things, increase Park View Federals minimum liquidity ratio: | ||
| reduce the level of adversely classified assets to no more than 50% of core capital plus allowance for loan and lease losses by December 31, 2010 and to reduce the level of adversely classified assets and assets designated as special mention to no more than 65% of core capital plus allowance for loan and lease losses by December 31, 2010; |
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| submit for Office of Thrift Supervision approval a new business plan that will include the requirements contained in the Cease and Desist Order and that also will include well supported and realistic strategies to achieve consistent profitability by September 30, 2010; | ||
| restrict quarterly asset growth to an amount not to exceed net interest credited on deposit liabilities until the Office of Thrift Supervision approves of the new business plan; | ||
| cease to accept, renew or roll over any brokered deposit or act as a deposit broker, without the prior written waiver of the Federal Deposit Insurance Corporation; and | ||
| not declare or pay dividends or make any other capital distributions from Park View Federal without receiving prior Office of Thrift Supervision approval. | ||
The PVF Cease and Desist Order requires PVF to take several actions, including, but not
limited to:
| submit a capital plan that includes, among other things, (i) the establishment of a minimum tangible capital ratio of tangible equity capital to total tangible assets commensurate with PVFs consolidated risk profile, and (ii) specific plans to reduce the risks to PVF from its current debt levels and debt servicing requirements; | ||
| not declare, make or pay any cash dividends or other capital distributions or purchase, repurchase or redeem or commit to purchase, repurchase or redeem PVF equity stock without the prior non-objection of the Office of Thrift Supervision, except that this provision does not apply to immaterial capital stock redemptions that arise in the normal course of PVFs business in connection with its stock-based compensation plans; and | ||
| not incur, issue, renew, roll over or increase any debt or commit to do so without the prior non-objection of the Office of Thrift Supervision (debt includes loans, bonds, cumulative preferred stock, hybrid capital instruments such as subordinated debt or trust preferred securities, and guarantees of debt). |
The
Cease and Desist Orders also impose certain on-going reporting
obligations and additional restrictions on severance and
indemnification payments, changes in directors and management
employment agreements and compensation arrangements that we may enter
into, third party service contracts and transactions with affiliates. We
have complied to date with all requirements of the Cease and Desist
Orders and we will continue to work to comply with all such requirements
in the future. We have submitted a capital plan which contemplates this stock offering and which is being
reviewed by the Office of Thrift Supervision. Although we have requested relief of the December
31, 2009 date for the increased capital requirements due to the pendency of the stock offering, any
such relief and continued relief is and will be solely subject to the approval of the Office of Thrift
Supervision. We have also submitted to the Office of Thrift Supervision our reduction targets for
our adversely classified assets. Both Cease and Desist Orders will remain in effect until
terminated, modified, or suspended in writing by the Office of Thrift Supervision.
The failure to comply with the Cease and Desist Orders could result in the initiation of
further enforcement action by the Office of Thrift Supervision, including the imposition of further
operating restrictions. The Office of Thrift Supervision could also direct us to seek a merger
partner. We have incurred, and expect to continue to incur, significant additional regulatory
compliance expense in connection with the Cease and Desist Orders. For further information, see
Risk Factors We are subject to restrictions and conditions of Cease and Desist Orders issued by
the Office of Thrift Supervision. We have incurred and expect to continue to incur significant
additional regulatory compliance expense in connection with the Cease and Desist Orders. Failure
to comply with the Cease and Desist Orders could result in additional enforcement action against
us.
Restructured Management and Directorship
In the past 18 months, we have undergone significant changes to management and the board of
directors. Our restructured management team and directorship has extensive experience in the
banking industry, in particular with large commercial banks, and has deep connections to the Ohio
market, in particular Cleveland.
New Chairman of the Board. In January 2009, Mark D. Grossi was appointed Chairman of PVF and
Park View Federal. Mr. Grossi has over 30 years experience in the banking, thrift and brokerage
industries. From
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1992 to Royal Bank of Scotlands acquisition of Charter One Bank, N.A. in 2004, Mr. Grossi served
as Executive Vice President, Chief Retail Banking Officer and member of the board of directors of
Charter One Bank. Prior to joining Charter One Bank, Mr. Grossi was President and Chief Executive
Officer and member of the board of directors of First American Savings Bank from 1987 to 1992, when
First American Savings Bank was acquired by Charter One Bank. Since 2004, Mr. Grossi has been
providing consulting services to financial services companies.
New President and Chief Executive Officer. In September 2009, Robert J. King, Jr. was
appointed as the President, Chief Executive Officer and a director of PVF and Park View Federal.
Previously, Mr. King most recently served as senior managing director of FSI Group, LLC, a private
equity operation focused on investing in the financial sector from 2006 through 2009. Prior to
that, Mr. King held numerous positions with Fifth Third Bank, which he joined in 1975. During his
tenure with the Cincinnati-based company, he served as vice president of Institutional Asset
Administration, director of marketing, commercial lending officer, customer service manager and
marketing research specialist. In 1989, he joined Fifth Third Bank (Northwestern Ohio) as an
executive vice president and was promoted to president and chief executive officer the following
year. In 1997, Fifth Third Banks board of directors appointed Mr. King chairman of the board and
chief executive officer of Fifth Third Bank (Northwestern Ohio), a position he held until his
retirement from Fifth Third Bank in 2004. Mr. King was also an executive vice president of Fifth
Third Bancorp and regional president of its affiliates in Toledo, Dayton, Columbus and southern
Ohio.
New Chief Financial Officer. In November 2009, James H. Nicholson was appointed Chief
Financial Officer of PVF and Park View Federal. From 2006 to 2009, Mr. Nicholson served Huntington
Bank in several capacities, including regional chief operating officer (Akron/Canton Region) and
regional president and chief operating officer (Eastern Ohio Region). Mr. Nicholson previously
served as Executive Vice President and Chief Operating Officer of Unizan Financial Corp. and
President and Chief Executive Officer and director of Unizan Bank, National Association from 2002
until Huntington Bancshares, Inc.s acquisition of Unizan Financial in 2006. Previously, Mr.
Nicholsons served BancFirst Ohio Corp. and The First National Bank of Zanesville as Controller of
the bank from 1990 to 1994, Chief Financial Officer until 1996, Executive Vice President and Chief
Operating Officer until 1997, and President and Chief Executive Officer and a director of the bank
until the merger with Unizan Financial (formerly UNB Corp.) in 2002. Mr. Nicholson became a
director of BancFirst Ohio Corp. in 2000, and was also serving as its Executive Vice President and
Corporate Secretary at the time of the 2002 merger.
New Chief Lending Officer. In November 2009, Lonnie L. Shiffert was appointed as Chief
Lending Officer. Previously, Mr. Shiffert served in several senior level commercial real estate
positions with institutions in the Cleveland area, including with Citizens Bank as Senior Vice
President and Manager, Commercial Real Estate Department (2007 to 2009), Sky Bank as Senior Vice
President and Manager, Commercial Real Estate Department (2006 to 2007), Fifth Third Bank as Senior
Vice President and Manager, Commercial Real Estate Department (2004 to 2006), Provident Bank as
Senior Vice President and Manager, Commercial Real Estate Department (1998 to 2004).
New Head of Retail Banking. In October 2009, Jane S. Grebenc was appointed as Executive Vice
President, Retail Banking. Previously, Ms. Grebenc served as Executive Vice President, Wealth
Segment and Senior Executive, Private Bank at KeyBank National Association from 2008 to 2009. Ms.
Grebenc previously served National City Corporation from 1982 to 2007 in several capacities,
including Executive Vice President, Private Client Group (2006 to 2007), Executive Vice President,
Loan Operations (2003 to 2006), Executive Vice President, Branch Network (1999 to 2003) and
Executive Vice President, Retail Banking Group (1995 to 1998).
Additional New Directors. Marty E. Adams, appointed to the Park View Federal board in
September 2009 and nominated to the PVF board for election at the upcoming annual meeting of
shareholders, has over 30 years of banking experience. Mr. Adams most recently served as the
Interim Chief Executive Officer of PVF and Park View Federal from March 2009 until September 2009.
Previously, Mr. Adams served as president and chief operating officer of Huntington Bancshares,
Inc. from July 2007 until December 2007 following Huntington Bancshares acquisition of Sky
Financial Group, Inc. Mr. Adams previously served as the chairman and chief executive officer of
Sky Financial Group, Inc. for 30 years.
Steven A. Calebrese, appointed to the boards of PVF and Park View Federal in 2008, is the
managing partner of Calabrese, Racek and Markos, Inc., which operates a number of commercial real
estate companies in
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Cleveland, Ohio and Tampa, Florida. The firms specialize in evaluation, market research and
reporting, management, construction and development services for commercial and industrial real
estate.
Umberto P. Fedeli, appointed to the boards of PVF and Park View Federal in 2008, has served
since 1988 as President and Chief Executive Officer of The Fedeli Group, a privately held insurance
brokerage firm in Independence, Ohio. He is a member of the board of directors of the Cleveland
Clinic Foundation and is currently serving as their Chairman of Government Relations and as a
member of their Executive Committee. He is on the Board of Trustees of John Carroll University, is
a trustee of the Cleveland Catholic Diocese Foundation, and Chairman of the Northern Ohio Italian
American Foundation, a charitable organization that he helped establish in 1995.
Business Strategy of our Restructured Management Team
In light of the operational challenges we recently have faced, our restructured management
team has taken, and will continue to aggressively pursue, the following actions that we believe
will not only improve our operations in the short-term, but will also position us for long-term
future opportunities:
Improve Our Asset Quality. We have taken several significant steps to stabilize and then
improve our asset quality, which we expect will improve our net interest margin and lower our
provision for loan losses. In particular, we have:
| Established a Special Asset Management Department. In the quarter ended March 31, 2009, we engaged a consultant to assist with asset review and business planning with an emphasis on problem loan identification, loss recognition and disposition of nonperforming assets. As a result of the consultants review, we established a Special Asset Management Department, headed by three newly hired and experienced workout professionals, and now consisting of nine total employees. The focus of the Special Asset Management Department is to manage nonperforming loans, including having borrowers increase loan collateral and negotiating repayment plans, forbearances, loan modifications and loan extensions with our borrowers, when we believe the project involved will be successfully completed. The Special Asset Management Department also works with management to prudently dispose of nonperforming loans and real estate owned. | ||
| Obtained an Independent Loan Review. During the year ended June 30, 2009, we engaged an outside loan review firm to perform a thorough review of our loan portfolio. This review involved analyzing all large borrowing relationships, delinquency trends, and loan collateral valuation in order to identify impaired loans. The review covered $384.7 million of loans, primarily commercial relationships, representing approximately 77.0% of our commercial loan portfolio. This analysis was performed so that management could identify all troubled loans and loan relationships as well as deteriorating loans and loan relationships. As a result of this review, detailed action plans were developed to either return the loans to performing status or dispose of the loan and end the borrowing relationship. These reviews also resulted in Park View Federal establishing specific valuation allowances of $15.0 million for identified collateral shortfalls during the year ended June 30, 2009. We intend to continue to engage an outside loan review firm to conduct at a minimum an annual review of our loan portfolio. | ||
| Applied Conservative Underwriting Practices. We have significantly curtailed our higher risk lending and have applied more conservative underwriting practices, including, among other things, requiring more detailed credit information in certain circumstances, increasing the amount of required collateral or equity requirements or reducing loan-to-value ratios and reducing the amount that we will lend to one borrower. |
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In connection with our loan review and additional efforts to determine the scope of our
deteriorating loans, management has identified certain positive factors relating to our
nonperforming assets. Our nonperforming assets are primarily located within our local market area.
This generally allows management and our Special Asset Management Department better access to the
collateral and borrowers and, therefore, more useful information in making loan modification and
foreclosure decisions. In addition, we have not historically purchased loans or loan
participations and are not dependent on outside parties to service our loans or make loan
modification decisions. As a result, we believe we are well-positioned to determine whether a
nonperforming loan will return to performing status or whether it is in the best interest of PVF to
end the borrowing relationship. Finally, we believe that the funds we raise in the stock offering
will strengthen our capital position to provide us with flexibility to address and reduce our
nonperforming asset levels.
Complete the Early Extinguishment of PVF Debt. Since June 30, 2009, we have made significant
strides in strengthening our balance sheet and capital structure by reducing our debt and
debt-servicing requirements and eliminating our trust preferred obligations.
| PVF Capital Trust I. The first transaction (the Completed Trust Preferred Exchange) was the exchange of outstanding trust preferred securities with an aggregate liquidation amount of $10.0 million issued by PVF Capital Trust I in exchange for $500,000 in cash, 205,297 shares of common stock, warrants to acquire 769,608 shares of common stock and warrants to acquire additional shares of common stock equal to 9.9% of the shares to be issued in any transaction for the exchange of trust preferred securities issued by PVF Capital Trust II (exclusive of shares issuable upon the exercise of warrants). As part of the Completed Trust Preferred Exchange, PVF submitted for cancellation the trust preferred securities and the common securities issued by PVF Capital Trust I and the related subordinated debentures issued by PVF. The Completed Trust Preferred Exchange was completed on September 3, 2009, and PVF realized after tax income of approximately $5.7 million and increased total shareholders equity by approximately $6.5 million during the quarter ending September 30, 2009 as a result of the cancellation of the trust preferred securities, the common securities and the subordinated debentures. | ||
| PVF Capital Trust II. Next, we entered into an agreement with investors holding trust preferred securities with an aggregate liquidation amount of $10.0 million issued by PVF Capital Trust II (the Second Trust Preferred Exchange). Pursuant to the agreement, the investors will tender $10.0 million aggregate liquidation amount of trust preferred securities to PVF in exchange for an aggregate of $400,000 in cash, a number of shares of common stock (the Initial Shares) equal to $600,000 divided by the conversion price and warrants to acquire 769,608 shares of common stock plus 9.9% of the Initial Shares. Further, PVF will issue additional warrants that become exercisable in the event PVF completes one or more public offerings or private placements of its common stock (including the stock offering conducted hereby) within a year. The second group of warrants will give the holders thereof the right to acquire additional shares of common stock so that the total number of shares they could acquire under all warrants would entitle them to purchase an aggregate of 4.9% of the common stock to be outstanding following the public offering or offerings completed during that one-year period. The consummation of the Second Trust Preferred Exchange is subject to the approval of PVFs shareholders at the upcoming annual meeting of shareholders. Upon consummation of the Second Trust Preferred Exchange, PVF intends to submit for cancellation the trust preferred securities, the common securities issued by PVF Capital Trust II and the related subordinated debentures. If completed, the Second Trust Preferred Exchange is expected to eliminate $10.0 million of subordinated debentures and, although the exact amounts are subject to variation based on the valuation of the warrants at closing, generate after tax income of approximately $5.9 million and increase total shareholders equity by approximately $6.5 million from the cancellation of the trust preferred securities, the common securities and the subordinated debentures. The income will be recorded during the quarter in which the trust preferred securities are cancelled, which is expected to be the first quarter of calendar year 2010. | ||
In the aggregate, we expect to record an after-tax gain in consolidated shareholders equity of approximately $11.6 million in connection with elimination of these trust preferred obligations. In |
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addition, the elimination of this debt is expected to reduce our annual debt servicing requirements by approximately $922,000. |
Raise Capital. We believe that our efforts to raise additional capital in the stock offering
will help us to achieve our goals of obtaining Office of Thrift Supervision termination of the
Cease and Desist Orders, to mitigate the impact on Park View Federal of a worsening economy and
manage our capital levels to maintain a capital cushion in excess of our regulatory capital
requirement.
At the minimum of the offering range, we expect to exceed all of our regulatory capital
requirements, including the higher capital requirements imposed by the Office of Thrift Supervision
and as set forth in the Cease and Desist Orders. On a pro forma basis at the minimum of the
offering, our tier one (core) capital ratio and total risk-based capital ratio at September 30,
2009 would have been ___% and ___%, respectively, exceeding the 8.0 % and 12.0% requirements
imposed by the Office of Thrift Supervision. On a pro forma basis at the maximum of the offering,
our tier one (core) capital ratio and total risk-based capital ratio at September 30, 2009 would
have been ___% and ___%, respectively. See
Capitalization. Such amounts include an increase in
Park View Federals regulatory capital ratios expected to be
reported at December 31, 2009 resulting from recent changes to
federal income tax laws. See Increase in Capital
Ratios Resulting from Recent Federal Income Tax Laws. However, to the extent we
experience increases in our allowance for loan losses and operating losses, such events will
reduce, and possibly eliminate, our capital cushion.
Control Expenses. Our new management team expects to actively work to reduce unneeded or
excess operating expenses. Our management team has made it a priority to identify cost savings
opportunities throughout all phases of our operations. In particular, once we are able to
successfully manage our asset quality and terminate our Cease and Desist Orders, we expect to
reduce significantly fees for consultants and other advisors and expenses related to the management
of our nonperforming assets. Our efficiency ratio (representing expenses divided by the sum of net
interest income and other income) was 106.3% and 80.5% for the three months ended September 30,
2009 and the year ended June 30, 2009, respectively.
Leverage the Existing Retail Branch Presence. Park View Federal has 17 branches in the
greater Cleveland market area, many of which are located in upscale suburban markets with a
favorable demographic profile. According to census tract data obtained from SNL Financial, Park
View Federals 17 sub-markets (by zip code) have a median household income level of $80,000 and a
median household net worth of $348,000, significantly higher than statewide and national averages.
Despite this attractive market area, we historically have under-performed in terms of our retail
banking penetration. Only nine of our 17 branches have ATMs, and 15 of the 17 branches have
drive-up facilities. As a result, transaction, money market and savings accounts comprised only
28.2% of the Companys total deposits as of September 30, 2009. In the future, our new management
team intends to change the deposit mix, increase product offerings, and achieve higher levels of
profitability by more effectively serving customers in our attractive markets.
Increase Market Share and Achieve Profitable Growth. As we improve our asset quality and
increase our operating efficiency, we expect that operating earnings will increase significantly.
Our new management team will focus on instituting an effective sales culture and transitioning the
loan portfolio as well as the deposit base to become more bank-like (i.e., less dependent on real
estate loans and certificates of deposit). Accordingly to the most recent Federal Deposit
Insurance Corporation data, the Cleveland and Akron metropolitan statistical areas had insured
deposits on June 30, 2009 of $66.0 billion and $11.3 billion, respectively. PVFs management team
believes that a void exists among community banks in those markets, and that a recapitalized Park
View Federal can attain significant market share growth on a profitable basis over the next several
years.
Obtain Termination of the Cease and Desist Orders.
We have complied to date with all requirements of the Cease
and Desist Orders and we will continue to work to comply with all
such requirements in the future. We will seek to demonstrate as soon as
possible to the Office of Thrift Supervision that we have fully complied with the requirements of
the Cease and Desist Orders and that the Office of Thrift Supervision should terminate the Cease
and Desist Orders. At such time, we will be able to return to a more typical level of regulatory
oversight and redirect management resources from maintaining compliance with the Cease and Desist
Orders to the operation of our institution.
Increase in Capital Ratios Resulting from Recent Federal Tax Laws
As part of the Worker, Home Ownership, and Business Assistance Act of 2009, taxpayers with net
operating losses, such as PVF Capital Corp., were permitted to elect to offset these losses against
income earned in up to five prior years. Typically, a net operating loss can be carried back for
only two years. As a result of this change in the income tax laws, PVF Capital Corp. and its
subsidiaries were able to offset all their net operating losses against historical income. Under
Office of Thrift Supervision regulations, a portion of Park View Federals deferred tax asset, amounting to $4.25 million at
September 30, 2009, was required to be excluded from Park View Federals tier one (core) and
risk-based capital. The effect of this change in tax laws will be to increase Park View Federals
capital ratios since this portion of its deferred tax asset is no longer required to be excluded.
On a pro forma basis assuming enactment of the tax law changes at September 30, 2009, Park View
Federals tier one (core), tier one risk-based and total risk-based capital ratios would have been
7.15%, 9.40% and 10.66%, respectively at September 30, 2009, as compared to Park View Federals
actual capital ratios of 6.70%, 8.77% and 10.03%, respectively, at such date. The change in the
tax laws will have no effect on PVF Capital Corp.s net income or shareholders equity.
