NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS
The accounting and reporting policies of PVF Capital Corp. (the Company) conform to U.S.
generally accepted accounting principles (GAAP) and general industry practice. The Companys principal subsidiary, Park View Federal Savings Bank (the Bank or Park View Federal is principally engaged in the
business of offering deposits through the issuance of savings accounts, money market accounts and certificates of deposit, and lending funds primarily for the purchase, construction, and improvement of real estate in Cuyahoga, Summit, Geauga, Lake,
Medina, Lorain and Portage Counties, Ohio. The deposit accounts of the Bank are insured up to applicable limits by the FDIC. The following is a description of the significant policies the Company follows in preparing and presenting its consolidated
financial statements.
Principles of Consolidation
: The consolidated financial statements include the
accounts of PVF and its wholly-owned subsidiaries, the Bank, Park View Federal Service Corp (PVFSC), Park View Federal Holdings, Inc. (PVF Holdings), and Mid Pines LC (MPLC). PVFSC owns some of the Banks
premises and leases them to the Bank. PVF Holdings, Inc. and MPLC did not have any significant assets or activity as of or for the periods presented. All significant intercompany transactions and balances are eliminated in consolidation.
PVFSC and the Bank have entered into various nonconsolidated joint ventures that own real estate including properties
leased to the Bank. See
Note 16Related Party Transactions
for additional disclosures related to these entities. Park View Federal has created various limited liability companies that have taken title to property acquired
through or in lieu of foreclosure.
Use of Estimates
: The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance for loan losses, valuation of mortgage servicing rights, fair value of mortgage banking derivatives, valuation of loans
held for sale, fair value of securities, valuation of other real estate owned, and the realizability of deferred tax assets and are particularly subject to change.
Cash Flows
: For purposes of the consolidated statements of cash flows, the Company considers cash and amounts due
from depository institutions, interest bearing deposits, and federal funds sold with original maturities of less than three months to be cash equivalents. Net cash flows are reported for customer loan transactions, NOW and passbook savings accounts,
time deposits, short-term borrowings, and advances from borrowers.
Interest-bearing Deposits:
Interest-bearing deposits in other financial institutions that mature within one year and are carried at cost.
Securities
: Debt securities that could be sold in the future because of changes in interest rates or other factors
are classified as available for sale. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other
comprehensive income, net of tax. Interest income includes amortization of purchase premium or accretion of purchase discount. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield.
Prepayment is assumed for mortgage-backed securities. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.
63
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Management evaluates securities for other-than-temporary impairment
(OTTI) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss,
and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its
amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as an impairment through earnings. For debt securities that do not meet the
aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other
comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of OTTI is recognized through earnings.
Mortgage Banking Activities
: Mortgage loans originated and intended for sale in the secondary market
are carried at fair value. The Company sells the loans on either a servicing retained or servicing released basis. Servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. The
Company measures servicing assets using the amortization method. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of
estimated future net servicing income. Loan servicing rights are amortized in proportion to and over the period of estimated net future servicing revenue. The expected period of the estimated net servicing income is based in part on the expected
prepayment of the underlying mortgages. The unamortized balance of mortgage servicing rights is included in prepaid expenses and other assets on the Consolidated Statement of Financial Condition.
Mortgage servicing rights are periodically evaluated for impairment. Impairment represents the excess of amortized cost
over its estimated fair value. Impairment is determined by stratifying rights into tranches based on predominant risk characteristics, such as interest rate and original time to maturity. Any impairment is reported as a valuation allowance for an
individual tranche. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance will be recorded as an increase to income.
Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of
outstanding principal and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Late fees and ancillary fees related to loan servicing are not material.
The Company is exposed to interest rate risk on loans held for sale and rate-lock loan commitments (IRLCs).
As market interest rates increase or decrease, the fair value of loans held for sale and rate-lock commitments will decrease or increase. The Company enters into derivative transactions principally to protect against the risk of adverse interest
movements affecting the value of the Companys committed loan sales pipeline. In order to mitigate the risk that a change in interest rates will result in a decrease in value of the Companys IRLCs in the committed mortgage pipeline or its
loans held for sale, the Company enters into mandatory forward loan sales contracts with secondary market participants. Mandatory forward sales contracts and committed loans intended to be held for sale are considered free-standing derivative
instruments and changes in fair value are recorded in current period earnings. For committed loans, fair value is measured using current market rates for the associated mortgage loans. For mandatory forward sales contracts, fair value is measured
using secondary market pricing.