Market Area Overview
PVF operates in the large and diverse Northeast Ohio market. The Cleveland and Akron
metropolitan statistical areas (MSAs) in which PVF operates have a total population of
approximately 2.8 million and are home
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to thousands of businesses. Though Cleveland, like many Midwestern cities, has struggled to move
beyond its manufacturing-oriented history, PVF believes that growth in other industries will have a
beneficial impact on the regional economy going forward. For instance, there has been significant
growth in recent years by the Cleveland Clinic and University Hospitals Health Systems, the areas
two largest private employers (which employ 45,000 people combined). As a result, Cleveland has
emerged as a leader in the health care industry. In addition to health care, a broad variety of
industries are represented among Clevelands largest companies. Fortune 500 constituents Aleris
International (metals), Eaton and Parker Hannifin (industrial machinery), KeyCorp (financial
services), Lubrizol and Sherwin-Williams (chemicals), Progressive (insurance), and TravelCenters of
America (specialty retail) are all headquartered in the Cleveland area. The top private employers
in Northeast Ohio as of December 31, 2008 included:
Top Ten Northeast Ohio Private Employers |
||||
Cleveland Clinic |
28,200 | |||
University Hospitals |
16,800 | |||
Progressive Corp |
9,400 | |||
KeyCorp |
6,400 | |||
PNC Financial Services Group |
6,300 | |||
General Motors |
6,300 | |||
MetroHealth |
5,500 | |||
Ford Motor Company |
5,500 | |||
Case Western Reserve University |
5,100 | |||
Summa Health System |
4,700 |
Source: clevelandplusbusiness.com |
Since the real estate market began to experience considerable difficulty in 2006, significant
economic challenges have resulted in most markets. The relative stability of the Northeast Ohio
real estate market has protected the region from the worst of the collapse. The Northeast Ohio
market did not experience the dramatic housing price increases that occurred in certain parts of
the United States, and consequently has not experienced as much of a market decline. From June 30,
2006 to August 31, 2009, the Case-Shiller index for the Cleveland market was down 12.6%. For that
same period, the U.S. Composite Index was down 30.2%.
PVF believes that Northeast Ohio, including Cleveland and Akron, is a large market with
substantial opportunity. The combined Cleveland and Akron MSA total for FDIC-insured deposits was
$77.3 billion as of June 30, 2009. A number of PVFs large super-regional competitors are
experiencing change. For instance, National City Corporation, the market leader with 30.5% of the
Cleveland MSAs deposits as of June 30, 2009 (according to FDIC data), recently sold to PNC
Financial Services Group. PVFs management believes that a recapitalized PVF will be in a better
position to achieve profitable growth in its current markets.
The Rights Offering
Securities Offered
|
We are distributing to you, at no charge, one non-transferable subscription right for each share of our common stock that you owned as of 5:00 p.m., Eastern Time, on December 18, 2009, either as a holder of record or, in the case of shares held of record by custodian banks, brokers, dealers or other nominees on your behalf, as a beneficial owner of such shares. | |
Subscription Price
|
$[SHARE PRICE] per share. | |
Record Date
|
5:00 p.m., Eastern Time, on December 18, 2009. | |
Expiration of the Rights
Offering
|
5:00 p.m., Eastern Time, on [EXPIRATION DATE]. We may extend the rights offering without notice to you until [EXPIRATION DATE #2]. |
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Use of Proceeds
|
We expect the aggregate net proceeds from the stock offering to be between $ million and $ million. We intend to use the proceeds of the stock offering to invest in Park View Federal to improve its regulatory capital position and for general corporate purposes. | |
Basic Subscription Privilege
|
The basic subscription privilege of each subscription right entitles you to purchase [Ratio] shares of our common stock at a subscription price of $[SHARE PRICE] per share; however, fractional shares of our common stock resulting from the exercise of the basic subscription privilege will be eliminated by rounding down to the nearest whole share. The number of rights you may exercise appears on your rights certificate. | |
Over-Subscription Privilege
|
In the event that you purchase all of the shares of our common stock available to you pursuant to your basic subscription privilege, you may also choose to subscribe for a portion of any shares of our common stock that are not purchased by our shareholders through the exercise of their basic subscription privileges. You may subscribe for shares of common stock pursuant to your over-subscription privilege, subject to the purchase and ownership limitations described below under the heading Limitations on the Purchase of Shares. | |
Limitations on the Purchase
of Shares
|
Persons, together with certain related affiliates, may purchase up to a number of shares such that upon completion of the stock offering the person owns up to 4.9% of PVFs common stock outstanding. If a person, together with certain affiliates, intends to purchase a number of shares such that upon completion of the stock offering the person owns in excess of 4.9% of PVFs common stock outstanding (including persons who currently own in excess of 4.9% of PVFs common stock outstanding and intend to maintain stock ownership in excess of 4.9%), the board of directors retains the discretion to limit such purchases in order to maintain compliance with the ownership change provisions of Section 382 of the Internal Revenue Code. See Risk FactorsPVF could, as a result of the stock offering or future investments in our common stock by 5% holders, experience an ownership change for tax purposes that could cause PVF to permanently lose a significant portion of its U.S. federal deferred tax assets. | |
In addition, except for our issuance to certain of our standby purchasers, we will not issue shares of our common stock pursuant to the exercise of basic subscription rights or over-subscription rights, or to any shareholder or standby purchaser who, in our sole opinion, could be required to obtain prior clearance or approval from or submit a notice to any state or federal bank regulatory authority to acquire, own or control such shares if, as of [EXPIRATION DATE], such clearance or approval has not been obtained and/or any applicable waiting period has not expired. | ||
Non-Transferability of Rights
|
The subscription rights may not be sold, transferred or assigned and will not be listed for trading on the Nasdaq Capital Market or on any other stock exchange or market. | |
No Board Recommendation
|
Our board of directors is making no recommendation regarding your exercise of your subscription rights. You are urged to make your decision based on your own assessment of our business and the rights offering. Please see Risk Factors for a discussion of some of the risks involved in investing in our common stock. |
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Standby Purchase Agreements
|
In connection with the rights offering, we have entered into standby purchase agreements with certain institutional investors and high net worth individuals. Subject to certain conditions, the standby purchase agreements obligate us to sell, and require the standby purchasers to purchase from us, up to [STANDBY MAX] shares of common stock. The number of shares available for sale to the standby purchasers will depend on the number of shares subscribed for in the rights offering. However, in no event will we issue fewer than [STANDBY MINIMUM] shares to the standby purchasers. The price per share paid by the standby purchasers for such common stock will be equal to the subscription price paid by our shareholders in the rights offering. | |
Standby Purchasers
|
Our standby purchasers are . | |
Revocation
|
All exercises of subscription rights are irrevocable, even if you later learn of information that you consider to be unfavorable to the exercise of your subscription rights. You should not exercise your subscription rights unless you are certain that you wish to purchase additional shares of our common stock at a subscription price of $[SHARE PRICE] per share. | |
Minimum Offering
|
The offering is conditioned upon the receipt of minimum offering proceeds of $ million, which includes the purchases by the standby purchasers of between $ million and $ million of our common stock. | |
Purchase Intentions of Our
Directors and Officers
|
Our directors and executive officers as a group, together with their affiliates, have indicated their intention to exercise rights to purchase, in the aggregate, approximately $3.5 million of our common stock in the rights offering. | |
Material U.S. Federal Income
Tax Considerations
|
For U.S. federal income tax purposes, you should not recognize income or loss upon receipt or exercise of a subscription right. You should consult your own tax advisor as to the tax consequences to you of the receipt, exercise or lapse of the rights in light of your particular circumstances. | |
Extension and Cancellation
|
Although we do not presently intend to do so, we have the option to extend the rights offering expiration date, but in no event will we extend the rights offering beyond [EXPIRATION DATE #2]. Our board of directors may cancel the rights offering at any time. In the event that the rights offering is cancelled, all subscription payments received by the subscription agent will be returned, without interest, as soon as practicable. | |
Conditions
|
We must meet the following conditions to complete the rights offering: |
| We must sell the minimum offering amount of at least $ million ([MINIMUM] shares) of common stock in the stock offering, which includes the purchases by the standby purchasers of between [STANDBY MINIMUM] and [STANDBY MAX] shares of our common stock. | ||
| Our shareholders must approve an amendment to our First Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock to 65,000,000. | ||
| Our shareholders must approve the issuance of shares to standby purchasers. |
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| Our shareholders must approve the exchange of outstanding trust preferred securities with an aggregate liquidation amount of $10.0 million for $400,000 in cash, common stock valued at $600,000 and warrants to acquire shares of common stock. |
Procedures for Exercising
|
To exercise your subscription rights, you must take the following steps: | |
Rights |
| If you hold a PVF stock certificate, you must deliver payment and a properly completed and signed rights certificate to the subscription agent to be received before 5:00 p.m., Eastern Time, on [EXPIRATION DATE]. You may deliver the documents and payment by U.S. mail or courier service. If U.S. mail is used for this purpose, we recommend using registered mail, properly insured, with return receipt requested. | ||
| If you are a beneficial owner of shares that are registered in the name of a custodian bank, broker, dealer or other nominee, you will not receive a rights certificate. You should instruct your nominee to exercise your subscription rights on your behalf. Please follow the instructions of your nominee, who may require that you meet a deadline earlier than 5:00 p.m., Eastern Time, on [EXPIRATION DATE]. | ||
| If shares of our common stock are held in your account under our 401(k) plan, the trustee must receive your properly completed form entitled 401(k) Plan Participant Election Form no later than , 2010. If you elect to exercise some or all of your subscription rights, you must ensure that the total amount of the funds required for such exercise is maintained in [ Fund] (an existing investment fund under the 401(k) plan) at or prior to 5:00 p.m., on , 2010. | ||
Subscription Agent
|
Computershare Trust Company N.A. | |
Financial Advisor and
Information Agent
|
Stifel, Nicolaus & Company, Incorporated is acting as our financial advisor and marketing and information agent in connection with the stock offering. We have agreed to pay certain fees to, and expenses of, Stifel, Nicolaus & Company, Incorporated. | |
Shares Outstanding Before the Rights Offering |
shares of our common stock were outstanding as of December 18, 2009. | |
Shares Outstanding After
Completion of the Rights
Offering
|
Assuming no options or warrants are exercised prior to the expiration of the rights offering and assuming all shares are sold in the rights offering and to standby purchasers at the maximum of the offering range, we expect approximately shares of our common stock will be outstanding immediately after completion of the rights offering and the closing of the transactions contemplated by the standby purchase agreements. | |
Nasdaq Capital Market Symbol
|
Shares of our common stock are currently listed for trading on the Nasdaq Capital Market under the symbol PVFC. |
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Risk Factors
|
Before you exercise your subscription rights to purchase shares of our common stock, you should be aware that there are risks associated with your investment, including the risks described in the section entitled Risk Factors of this prospectus, and the risks that we have highlighted in other sections of this prospectus. You should carefully read and consider these risk factors together with all of the other information included in this prospectus before you decide to exercise your subscription rights to purchase shares of our common stock. |
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Risk Factors
You should consider carefully the following risk factors before purchasing shares of PVF
common stock.
Risks Related to Our Business
We are subject to restrictions and conditions of Cease and Desist Orders issued by the Office of
Thrift Supervision. We have incurred and expect to continue to incur significant additional
regulatory compliance expense in connection with the Cease and Desist Orders. Failure to comply
with the Cease and Desist Orders could result in additional enforcement action against us.
The Office of Thrift Supervision has issued Cease and Desist Orders against PVF and Park View
Federal. The Cease and Desist Orders contain a number of significant directives, including higher
capital requirements, requirements to reduce the level of our classified and criticized assets,
growth and operating restrictions, restrictions on brokered deposits, and restrictions on dividend
payments. These restrictions may impede our ability to operate our own business and to effectively
compete in our markets. If we fail to comply with the terms and conditions of the Cease and Desist
Orders, the Office of Thrift Supervision could take additional enforcement action against us,
including the imposition of further operating restrictions, directing us to seek a merger partner
or to liquidate Park View Federal. We have complied to date with all requirements of the Cease
and Desist Orders and we will continue to work to comply with all
such requirements in the future. As of the date of this prospectus, we have submitted a capital
plan which contemplates this stock offering and which is being reviewed by the Office of Thrift
Supervision. We have also submitted to the Office of Thrift Supervision our reduction targets for
our adversely classified assets.
We have incurred and expect to continue to incur significant additional regulatory compliance
expense in connection with the Cease and Desist Orders, and we will incur ongoing expenses
attributable to compliance with the terms of the orders. It is possible regulatory compliance
expenses related to the Cease and Desist Orders could have a material adverse impact on us in the
future.
In addition, the Office of Thrift Supervision must approve any deviation from our business
plan, which could limit our ability to make any changes to our business, which could negatively
impact the scope and flexibility of our business activities. Further, the imposition of the Cease
and Desist Orders, including certain restrictions on severance and
indemnification payments and employment and compensation arrangements, may make it more difficult to attract and retain qualified employees. While we
plan to take appropriate actions and intend to seek to have the Cease and Desist Orders terminated
in the future, such actions may not result in the Office of Thrift Supervision terminating the
Cease and Desist Orders.
Our capital levels currently are not sufficient to achieve compliance with the higher capital
requirements we must meet by December 31, 2009 and any capital cushion in the future may not be
sufficient to absorb additional loan or other losses and maintain compliance with these higher
capital requirements.
The Office of Thrift Supervision has directed Park View Federal to raise its tier one (core)
capital and total risk-based capital ratios to 8% and 12%, respectively, by December 31, 2009. At
September 30, 2009, we did not meet these requirements and would have needed approximately $13.2
million in additional capital, based on assets at such date, to meet these requirements. PVF
currently does not have any capital available to invest in Park View Federal. While the goal of
the stock offering is to raise sufficient capital to downstream to Park View Federal to achieve
these capital levels, we do not expect to complete the stock offering by December 31, 2009.
Although we have requested relief of the December 31, 2009 date for these increased capital
requirements due to the pendency of the stock offering, any such
relief and continued relief is and will be
solely subject to the approval of the Office of Thrift Supervision. Even assuming completion of
the stock offering, our capital cushion, if any, may not be significant. At the minimum of the
offering, our pro forma tier one (core) capital and total risk-based capital ratios at
September 30, 2009 are expected to be ___% and ___%, respectively, with a capital cushion of
approximately $ ___ million in excess of the required capital levels. However, after the
offering, increases to our allowance for loan losses and operating losses will negatively impact
our capital cushion. If our capital cushion is impacted such that our capital ratios do not comply
with the requirements of the Cease and Desist Order, the Office of Thrift Supervision could take
additional enforcement action against us, including the imposition further operating
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restrictions. The Office of Thrift Supervision could also direct us to seek a merger partner or
liquidate Park View Federal.
Our classified asset levels currently are not sufficient to achieve compliance with the classified
asset levels we must meet by December 31, 2010.
The Office of Thrift Supervision has directed Park View Federal to reduce the level of
adversely classified assets to no more than 50% of core capital plus allowance for loan and lease
losses by December 31, 2010 and to reduce the level of adversely classified assets and assets
designated as special mention to no more than 65% of core capital plus allowance for loan and lease
losses by December 31, 2010. At September 30, 2009, we did not meet these requirements and our
levels of adversely classified assets and adversely classified assets and assets designated as
special mention to core capital plus allowance for loan and lease losses were 137.2% and 170.7%,
respectively. We do not expect to achieve compliance with these classified asset ratios prior to
December 31, 2010. If we fail to meet the required classified asset ratios by December 31, 2010,
the Office of Thrift Supervision could take additional enforcement action against us, including the
imposition of further operating restrictions. The Office of Thrift Supervision also could also
direct us to seek a merger partner or liquidate Park View Federal.
Higher loan losses could require us to increase our allowance for loan losses through a charge to
earnings.
When we loan money we incur the risk that our borrowers do not repay their loans. We reserve
for loan losses by establishing an allowance through a charge to earnings. The amount of this
allowance is based on our assessment of loan losses inherent in our loan portfolio. The process for
determining the amount of the allowance is critical to our financial results and condition. It
requires subjective and complex judgments about the future, including forecasts of economic or
market conditions that might impair the ability of our borrowers to repay their loans. We might
underestimate the loan losses inherent in our loan portfolio and have loan losses in excess of the
amount reserved. We might increase the allowance because of changing economic conditions. For
example, in a rising interest rate environment, borrowers with adjustable-rate loans could see
their payments increase. There may be a significant increase in the number of borrowers who are
unable or unwilling to repay their loans, resulting in our charging off more loans and increasing
our allowance. In addition, when real estate values decline, the potential severity of loss on a
real estate-secured loan can increase significantly, especially in the case of loans with high
combined loan-to-value ratios. The recent decline in the national economy and the local economies
of the areas in which the loans are concentrated could result in an increase in loan delinquencies,
foreclosures or repossessions resulting in increased charge-off amounts and the need for additional
loan loss allowances in future periods. In addition, our determination as to the amount of our
allowance for loan losses is subject to review by our primary regulator, the Office of Thrift
Supervision, as part of its examination process, which may result in the establishment of an
additional allowance based upon the judgment of the Office of Thrift Supervision after a review of
the information available at the time of its examination. Our allowance for loan losses amounted
to $31.8 million, or 4.63% of total loans outstanding and 42.5% of nonperforming loans, at
September 30, 2009. Our allowance for loan losses at September 30, 2009 may not be sufficient to
cover future loan losses. A large loss could deplete the allowance and require increased provisions
to replenish the allowance, which would decrease our earnings. In addition, at September 30, 2009,
we had 25 loan relationships that were performing according to their original terms with
outstanding balances that exceeded $3.0 million. However, the deterioration of one or more of
these loans could result in a significant increase in our nonperforming loans and our provision for
loan losses, which would negatively impact our results of operations.
A continuation of recent turmoil in the financial markets could have an adverse effect on our
financial position or results of operations.
Since 2008, United States and global financial markets have experienced severe disruption and
volatility, and general economic conditions have declined significantly. Adverse developments in
credit quality, asset values and revenue opportunities throughout the financial services industry,
as well as general uncertainty regarding the economic, industry and regulatory environment, have
had a marked negative impact on the industry. Dramatic declines in the U.S. housing market over
the past two years, with falling home prices, increasing foreclosures and increasing unemployment,
have negatively affected the credit performance of mortgage loans and resulted in significant
write-downs of asset values by many financial institutions. The United States and the governments
of
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other countries have taken steps to try to stabilize the financial system, including investing in
financial institutions, and have also been working to design and implement programs to improve
general economic conditions. Notwithstanding the actions of the United States and other
governments, these efforts may not succeed in restoring industry, economic or market conditions and
may result in adverse unintended consequences. Factors that could continue to pressure financial
services companies, including PVF, are numerous and include (i) worsening credit quality, leading
among other things to increases in loan losses and reserves, (ii) continued or worsening disruption
and volatility in financial markets, leading to, among other things, continuing reductions in asset
values, (iii) capital and liquidity concerns regarding financial institutions generally, (iv)
limitations resulting from or imposed in connection with governmental actions intended to stabilize
or provide additional regulation of the financial system, or (v) recessionary conditions that are
deeper or last longer than currently anticipated.
The current economic recession could result in increases in our level of non-performing loans
and/or reduce demand for our products and services, which would lead to lower revenue, higher loan
losses and lower earnings.
Our business activities and earnings are affected by general business conditions in the United
States and in our local market area. These conditions include short-term and long-term interest
rates, inflation, unemployment levels, monetary supply, consumer confidence and spending,
fluctuations in both debt and equity capital markets and the strength of the economy in the United
States generally and in our market area in particular. In the current recession, the national
economy has experienced a general economic downturn, with rising unemployment levels, declines in
real estate values and an erosion in consumer confidence. Our primary market area has also been
negatively impacted by the current economic recession. From September 2008 to September 2009,
unemployment rates in the Cleveland-Elyria-Mentor metropolitan statistical area increased from 6.5%
to 8.3%. In addition, our primary market area has also experienced a softening of the local real
estate market, a reduction in local property values and a decline in the local manufacturing
industry, which employs many of our borrowers. A prolonged or more severe economic downturn,
continued elevated levels of unemployment, further declines in the values of real estate, or other
events that affect household and/or corporate incomes could impair the ability of our borrowers to
repay their loans in accordance with their terms. Nearly all of our loans are secured by real
estate or made to businesses in our primary market area, the greater Cleveland metropolitan area
and the surrounding areas. As a result of this concentration, a prolonged or more severe downturn
in the local economy could result in significant increases in nonperforming loans, which would
negatively impact our interest income and result in higher provisions for loan losses, which would
decrease our earnings and further increase the capital required to comply with the Cease and Desist
Orders. The economic downturn could also result in reduced demand for credit or fee-based products
and services, which also would decrease our revenues.
Our emphasis on construction and commercial real estate lending and land loans may expose us to
increased lending risks.
At September 30, 2009, we had $195.3 million in loans secured by commercial real estate, $54.3
million in real estate construction loans, which included $32.7 million in residential construction
loans, $4.9 million in loans for the construction of multi-family properties and $16.7 million for
the construction of commercial properties and $60.3 million in loans secured by land. Commercial
real estate loans, construction loans and land loans represented 28.4%, 7.9% and 8.8%,
respectively, of our net loan portfolio. At September 30, 2009, we had $12.6 million of reserves
specifically allocated to these loan types. While commercial real estate, construction and land
loans are generally more interest rate sensitive and carry higher yields than do residential
mortgage loans, these types of loans generally expose a lender to greater risk of non-payment and
loss than single-family residential mortgage loans because repayment of the loans often depends on
the successful operation of the property, the income stream of the borrowers and, for construction
loans, the accuracy of the estimate of the propertys value at completion of construction and the
estimated cost of construction. Such loans typically involve larger loan balances to single
borrowers or groups of related borrowers compared to single-family residential mortgage loans.
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Our adjustable-rate mortgage loans may expose us to increased lending risks.
At September 30, 2009, we had $614.4 million in adjustable-rate mortgage loans, or 89.4% of
our total loan portfolio. In addition, $356.6 million, or 58.0%
of our adjustable-rate mortgage loans will have interest rate
adjustments on or prior to September 30, 2010. While adjustable-rate loans better offset the adverse effects of an
increase in interest rates as compared to fixed-rate mortgages, the increased mortgage payments
required of adjustable-rate loan borrowers upon an interest rate
adjustment in a rising interest rate environment could cause an
increase in delinquencies and defaults. The marketability of the underlying property also may be
adversely affected in a high interest rate environment. In addition, although adjustable-rate
mortgage loans help make our asset base more responsive to changes in interest rates, the extent of
this interest sensitivity is limited by the annual and lifetime interest rate adjustment limits.
PVFs financial condition and results of operations are dependent on the economy in Park View
Federals market area.
Park View Federals market area consists of Portage, Lake, Geauga, Cuyahoga, Summit, Medina
and Lorain Counties in Ohio. As of September 30, 2009, management estimates that more than 90% of
deposits and 90% of loans came from its market area. Because of Park View Federals concentration
of business activities in its market area, PVFs financial condition and results of operations
depend upon economic conditions in its market area. Adverse economic conditions in our market area
could reduce our growth rate, affect the ability of our customers to repay their loans and
generally affect our financial condition and results of operations. Conditions such as inflation,
recession, unemployment, high interest rates, short money supply, scarce natural resources,
international disorders, terrorism and other factors beyond our control may adversely affect our
profitability. We are less able than a larger institution to spread the risks of unfavorable local
economic conditions across a large number of diversified economies. Any sustained period of
increased payment delinquencies, foreclosures or losses caused by adverse market or economic
conditions in the State of Ohio could adversely affect the value of our assets, revenues, results
of operations and financial condition. Moreover, we cannot give any assurance we will benefit from
any market growth or favorable economic conditions in our primary market areas if they do occur.
Increased and/or special FDIC assessments will hurt our earnings
Beginning in late 2008, the economic environment caused higher levels of bank failures, which
dramatically increased FDIC resolution costs and led to a significant reduction in the Deposit
Insurance Fund. As a result, the FDIC has significantly increased the initial base assessment
rates paid by financial institutions for deposit insurance. The base assessment rate was increased
by seven basis points (7 cents for every $100 of deposits) for the first quarter of 2009.
Effective April 1, 2009, initial base assessment rates were changed to range from 12 basis points
to 45 basis points across all risk categories with possible adjustments to these rates based on
certain debt-related components. These increases in the base assessment rate have increased our
deposit insurance costs and negatively impacted our earnings. In addition, in May 2009, the FDIC
imposed a special assessment on all insured institutions due to recent bank and savings association
failures. The emergency assessment amounted to 5 basis points on each institutions assets minus
tier one (core) capital as of June 30, 2009, subject to a maximum equal to 10 basis points times
the institutions assessment base. In addition, the FDIC may impose additional emergency special
assessments after June 30, 2009, of up to 5 basis points per quarter on each institutions assets
minus tier one (core) capital if necessary to maintain public confidence in federal deposit
insurance or as a result of deterioration in the deposit insurance fund reserve ratio due to
institution failures. The latest date possible for imposing any such additional special assessment
is December 31, 2009, with collection on March 30, 2010. Any additional emergency special
assessment imposed by the FDIC will further hurt our earnings.
In lieu of imposing a special assessment, the FDIC has proposed that all institutions prepay
their assessments for the fourth quarter of 2009 and all of 2010, 2011 and 2012. This pre-payment
would be due on December 30, 2009. Under the proposal, the assessment rate for the fourth quarter
of 2009 and for 2010 would be based on each institutions total base assessment rate for the third
quarter of 2009, modified to assume that the assessment rate in effect on September 30, 2009 had
been in effect for the entire third quarter, and the assessment rate for 2011 and 2012 would be
equal to the modified third quarter assessment rate plus an additional 3 basis points. In
addition, each institutions base assessment rate for each period would be calculated using its
third quarter assessment base, adjusted quarterly for an estimated 5% annual growth rate in the
assessment base through the end of 2012. If the FDIC adopts this proposal, we would be required to
make a payment of approximately $6.0 million
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to the FDIC on December 30, 2009. We would record this payment as a prepaid expense and amortize
the expense over three years.
PVF could, as a result of the stock offering or future investments in our common stock by 5%
holders, experience an ownership change for tax purposes that could cause PVF to permanently lose
a portion of its U.S. federal deferred tax assets.
The completion of the stock offering could cause PVF to experience an ownership change as
defined for U.S. federal income tax purposes. Even if these transactions do not cause PVF to
experience an ownership change, these transactions materially increase the risk that PVF could
experience an ownership change in the future. As a result, issuances or sales of common stock or
other securities in the future (including common stock issued in the stock offering), or certain
other direct or indirect changes in ownership, could result in an ownership change under Section
382 of the Internal Revenue Code of 1986, as amended. In the event an ownership change were to
occur, PVF could realize a permanent loss on a portion of its U.S. federal deferred tax assets as a
result of certain limitations on certain built-in losses that have not been recognized for tax
purposes, including, for example, losses on existing nonperforming assets. The amount of the
permanent loss would depend on the size of the annual limitation (which is in part a function of
PVFs market capitalization at the time of an ownership change) and the applicable carryforward
period for losses that have been limited (U.S. federal net operating losses generally may be
carried forward for a period of 20 years). Any permanent loss could have a material adverse effect
on PVFs results of operations and financial condition.
PVF has not established a valuation allowance against its U.S. federal deferred tax assets of
September 30, 2009, as PVF believed, based on its analysis as of that date, that it was more likely
than not that all of these assets would be realized. Section 382 of the Internal Revenue Code
imposes restrictions on the use of a corporations net operating losses, certain recognized
built-in losses and other carryovers after an ownership change occurs. An ownership change is
generally a greater than 50 percentage point increase by certain 5% shareholders during the
testing period, which is generally the three year-period ending on the transaction date. Upon an
ownership change, a corporation generally is subject to an annual limitation on its pre-change
losses and certain recognized built-in losses equal to the value of the corporations market
capitalization immediately before the ownership change multiplied by the long-term tax-exempt
rate (subject to certain adjustments). The annual limitation is increased each year to the extent
that there is an unused limitation in a prior year. Since U.S. federal net operating losses
generally may be carried forward for up to 20 years, the annual limitation also effectively
provides a cap on the cumulative amount of pre-change losses and certain recognized built-in losses
that may be utilized. Pre-change losses and certain recognized built-in losses in excess of the
cap are effectively lost. Thus, if an ownership change were to occur, it is possible that the
limitations imposed could cause a net increase in our U.S. Federal income tax liability and cause
U.S. Federal income taxes to be paid earlier than if such limitations were not in effect.
The relevant calculations under Section 382 of the Internal Revenue Code are technical and
highly complex. The stock offering, combined with other ownership changes in recent years, could
cause PVF to experience an ownership change. If an ownership change were to occur, PVF
believes it could permanently lose the ability to realize a portion of its deferred tax asset,
resulting in reduction to PVFs total shareholders equity. This could also decrease Park View
Federals regulatory capital. PVF does not believe, however, that any such decrease in regulatory
capital would be material.
Park View Federal has been notified by the counterparty to a repurchase agreement that the
counterparty is entitled to declare that an event of default has occurred under the repurchase
agreement. If the counterparty were to declare a default and pursue its remedies, Park View
Federal could incur an expense of approximately $3.0 million related to the early termination of
the repurchase transaction.
Park View Federal is a party to a repurchase agreement, pursuant to which it has sold $50.0
million in securities to a counterparty with an obligation to repurchase such securities at a later
date. Park View Federals obligation to repurchase securities is fully collateralized by the
securities sold to the counterparty under obligation to repurchase. This transaction provides
additional liquidity to Park View Federal at an imputed interest rate to Park View Federal of
4.99%. Park View Federal has been notified by the counterparty that as a result of Park View
Federals failure to remain well capitalized, as described in the repurchase agreement, the
counterparty is entitled
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to declare that an event of default has occurred under the agreement. While the counterparty has
not at this time declared that an event of default has occurred, if it were to elect to do so and
pursue its remedies under the repurchase agreement, it would be entitled to seize and sell the
collateral it holds and use the proceeds from such sale to satisfy amounts owed it under the
repurchase agreement. In such event, because market interest rates are below the imputed interest
rate in the repurchase transaction, Park View Federal estimates based on current market rates that
it could incur an expense of approximately $3.0 million related to the early termination of the
repurchase transaction.
Changing interest rates may decrease our earnings and asset values.
Our net interest income is the interest we earn on loans and investments less the interest we
pay on our deposits and borrowings. Our net interest margin is the difference between the yield we
earn on our assets and the interest rate we pay for deposits and our other sources of funding.
Changes in interest ratesup or downcould adversely affect our net interest margin and, as a
result, our net interest income. Although the yield we earn on our assets and our funding costs
tend to move in the same direction in response to changes in interest rates, one can rise or fall
faster than the other, causing our net interest margin to expand or contract. Our liabilities tend
to be shorter in duration than our assets, so they may adjust faster in response to changes in
interest rates. As a result, when interest rates rise, our funding costs may rise faster than the
yield we earn on our assets, causing our net interest margin to contract until the yield catches
up. Changes in the slope of the yield curveor the spread between short-term and long-term
interest ratescould also reduce our net interest margin. Normally, the yield curve is upward
sloping, meaning short-term rates are lower than long-term rates. Because our liabilities tend to
be shorter in duration than our assets, when the yield curve flattens or even inverts, we could
experience pressure on our net interest margin as our cost of funds increases relative to the yield
we can earn on our assets.
Changes in interest rates also affect the value of Park View Federals interest-earning
assets, and in particular Park View Federals securities portfolio. Generally, the value of
fixed-rate securities fluctuates inversely with changes in interest rates. Unrealized gains and
losses on securities available for sale are reported as a separate component of equity, net of tax.
Decreases in the fair value of securities available for sale resulting from increases in interest
rates could have an adverse effect on shareholders equity.
PVF and Park View Federal operate in a highly regulated environment and may be adversely affected
by changes in laws and regulations.
Park View Federal is subject to extensive regulation, supervision and examination by the
Office of Thrift Supervision, our primary federal regulator, and by the Federal Deposit Insurance
Corporation, as insurer of its deposits. PVF also is subject to regulation and supervision by the
Office of Thrift Supervision. Such regulation and supervision govern the activities in which an
institution and its holding company may engage, and are intended primarily for the protection of
the insurance fund and for the depositors and borrowers of Park View Federal. The regulation and
supervision by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation are
not intended to protect the interests of investors in PVF common stock. Regulatory authorities
have extensive discretion in their supervisory and enforcement activities, including the imposition
of restrictions on our operations, the classification of our assets and determination of the level
of our allowance for loan losses. Any change in such regulation and oversight, whether in the form
of regulatory policy, regulations, legislation or supervisory action, may have a material impact on
our operations.
Proposed regulatory reform may have a material impact on our operations.
The Obama Administration has published a comprehensive regulatory reform plan that is intended
to modernize and protect the integrity of the United States financial system and has offered
proposed legislation to accomplish these reforms. The Presidents plan contains several elements
that would have a direct effect on PVF and Park View Federal. Under the proposed legislation, the
federal thrift charter and the Office of Thrift Supervision would be eliminated and all companies
that control an insured depository institution must register as a bank holding company. Existing
federal thrifts, such as Park View Federal, would become a national bank or could choose to adopt a
state charter. Registration as a bank holding company would represent a significant change, as
there currently exist significant differences between savings and loan holding company and bank
holding company supervision and regulation. For example, the Federal Reserve imposes leverage and
risk-based capital requirements
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on bank holding companies whereas the Office of Thrift Supervision does not impose any capital
requirements on savings and loan holding companies. The Administration has also proposed the
creation of a new federal agency, the Consumer Financial Protection Agency, that would be dedicated
to protecting consumers in the financial products and services market. The creation of this agency
could result in new regulatory requirements and raise the cost of regulatory compliance. In
addition, legislation stemming from the reform plan could require changes in regulatory capital
requirements, loan loss provisioning practices, and compensation practices. If implemented, the
foregoing regulatory reforms may have a material impact on our operations. However, because the
final legislation may differ significantly from the reform plan proposed by the President, we
cannot determine the specific impact of any regulatory reform at this time.
Strong competition within Park View Federals market area could hurt profits and slow growth.
Park View Federal faces intense competition both in making loans and attracting deposits.
This competition has made it more difficult for Park View Federal to make new loans and at times
has forced Park View Federal to offer higher deposit rates. Price competition for loans and
deposits might result in Park View Federal earning less on loans and paying more on deposits, which
would reduce net interest income. Competition also makes it more difficult to increase loans and
deposits. As of June 30, 2009, which is the most recent date for which information is available,
we held 1.0% of the deposits in Cleveland-Elyria-Mentor, Ohio metropolitan statistical area, which
was the 14th largest share of deposits out of 40 financial institutions with offices in the area,
and 0.8% of the deposits in Akron, Ohio metropolitan statistical area, which was the 16th largest
share of deposits out of 28 financial institutions with offices in this area. Competition also
makes it more difficult to hire and retain experienced employees. Some of the institutions with
which Park View Federal competes have substantially greater resources and lending limits than Park
View Federal has and may offer services that Park View Federal does not provide. Management
expects competition to increase in the future as a result of legislative, regulatory and
technological changes and the continuing trend of consolidation in the financial services industry.
Park View Federals profitability depends upon its continued ability to compete successfully in
its market area.
Provisions in PVFs First Amended and Restated Articles of Incorporation and Bylaws and statutory
provisions could discourage a hostile acquisition of control.
PVFs First Amended and Restated Articles of Incorporation and Bylaws contain certain
provisions that could discourage nonnegotiated takeover attempts that certain shareholders might
deem to be in their interests or through which shareholders might otherwise receive a premium for
their shares over the then current market price and that may tend to perpetuate existing
management. These provisions include: the classification of the terms of the members of the board
of directors; supermajority provisions for the approval of certain business combinations;
elimination of cumulative voting by shareholders in the election of directors; certain provisions
relating to meetings of shareholders; and provisions allowing the board of directors to consider
nonmonetary factors in evaluating a business combination or a tender or exchange offer. The
provisions in PVFs First Amended and Restated Articles of Incorporation requiring a supermajority
vote for the approval of certain business combinations and containing restrictions on acquisitions
of PVFs equity securities provide that the supermajority voting requirements or acquisition
restrictions do not apply to business combinations or acquisitions meeting specified board of
directors approval requirements. The First Amended and Restated Articles of Incorporation also
authorizes the issuance of 1,000,000 shares of preferred stock as well as additional shares of
common stock up to a total of 15,000,000 outstanding shares. At our upcoming annual meeting of
shareholders, we are proposing to increase the authorized shares of common stock to 65,000,000
These shares could be issued without further shareholder approval on terms or in circumstances that
could deter a future takeover attempt.
We are subject to the Ohio statutes relating to control share acquisitions, which restrict the
ability of an acquirer to acquire a significant amount of our outstanding common stock without
shareholder approval, as well as Ohios merger moratorium statute, which restricts the ability of
certain interested shareholders to effect transactions involving us or our assets. In addition,
federal banking laws contain various restrictions on acquisitions of control of savings
associations and their holding companies.
The First Amended and Restated Articles of Incorporation, Bylaws and statutory provisions, as
well as certain other provisions of state and federal law and certain provisions in PVFs and Park
View Federals employee benefit plans, employment agreements and change in control severance
agreements, may have the effect of
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discouraging or preventing a future takeover attempt in which shareholders of PVF otherwise
might receive a substantial premium for their shares over then current market prices.
We may need to raise additional capital in the future, but that capital may not be available when
we need it. Any additional securities issued in a capital raising transaction would dilute your
ownership if you did not, or were not permitted to, invest in the additional issuances.
The Office of Thrift Supervision is requiring us to raise our tier one (core) capital and
total risk-based capital ratios to 8.0% and 12.0%, respectively, as of December 31, 2009. Even if
the stock offering is successful, we may at some point need to raise additional capital, through
offerings of our common stock, preferred stock, securities convertible into common stock, or rights
to acquire such securities or our common stock, to maintain these required capital ratios and to
support our operations and any future growth, as well as to protect against the impact of any
further deterioration in our loan portfolio. Our ability to raise additional capital, if needed,
will depend on conditions in the capital markets at that time and on our financial performance.
Recently, the volatility and disruption in the capital and credit markets have reached
unprecedented levels. In some cases, the markets have produced downward pressure on stock prices
and credit availability for certain issuers without regard to those issuers underlying financial
strength. If current levels of market disruption and volatility continue or worsen, our ability to
raise additional capital may be disrupted. If we cannot raise additional capital when needed, our
results of operations and financial condition may be adversely affected, and our banking regulators
may subject Park View Federal to further regulatory enforcement action.
Under our First Amended and Restated Articles of Incorporation, we have additional authorized
shares of common stock and preferred stock that we can issue from time to time at the discretion of
our board of directors, without further action by the shareholders, except where shareholder
approval is required by law or Nasdaq Capital Market requirements. The issuance of any additional
shares of common stock, preferred stock or convertible securities could be substantially dilutive
to shareholders of our common stock. Holders of our shares of common stock have no preemptive
rights that entitle them to purchase their pro-rata share of any offering of shares of any class or
series and, therefore, our shareholders may not be permitted to invest in future issuances of our
common stock and as a result will be diluted.
Shareholders will experience dilution of their ownership interest in PVF upon the exercise of
warrants issued in connection with the Completed Trust Preferred Exchange, and, if shareholders
approve the Second Trust Preferred Exchange at the annual meeting of shareholders, the warrants to
be issued in the Second Trust Preferred Exchange.
In the Completed Trust Preferred Exchange, we issued warrants to acquire a number of shares of
common stock equal to 769,608 shares plus 9.9% of the shares to be issued in the Second Trust
Preferred Exchange (exclusive of shares issuable upon the exercise of warrants). Pursuant to the
Second Trust Preferred Exchange, the investors will tender $10.0 million aggregate liquidation
amount of trust preferred securities to PVF in exchange for an aggregate of $400,000 in cash, the
Initial Shares and warrants to acquire 769,608 shares of common stock plus 9.9% of the Initial
Shares. Further, we will issue additional warrants that become exercisable in the event we
complete one or more public offerings or private placements of our common stock (including the
stock offering conducted by this prospectus) within a year. The second group of warrants will give
the holders the right to acquire additional shares of common stock so that the total number of
shares they could acquire under all warrants would be an aggregate of 4.9% of the common stock to
be outstanding following the public offering or offerings completed during that one-year period.