64
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Loans
: Loans that management has the intent and ability to
hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal
balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.
Interest income on mortgage and commercial loans is discontinued at the time the loan is greater than 90 days delinquent
unless the loan is well-secured with a loan to value ratio of 60% or less and in process of collection. Interest income on consumer loans is discontinued at the time the loan is greater than 90 days delinquent. Consumer loans that become 180
days or more past due will be classified as loss and fully reserved. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or
interest is considered doubtful. Nonaccrual loans and loans past due greater than 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired
loans. A loan is moved to non-accrual status in accordance with the Companys policy, typically after 90 days of non-payment.
All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for either on the cash-basis or cost-recovery
method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
Allowance for Loan Losses
: The allowance for loan losses is maintained at a level to absorb probable incurred
losses in the portfolio as of the balance sheet date. The adequacy of the allowance for loan losses is periodically evaluated by the Company based upon the overall portfolio composition and general market conditions as well as information about
specific borrower situations and estimated collateral values. While management uses the best information available to make these evaluations, future adjustments to the allowance may be necessary if economic conditions change substantially from the
assumptions used in making the evaluations.
Allocations of the allowance may be made for specific loans, but
the entire allowance is available for any loan that, in managements judgment, should be charged off. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent
recoveries, if any, are credited to the allowance for loan losses.
The allowance consists of specific and
general components. The specific allocation relates to loans that are individually classified as impaired and not yet charged off. The general component covers non-impaired loans and is based on historical loss experience, adjusted for current
factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company. For the year ended June 30, 2013 management adjusted the loss history period to 36 month, from 18
months. As the more recent loss history has improved substantially, management believes that the elongated horizon for losses more appropriately captures existing risk in the portfolio. This actual loss experience is supplemented with other
economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries;
trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff;
national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.
The loan portfolio segments include one-to-four family, one-to-four family construction, multi-family, commercial real estate, land, commercial and industrial, and consumer loans. One-to-four family,
one-to-four family construction, and consumer loans rely on the historic cash flows of individual borrowers and on the real estate securing the loan. Multi-family, commercial real estate, land, SBA, and the commercial and industrial segments are
comprised of loans with a reliance on historic cash flows of small business borrowers and of small scale investors, as well as of the underlying real estate projects or of the land. The underwriting criteria across all segments consider the risk
attributes associated with weak local economic conditions and a weak real estate market.
65
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
A loan is considered impaired when, based on current information and
events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment
status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines
the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the
borrowers prior payment record, and the amount of the shortfall in relation to the principal and interest owed.
Certain loans to borrowers experiencing financial difficulty can be modified as troubled debt restructurings and are classified as impaired. The modification of the terms of such loans include one or a
combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the
recorded investment in the loan. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed under the Companys internal underwriting policy with respect to the following: whether the borrower is
or will be in payment default on any of his or her debt in the foreseeable future without the modification; whether there is a potential for a bankruptcy filing; whether there is a going-concern issue; or whether the borrower is unable to secure
financing elsewhere.
Generally, accruing loans which have one or more of their terms modified in response to
financial difficulties of the borrower, but remain payment current, are considered troubled debt restructurings on accrual status and performing. Loans that are classified as nonaccrual, which have one or more of their terms modified in response to
financial difficulties of the borrower, need to remain payment current for a minimum of 180 days under the terms of the restructuring. Only after satisfactory payment history has been re-established can the loan be moved to accrual status.
Troubled debt restructurings are separately identified for impairment disclosures and are measured at the
present value of estimated future cash flows using the respective loans effective rate at inception. The Company records impairments associated with troubled debt restructurings as specific allocations to the allowance. If a troubled debt
restructure is paid off, the associated specific allocation is released back into the general allowance. For troubled debt restructurings considered to be collateral dependent, the loan is reported, net, at the fair value of collateral. For troubled
debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.
Large groups of smaller balance homogeneous loans are collectively evaluated for impairment and accordingly, they are not
separately identified for impairment disclosure purposes.
The Companys loan portfolio is primarily
secured by real estate. Collection of real estate secured loans in the portfolio is dependent on court proceedings, and as a result, loans may remain past due for an extended period before being collected, transferred to other real estate owned, or
charged off. Charge-offs are recorded after the foreclosure process is complete for any deficiency between the Companys recorded investment in the loan and the fair value of the real estate acquired or sold, to the extent that such a
deficiency exists.