The consummation of the Second Trust Preferred Exchange is subject to the approval of our
shareholders at the upcoming annual meeting of shareholders. Assuming the Second Trust Preferred
Exchange is approved by shareholders at the annual meeting of shareholders and that we sell ___
shares of common stock in this offering, and assuming the exercise price for the warrants is
$ ___ per share, which is the offering price per share in this offering, then we would have
outstanding warrants to acquire ___ shares of common stock. If all such warrants were to be
exercised, your ownership interest would be diluted by ___%.
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Risks Related to the Rights Offering
The future price of the shares of common stock may be less than the $[SHARE PRICE] purchase price
per share in the rights offering.
If you exercise your subscription rights to purchase shares of common stock in the rights
offering, you may not able to sell them later at or above the $[SHARE PRICE] purchase price in the
rights offering. The actual market price of our common stock could be subject to wide fluctuations
in response to numerous factors, some of which are beyond our control. These factors include,
among other things, actual or anticipated variations in our costs of doing business, operating
results and cash flow, the nature and content of our earnings releases and our competitors
earnings releases, changes in financial estimates by securities analysts, business conditions in
our markets and the general state of the securities markets and the market for other financial
stocks, changes in capital markets that affect the perceived availability of capital to companies
in our industry, governmental legislation or regulation, currency and exchange rate fluctuations,
as well as general economic and market conditions, such as downturns in our economy and recessions.
Once you exercise your subscription rights, you may not revoke them. If you exercise your
subscription rights and, afterwards, the public trading market price of our shares of common stock
decreases below the subscription price, you will have committed to buying shares of our common
stock at a price above the prevailing market price and could have an immediate unrealized loss.
Our common stock is traded on the Nasdaq Capital Market under the ticker symbol PVFC, and the
last reported sales price of our common stock on the Nasdaq Capital Market on , 2009
was $ per share. We cannot assure you that the market price of our shares of common stock
will not decline after you exercise your subscription rights. Moreover, we cannot assure you that
following the exercise of your subscription rights you will be able to sell your common stock at a
price equal to or greater than the subscription price.
The subscription price determined for the rights offering is not an indication of the fair value of
our common stock.
Our board of directors may elect to receive a fairness opinion from our financial advisor with
respect to the consideration to be paid to PVF prior to the closing of the stock offering, but has
not done so as of the date of this prospectus. In determining the subscription price, the board of
directors considered a number of factors, including: the price at which our shareholders might be
willing to participate in the rights offering, historical and current trading prices for our common
stock, the need for liquidity and capital, negotiations with standby purchasers and the desire to
provide an opportunity to our shareholders to participate in the rights offering on a pro rata
basis. In conjunction with its review of these factors, the board of directors also reviewed our
history and prospects, including our past and present earnings, our prospects for future earnings,
our current financial condition and regulatory status. The per share subscription price is not
necessarily related to our book value or any other established criteria of fair value and may or
may not be considered the fair value of our common stock to be offered in the rights offering.
After the date of this prospectus, our shares of common stock may trade at prices below the
subscription price.
The stock offering may reduce your percentage ownership in PVF.
Even if our current shareholders fully exercise their basic subscription rights, they will
experience dilution to their percentage ownership of our outstanding shares of common stock as a
result of the stock offering. In addition, current shareholders who do not exercise a certain
level of over-subscription rights, will experience dilution as a result of the sale of shares to
standby purchasers. Standby purchasers will be able to purchase additional shares of our common
stock beyond those shares issuable upon exercise of the subscription rights. We are obligated to
sell additional shares to standby purchasers because the standby purchasers have a right to
purchase [STANDBY MINIMUM] shares, even if we issue all of the shares issuable upon exercise of the
basic subscription privilege and the over-subscription privilege.
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After the consummation of the rights offering and the sale of additional shares of common stock to
the standby purchasers, a significant amount of our common stock will be concentrated in the hands
of a few of our shareholders. Your interests may not be the same as the interests of these
shareholders.
Upon the completion of the rights offering and the sale of additional shares of common stock
to the standby purchasers, if only the standby purchasers and our directors and executive officers
exercised their subscription rights, the ___ standby purchasers would collectively own
approximately ___% of our common stock. As a result, they would have the ability to significantly
influence, along with our directors and executive officers, matters generally requiring shareholder
approval. These matters include the election of directors and the approval of significant
corporate transactions, including potential mergers, consolidations or sales of all or
substantially all of our assets. Your interests as a holder of the common stock may differ from
the interests of the standby purchasers and their affiliates.
Our directors and executive officers own, and expect to continue to own after completion of the
stock offering, a significant portion of our common stock and can exert significant control over
our business and corporate affairs.
Our directors and executive officers, as a group, beneficially owned approximately ___% of
our outstanding common stock, as of December 18, 2009. Following the stock offering and assuming
completion of the exchange of the PVF Capital Trust II trust preferred securities, our directors
and executive officers, together with their affiliates are expected to own approximately ___% and
% of our total outstanding shares of common stock, assuming the sale at the minimum and
maximum of the offering range, respectively. As a result of their ownership, the directors and
executive officers will have the ability, by voting their shares in concert, to significantly
influence, along with the standby purchasers, the outcome of all matters submitted to our
shareholders for approval, including the election of directors and the approval of significant
corporate transactions, including potential mergers, consolidations or sales of all or
substantially all of our assets
You may not revoke your exercise of rights; we may terminate the rights offering.
Once you have exercised your subscription rights, you may not revoke your exercise even if you
learn information about us that you consider to be unfavorable. We may terminate the rights
offering at our discretion, including without limitation if we fail to sell at least [MINIMUM]
shares and raise at least $ million in the stock offering. If we terminate the rights
offering, neither we nor the subscription agent will have any obligation to you with respect to the
rights except to return any payment received by the subscription agent, without interest or
penalty.
You will not be able to sell the shares you buy in the rights offering until you receive your stock
certificates or your account is credited with the shares of common stock.
If you purchase shares of our common stock in the rights offering by submitting a rights
certificate and payment, we will mail you a stock certificate as soon as practicable after
[EXPIRATION DATE], or such later date as to which the rights offering may be extended. If your
shares are held by a custodian bank, broker, dealer or other nominee and you purchase shares of our
common stock, your account with your nominee will be credited with the shares of common stock you
purchased in the rights offering as soon as practicable after the expiration of the rights
offering, or such later date as to which the rights offering may be extended. Until your stock
certificates have been delivered or your account is credited, you may not be able to sell your
shares even though the common stock issued in the rights offering will be listed for trading on the
Nasdaq Capital Market. The stock price may decline between the time you decide to sell your shares
and the time you are actually able to sell your shares.
Although publicly traded, our common stock has substantially less liquidity than the average
liquidity of stocks listed on the Nasdaq Capital Market.
Although our common stock is listed for trading on the Nasdaq Capital Market, our common stock
has substantially less liquidity than the average liquidity for companies listed on the Nasdaq
Capital Market. A public trading market having the desired characteristics of depth, liquidity and
orderliness depends on the presence in the
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marketplace of willing buyers and sellers of our common stock at any given time. This marketplace
depends on the individual decisions of investors and general economic and market conditions over
which we have no control. This limited market may affect your ability to sell your shares on short
notice, and the sale of a large number of shares at one time could temporarily depress the market
price of our common stock. For these reasons, our common stock should not be viewed as a
short-term investment.
The market price of our common stock may fluctuate in the future, and this volatility may be
unrelated to our performance. General market price declines or overall market swings in the future
could adversely affect the price of our common stock, and the current market price may not be
indicative of future market prices.
We have broad discretion in the use of proceeds of the stock offering.
Other than an investment in Park View Federal, we have not designated the anticipated net
proceeds of the stock offering for specific uses. Accordingly, our management will have
considerable discretion in the application of the net proceeds of the stock offering and you will
not have the opportunity, as part of your investment decision, to assess whether the proceeds are
being used appropriately. See Use of Proceeds.
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Selected Consolidated Financial and Other Data
Our selected consolidated financial data is presented below as of and for the three months
ended September 30, 2009 and 2008 and as of and for the years ended June 30, 2005 through 2009.
Our selected consolidated financial data presented below as of June 30, 2009 and 2008 and for each
of the years in the three-year period ended June 30, 2009, are derived from our audited financial
statements and related notes incorporated by reference in this prospectus. Selected consolidated
financial data as of June 30, 2007, 2006 and 2005 and for each of the years in the two-year period
ended June 30, 2006 has been derived from our audited consolidated financial statements. Our
selected consolidated financial data as of September 30, 2009 and for the three months ended
September 30, 2009 and 2008 are derived from our unaudited interim consolidated financial
statements incorporated by reference in this prospectus. In the opinion of our management, such
amounts contain all adjustments (consisting of only normal recurring adjustments) necessary to
present fairly our financial position and results of operations for such periods in accordance with
generally accepted accounting principles. Our results for the three months ended September 30,
2009 are not necessarily indicative of our results of operations that may be expected for any
future period.
At | ||||||||||||||||||||||||
September | At June 30, | |||||||||||||||||||||||
(In thousands) | 30, 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||
Total assets |
$ | 887,081 | $ | 912,209 | $ | 867,402 | $ | 900,816 | $ | 906,081 | $ | 823,899 | ||||||||||||
Loans receivable, net |
653,224 | 668,460 | 714,492 | 713,329 | 736,065 | 660,494 | ||||||||||||||||||
Loans receivable held for sale, net |
6,428 | 27,078 | 7,831 | 14,993 | 10,698 | 9,060 | ||||||||||||||||||
Mortgage-backed securities held to
maturity |
| | 55,151 | 25,880 | 27,578 | 31,720 | ||||||||||||||||||
Mortgage-backed securities
available for
sale |
60,630 | 64,178 | | | | | ||||||||||||||||||
Cash and cash equivalents |
29,004 | 21,213 | 17,804 | 28,458 | 19,738 | 11,090 | ||||||||||||||||||
Securities held to maturity |
57,000 | 50,000 | 7,580 | 58,000 | 58,000 | 57,500 | ||||||||||||||||||
Securities available for sale |
137 | 103 | 1,890 | | | | ||||||||||||||||||
Deposits |
696,931 | 724,932 | 659,386 | 658,053 | 656,864 | 591,226 | ||||||||||||||||||
Borrowings |
106,339 | 106,366 | 114,950 | 146,260 | 156,773 | 146,413 | ||||||||||||||||||
Shareholders equity |
54,894 | 49,505 | 69,075 | 71,490 | 68,973 | 66,453 |
Operating Data:
Three Months Ended | ||||||||||||||||||||||||||||
September 30, | Year Ended June 30, | |||||||||||||||||||||||||||
(In thousands except per share data) | 2009 | 2008 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||||
Interest income |
$ | 9,998 | $ | 12,491 | $ | 46,662 | $ | 56,485 | $ | 62,020 | $ | 55,651 | $ | 43,963 | ||||||||||||||
Interest expense |
5,521 | 7,188 | 27,347 | 34,275 | 36,705 | 28,408 | 19,801 | |||||||||||||||||||||
Net interest income before provision for
loan losses |
4,477 | 5,303 | 19,315 | 22,210 | 25,315 | 27,243 | 24,162 | |||||||||||||||||||||
Provision for loan losses |
1,760 | 691 | 31,273 | 6,058 | 1,103 | 826 | 111 | |||||||||||||||||||||
Net interest income after provision for
loan
losses |
2,717 | 4,612 | (11,958 | ) | 16,152 | 24,212 | 26,417 | 24,051 | ||||||||||||||||||||
Noninterest income |
9,864 | (2) | (1,041 | )(3) | 4,799 | (3) | 2,458 | 3,376 | 2,028 | 3,006 | ||||||||||||||||||
Noninterest expense |
6,236 | 4,936 | 23,001 | 20,806 | 21,634 | 21,549 | 18,942 | |||||||||||||||||||||
Income (loss) before federal income taxes |
6,345 | (1,365 | ) | (30,160 | ) | (2,196 | ) | 5,954 | 6,896 | 8,115 | ||||||||||||||||||
Federal income tax expense (benefit) |
2,145 | (464 | ) | (10,044 | ) | (1,095 | ) | 1,720 | 2,053 | 2,531 | ||||||||||||||||||
Net income (loss) |
$ | 4,200 | $ | (901 | ) | $ | (20,116 | ) | $ | (1,101 | ) | $ | 4,234 | $ | 4,843 | $ | 5,584 | |||||||||||
Basic earnings (loss) per share |
$ | 0.54 | $ | (0.12 | ) | $ | (2.59 | ) | $ | (0.14 | ) | $ | 0.55 | $ | 0.63 | $ | 0.72 | (1) | ||||||||||
Diluted earnings (loss) per share |
$ | 0.54 | $ | (0.12 | ) | $ | (2.59 | ) | $ | (0.14 | ) | $ | 0.54 | $ | 0.62 | $ | 0.71 | (1) |
(1) | Adjusted for stock dividends. | |
(2) | Includes $8.6 million gain related to exchange of PVF Capital Trust I trust preferred securities. | |
(3) | Includes $1.8 million other-than-temporary impairment of securities. |
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Other Data:
At or For the Three | ||||||||||||||||||||||||||||
Month Ended | ||||||||||||||||||||||||||||
September 30, | At or For the Year Ended June 30, | |||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
Performance Ratios: |
||||||||||||||||||||||||||||
Return on average assets(1) |
1.89 | % | (0.41 | )% | (2.25 | )% | (0.13 | )% | 0.47 | % | 0.56 | % | 0.70 | % | ||||||||||||||
Return on average equity(1) |
32.18 | (5.18 | ) | (32.39 | ) | (1.55 | ) | 6.00 | 7.15 | 8.62 | ||||||||||||||||||
Interest rate spread |
2.05 | 2.24 | 2.21 | 2.48 | 2.77 | 3.15 | 3.12 | |||||||||||||||||||||
Net interest margin(1) |
2.16 | 2.60 | 2.32 | 2.70 | 2.98 | 3.34 | 3.24 | |||||||||||||||||||||
Efficiency ratio(2) |
106.25 | 82.08 | 80.52 | 81.19 | 76.09 | 73.53 | 70.15 | |||||||||||||||||||||
Average interest-earning assets to average
interest-bearing
liabilities |
104.00 | 104.09 | 103.40 | 105.33 | 104.84 | 105.38 | 104.81 | |||||||||||||||||||||
Shareholders equity to total assets (all tangible) |
6.19 | 7.52 | 5.43 | 7.96 | 7.94 | 7.61 | 8.07 | |||||||||||||||||||||
Ratio of average equity to average assets |
5.87 | 7.85 | 6.94 | 8.09 | 7.76 | 7.78 | 8.16 | |||||||||||||||||||||
Dividend payout ratio (cash dividends declared
divided by net income) |
| | | | 54.04 | 47.13 | 37.20 | |||||||||||||||||||||
Asset Quality Ratios: |
||||||||||||||||||||||||||||
Nonperforming assets to total assets |
9.75 | % | 3.99 | % | 9.00 | % | 3.40 | % | 1.90 | % | 1.80 | % | 1.66 | % | ||||||||||||||
Nonperforming loans to total loans |
10.90 | 3.87 | 10.04 | 3.50 | 2.02 | 2.08 | 1.85 | |||||||||||||||||||||
Net charge-offs to average loans(1) |
0.77 | 0.83 | 1.29 | 0.14 | 0.16 | 0.07 | 0.03 | |||||||||||||||||||||
Allowance for loan losses to total loans |
4.63 | 1.21 | 4.48 | 1.33 | 0.64 | 0.63 | 0.64 | |||||||||||||||||||||
Park View Federal Regulatory Capital Ratios: |
||||||||||||||||||||||||||||
Ratio of tangible capital to adjusted total assets |
6.70 | % | 9.22 | % | 6.54 | % | 9.69 | % | 9.72 | % | 8.33 | % | 8.77 | % | ||||||||||||||
Ratio of tier one (core) capital to adjusted total assets |
6.70 | 9.22 | 6.54 | 9.69 | 9.72 | 8.33 | 8.77 | |||||||||||||||||||||
Ratio of tier one risk-based capital to risk-weighted
assets |
8.77 | 11.93 | 8.77 | 12.09 | 12.56 | 9.72 | 10.41 | |||||||||||||||||||||
Ratio of total risk-based capital to risk-weighted assets |
10.03 | 12.81 | 10.03 | 12.99 | 13.08 | 10.28 | 10.97 |
(1) | Ratios for the three months ended September 30, 2009 and 2008 are annualized. Securities gains, other-than-temporary impairment charges, gains on the cancellation of debt and gains or losses on the disposition or write-down of other real estate owned are excluded from noninterest income. | |
(2) | Represents other expenses divided by the sum of net interest income and other income. |
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Cautionary Note Regarding Forward-Looking Statements
Some of our statements contained in, or incorporated by reference into, this prospectus are
forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. We intend such forward-looking statements
to be covered by the safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and are including this statement for purposes of invoking
these safe harbor provisions. Forward-looking statements are not guarantees of performance or
results. When we use words like may, plan, contemplate, anticipate, believe, intend,
continue, expect, project, predict, estimate, target, could, is likely, should,
would, will, and similar expressions, you should consider them as identifying forward-looking
statements, although we may use other phrasing. These forward-looking statements involve risks and
uncertainties and are based on our beliefs and assumptions, and on the information available to us
at the time that these disclosures were prepared. These forward-looking statements involve risks
and uncertainties and may not be realized due to a variety of factors, including, but not limited
to, the following:
| the unfavorable effects of future economic conditions, including inflation, recession or a continuing decrease in real estate values; | ||
| the failure of assumptions underlying the establishment of our allowance for loan losses, that may prove to be materially incorrect or may not be borne out by subsequent events; | ||
| adverse changes in the securities markets; | ||
| changes in governmental monetary and fiscal policies, as well as legislative and regulatory changes; | ||
| the risks of changes in interest rates on the level and composition of deposits, loan demand and the values of loan collateral, securities and interest sensitive assets and liabilities; | ||
| the imposition of additional formal enforcement actions by bank regulatory authorities upon Park View Federal or PVF; | ||
| the effects of terrorism and efforts to combat it; | ||
| our ability to effectively manage market risk, credit risk and operational risk; | ||
| the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating regionally, nationally and internationally, together with competitors offering banking products and services by mail, telephone and the Internet; | ||
| the effect of any mergers, acquisitions or other transactions to which we or our subsidiaries may from time to time be a party, including our ability to successfully integrate any businesses that we acquire; and | ||
| the risks described in this prospectus and our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. |
All written or oral forward-looking statements attributable to us are expressly qualified in
their entirety by this cautionary note. Our actual results may differ significantly from those we
discuss in these forward-looking statements. For other factors, risks and uncertainties that could
cause our actual results to differ materially from estimates and projections contained in these
forward-looking statements, please read the Risk Factors section of this prospectus. Any
forward-looking statement speaks only as of the date which such statement was made, and, except as
required by law, we expressly disclaim any obligation or undertaking to disseminate any updates or
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revisions to any forward-looking statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated events.
Use of Proceeds
Although we cannot determine what the actual net proceeds from the sale of the shares of
common stock in the stock offering will be until the stock offering is completed, we estimate that
the aggregate net proceeds from the stock offering, after deducting estimated offering expenses,
will be between $ million and $ million. Subject to Office of Thrift Supervision approval
of or non-objection to the capital plan and business plan we have adopted, we intend to invest
$ million of the net proceeds in Park View Federal to improve its regulatory capital position
and to retain the remainder of the net proceeds. The net proceeds we retain may be used for
general corporate purposes. Other than an investment in Park View Federal, we currently have no
arrangements or understandings regarding any specific use of proceeds.