Historically, the Company recognized specific impairment on individual loans through the
utilization of a specific valuation allowance, but did not charge off the impaired loan amount until the loan was disposed and removed from the loan accounting system. During the quarter ended December 31, 2011, the Company implemented an
enhanced loan accounting system, which provides for the systematic recording of charged-off loans for financial recognition without losing the ability to track the legal contractual amounts. As such, during the three months ended March 31, 2012
and
66
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
December 31, 2011, respectively, the Company charged off those principal loan amounts which had previously been specifically impaired through a specific valuation allowance and continued to
be carried in loans outstanding. In addition to reducing loan balances, including nonperforming loans, this new enhanced loan accounting system had the impact of elevating reported charge-offs for the periods and reducing the allowance for loan
losses associated with specific reserves. Since these charge-offs associated with the implementation of this loan accounting system were previously specifically reserved and included in the Companys historical loss factors, the allowance for
loan losses did not need to be replenished after recording these charge-offs.
Transfers of Financial
Assets
: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee
obtains the right (free of conditions to constrain it from taking that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them
before their maturity.
Office Properties and Equipment
: Land is carried at cost. Buildings and
equipment are stated at cost less accumulated depreciation. Depreciation and amortization are computed using the straight-line method at rates expected to amortize the cost of the assets over their estimated useful lives or, with respect to
leasehold improvements, the term of the lease, if shorter. Estimated lives for buildings are 40 years. Estimated lives for equipment range from 1 to 10 years.
Other Real Estate Owned
: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. These
assets are subsequently accounted for at the lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are
expensed.
Federal Home Loan Bank (FHLB) Stock
: The Bank is a member of the FHLB system. Members are
required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based
on ultimate recovery of par value. Both cash and stock dividends are reported as income.
Long-Term
Assets
: Office properties and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair
value.
Bank-Owned Life Insurance
: The Company has purchased life insurance policies on certain
officers. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value, adjusted for other charges or other amounts due that are probable at settlement.
Income Taxes
: Income tax expense is the total of the current year income tax due or refundable and the change in
deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A
valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.
A tax
position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of the tax
benefit that is greater than fifty percent likely of being realized on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded.
The Company is subject to federal income tax only. Ohio-domiciled Banks and bank holding companies are not subject to
income tax in Ohio. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company is no longer subject to examination by taxing authorities for years before 2010.
67
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Stock Compensation
: Compensation cost is recognized for stock
options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black Scholes model is utilized to estimate the fair value of stock options, while the market price of the Companys common
stock at the date of grant is used for restricted stock awards.
Compensation cost is recognized over the
requisite service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the entire service period for the entire award.
Comprehensive Income (Loss)
: Comprehensive income (loss) consists of net income (loss) and other comprehensive
income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale which are also recognized as a separate component of equity.
Earnings per Share
: Basic earnings (loss) per share is calculated by dividing net income (loss) for the period by
the weighted average number of shares of common stock outstanding during the period. The additional potential common shares issuable under stock options and outstanding warrants to purchase common stock are included in the calculation of diluted
earnings per share.
Loss Contingencies
: Loss contingencies, including claims and legal actions arising
in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe at this time such matters exist that will have a material
effect on the financial statements.
Loan Commitments and Related Financial Instruments
: Financial
instruments include off-balance-sheet credit instruments, such as commitments to make loans issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability
to repay. Such financial instruments are recorded when they are funded.
Restrictions on Cash
: Cash on
hand or on deposit with the Federal Reserve Bank that was required to meet regulatory reserve requirements.
Dividend Restriction
: Banking regulations require maintaining certain capital levels and may limit the dividend
paid by the bank to the holding company or by the holding company to shareholders. See
Note 15Regulatory Matters
for more specific disclosure related to the Bank.
Fair Value of Financial Instruments
: Fair values of financial instruments are estimated using relevant market
information and other assumptions, as more fully disclosed in
Note 19Fair Value
. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other
factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.
Operating Segments
: While the Companys chief decision-makers monitor the revenue streams of the various
Company products and services, the identifiable segments are not material and operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Companys financial service operations are considered
by management to be aggregated in one reportable operating segment.