The net proceeds may vary because total expenses relating to the offering may be more or less
than our estimates. For example, our expenses will increase if shares of common stock not
purchased in the rights offering are sold to standby purchasers.
Market for the Common Stock and Dividend Information
PVFs common stock trades under the symbol PVFC on the Nasdaq Capital Market. PVF had
shares of common stock outstanding and approximately ___ holders of record of the
common stock at December 18, 2009. On , the most recent practicable date before the date of
this prospectus, the closing price of our common stock as reported on the Nasdaq Capital Market was
$ per share.
Office of Thrift Supervision regulations applicable to all federal savings banks such as Park
View Federal limit the dividends that may be paid by Park View Federal to PVF. Any dividends paid
may not reduce Park View Federals capital below minimum regulatory requirements. Pursuant to the
Cease and Desist Order, Park View Federal may not declare or pay a dividend without receiving prior
Office of Thrift Supervision approval.
Quarterly cash dividends of $.074 per share were declared on PVFs outstanding common stock in
fiscal 2008, and cash dividends of $.0025 per share were declared on PVFs outstanding common stock
during the first quarter of fiscal 2009. In December 2008, PVF discontinued the payment of cash
dividends on the common stock. Pursuant to the Cease and Desist Order, PVF may not declare or pay a
dividend, including the repurchase or redemption of capital stock, without the prior non-objection
of the Office of Thrift Supervision.
The following table sets forth, for the periods indicated, the high and low sales prices per
share of PVFs common stock as reported on the Nasdaq Capital Market.
Fiscal Year Ending June 30, 2010 | High | Low | ||||||
Second quarter (through ______, 2009) |
$ | $ | ||||||
First quarter |
3.06 | 1.49 |
Fiscal Year Ended June 30, 2009 | High | Low | ||||||
Fourth quarter |
$ | 3.20 | $ | 1.46 | ||||
Third quarter |
3.20 | 1.20 | ||||||
Second quarter |
5.00 | 1.43 | ||||||
First quarter |
8.09 | 3.72 |
Fiscal Year Ended June 30, 2008 | High | Low | ||||||
Fourth quarter |
$ | 10.76 | $ | 7.00 | ||||
Third quarter |
12.80 | 8.00 | ||||||
Second quarter |
15.77 | 10.34 | ||||||
First quarter |
16.14 | 12.50 |
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Capitalization
The following table presents our historical consolidated capitalization at September 30, 2009,
our pro forma consolidated capitalization after giving effect to the (Second Trust Preferred
Exchange) and our pro forma consolidated capitalization after giving effect to the Second Trust
Preferred Exchange and the sale and receipt of net proceeds at the minimum and maximum of the
offering range of the stock offering. The table also sets forth the historical regulatory capital
ratios of Park View Federal at September 30, 2009, and the pro forma regulatory capital ratios of
Park View Federal, assuming an increase in the regulatory capital
ratios resulting from recent changes to federal income tax laws and
the receipt by Park View Federal of $___million and $___million of net
proceeds at the minimum and maximum of the offering range of the stock offering, respectively, and
further assuming that ___% of the proceeds received by Park View Federal were invested in assets
with a risk weighting of 20%, and ___% were invested in assets with a risk weighting of 50% ($ in
thousands). See
SummaryIncrease in Capital Ratios Resulting from
Recent Federal Income Tax Laws. The change in federal
income tax laws will have no impact on PVFs shareholders
equity and the Second Trust Preferred Exchange will have no impact on
the regulatory capital of Park View Federal.
Pro Forma Capitalization | ||||||||||||||||
Based Upon the Sale of | ||||||||||||||||
Minimum of | Maximum of | |||||||||||||||
Offering | Offering | |||||||||||||||
Pro Forma | Range: | Range: | ||||||||||||||
Capitalization | [MINIMUM] | [MAXIMUM] | ||||||||||||||
Capitalization as | Based Upon the | Shares at | Shares at | |||||||||||||
September 30, | Trust Preferred | $_____ Per | $_____ Per | |||||||||||||
(Dollars in thousands, except per share data) | 2009 | Exchange (3) | Share | Share | ||||||||||||
Deposits |
$ | 696,931 | $ | 696,931 | $ | 696,931 | $ | 696,931 | ||||||||
Federal Home Loan Bank advances |
35,000 | 35,000 | 35,000 | 35,000 | ||||||||||||
Subordinated debentures |
10,000 | | | | ||||||||||||
Other borrowings |
51,339 | 51,339 | 51,339 | 51,339 | ||||||||||||
Total deposits and borrowed funds |
$ | 793,270 | $ | 783,270 | $ | 783,270 | $ | 783,270 | ||||||||
Shareholders equity: |
||||||||||||||||
Serial preferred stock, $.01 par value, 1,000,000
shares authorized, none issued |
| |||||||||||||||
Common stock $0.01 par value, 65,000,000 shares
authorized (post- shareholder approval); shares to
be issued as reflected (1)(2) |
85 | |||||||||||||||
Additional paid-in capital |
69,894 | |||||||||||||||
Retained earnings (accumulated deficit) |
(12,339 | ) | ||||||||||||||
Accumulated other comprehensive income |
1,091 | |||||||||||||||
Treasury stock, at cost |
(3,837 | ) | ||||||||||||||
Total shareholders equity |
$ | 54,894 | ||||||||||||||
Total shares outstanding |
7,979,120 | |||||||||||||||
Total shareholders equity as a percentage of total
assets (all tangible) |
6.19 | % | ||||||||||||||
Tangible book value per share |
$ | 6.88 | ||||||||||||||
Regulatory capital ratios of Park View Federal: |
||||||||||||||||
Tier one (core) capital ratio |
6.70 | % | 6.70 | % | ||||||||||||
Tier one risk-based capital ratio |
8.77 | % | 8.77 | % | ||||||||||||
Total risk-based capital ratio |
10.03 | % | 10.03 | % |
(1) | We currently have 15,000,000 authorized shares of common stock, par value $0.01 per share. At our annual meeting of shareholders, which is scheduled to be held , 2010, we are submitting to shareholders a proposal to amend our First Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock to 65,000,000. | |
(2) | The number of shares of common stock to be outstanding after the stock offering is based on the number of shares outstanding as of December 18, 2009 and excludes shares of our common stock issuable upon exercise of outstanding options on such date, at a weighted average exercise price of $___, and the warrants issued in connection with the exchange of trust preferred securities of PVF Capital Trust I and PVF Capital Trust II. | |
(3) | Assumes shares of common stock are issued in connection with the Second Trust Preferred Exchange based on an assumed conversion price of $___. See SummaryBusiness Strategy of our Restructured Management TeamEarly Extinguishment of PVF Debt. | |
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Subscriptions by Directors and Executive Officers
We expect all of our directors and executive officers to participate in the rights offering.
Our directors and executive officers, together with their affiliates, intend to purchase
approximately $ million in available
common stock in the rights offering. The purchase price
paid by our directors and executive officers, together with their affiliates, will be $ per
share, the same paid by all other persons who purchase shares of our common stock in the rights
offering. Following the stock offering and assuming completion of the exchange of the PVF Capital
Trust II trust preferred securities, our directors and executive officers, together with their
affiliates are expected to own approximately shares of common stock, or between ___%
and ___% of our total outstanding shares of common stock, assuming the sale at the minimum and
maximum of the offering range, respectively.
The Rights Offering
The Subscription Rights
We are distributing to the holders of our shares of common stock as of December 18, 2009
non-transferable subscription rights to purchase shares of our common stock at $[SHARE PRICE] per
share. The subscription rights entitle the holders of our common stock to purchase an aggregate of
approximately [RIGHTS#] shares of our common stock for an aggregate purchase price of $___
million.
Each holder of record of our common stock will receive one subscription right for each share
of our common stock owned by such holder as of 5:00 p.m., Eastern Time, on December 18, 2009. Each
subscription right entitles the holder to a basic subscription privilege and an over-subscription
privilege.
Basic Subscription Privilege. With your basic subscription privilege, you may purchase
[Ratio] shares of our common stock per subscription right, subject to delivery of the required
documents and payment of the subscription price of $[SHARE PRICE] per share, prior to the
expiration of the rights offering. Fractional shares of our common stock resulting from the
exercise of the basic subscription privilege will be eliminated by rounding down to the nearest
whole share. You may exercise all or a portion of your basic subscription privilege. However, if
you exercise less than your full basic subscription privilege, you will not be entitled to purchase
shares under your over-subscription privilege. Under the standby purchase agreements, those
standby purchasers who are existing shareholders have agreed to exercise their basic subscription
privileges in full, representing approximately ___ shares.
Over-Subscription Privilege. In the event that you purchase all of the shares of common stock
available to you pursuant to your basic subscription privilege, you may also choose to purchase a
portion of any shares of our common stock that are not purchased by other shareholders through the
exercise of their basic subscription privileges. If sufficient shares of common stock are
available, we will seek to honor the over-subscription requests in full. If over-subscription
requests exceed the number of shares of common stock available to be purchased pursuant to the
over-subscription privilege, we will allocate the available shares of common stock among
shareholders who over-subscribed by multiplying the number of shares requested by each shareholder
through the exercise of their over-subscription privileges by a fraction which equals (x) the
number of shares available to be issued through over-subscription privileges divided by (y) the
total number of shares requested by all subscribers through the exercise of their over-subscription
privileges. As described above for the basic subscription privilege, we will not issue fractional
shares through the exercise of over-subscription privileges.
In order to properly exercise your over-subscription privilege, you must deliver the
subscription payment related to your over-subscription privilege at the time you deliver payment
related to your basic subscription privilege. Because we will not know the actual number of
unsubscribed shares prior to the expiration of the rights offering, if you wish to maximize the
number of shares you purchase pursuant to your over-subscription privilege, you will need to
deliver payment in an amount equal to the aggregate subscription price for the maximum number of
shares of our common stock that may be available to you. For that calculation, you must assume
that no shareholder other than you and the standby purchasers, who have agreed to exercise their
basic subscription privileges for an
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Table of Contents
aggregate of approximately shares, will subscribe for any shares of our common stock
pursuant to their basic subscription privilege.
We can provide no assurances that you will be able to purchase the number of shares issuable
upon the exercise of your over-subscription privilege in full. We will not be able to satisfy any
orders for shares pursuant to the over-subscription privilege if all of our shareholders exercise
their basic subscription privileges in full. We can only honor an over-subscription privilege to
the extent sufficient shares of our common stock are available following the exercise of
subscription rights under the basic subscription privileges.
To the extent the aggregate subscription price of the actual number of unsubscribed shares
available to you pursuant to the over-subscription privilege is less than the amount you paid in
connection with the exercise of the over-subscription privilege, you will be allocated only the
number of unsubscribed shares actually available to you, and any excess subscription payments will
be returned to you, without interest, as soon as practicable.
To the extent the amount you paid in connection with the exercise of the over-subscription
privilege is less than the aggregate subscription price of the actual number of unsubscribed shares
available to you pursuant to the over-subscription privilege, you will be allocated the number of
unsubscribed shares for which you actually paid in connection with the over-subscription privilege.
Reasons for the Stock Offering
We are engaging in the stock offering to raise equity capital to improve Park View Federals
capital position in order to comply with the Cease and Desist Orders and to retain additional
capital at PVF. See Use of Proceeds. Our board of directors has chosen to raise capital through
a rights offering to give our shareholders the opportunity to limit ownership dilution by buying
additional shares of common stock. Our board of directors also considered several alternative
capital raising methods prior to concluding that the rights offering was the appropriate option
under the current circumstances. We believe that the rights offering will strengthen our financial
condition by generating additional cash and increasing our capital position; however, our board of
directors is making no recommendation regarding your exercise of the subscription rights. We
cannot assure you that we will not need to seek additional financing or engage in additional
capital offerings in the future.
Standby Commitments
Prior to making their commitment to participate in the stock offering, each of the standby
purchasers executed a non-disclosure agreement and pursuant to this agreement gained access to
limited nonpublic information about the stock offering. Subsequently, we negotiated and entered
into standby purchase agreements with the standby purchasers in connection with the stock offering.
The following description of the standby purchase agreements summarizes certain terms of the
standby purchase agreements. A form of the standby purchase agreements has been filed as an
exhibit to the registration statement of which this prospectus is a part. We urge you to carefully
read the entire document.
Subject to certain conditions, including the receipt of required regulatory approvals, the
standby purchase agreements obligate us to sell, and require the standby purchasers to purchase
from us, up to an aggregate of $ million ([STANDBY MAX] shares) of our common stock. Of this
$ million, approximately $ million represents all of the shares purchasable with their
basic subscription privileges. Each of the standby purchasers has agreed not to exercise its
over-subscription privilege in any amount. In addition, the standby purchase agreement obligates
us to sell, and requires the standby purchasers to purchase from us, up to approximately $___
million of our shares of common stock, depending on the number of unexercised subscription rights,
which together with the shares purchasable under their basic subscription right totals their $___
million commitment. In no event will we issue fewer than $ million of shares ([STANDBY
MINIMUM] shares) to standby purchasers. The $[SHARE PRICE] price per share paid by the standby
purchasers for such common stock equals the subscription price paid by all others in the rights
offering.
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Table of Contents
The following table sets forth the minimum and maximum share commitments of the standby
purchasers.
Minimum Share | Maximum Share | |||
Name | Commitment | Commitment | ||
Total |
Each standby purchase agreement provides that it may be terminated by the standby purchaser
only upon the occurrence of the following events:
(i) | prior to the closing of the stock offering, if we experience a material adverse effect on our financial condition, or on our financial position, operations, assets, results of operation or business (excluding changes in general economic, industry, market or competitive conditions that generally affect the financial institutions industry, unless such changes have a disproportionate effect on us); | ||
(ii) | the suspension of trading in our common stock, a general suspension of trading on the Nasdaq Capital Market or the establishment of limited or minimum prices on the Nasdaq Capital Market; | ||
(iii) | if we materially breach the standby purchase agreement and such breach is not cured within the time period specified in the standby purchase agreement; | ||
(iv) | if the stock offering is not completed by , 2010; | ||
(v) | if we fail to receive shareholder approval of the issuance of shares to standby purchasers; | ||
(vi) | if we fail to receive shareholder approval of the amendment to our First Amended and Restated Articles of Incorporation to increase the number of authorized shares; | ||
(vii) | in the event that we are unable to obtain any required federal or state approvals for the stock offering on conditions reasonably satisfactory to us despite our reasonable efforts to obtain such approvals; and | ||
(viii) | any circumstances occur that would result in the standby purchaser, individually or otherwise with any other person or entity, being required to register as a depository institution holding company under federal or state laws or regulations, or to submit an application, or notice, to a federal regulatory authority. |
The obligations of PVF and the standby purchasers to complete the stock offering is subject to
additional conditions, including the shares to be issued in the rights offering and to the standby
purchasers being authorized for listing on the Nasdaq Capital Market.
Each standby purchaser has represented to us that they are not affiliates of the other
within the meaning of Rule 405 of the Securities Act of 1933, as amended, and are not acting in
concert with each other and are not members of a group (within the meaning of Section 13(d)(3) of
the Exchange Act) and have no current intention to act in the future in a manner that would make
them members of such a group.
Method of Exercising Subscription Rights
One non-transferable subscription right is being distributed for each share of our common
stock that you owned as of 5:00 p.m., Eastern Time, on December 18, 2009. The exercise of subscription
rights is irrevocable and may not be cancelled or modified. You may exercise your subscription
rights as follows:
Subscription by Registered Holders. If you hold a PVF stock certificate, the number of rights
you may exercise pursuant to your basic subscription privilege is indicated on the enclosed rights
certificate. You may exercise your subscription rights by properly completing and executing the
rights certificate and forwarding it,
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together with your full payment, to the subscription agent at the address set forth below under
Subscription Agent, to be received prior to 5:00 p.m., Eastern Time, on [EXPIRATION DATE].
Subscription by Beneficial Owners. If you are a beneficial owner of shares of our common
stock that are registered in the name of a broker, custodian bank or other nominee, you will not
receive a rights certificate. Instead, one subscription right will be issued to the nominee record
holder for each share of our common stock that you own at the record date. If you are not
contacted by your nominee, you should promptly contact your nominee in order to subscribe for
shares of our common stock in the rights offering.
If you hold your shares of common stock in the name of a custodian bank, broker, dealer or
other nominee, your nominee will exercise the subscription rights on your behalf in accordance with
your instructions. Your nominee may establish a deadline that may be before the 5:00 p.m., Eastern
Time, [EXPIRATION DATE] expiration date that we have established for the rights offering.
Payment Method
As described in the instructions accompanying the rights certificate, payments submitted to
the subscription agent must be made in full United States currency by:
| check payable to Computershare Trust Company, N.A.; | ||
| bank check or bank draft payable to Computershare Trust Company, N.A., drawn upon a United States bank; or | ||
| money order payable to Computershare Trust Company, N.A. | ||
Payment will be deemed to have been received by the subscription agent only upon the
subscription agents receipt of any certified check, bank check or bank draft drawn upon a United
States bank or money order or, in the case of an uncertified personal check, receipt and clearance
of such check.
Please note that funds paid by uncertified personal check may take at least seven business
days to clear. Accordingly, if you wish to pay by means of an uncertified personal check, we urge
you to make payment sufficiently in advance of the expiration date to ensure that the subscription
agent receives cleared funds before that time. We also urge you to consider payment by means of a
certified check, bank check, bank draft or money order.
You should read and follow the instructions accompanying the rights certificate carefully. As
described in the instructions accompanying the rights certificate, in certain cases additional
documentation or signature guarantees may be required.
The method of delivery of payments of the subscription amount to the subscription agent will
be at the risk of the holders of subscription rights. If sent by mail, we recommend that you send
those documents and payments by registered mail, properly insured, with return receipt requested,
and that a sufficient number of days be allowed to ensure delivery to the subscription agent. Do
not send or deliver these materials to us.
There is no sales fee or commission payable by you. We will pay all fees charged by the
subscription agent and the information agent. You are responsible for paying any other
commissions, fees, taxes or other expenses incurred in connection with the exercise of the
subscription rights.
Medallion Guarantee May Be Required
Your signature on your rights certificate must be guaranteed by an eligible institution, such
as a member firm of a registered national securities exchange or a member of the Financial Industry
Regulatory Authority, or a commercial bank or trust company having an office or correspondent in
the United States, subject to standards and procedures adopted by the subscription agent, unless:
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| you provide on the rights certificate that shares are to be delivered in your name and to your address of record, as imprinted on the face of the rights certificate; or | ||
| you are an eligible institution. |
Limit on How Many Shares of Common Stock You May Purchase in the Rights Offering
Persons, together with certain related affiliates, may purchase up to a number of shares such
that upon completion of the stock offering the person owns up to 4.9% of PVFs common stock
outstanding. If a person, together with certain affiliates, intends to purchase a number of shares
such that upon completion of the stock offering the person owns in excess of 4.9% of PVFs common
stock outstanding (including persons who currently own in excess of 4.9% of PVFs common stock
outstanding and intend to maintain stock ownership in excess of 4.9%), the board of directors
retains the discretion to limit such purchases in order to maintain compliance with the ownership
change provisions of Section 382 of the Internal Revenue Code. See Risk FactorsPVF could, as a
result of the stock offering or future investments in our common stock by 5% holders, experience an
ownership change for tax purposes that could cause PVF to permanently lose a significant portion
of its U.S. federal deferred tax assets.
In addition, we will not issue shares of common stock pursuant to the exercise of basic
subscription rights or over-subscription rights to any shareholder (other than certain standby
purchasers) who, in our sole opinion, could be required to obtain prior clearance or approval from
or submit a notice to any state or federal bank regulatory authority to acquire, own or control
such shares if, as of [EXPIRATION DATE], such clearance or approval has not been obtained and/or
any required waiting period has not expired. If we elect not to issue shares in such case, such
shares will become available to satisfy over-subscription by other shareholders pursuant to
subscription rights and will be available to standby purchasers.
Missing or Incomplete Subscription Information
If you send a payment that is insufficient to purchase the number of shares you requested, or
if the number of shares you requested is not specified in the forms, the payment received will be
applied to exercise your subscription rights to the fullest extent possible based on the amount of
the payment received, subject to the availability of shares under the over-subscription privilege
and the elimination of fractional shares. Any excess subscription payments received by the
subscription agent will be returned, without interest, as soon as practicable following the
expiration of the rights offering.
Expiration Date
The subscription period, during which you may exercise your subscription rights, expires at
5:00 p.m., Eastern Time, on [EXPIRATION DATE], which is the expiration of the rights offering. If
you do not exercise your subscription rights prior to that time, your subscription rights will
expire and will no longer be exercisable. We will not be required to issue shares of our common
stock to you if the subscription agent receives your rights certificate or your subscription
payment after that time. We have the option to extend the rights offering without notice to you.
In no event will the expiration date be later than [EXPIRATION #2]. We may extend the expiration
of the rights offering by giving oral or written notice to the subscription agent prior to the
expiration of the rights offering. If we elect to extend the expiration of the rights offering, we
will issue a press release announcing such extension no later than the next business day after the
board of directors determines to extend the rights offering.
If you hold your shares of common stock in the name of a custodian bank, broker, dealer or
other nominee, your nominee will exercise the subscription rights on your behalf in accordance with
your instructions. Your nominee may establish a deadline that may be before the 5:00 p.m., Eastern
Time, [EXPIRATION DATE], expiration date that we have established for the rights offering.
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Determination of Subscription Price
In determining the subscription price, our board of directors considered a number of factors,
including: the price at which our shareholders might be willing to participate in the rights
offering, historical and current trading prices for our common stock, the need for liquidity and
capital, negotiations with standby purchasers, and the desire to provide an opportunity to our
shareholders to participate in the rights offering on a pro rata basis. In conjunction with its
review of these factors, the board of directors also reviewed our history and prospects, including
our past and present earnings, our prospects for future earnings, our current financial condition
and regulatory status. We may elect to receive a fairness opinion from our financial advisor with
respect to the consideration to be paid to PVF prior to the closing of the stock offering, but we
have not done so as of the date of this prospectus. The subscription price is not necessarily
related to our book value, net worth or any other established criteria of value and may or may not
be considered the fair value of our common stock to be offered in the rights offering.
We cannot assure you that the market price of our shares of common stock will not decline
during or after the rights offering. We also cannot assure you that you will be able to sell
shares of our common stock purchased during the rights offering at a price equal to or greater than
the subscription price. We urge you to obtain a current quote for our common stock before
exercising your subscription rights.
Conditions, Withdrawal and Termination
We reserve the right to withdraw the rights offering at any time for any reason. We may
terminate the rights offering if at any time before completion of the rights offering there is any
judgment, order, decree, injunction, statute, law or regulation entered, enacted, amended or held
to be applicable to the rights offering that in the sole judgment of our board of directors would
or might make the rights offering or its completion, whether in whole or in part, illegal or
otherwise restrict or prohibit completion of the rights offering. We may waive any of these
conditions and choose to proceed with the rights offering even if one or more of these events
occur. If we terminate the rights offering, all affected subscription rights will expire without
value, and all subscription payments received by the subscription agent will be returned, without
interest or penalty, as soon as practicable.
In addition, we cannot complete the stock offering unless:
| We sell at least $ million of common stock in the stock offering ([MINIMUM] shares), which includes the purchases by the standby purchasers of up to [STANDBY MAX] shares of our common stock; | ||
| Our shareholders approve an amendment to our First Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock to 65,000,000. Our First Amended and Restated Articles of Incorporation currently authorize us to issue 15,000,000 shares of common stock, which is less than the sum of our current outstanding shares plus the shares we are offering for sale in the stock offering. At our 2009 Annual Meeting of Shareholders, which is scheduled to be held , 2010, we are submitting to shareholders a proposal to amend the First Amended and Restated Articles of Incorporation; and | ||
| Our shareholders approve the issuance of shares to standby purchasers. At our 2009 Annual Meeting of Shareholders, we are submitting to shareholders a proposal to approve the issuance of shares to standby purchasers. |
Subscription Agent
The subscription agent for the stock offering is Computershare Trust Company, N.A. The
address to which rights certificates and payments should be mailed or delivered is provided below.
If sent by mail, we recommend that you send documents and payments by registered mail, properly
insured, with return receipt requested, and that a sufficient number of days be allowed to ensure
delivery to the subscription agent. Do not send or deliver these materials to PVF.
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By Mail:
|
By Express Mail or Overnight Courier: | |
Computershare Trust Company, N.A.
|
Computershare Trust Company, N.A. | |
c/o Voluntary Corporate Actions
|
c/o Voluntary Corporate Actions | |
PVF Capital Corp. Rights Offering
|
PVF Capital Corp. Rights Offering | |
P.O. Box 43011
|
250 Royall Street | |
Providence, RI 02940-3011
|
Suite V | |
Canton, MA 02021 |
Information Agent
We have appointed Stifel Nicolaus as information agent for the offering. Any questions or
requests regarding PVF, Park View Federal or the stock offering or any questions regarding
completing a rights certificate or submitting payment in the rights offering may be directed to
Stifel Nicolaus at (___) ___-___(toll free) Monday through Friday (except bank holidays),
between 9:00 a.m. and 4:00 p.m., Eastern Time. We will pay the fees and expenses of the
information agent and have also agreed to indemnify the information agent from certain liabilities
that it may incur in connection with the rights offering.
No Fractional Shares
All shares will be sold at a purchase price of $[SHARE PRICE] per share. We will not issue
fractional shares. Fractional shares of our common stock resulting from the exercise of the basic
subscription privileges and the over-subscription privileges will be eliminated by rounding down to
the nearest whole share. Any excess subscription payments received by the subscription agent will
be returned, without interest, as soon as practicable.
Notice to Nominees
If you are a broker, custodian bank or other nominee holder that holds shares of our common
stock for the account of others on the record date, you should notify the beneficial owners of the
shares for whom you are the nominee of the rights offering as soon as possible to learn their
intentions with respect to exercising their subscription rights. You should obtain instructions
from the beneficial owners, as set forth in the instructions we have provided to you for your
distribution to beneficial owners. If a registered holder of our common stock so instructs, you
should complete the rights certificate and submit it to the subscription agent with the proper
subscription payment to be received by the expiration date. You may exercise the number of
subscription rights to which all beneficial owners in the aggregate otherwise would have been
entitled had they been direct holders of our common stock on the record date, provided that you, as
a nominee record holder, make a proper showing to the subscription agent by submitting the form
entitled Nominee Holder Certification, which is provided with your rights offering materials. If
you did not receive this form, you should contact the subscription agent to request a copy.
Beneficial Owners
If you are a beneficial owner of shares of our common stock and will receive your subscription
rights through a broker, custodian bank or other nominee, we will ask your nominee to notify you of
the rights offering. If you wish to exercise your subscription rights, you will need to have your
broker, custodian bank or other nominee act for you, as described above. To indicate your decision
with respect to your subscription rights, you should follow the instructions of your nominee. If
you wish instead to obtain a separate rights certificate, you should contact your nominee as soon
as possible and request that a rights certificate be issued to you. You should contact your
nominee if you do not receive notice of the rights offering, but you believe you are entitled to
participate in the rights offering. We are not responsible if you do not receive the notice by
mail or otherwise from your nominee or if you receive notice without sufficient time to respond to
your nominee by the deadline established by your nominee, which may be before the 5:00 p.m.,
Eastern Time, [EXPIRATION DATE], expiration date.
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Persons Holding Shares Through Our 401(k) Plan
If shares of our common stock are held in your account under our 401(k) plan as of 5:00 p.m.,
Eastern Time, on December 18, 2009, you are eligible to participate in the offering. If you wish to
exercise some or all of your subscription rights, you will need to notify the trustee of the 401(k)
plan of your decision and the trustee will act for you. The trustee must receive your properly
completed form entitled 401(k) Plan Participant Election Form no later than , 2010. If
you elect to exercise some or all of your subscription rights, you must ensure that the total
amount of the funds required for such exercise is maintained in the Merrill Lynch Retirement
Preservation Trust Fund (an existing investment fund under the 401(k) plan) at or prior to 5:00
p.m., on , 2010. The trustee, in order to exercise subscription rights on your behalf,
will transfer funds from your the Merrill Lynch Retirement Preservation Trust Fund account one
business day before the expiration date. If these funds are insufficient to exercise all of your
rights in accordance with your election, or if you transfer amounts out of the Merrill Lynch
Retirement Preservation Trust Fund, including after , 2010 (due to, for example, a fund
transfer, loan, withdrawal or distribution), the subscription rights will be exercised to the
maximum extent possible with the amount you have invested in your the Merrill Lynch Retirement
Preservation Trust Fund account. Your 401(k) Plan Participant Election Form accompanies this
prospectus. Once you elect to exercise your rights you cannot revoke your election.
Non-Transferability of Subscription Rights
The subscription rights granted to you are non-transferable and, therefore, you may not sell,
transfer or assign your subscription rights to anyone. The subscription rights will not be listed
for trading on the Nasdaq Capital Market or any other stock exchange or market. The shares of our
common stock issuable upon exercise of the subscription rights will be listed on the Nasdaq Capital
Market under the ticker symbol PVFC.
Validity of Subscriptions
We will resolve all questions regarding the validity and form of the exercise of your
subscription rights, including time of receipt and eligibility to participate in the rights
offering. Our determination will be final and binding. Once made, subscriptions and directions
are irrevocable, and we will not accept any alternative, conditional or contingent subscriptions or
directions. We reserve the absolute right to reject any subscriptions or directions not properly
submitted or the acceptance of which would be unlawful. You must resolve any irregularities in
connection with your subscriptions before the subscription period expires, unless waived by us in
our sole discretion. Neither we nor the subscription agent shall be under any duty to notify you
or your representative of defects in your subscriptions. A subscription will be considered
accepted, subject to our right to withdraw or terminate the rights offering, only when a properly
completed and duly executed rights certificate and any other required documents and the full
subscription payment have been received by the subscription agent. Our interpretations of the
terms and conditions of the rights offering will be final and binding.
Escrow Arrangements; Return of Funds
The subscription agent will hold funds received in payment for shares of our common stock in a
segregated account pending completion of the rights offering. The subscription agent will hold
this money in escrow until the rights offering is completed or is withdrawn and canceled. If the
rights offering is canceled for any reason, all subscription payments received by the subscription
agent will be returned, without interest or penalty, as soon as practicable.
Shareholder Rights
You will have no rights as a holder of the shares of our common stock you purchase in the
rights offering until certificates representing the shares of our common stock are issued to you,
or your account at your nominee is credited with the shares of our common stock purchased in the
rights offering.
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Foreign Shareholders
We will not mail this prospectus or rights certificates to shareholders with addresses that
are outside the United States or that have an army post office or foreign post office address. The
subscription agent will hold these rights certificates for their account. To exercise subscription
rights, our foreign shareholders must notify the subscription agent prior to 5:00 p.m., Eastern
Time, at least three business days prior to the expiration of the rights offering (or, if the
rights offering is extended, on or before three business days prior to the extended expiration
date) and demonstrate to the satisfaction of the subscription agent that the exercise of such
subscription rights does not violate the laws of the jurisdiction of such shareholder.
No Revocation or Change
Once you submit the rights certificate or have instructed your nominee of your subscription
request, you are not allowed to revoke or change the exercise or request a refund of monies paid.
All exercises of subscription rights are irrevocable, even if you learn information about us that
you consider to be unfavorable. You should not exercise your subscription rights unless you are
certain that you wish to purchase additional shares of our common stock at the subscription price.
Regulatory Limitation
Except for issuances to certain of the standby purchasers, we will not issue shares of common
stock pursuant to the exercise of basic subscription rights or over-subscription rights, or to any
shareholder or other standby purchaser who, in our sole opinion, could be required to obtain prior
clearance or approval from or submit a notice to any state or federal bank regulatory authority to
acquire, own or control such shares if, as of [EXPIRATION DATE], such clearance or approval has not
been obtained and/or any required waiting period has not expired. If we elect not to issue shares
in such case, such shares will become available to satisfy over-subscriptions by other shareholders
pursuant to subscription rights and will be available to standby purchasers.
Material U.S. Federal Income Tax Treatment of Rights Distribution
For U.S. federal income tax purposes, you should not recognize income or loss upon receipt or
exercise of these subscription rights to purchase shares of our common stock for the reasons
described below in Material U.S. Federal Income Tax Consequences.
No Recommendation to Rights Holders
Our board of directors is making no recommendation regarding your exercise of the subscription
rights. Shareholders who exercise subscription rights risk investment loss on new money invested.
We cannot assure you that the market price for our common stock will be above the subscription
price or that anyone purchasing shares at the subscription price will be able to sell those shares
in the future at the same price or a higher price. You are urged to make your decision based on
your own assessment of our business and the rights offering. Please see Risk Factors for a
discussion of some of the risks involved in investing in our common stock.
Shares of Our Common Stock Outstanding After the Rights Offering
Assuming no options are exercised prior to the expiration of the rights offering and assuming
completion of the exchange of the PVF Capital Trust II trust preferred securities, we expect
approximately shares of our common stock will be outstanding immediately after
completion of the rights offering and the closing of the transactions contemplated by the standby
purchase agreements, assuming all shares are sold at the maximum of the rights offering and to
standby purchasers.
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Material U.S. Federal Income Tax Consequences
The following discussion is a summary of the material United States federal income tax
consequences of the ownership and exercise of the subscription rights acquired through the rights
offering and the shares of common stock received upon exercise of the subscription rights or, if
applicable, upon exercise of the over-subscription privilege. This discussion is a summary and
does not consider all aspects of U.S. federal income taxation that may be relevant to particular
U.S. holders in light of their particular circumstances. This discussion applies to you only if
you are a U.S. holder (defined below), acquire your subscription rights in the rights offering and
you hold your subscription rights or shares of common stock issued to you upon exercise of the
subscription rights or, if applicable, the over-subscription privilege as capital assets for tax
purposes. This section does not apply to you if you are not a U.S. holder or if you are a member
of a special class of holders subject to special rules, including, but not limited to:
| A financial institution, | ||
| A regulated investment company, | ||
| A real estate investment trust, | ||
| A dealer in securities, | ||
| A trader in securities that elects to use a mark-to-market method of accounting for securities holdings, | ||
| A tax-exempt organization, | ||
| An insurance company, | ||
| A person liable for alternative minimum tax, | ||
| A person who acquired common stock pursuant to the exercise of compensatory stock options or otherwise as compensation, | ||
| A person that holds common stock as part of a straddle or a hedging or conversion transaction, or | ||
| A person whose functional currency is not the U.S. dollar. |
This section is based on the Internal Revenue Code of 1986, as amended, its legislative
history, existing and proposed regulations, published rulings and court decisions, all as currently
in effect. These laws are subject to change or differing interpretations at any time, possibly on
a retroactive basis.
You are a U.S. holder if you are a beneficial owner of subscription rights or common stock and
you are:
| An individual citizen or resident of the United States, | ||
| A domestic corporation, | ||
| An estate whose income is subject to United States federal income tax regardless of its source, or | ||
| A trust if (i) a United States court can exercise primary supervision over the trusts administration and one or more United States persons are authorized to control all substantial decisions of the trust, or (ii) the trust has a valid election in effect under applicable regulations to be treated as a United States person. |
If a partnership (including any entity treated as a partnership for U.S. federal income tax
purposes) receives the subscription rights or holds shares of common stock received upon exercise
of the subscription rights or the
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over-subscription privilege, the tax treatment of a partner in a partnership generally will depend
upon the status of the partner and the activities of the partnership. Such a partner or
partnership should consult its tax advisor as to the U.S. federal income tax consequences of
receiving, exercising and disposing of the subscription rights and acquiring, holding or disposing
of shares of the common stock.
This discussion addresses only certain material United States federal income tax consequences.
You should consult your own tax advisor regarding the United States federal, state, local,
non-U.S. and other tax consequences of receiving, owning, exercising and disposing of subscription
rights and shares of common stock in your particular circumstances.
Taxation of Subscription Rights
Receipt of Subscription Rights. Your receipt of subscription rights pursuant to the rights
offering should be treated as a nontaxable distribution with respect to your existing shares of
common stock for U.S. federal income tax purposes. The discussion below assumes that the receipt
of subscription rights will be treated as a nontaxable distribution.
If the fair market value of the subscription rights you receive is less than 15% of the fair
market value of your existing shares of common stock on the date you receive the subscription
rights, the subscription rights will be allocated a zero basis for U.S. federal income tax
purposes, unless you elect to allocate basis between your existing shares of common stock and the
subscription rights in proportion to the relative fair market values of the existing shares of
common stock and the subscription rights determined on the date of receipt of the subscription
rights. If you choose to allocate basis between your existing shares of common stock and the
subscription rights, you must make this election on a statement included with your tax return for
the taxable year in which you receive the subscription rights. Such an election is irrevocable.
On the other hand, if the fair market value of the subscription rights you receive is 15% or
more of the fair market value of your existing shares of common stock on the date you receive the
subscription rights, then you must allocate your basis in your existing shares of common stock
between the existing shares of common stock and the subscription rights you receive in proportion
to their fair market values determined on the date you receive the subscription rights.
The fair market value of the subscription rights on the date the subscription rights are
distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of
the fair market value of the subscription rights on that date. In determining the fair market
value of the subscription rights, you should consider all relevant facts and circumstances,
including any difference between the subscription price of the subscription rights and the trading
price of our common stock on the date that the subscription rights are distributed, the length of
the period during which the subscription rights may be exercised and the fact that the subscription
rights are non-transferable.
Your holding period in a subscription right will include your holding period in the shares of
common stock with respect to which the subscription right was distributed.
Exercise of Subscription Rights or Over-Subscription Privilege. Generally, you will not
recognize gain or loss on the exercise of a subscription right or over-subscription privilege.
Your tax basis in a new share of common stock acquired when you exercise a subscription right will
be equal to the sum of (i) your adjusted tax basis, if any, in the subscription right, (ii) any
servicing fee charged to you by your broker, bank or trust company and (iii) the subscription price
you paid for such shares. The holding period of a share of common stock acquired when you exercise
your subscription right will begin on the date of exercise.
Acquisition of Common Stock through Exercise of Over-Subscription Privilege. If you acquire
shares of common stock through exercise of the over-subscription privilege, your basis in such
shares will generally be equal to the subscription price you paid for such shares plus any
servicing fee charged to you by your broker, bank or trust company. The holding period with
respect to such shares of common stock will commence on the day after the acquisition of the common
stock.
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Not Exercising Subscription Rights. If you do not exercise your subscription rights, you
should not recognize a capital loss for United States federal income tax purposes and any portion
of the tax basis in your existing shares of common stock previously allocated to the subscription
right not exercised will be re-allocated to the existing common stock.
Taxation of Common Stock
Distributions. Distributions with respect to shares of common stock acquired upon exercise of
subscription rights or the over-subscription privilege will be taxable as dividend income when
actually or constructively received to the extent of our current or accumulated earnings and
profits as determined for U.S. federal income tax purposes. To the extent that the amount of a
distribution exceeds our current and accumulated earnings and profits, such distribution will be
treated first as a tax-free return of capital to the extent of your adjusted tax basis in such
common stock and thereafter as capital gain.
Subject to certain exceptions for short-term and hedged positions, distributions constituting
dividend income received by certain non-corporate U.S. holders, including individuals, in respect
of the common stock in taxable years beginning before January 1, 2011 are generally taxed at a
maximum rate of 15%. Similarly, subject to similar exceptions for short-term and hedged positions,
distributions on the common stock constituting dividend income paid to holders that are domestic
corporations generally will qualify for the dividends-received deduction. You should consult your
own tax advisor regarding the availability of the reduced dividend tax rate and the
dividends-received deduction in light of your particular circumstances.
Dispositions. If you sell or otherwise dispose of the common stock, you will generally
recognize capital gain or loss equal to the difference between the amount you realize and your
adjusted tax basis in the common stock. Such capital gain or loss will be long-term capital gain
or loss if your holding period for the common stock is more than one year. Long-term capital gain
of a non-corporate U.S. holder, including individuals, that is recognized in taxable years
beginning before January 1, 2011 is generally taxed at a maximum rate of 15%. The deductibility of
net capital losses is subject to limitations.