Reclassifications
: Certain
reclassifications have been made to the prior year amounts to conform to the current year presentation.
68
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 2ADJUSTMENT FOR FREDDIE MAC INTEREST
During the quarter ended December 31, 2012, the Company identified that it was not making
appropriate adjustments with respect to interest on residential mortgage loans originated and sold into the secondary market. In these mortgage sales, interest was advanced by Freddie Mac for the period from the first day of the month until the date
of settlement with Freddie Mac to ensure a whole payment was subsequently remitted by the Company to Freddie Mac. Such amounts should have been reversed monthly from interest income and included in the liability account of funds due to Freddie Mac.
It was determined that the adjustments to reverse interest income were not made beginning in August 2011.
The
Company is applying relevant guidance from the SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108) to assess the
materiality of the interest income adjustments described above. It was determined, based upon the assessment, that the adjustments were immaterial to the previously reported amounts contained in the Companys prior periodic filings. Although
the interest income adjustments were immaterial to prior periods, recording the cumulative impact of the out-of period correction in the second quarter of 2013 would have been material. Therefore the Company applied the guidance for accounting for
changes and error corrections and revised the prior period financial statements presented per SAB 108.
The
Company is therefore revising the previously reported financial information for the twelve months ended June 30, 2012. The adjustment for the twelve months ended June 30, 2012 is a decrease to interest income of $0.6 million and an
increase in accrued expenses and other liabilities for the same amount. This adjustment does not require previously filed reports with the SEC to be amended. The Company considers these adjustments to be immaterial to prior periods.
69
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The applicable effect on the prior year balance sheet and statement of
operations related to the adjustment for interest income on residential loans is as follows:
|
|
|
|
|
|
|
June 30,
2012
|
|
Statement of Financial Condition:
|
|
|
|
|
Accrued expenses and other liabilities as previously reported
|
|
$
|
24,224,709
|
|
Adjustment for interest income on residential loans sold
|
|
|
599,745
|
|
|
|
|
|
|
Accrued expenses and other liabilities as adjusted
|
|
$
|
24,824,454
|
|
|
|
|
|
|
Retained earnings as previously reported
|
|
$
|
(26,119,855
|
)
|
Net impact of adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Retained earnings (accumulated deficit) as adjusted
|
|
$
|
(26,719,600
|
)
|
|
|
|
|
|
Total stockholders equity as previously reported
|
|
$
|
70,730,621
|
|
Net impact of adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Total stockholders equity as adjusted
|
|
$
|
70,130,876
|
|
|
|
|
|
|
|
|
|
|
For the year
ended
June 30, 2012
|
|
Statement of Operations:
|
|
|
|
|
Interest and divdends income on loans as previously reported
|
|
$
|
28,382,546
|
|
Adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Interest and divdends income on loans as adjusted
|
|
$
|
27,782,801
|
|
|
|
|
|
|
Total interest and dividends income
|
|
$
|
29,847,913
|
|
Adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Total interest and dividends income as adjusted
|
|
$
|
29,248,168
|
|
|
|
|
|
|
Net interest income as previously reported
|
|
$
|
21,973,522
|
|
Adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Net interest income as adjusted
|
|
$
|
21,373,777
|
|
|
|
|
|
|
Net interest income after provision for loan losses as previously reported
|
|
$
|
14,991,522
|
|
Adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Net interest income as adjusted
|
|
$
|
14,391,777
|
|
|
|
|
|
|
Income (loss) before federal income taxes as previously reported
|
|
$
|
(1,550,076
|
)
|
Adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Income (loss) before federal income taxes as adjusted
|
|
$
|
(2,149,821
|
)
|
|
|
|
|
|
Net income (loss) as previously reported
|
|
$
|
(1,331,077
|
)
|
Adjustment for interest income on residential loans sold
|
|
|
(599,745
|
)
|
|
|
|
|
|
Net income (loss) as adjusted
|
|
$
|
(1,930,822
|
)
|
|
|
|
|
|
Basic earnings (loss) per share as previously reported
|
|
$
|
(0.05
|
)
|
Adjustment for interest income on residential loans sold
|
|
|
(0.03
|
)
|
|
|
|
|
|
Basic earnings (loss) per share as adjusted
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
70
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 3AGREEMENT AND PLAN OF MERGER
On February 19, 2013, the Company and F.N.B. Corporation (FNB) the parent company of
First National Bank of Pennsylvania (FNB Bank), entered into an Agreement and Plan of Merger (Merger Agreement) pursuant to which the Company will merge with and into FNB. Promptly following consummation of the merger, it is
expected that the Bank will merge with and into FNB Bank.