Information Reporting and Backup Withholding
For non-corporate U.S. holders, information reporting requirements, on Internal Revenue
Service Form 1099, generally will apply to the payment of dividends on the common stock and the
payment of the proceeds from the sale, redemption or other disposition of common stock.
Additionally, backup withholding will apply to such payments if a non-corporate U.S. holder
fails to provide an accurate taxpayer identification number, is notified by the Internal Revenue
Service that it has failed to report all dividends required to be shown on its federal income tax
returns, or in certain circumstances, fails to comply with applicable certification requirements.
Any amount withheld from a payment under the backup withholding rules is allowable as a credit
against (and may entitle you to a refund with respect to) your federal income tax liability,
provided that the required information is furnished to the Internal Revenue Service.
Plan of Distribution
Directors, Executive Officers and Employees
Our directors and executive officers may participate in the solicitation of the exercise of
subscription rights for the purchase of common stock. These persons will not receive any
commissions or compensation in connection with these activities, other than their normal
compensation, but they will be reimbursed for their reasonable out-of-pocket expenses incurred in
connection with any solicitation. Other trained employees of Park View Federal may assist in the
rights offering in ministerial capacities, providing clerical work in effecting an exercise of
subscription rights or answering questions of a ministerial nature. Other questions of prospective
purchasers will be directed to our executive officers or registered representatives of Stifel
Nicolaus, our financial and marketing advisor and
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information agent. Our other employees have been instructed not to solicit the exercise of
subscription rights for the purchase of shares of common stock or to provide advice regarding the
exercise of subscription rights. We will rely on Rule 3a4-1 under the Securities Exchange Act of
1934, as amended, and the solicitation of subscription rights and the sales of the common stock
underlying such subscription rights will be conducted within the requirements of Rule 3a4-1, so as
to permit officers, directors and employees to participate in the sale of our common stock. None
of our officers, directors or employees will be compensated in connection with their participation
in the offering by the payment of commissions or other remuneration based either directly or
indirectly on the transactions in the shares of common stock.
Financial Advisor
We have engaged Stifel Nicolaus, a broker-dealer registered with the Financial Industry
Regulatory Authority, as our financial and marketing advisor in connection with the stock offering
pursuant to an agency agreement between Stifel Nicolaus, and us. Stifel Nicolaus is a nationally
recognized investment banking firm with significant experience in advising financial institutions.
In the ordinary course of its investment banking business, Stifel Nicolaus is regularly engaged in
the valuation of financial institutions and their securities in connection with mergers and
acquisitions and other corporate transactions.
In its capacity as our financial and marketing advisor, Stifel Nicolaus provided advice to us
regarding the structure of the stock offering as well as with respect to marketing the shares of
our common stock to be issued in the stock offering. Stifel Nicolaus has identified potential
standby purchasers and assisted us in negotiating standby purchase agreements with the standby
purchasers.
Stifel Nicolaus has not prepared any report or opinion constituting a recommendation or advice
to us or our shareholders; however, Stifel Nicolaus may be requested to prepare an opinion
addressed to our board of directors prior to the closing of the stock offering as to the fairness,
from a financial point of view and, as of the date of such opinion and subject to the assumptions
and qualifications contained in such opinion, of the consideration to be paid to PVF in connection
with the stock offering. Stifel Nicolaus expresses no opinion and makes no recommendation to
holders of the subscription rights as to the purchase by any person of shares of our common stock.
Stifel Nicolaus also expresses no opinion as to the prices at which shares to be distributed in
connection with the rights offering may trade if and when they are issued or at any future time.
See The Rights OfferingDetermination of Subscription Price.
As compensation for its services, we have agreed to pay Stifel Nicolaus the following amounts:
| an initial retainer fee of $25,000, which was paid upon execution of the engagement letter, and an additional monthly retainer fee of $25,000 payable on the 30th day of each month during the term of the engagement letter, commencing on November 30, 2009; | ||
| a placement fee equal to: (i) 1.5% of the aggregate dollar amount of the common stock sold in the rights offering pursuant to basic subscription privileges, (ii) 6.0% of the aggregate dollar amount of the common stock sold in the rights offering pursuant to over-subscription privileges and (iii) 6.0% of the aggregate dollar amount of the common stock sold to standby purchasers, provided, however, that the placement fee for common stock sold to members of the PVF board of directors will be 1.5% of the aggregate dollar amount of common stock sold to such directors; and | ||
| if an opinion is requested by our board of directors, a fairness opinion fee of $100,000 in connection with an opinion given by Stifel Nicolaus as to the fairness to PVF, from a financial point of view, of the consideration to be paid in connection with the stock offering; |
We have agreed to reimburse Stifel Nicolaus for its reasonable out-of-pocket expenses
pertaining to its engagement, including legal fees, up to $175,000, regardless of whether the
rights offering is consummated. Although, Stifel Nicolaus has no obligation to act, and will not
act, in any capacity as an underwriter in the rights offering, if it were nonetheless deemed to be
an underwriter under the Securities Act, the fees and commission to be paid to it might be deemed
to be underwriting fees and commissions. We have agreed to indemnify Stifel Nicolaus against
certain liabilities and expenses in connection with its engagement, including certain potential
liabilities under
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the federal securities laws. Stifel Nicolaus expresses no opinion and makes no recommendation to
our shareholders as to the purchase by any person of any shares of common stock. Stifel Nicolaus
expresses no opinion as to the prices that the shares of our comment stock may trade for if and
when they are issued or at any future time.
We and each of our directors and executive officers and certain of the standby purchasers have
agreed with Stifel Nicolaus that, without the prior written consent of Stifel Nicolaus, none of us
or those certain standby purchasers will, during the period ending 180 days after the closing date
of this offering:
| offer, sell, contract to sell (including any short sale), pledge, hypothecate, establish an open put equivalent position within the meaning of Rule 15a-1(h) of the Securities Exchange Act of 1934, as amended, grant any option, right or warrant for the sale of, purchase any option or contract to sell, sell any option or contract to purchase, or otherwise encumber, dispose of or transfer, or grant any rights with respect to, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock, or enter into any transaction that would have the same effect; or | ||
| enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock, whether any transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Stifel Nicolaus. This 180-day period may be extended under certain circumstances if we announce or pre-announce earnings or material news or a material event within approximately 17 days prior to, or approximately 16 days after, the termination of the 180-day period. |
The restrictions described in the preceding paragraph do not apply to:
| the transfer by any individual of shares of our common stock to a trust for the benefit of such individual or members of such individuals immediate family, as a bona fide gift or which occurs by operation of law, if each transferee or donee agrees in writing as a condition precedent to such transfer or gift to be bound by the same restrictions; and | ||
| transactions by any person other than us relating to shares of our common stock or other securities acquired in open market transactions after the completion of the offering of the shares. |
Stifel Nicolaus may in the future provide other investment banking services to us and will
receive compensation for such services. In the ordinary course of its business as a broker-dealer,
Stifel Nicolaus may also purchase securities from and sell securities to us and may actively trade
our equity or debt securities for its own account and for the accounts of customers and,
accordingly, may at any time hold a long or short position in such securities.
Subscription for and Delivery of Shares
As soon as practicable after the record date for the rights offering, we will distribute the
subscription rights and rights certificates to individuals who owned shares of our common stock at
5:00 p.m., Eastern Time, on December 18, 2009. If you wish to exercise your subscription rights and
purchase shares of our common stock, you should complete the rights certificate and return it with
payment for the shares to the subscription agent, Computershare, Inc., at the following address:
By Mail:
|
By Express Mail or Overnight Courier: | |
Computershare Trust Company, N.A.
|
Computershare Trust Company, N.A. | |
c/o Voluntary Corporate Actions
|
c/o Voluntary Corporate Actions | |
PVF Capital Corp. Rights Offering
|
PVF Capital Corp. Rights Offering | |
P.O. Box 43011
|
250 Royall Street, Suite V | |
Providence, RI 02940-3011
|
Canton, MA 02021 |
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See The Rights OfferingMethod of Exercising Subscription Rights. If you have any questions
regarding PVF, Park View Federal, or the stock offering, or you have any questions regarding
completing a rights certificate or submitting payment in the rights offering, please call our
information agent, Stifel Nicolaus at (___) ___-___(toll free), Monday through Friday (except
bank holidays), between 9:00 a.m. and 4:00 p.m., Eastern Time.
Description of Common Stock
The following description does not purport to be complete and is subject to, and qualified in
its entirety by reference to, our Articles of Incorporation, Code of Regulations, and our Bylaws,
as amended to date.
Common Stock
We are currently authorized to issue 15,000,000 shares of common stock, $.01 par value. There
were shares of common stock outstanding as of as of December 18, 2009. At our upcoming
annual meeting of stockholders, we are proposing to increase the authorized shares of common stock
to 65,000,000.
Dividend Rights
Holders of our common stock are entitled to receive such dividends as may be declared by our
board of directors out of legally available funds, and to receive pro rata any assets distributable
to holders of our common stock upon our liquidation.
In December 2008, PVF deferred the payment of dividends on its subordinated debentures. Under
the terms of the debentures, if PVF defers the payment of interest on the debentures, PVF generally
may not pay dividends or distributions, or redeem, purchase, or make a liquidation payment with
respect to any of its capital stock. Accordingly, at such time, PVF discontinued the payment of
cash dividends on the common stock. Pursuant to the Cease and Desist Order, PVF may not declare or
pay a dividend, including the repurchase or redemption of capital stock, without the prior
non-objection of the Office of Thrift Supervision.
Voting Rights
Holders of our common stock are entitled to vote for the election of directors and upon all
other matters, which may be submitted to a vote of shareholders generally, with each share being
entitled to one vote. Our common shareholders do not possess cumulative voting rights. This means
that holders of more than 50% of our common stock (on a fully diluted basis) voting for the
election of directors can elect all of the directors, and holders of the remaining shares will not
be able to elect any directors.
Directors are elected by a plurality of the votes cast at the meeting, i.e., the nominees
receiving the highest number of votes will be elected regardless of whether such votes constitute a
majority of the shares represented at the meeting. Any other corporate action shall be authorized
by a majority of the votes cast at the meeting unless otherwise provided by Chapter 1701 of the
Ohio Revised Code, our First Amended and Restated Articles of Incorporation, Amended and Restated
Code of Regulations, or our Amended and Restated Bylaws.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of our holding company, the holders
of our common stock would be entitled to receive, after payment or provision for payment of all our
debts and liabilities, all of our assets available for distribution. Holders of our serial
preferred stock, if any such shares are then outstanding, may have a priority over the holders of
common stock in the event of any liquidation or dissolution. We have no serial preferred stock
currently outstanding.
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Other Rights
Common shareholders have no preemptive rights to purchase additional securities that may be
issued by us in the future. There are no redemption or conversion provisions applicable to our
common stock, and common shareholders are not liable for any further capital call or assessment.
Anti-Takeover Effects
First Amended and Restated Articles of Incorporation. Our First Amended and Restated Articles
of Incorporation provide for a classified board to which approximately one-third of our board of
directors is elected each year at our annual meeting of shareholders. Accordingly, our directors
serve three-year terms rather than one-year terms. The classification of our board of directors
has the effect of making it more difficult for shareholders to change the composition of our board
of directors. At least two annual meetings of shareholders, instead of one, will generally be
required to effect a change in a majority of our board of directors. The classification of our
board of directors could also have the effect of discouraging a third party from initiating a proxy
contest, making a tender offer or otherwise attempting to obtain control of us, even though such an
attempt might be beneficial to us and our shareholders. The classification of our board of
directors could thus increase the likelihood that incumbent directors will retain their positions.
Our First Amended and Restated Articles of Incorporation require the affirmative vote of the
holders of not less than eighty percent (80%) of the outstanding common stock of PVF entitled to
vote with respect to each such transaction: (a) any merger, share exchange or consolidation of PVF
with or into a related person (as defined therein); (b) any sale, lease, exchange, transfer or
other disposition, including without limitation, a mortgage, or any other security device, of all
or any substantial part (as defined therein) of the assets of PVF (including, without limitation,
any voting securities of a subsidiary) or of a subsidiary to a related person; (c) any merger or
consolidation of a related person with or into PVF or a subsidiary; (d) any sale, lease, exchange,
transfer or other disposition, including without limitation, a mortgage, or any other capital
device, of all or any substantial part of the assets of related person to PVF or a subsidiary; (e)
the issuance of any securities of PVF or a subsidiary of a related person; (f) the acquisition by
PVF or a subsidiary of any securities of a related person; (g) any reclassification of the common
stock of PVF, or any recapitalization involving the common stock of PVF; and (h) any agreement,
contract or other arrangement providing for any of the transactions described in (a) through (g)
above (the Special Voting Requirement). The Special Voting Requirement shall not apply to any
such merger, consolidation, sale or exchange, issuance or delivery of stock or other securities, or
dissolution which was approved by the affirmative vote of at least two-thirds of the continuing
directors (as defend therein), provided such appraisal was obtained at a meeting in which a
continuing director quorum (as defined therein) was present, nor shall it apply to any such
transactions solely between PVF and another entity ninety percent (90%) or more of the voting stock
or voting equity interests of which is owned by PVF provided that Chapter 1704 of the Ohio Revised
Code does not prevent such transaction from being effected.
Our First Amended and Restated Articles of Incorporation also contain additional provisions
that may make takeover attempts and other acquisitions of interests in us more difficult where the
takeover attempt or other acquisition has not been approved by our board of directors. These
provisions include:
| a requirement that a shareholder wishing to nominate directors for election comply with certain procedures, including advance notice requirements; and | ||
| the affirmative vote of the holders of not less than eighty percent (80%) of the outstanding common stock of PVF shall be required to: |
| remove any directory or the entire board of directors of PVF unless for cause; and | ||
| amend or repeal certain articles in our First Amended and Restated Articles of Incorporation, some of which include: the article regarding actions by shareholders (Article Ninth); the article regarding the classification of our board of directors (Article |
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Tenth); the article regarding the removal of directors (Article Eleventh); the article regarding the Special Voting Requirement (Article Fourteenth); and the article regarding the repeal or amendment of PVFs Code of Regulations (Article Fifteenth), except that such repeal, alteration, amendment or rescission of the above referenced articles may be made by the affirmative vote of the holders of a majority of the outstanding shares of capital stock of PVF entitled to vote at a meeting of stockholders if the same is first approved by a majority of the directors. |
Control Share Acquisitions. Section 1701.831 of the Ohio Revised Code provides that certain
notice and informational filings and special shareholder meeting and voting procedures must be
followed prior to consummation of a proposed control share acquisition. The Ohio Revised Code
defines a control share acquisition as any acquisition of an issuers shares which would entitle
the acquirer, immediately after that acquisition, directly or indirectly, to exercise or direct the
exercise of voting power of the issuer in the election of directors within any one of the following
ranges of that voting power:
| one-fifth or more but less than one-third of that voting power; | ||
| one-third or more but less than a majority of that voting power; or | ||
| a majority or more of that voting power. |
Assuming compliance with the notice and information filings prescribed by the statute, the
proposed control share acquisition may be made only if, at a special meeting of shareholders, the
acquisition is approved by at least a majority of the voting power of the issuer represented at the
meeting and at least a majority of the voting power remaining after excluding the combined voting
power of the interested shares. Interested shares are the shares held by the intended acquirer
and the employee-directors and officers of the issuer, as well as certain shares that were acquired
after the date of the first public disclosure of the acquisition but before the record date for the
meeting of shareholders and shares that were transferred, together with the voting power thereof,
after the record date for the meeting of shareholders.
Nasdaq. In addition, under existing Nasdaq Stock Market regulations, approval of a majority
of the holders of common stock would be required in connection with any transaction or series of
related transactions that would result in the original issuance of additional shares of common
stock for a price less than the greater of book or market value, other than in a public offering
for cash, (i) if the common stock (including securities convertible into or exercisable for common
stock) has, or will have upon issuance, voting power equal to or in excess of 20% of the voting
power outstanding before the issuance of such common stock; or (ii) if the number of shares of
common stock to be issued is or will be equal to or in excess of 20% of the number of shares
outstanding before the issuance of the common stock.
Experts
The consolidated financial statements of PVF as of June 30, 2009 and 2008, and for each of the
years in the three-year period ended June 30, 2009, appearing in PVFs Annual Report on Form 10-K
for the year ended June 30, 2009 have been incorporated by reference herein in reliance upon the
report of Crowe Horwath LLP, independent registered public accounting firm, incorporated by
reference herein and upon the authority of that firm as experts in accounting and auditing.
Legal Matters
Certain legal matters in connection with this offering will be passed upon for PVF by
Kilpatrick Stockton LLP, Washington, DC. Certain legal matters will be passed upon for Stifel
Nicolaus by Jones Day.
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Incorporation by Reference
The Securities and Exchange Commission allows us to incorporate by reference the information
we file with it, which means that we can disclose important information to you by referring you to
those documents. The information we incorporate by reference is an important part of this
prospectus. We incorporate by reference the following documents:
| our Annual Report on Form 10-K, as amended, for the fiscal year ended June 30, 2009; | ||
| our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009; | ||
| our Current Reports on Form 8-K filed July 1, 2009, July 31, 2009, August 26, 2009, September 4, 2009, September 10, 2009, September 21, 2009, October 5, 2009, October 16, 2009, October 23, 2009, November 3, 2009, November 16, 2009 and December 1, 2009; and | ||
| our Definitive Proxy Statement on Schedule 14A, filed , 2009. |
Any statement contained in a document that is incorporated by reference will be modified or
superseded for all purposes to the extent that a statement contained in this prospectus modifies or
is contrary to that previous statement. Any statement so modified or superseded will not be deemed
a part of this prospectus except as so modified or superseded.
You may request a copy of any of these filings at no cost, by writing or telephoning us at the
following address or telephone number:
PVF Capital Corp.
30000 Aurora Road
Solon, Ohio 44139
(440) 248-7171
30000 Aurora Road
Solon, Ohio 44139
(440) 248-7171
We have filed with the SEC a registration statement under the Securities Act of 1933, as
amended, with respect to the shares of common stock offered hereby. As permitted by the rules and
regulations of the SEC, this prospectus does not contain all the information set forth in the
registration statement. Such information can be examined without charge at the public reference
facilities of the SEC located at 100 F Street, NE, Washington, D.C. 20549, and copies of such
material can be obtained from the Securities and Exchange Commission at prescribed rates. The
Securities and Exchange Commission telephone number is 1-800-SEC-0330. In addition, the SEC
maintains a web site (www.sec.gov) that contains periodic reports, proxy and information statements
and other information regarding registrants that file electronically with the SEC, including PVF.
The statements contained in this prospectus as to the contents of any contract or other document
filed as an exhibit to the registration statement are, of necessity, brief descriptions of the
material terms of, and should be read in conjunction with, such contract or document.
In addition, we make available, without charge, through our website, www.parkviewfederal.com,
electronic copies of our filings with the SEC, including copies of annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if
any. Information on our website should not be considered a part of this prospectus, and we do not
intend to incorporate into this prospectus any information contained in the website.
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[MAXIMUM] Shares
(Maximum)
COMMON STOCK
PRELIMINARY
PROSPECTUS
Stifel Nicolaus
,
2009
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
SEC filing fee (1) |
$ | * | ||
FINRA filing fee (1) |
* | |||
Nasdaq Stock Market listing fee |
* | |||
EDGAR, printing, postage and mailing |
* | |||
Legal fees and expenses |
* | |||
Accounting fees and expenses |
* | |||
Marketing firm fees (1)(2)(3) |
* | |||
Marketing firm expenses (including marketing firms counsel fees) |
* | |||
Subscription agent and registrar fees and expenses |
* | |||
Certificate printing |
* | |||
Miscellaneous |
* | |||
Total |
||||
* | To be filed by amendment. | |
(1) | Estimated based on registration of shares of common stock at $ per share. | |
(2) | Assumes insider purchases of shares and standby purchasers purchases of shares. | |
(3) | Stifel, Nicolaus & Company, Incorporated will receive a placement fee equal to: (i) 1.5% of the aggregate dollar amount of the common stock sold in the rights offering pursuant to basic subscription privileges, (ii) 6.0% of the aggregate dollar amount of the common stock sold in the rights offering pursuant to over-subscription privileges and (iii) 6.0% of the aggregate dollar amount of the common stock sold to standby purchasers, provided, however, that the placement fee for common stock sold to members of the PVF board of directors will be 1.5% of the aggregate dollar amount of common stock sold to such directors. Stifel Nicolaus will also receive an initial retainer fee of $25,000, which was paid upon execution of the engagement letter, and an additional monthly retainer fee of $25,000 payable on the 30th day of each month during the term of the engagement letter, commencing on November 30, 2009. In addition, Stifel, Nicolaus will be reimbursed for its reasonable out-of-pocket expenses pertaining to its engagement, including legal fees, up to $175,000. |
Item 14. Indemnification of Directors and Officers.