Under the terms of the Merger Agreement, the
Companys shareholders will receive 0.3405 shares (the Exchange Ratio) of FNB common stock for each share of the Companys common stock they own. In addition, all unexercised warrants remaining at the time of closing will be
settled in cash based on the average closing price of FNBs common shares for a specific 20 day trading period. The Merger Agreement also provides that all options to purchase the Companys stock which are outstanding and unexercised
immediately prior to the closing shall be converted into fully vested and exercisable options to purchase shares of FNB common stock, based upon the Exchange Ratio.
The Companys common stockholders approved the Agreement and Plan of Merger at the special meeting of stockholders
held September 25, 2013. Additionally, the planned merger has received the necessary regulatory approvals to consummate the merger. Consummation of the merger is subject to certain conditions, including, governmental filings and expiration of
applicable waiting periods, accuracy of specified representations and warranties of the other party, absence of a material adverse effect, recipient of tax opinions and the absence of any injunctions or other legal restraints.
NOTE 4SECURITIES
As of June 30, 2013 and 2012, the amortized cost and fair value of securities available for sale
and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair
Value
|
|
Trust preferred securities
|
|
$
|
19,329,262
|
|
|
$
|
974,357
|
|
|
$
|
(89,420
|
)
|
|
$
|
20,214,199
|
|
Mortgage-backed GSE securities
|
|
|
29,119,910
|
|
|
|
88,615
|
|
|
|
(272,185
|
)
|
|
|
28,936,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
48,449,172
|
|
|
$
|
1,062,972
|
|
|
$
|
(361,605
|
)
|
|
$
|
49,150,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
|
Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair
Value
|
|
FNMA structured notes
|
|
$
|
2,000,000
|
|
|
$
|
9,320
|
|
|
$
|
|
|
|
$
|
2,009,320
|
|
Trust preferred securities
|
|
|
20,964,197
|
|
|
|
344,230
|
|
|
|
(46,665
|
)
|
|
|
21,261,762
|
|
Mortgage-backed GSE securities
|
|
|
15,093,864
|
|
|
|
293,098
|
|
|
|
|
|
|
|
15,386,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
38,058,061
|
|
|
$
|
646,648
|
|
|
$
|
(46,665
|
)
|
|
$
|
38,658,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management performs a quarterly evaluation of investment securities for
other-than-temporary impairment. At June 30, 2013 and June 30, 2012, respectively, the gross unrealized losses were in a loss position for less than twelve months on all but the trust preferred securities. The unrealized losses in trust
preferred securities relate primarily to the changes in market interest rates and spreads since the securities were purchased. Management does
71
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
not believe that any of these losses at June 30, 2013 or June 30, 2012 represent an other-than-temporary impairment. Should the impairment of any of these securities become
other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized within net income in the period the other-then-temporary impairment is identified.
The amortized cost and fair value of securities available for sale, by contractual maturity, are shown below:
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
Amortized
Cost
|
|
|
Fair
Value
|
|
One to five years
|
|
$
|
982,621
|
|
|
$
|
982,970
|
|
Five to ten years
|
|
|
5,018,184
|
|
|
|
5,002,480
|
|
Greater than 10 years
|
|
|
13,328,457
|
|
|
|
14,228,749
|
|
Mortgage-backed GSE securities
|
|
|
29,119,910
|
|
|
|
28,936,340
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
48,449,172
|
|
|
$
|
49,150,539
|
|
|
|
|
|
|
|
|
|
|
These mortgage-backed securities are backed by residential mortgage loans and do not
mature on a single maturity date. Securities pledged as collateral for contingent funding at the Federal Home Loan Bank of Cincinnati were approximately $10.8 million.
72
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Gross unrealized losses on mortgage backed securities at June 30,
2013 were at a loss position for less than 12 months. There were no gross unrealized losses on mortgage-backed securities at June 30, 2012. All of the Companys holdings of mortgage-backed securities at year end 2013 and 2012 were issued
by U.S. government sponsored enterprises. Unrealized gains and losses on mortgage-backed securities have not been recognized into income, because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit
quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The Company does not consider these securities
to be other than temporarily impaired at June 30, 2013 and 2012.