Under Section 1701.13 of the Ohio Revised Code, Ohio corporations are authorized to indemnify
directors, officers, employees and agents within prescribed limits and must indemnify them under
certain circumstances. Ohio law does not provide statutory authorization for a corporation to
indemnify directors, officers, employees and agents for settlements, fines or judgments in the
context of derivative suits. However, it provides that directors (but not officers, employees or
agents) are entitled to mandatory advance of expenses, including attorneys fees, incurred in
defending any action, including derivative actions, brought against the director, provided that the
director agrees to cooperate with the corporation concerning the matter and to repay the amount
advanced if it is proved by clear and convincing evidence that the directors act or failure to act
was done with deliberate intent to cause injury to the corporation or with reckless disregard for
the corporations best interests.
Ohio law does not authorize payment of judgments to a director, officer, employee or agent
after a finding of negligence or misconduct in a derivative suit absent a court order.
Indemnification is permitted, however, to the extent such person succeeds on the merits. In all
other cases, if a director, officer, employee or agent acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the corporation,
indemnification is discretionary except as otherwise provided by a corporations articles of
incorporation, code of regulations or by contract except with respect to the advancement of
expenses of directors.
Under Ohio law, a director is not liable for monetary damages unless it is provided by clear
and convincing evidence that his action or failure to act was undertaken with deliberate intent to
cause injury to the corporation or with
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reckless disregard for the best interests of the
corporation. There is, however, no comparable provision limiting the
liability of officers, employees or agents of a corporation. The statutory right to
indemnification is not exclusive in Ohio, and Ohio corporations may, among other things, procure
insurance for such persons.
Article Sixth of our First Amended and Restated Articles of Incorporation provides:
SIXTH: By resolution adopted by the directors in the manner set forth in
division (E) of Section 1701.13 of the Revised Code of Ohio or its
successor, the Corporation shall indemnify or agree to indemnify:
1. Any person who was or is a party or is threatened to be made a party, to
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, other than an action by
or in the right of the Corporation, by reason of the fact that he is or was
a director, officer, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, trustee, officer,
employee, or agent of another corporation, domestic or foreign, nonprofit or
for profit, partnership, joint venture, trust, or other enterprise, against
expenses, including attorneys fees, judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Corporation and, with respect to any criminal action or proceeding,
he had reasonable cause to believe that his conduct was unlawful; and
2. Any person who was or is a party or is threatened to be made a party, to
any threatened, pending, or completed action or suit by or in the right of
the Corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, trustee, officer, employee, or agent of another corporation,
domestic or foreign, nonprofit or for profit, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys fees,
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
of the following:
a. Any claim, issue or matter as to which such person is adjudged to
be liable for negligence or misconduct in the performance of his
duty to the Corporation unless, and only to the extent that the
court of common pleas or the court in which such action or suit was
brought determines upon application that, despite the adjudication
of liability, but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses as the court of common pleas or such other court shall deem
proper;
b. Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code of Ohio.
3. To the extent that a director, trustee, officer, employee, or agent has
been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred
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to in subsections (1) and (2) of this Article Sixth,
or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses, including attorneys fees, actually and
reasonably incurred by him in connection with the action, suit or
proceeding.
4. Any indemnification under subsections (1) and (2) of this Article Sixth,
unless ordered by a court, shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of
the director, trustee, officer, employee, or agent is proper in the
circumstances because he has met the applicable standard of conduct set
forth in subsections (1) and (2) of this Article Sixth. Such determination
shall be made by the directors of the Corporation in the manner set forth in
division (E)(4) of Section 1701.13 of the Revised Code of Ohio.
Item 15. Recent Sales of Unregistered Securities.
On September 1, 2009, PVF Capital Corp. (the Company) entered into an Exchange Agreement
(the Alesco Exchange Agreement) with Alesco Preferred Funding IV, Ltd. (the Alesco CDO) and
Cohen & Company Financial Management, LLC (Cohen). The Alesco CDO was the holder of $10.0 million
principal amount trust preferred securities issued by PVF Capital Trust I (the Trust I), and
Cohen is the collateral manager for the Alesco CDO. In June 2004, the Company formed the Trust I as
a special purpose entity for the sole purpose of issuing $10.0 million of variable-rate trust
preferred securities (the Capital Securities I). The Company issued subordinated deferrable
interest debentures (the Subordinated Debentures I) to the Trust I in exchange for the proceeds
of the offering of the trust preferred securities. The trust preferred securities carry a variable
interest rate that adjusts to the three month LIBOR rate plus 260 basis points. The Subordinated
Debentures I are the sole asset of the Trust I.
Under the Alesco Exchange Agreement, on September 3, 2009, the Alesco CDO exchanged its $10.0
million of trust preferred securities for consideration to be paid by the Company. The
consideration to be paid by the Company will consist of (i) a cash payment of $500,000; (ii) a
number of shares of Company common stock equal to $500,000 divided by the average daily closing
price of the Companys common stock for the twenty (20) business days prior to September 1, 2009
(the Initial Shares); (iii) a warrant (Warrant A) to purchase 769,608 shares of Company common
stock; and (iv) a warrant (Warrant B and together with Warrant A, the Alesco Warrants) to
purchase a number of shares of Company common stock equal to 9.9% of any shares of Company common
stock issued, exclusive of any warrant or warrant shares, in exchange for capital securities of PVF
Capital Trust II (Trust II) in the event the Company in the future issues shares of its common
stock in exchange for Trust II capital securities.
The number of shares of Company common stock issuable pursuant to each of Warrant A and
Warrant B may not exceed certain limits. Specifically, the number shares issuable upon the exercise
of Warrant A or Warrant B may not exceed the maximum number of shares of the Companys common stock
such that the Alesco CDO, upon its exercise of the applicable Alesco Warrant, shall own 9.9% of the
Companys common stock then issued and outstanding, except that in the event the Alesco CDO
receives comfort from the Office of Thrift Supervision (the OTS) that allows it to rebut the
presumption that its holdings of the Companys common stock constitute control of the Company for
the purpose of the applicable OTS regulations, this limitation shall have no effect. In addition,
the number of shares of Company common stock issuable upon the exercise of Warrant B may not exceed
a number of shares equal to 1,546,991 shares minus the sum of the Initial Shares and 769,608
shares.
Warrant A is exercisable at any time before September 3, 2011 at a price equal to the lesser
of (i) $4.00 per share, (ii) the offering price for shares of Company common stock issued solely
for cash in any subsequent public offering or private placement of the Companys common stock, or
(iii) the Conversion Price (as defined below) for any subsequent exchange of Company common stock
for capital securities of Trust II.
Warrant B is exercisable at any time before September 3, 2011 at the Conversion Price utilized
in any subsequent exchange of Company common stock for capital securities of Trust II pursuant to
an exchange agreement executed within one year of the closing date.
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The Conversion Price is defined in the Alesco Exchange Agreement as the price, if any,
utilized in any subsequent exchange of Company common stock for capital securities of Trust II to
determine the number of shares of Company common stock to be exchanged for Trust II capital
securities exclusive of any warrants, warrant shares
or warrant prices. For example, if the subsequent exchange agreement for the capital securities of
Trust II provided for terms identical to those provided in the Alesco Exchange Agreement, then the
Conversion Price would be the daily average closing price of the Companys common stock for the 20
business days prior to the date of the subsequent agreement.
The issuance of Company common stock pursuant to the Alesco Exchange Agreement was made by the
Company pursuant to an exemption from the registration requirements of the Securities Act of 1933,
as amended, contained in Section 4(2) of such Act and Rule 506 promulgated thereunder.
On October 9, 2009, the Company entered into an Exchange Agreement (the Investors Exchange
Agreement) with Marty E. Adams, Umberto P. Fedeli, Robert J. King, Jr., James E. Pastore, John S.
Loeber, Lee Burdman, Jonathan A. Levy, Richard R. Hollington, Jr. and Richard R. Hollington, III
(collectively, the Investors). Marty E. Adams is a director of the Companys wholly owned
subsidiary, Park View Federal Savings Bank (the Bank), and served as the Interim Chief Executive
Officer of the Company and the Bank until September 10, 2009. Robert J. King, Jr., is the President
and Chief Executive Officer and a director of the Company and the Bank. Umberto P. Fedeli is a
director of the Company and the Bank.
The Investors hold trust preferred securities with an aggregate liquidation amount of $10.0
million issued by Trust II. In July 2006, the Company formed the Trust II as a special purpose
entity for the sole purpose of issuing $10.0 million of trust preferred securities (the Capital
Securities II). The Company issued subordinated deferrable interest debentures (the Subordinated
Debentures II) to the Trust II in exchange for the proceeds of the offering of the trust preferred
securities. The trust preferred securities carry a fixed rate of 7.462% until September 15, 2011
and thereafter a variable interest rate that adjusts to the three month LIBOR rate plus 175 basis
points. The Subordinated Debentures II are the sole asset of the Trust II.
The Investors Exchange Agreement provides that on the closing date, the Investors will
exchange the $10.0 million of trust preferred securities for aggregate consideration consisting of
(i) $400,000 in cash, (ii) shares of common stock valued at $600,000 based on the average daily
closing price of the common stock over the 20 trading days prior to the closing of the transaction
(the 20-Day Average Closing Price) and (the Investor Initial Shares) (iii) warrants to purchase
769,608 shares of common stock plus a number of shares of common stock equal to 9.9% of the shares
to be issued to the Investors as described in clause (ii) above (the Investor Warrants). In
addition, the Investors will receive additional warrants that become exercisable in the event the
Company completes one or more public or private offerings of its common stock within a year. The
additional warrants will give the Investors the right to acquire additional shares of common stock
so that the total number of shares they could acquire under all warrants would entitle them to
purchase an aggregate of 4.9% of the Companys common stock outstanding following the offering or
offerings completed during that one-year period. The exercise price for the warrants is the lesser
of (i) $4.00 per share, (ii) the 20-Day Average Closing Price, or (iii) if during the term of the
warrants the Company sells shares of common stock in a public or private offering, the price at
which shares are sold in that offering. The Investor Warrants are exercisable for five years
following the closing.
The issuance of Company common stock pursuant to the Investors Exchange Agreement will be made
by the Company pursuant to an exemption from the registration requirements of the Securities Act of
1933, as amended, contained in Section 4(2) of such Act and Rule 506 promulgated thereunder.
Consummation of the Investors Exchange is subject to the approval of the Investors Exchange by
the shareholders of the Company pursuant to the rules and regulations of The Nasdaq Stock Market,
Inc. The Company intends to submit a proposal for the approval of the Investors Exchange to its
shareholders at the Companys upcoming 2009 annual meeting of stockholders. The directors of the
Company have executed voting agreements agreeing to vote shares of Common Stock they hold in favor
of the Investors Exchange. Consummation of the
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Investors Exchange also is subject to other
customary closing conditions.
Item 16. Exhibits and Financial Statement Schedules.
The exhibits and financial statement schedules filed as a part of this registration statement are
as follows:
(a) | List of Exhibits (filed herewith unless otherwise noted) |
1.1 | Engagement Letter between PVF Capital Corp. and Stifel Nicolaus & Company, Incorporated * | ||
1.2 | Form of Agency Agreement between PVF Capital Corp. and Stifel Nicolaus & Company, Incorporated | ||
3.11 | Articles of Incorporation, as amended and restated | ||
3.22 | Code of Regulations, as amended and restated | ||
3.3 | Bylaws, as amended and restated | ||
4.13 | Specimen Common Stock Certificate | ||
4.24 | Form of Common Stock Warrant issued to Alesco Preferred Funding IV, Ltd. | ||
4.34 | Form of Common Stock Warrant issued to Alesco Preferred Funding IV, Ltd. | ||
4.4 | Form of Rights Certificate | ||
5.1 | Opinion of Kilpatrick Stockton LLP re: Legality | ||
10.14 | Exchange Agreement by and among Alesco Preferred Funding IV, Ltd., Cohen & Company Financial Management, LLC and PVF Capital Corp., dated September 1, 2009 | ||
10.24 | Joint Cancellation Direction and Release by and among PVF Capital Corp., PVF Capital Trust I and The Bank of New York Mellon, dated September 3, 2009 | ||
10.34 | Exchange Agreement between PVF Capital Corp., Marty E. Adams, Umberto P. Fedeli, Robert J. King, Jr., James B. Pastore, John S. Loeber, Lee Burdman, Jonathan A. Levy, Richard R. Hollington, Jr. and Richard R. Hollington, III, dated October 9, 2009 | ||
10.43 | Park View Federal Savings Bank Conversion Stock Option Plan | ||
10.53 | PVF Capital Corp. 1996 Incentive Stock Option Plan | ||
10.65 | PVF Capital Corp. 2000 Incentive Stock Option Plan and Deferred Compensation Plan | ||
10.76 | PVF Capital Corp. 2008 Equity Incentive Plan | ||
10.87 | Management Incentive Compensation Plan | ||
10.98 | Amended and Restated Severance Agreement by and between PVF Capital Corp., Park View Federal Savings Bank and Jeffrey N. Male | ||
10.108 | Amended and Restated Severance Agreement by and between PVF Capital Corp., Park View Savings Bank and Edward B. Debevec | ||
10.119 | Form of Employment Agreement between PVF Capital Corp., Park View Federal Savings Bank and Robert J. King, Jr. ** | ||
10.129 | Letter Agreement between PVF Capital Corp. and John R. Male, dated July 27, 2009 *** | ||
10.1310 | Agreement by and between PVF Capital Corp., Park View Federal Savings Bank, Steven A. Calabrese, CCAG Limited Partnership and Steven A. Calabrese Profit Sharing Trust, dated September 30, 2008 | ||
10.1410 | Agreement by and between PVF Capital Corp., Park View Federal Savings Bank, Richard M. Osborne and Richard M. Osborne Trust, dated September 30, 2008 | ||
10.1511 | Agreement among PVF Capital Corp., Park View Federal Savings Bank and Marty Adams Consulting LLC, dated February 26, 2009 **** | ||
10.1612 | Stipulation and Consent to the Issuance of an Order to Cease and Desist between Park View Federal Savings Bank and the Office of Thrift Supervision | ||
10.1712 | Order to Cease and Desist issued by the Office of Thrift Supervision for Park View Federal Savings Bank | ||
10.1812 | Stipulation and Consent to the Issuance of an Order to Cease and Desist between PVF Capital Corp. and the Office of Thrift Supervision | ||
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10.1912 | Order to Cease and Desist issued by the Office of Thrift Supervision for PVF Capital Corp. | ||
10.20 | Form of Standby Purchaser Agreement | ||
21 | Subsidiaries of the Registrant * | ||
23.1 | Consent of Kilpatrick Stockton LLP (included in Exhibit 5.1) | ||
23.2 | Consent of Crowe Horwath LLP | ||
24.1 | Power of Attorney (included on signature page) | ||
99.1 | Form of Instruction as to Use of Rights Certificates | ||
99.2 | Form of Letter to Shareholders Who are Record Holders | ||
99.3 | Form of Letter to Shareholders Who are Dealers/Nominees | ||
99.4 | Form of Letter to Clients Who are Beneficial Holders | ||
99.5 | Form of Nominee Holder Certification | ||
99.6 | Form of Beneficial Owner Election Form | ||
99.7 | Form of Broker-Dealer Letter of Stifel Nicolaus & Company, Incorporated | ||
99.8 | 401(k) Participant Election Form |
| Management contract or compensatory plan or arrangement. | |
* | Previously filed. | |
** | Not currently effective. Subject to OTS approval. | |
*** | The provision in the Letter Agreement pertaining to Mr. Males consulting arrangement with the Company is subject to OTS approval. | |
**** | The agreement was terminated on September 10, 2009 in accordance with its terms. | |
(1) | Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended June 30, 2002 (Commission File No. 0-24948). | |
(2) | Incorporated by reference to the Registrants Current Report on Form 8-K filed on February 6, 2008 (Commission File No. 0-24948). | |
(3) | Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended June 30, 1996 (Commission File No. 0-24948). | |
(4) | Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (Commission File No. 0-24948). | |
(5) | Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended June 30, 2003 (Commission File No. 0-24948). | |
(6) | Incorporated by reference to the Registrants Definitive Proxy Statement filed on October 17, 2008 (Commission File No. 0-24948). | |
(7) | Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended June 30, 2007 (Commission File No. 0-24948). | |
(8) | Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 (Commission File No. 0-24948). | |
(9) | Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended June 30, 2009 (Commission File No. 0-24948). | |
(10) | Incorporated by reference to the Registrants Current Report on Form 8-K filed on October 6, 2008 (Commission File No. 0-24948). | |
(11) | Incorporated by reference to the Registrants Current Report on Form 8-K filed on March 4, 2009 (Commission File No. 0-24948). | |
(12) | Incorporated by reference to the Registrants Current Report on Form 8-K filed on October 23, 2009 (Commission File No. 0-24948). |
(b) | Financial Statement Schedules |
No financial statement schedules are filed because the required information is not applicable
or is included in the consolidated financial statements or related notes.
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Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | ||
(4) | That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. | ||
(5) | That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(6) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: |
The undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the |
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offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | ||
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | ||
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Solon, State of Ohio, on December 9, 2009.
PVF Capital Corp. |
||||
By: | /s/ Robert J. King, Jr. | |||
Robert J. King, Jr. | ||||
President, Chief Executive Officer and Director | ||||
POWER OF ATTORNEY
We, the undersigned directors and officers of PVF Capital Corp. (the Company) hereby
severally constitute and appoint Robert J. King, Jr. and James H. Nicholson with full power of
substitution, our true and lawful attorneys-in-fact and agents, to do any and all things in our
names in the capacities indicated below which said Robert J. King, Jr. and James H. Nicholson may
deem necessary or advisable to enable PVF Capital Corp. to comply with the Securities Act of 1933,
as amended, and any rules regulations and requirements of the Securities and Exchange Commission,
in connection with the registration statement on Form S-1 of PVF Capital Corp., including
specifically but not limited to, power and authority to sign for us in our names in the capacities
indicated below, the registration statement and any and all amendments (including post-effective
amendments) thereto; and we hereby ratify and confirm all that said Robert J. King, Jr. and James
H. Nicholson shall lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
Name | Title | Date | ||
/s/ Robert J. King, Jr.
|
President, Chief Executive Officer and
Director (principal executive officer) |
December 9, 2009 | ||
/s/ James H. Nicholson
|
Chief Financial Officer (principal financial officer) |
December 9, 2009 | ||
/s/ Edward B. Debevec
|
Treasurer (principal accounting officer) |
December 9, 2009 | ||
/s/ Mark D. Grossi
|
Chairman of the Board | December 9, 2009 | ||
/s/ John R. Male
|
Director | December 9, 2009 | ||
/s/ C. Keith Swaney
|
Director | December 9, 2009 |
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Name | Title | Date | ||
/s/ Robert K. Healey
|
Director | December 9, 2009 | ||
/s/ Stanley T. Jaros
|
Director | December 9, 2009 | ||
/s/ Stuart D. Neidus
|
Director | December 9, 2009 | ||
/s/ Raymond J. Negrelli
|
Director | December 9, 2009 | ||
/s/ Ronald D. Holman, II
|
Director | December 9, 2009 | ||
/s/ Umberto P. Fedeli
|
Director | December 9, 2009 | ||
/s/ Steven A. Calabrese
|
Director | December 9, 2009 | ||
/s/ Thomas J. Smith
|
Director | December 9, 2009 |