In June of 2011, the Company sold a
mortgaged-backed security with an amortized cost of $29,871,145. The Company realized a gross gain of $1,232,112.
There were no sales of securities in 2013 and 2012.
73
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 5LOANS RECEIVABLE
Loans receivable at June 30, 2013 and 2012 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
63,920,894
|
|
|
$
|
58,743,933
|
|
1-4 Family Non-Owner Occupied
|
|
|
26,983,659
|
|
|
|
34,368,320
|
|
1-4 Family Second Mortgage
|
|
|
27,354,036
|
|
|
|
29,202,145
|
|
Home Equity Lines of Credit
|
|
|
60,161,378
|
|
|
|
65,908,899
|
|
Home Equity Investment Lines of Credit
|
|
|
1,846,696
|
|
|
|
5,645,851
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
2,228,280
|
|
|
|
514,052
|
|
1-4 Family Construction Models/Speculative
|
|
|
636,673
|
|
|
|
1,608,137
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
53,678,945
|
|
|
|
53,959,459
|
|
Multi-Family Second Mortgage
|
|
|
62,782
|
|
|
|
145,642
|
|
Multi-Family Construction
|
|
|
1,993,935
|
|
|
|
5,375,000
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
201,226,335
|
|
|
|
198,287,457
|
|
Commercial Second Mortgage
|
|
|
4,480,877
|
|
|
|
5,750,283
|
|
Commercial Lines of Credit
|
|
|
23,002,499
|
|
|
|
22,335,619
|
|
Commercial Construction
|
|
|
11,115,046
|
|
|
|
7,732,736
|
|
Commercial and Industrial Loans
|
|
|
49,595,951
|
|
|
|
35,443,184
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
9,872,596
|
|
|
|
12,091,093
|
|
Acquisition and Development Loans
|
|
|
11,479,323
|
|
|
|
19,093,006
|
|
Consumer Loans
|
|
|
636,332
|
|
|
|
2,112,708
|
|
|
|
|
|
|
|
|
|
|
Total loans receivable
|
|
|
550,276,237
|
|
|
|
558,317,524
|
|
|
|
|
Net deferred loan origination fees
|
|
|
(531,496
|
)
|
|
|
(637,144
|
)
|
Allowance for loan losses
|
|
|
(13,926,341
|
)
|
|
|
(16,052,865
|
)
|
|
|
|
|
|
|
|
|
|
Total loans receivable, net
|
|
$
|
535,818,400
|
|
|
$
|
541,627,515
|
|
|
|
|
|
|
|
|
|
|
The following is a summary of the changes in the allowance for loan losses for the year
ended June 30, 2011:
|
|
|
|
|
|
|
2011
|
|
Beginning balance
|
|
$
|
31,519,466
|
|
Provision for loan losses
|
|
|
13,540,000
|
|
Loans charged-off
|
|
|
(15,528,353
|
)
|
Recoveries
|
|
|
465,780
|
|
|
|
|
|
|
Ending balance
|
|
$
|
29,996,893
|
|
|
|
|
|
|
74
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents activity in the allowance for loan losses by portfolio
segment for the years ended June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
Family
|
|
|
One-to-Four
Family
Construction
|
|
|
Multi-
Family
|
|
|
Commercial
Real
Estate
|
|
|
Commercial
and
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Beginning balance at June 30, 2012
|
|
$
|
5,765,276
|
|
|
$
|
305,312
|
|
|
$
|
1,903,138
|
|
|
$
|
5,084,179
|
|
|
$
|
928,043
|
|
|
$
|
2,057,301
|
|
|
$
|
9,616
|
|
|
$
|
16,052,865
|
|
Provision for loan losses
|
|
|
887,943
|
|
|
|
259,057
|
|
|
|
42,984
|
|
|
|
654,018
|
|
|
|
388,929
|
|
|
|
(186,876
|
)
|
|
|
3,945
|
|
|
|
2,050,000
|
|
Charge-offs
|
|
|
(2,940,260
|
)
|
|
|
(261,009
|
)
|
|
|
(605,364
|
)
|
|
|
(514,812
|
)
|
|
|
(341,796
|
)
|
|
|
(371,781
|
)
|
|
|
(13,000
|
)
|
|
|
(5,048,022
|
)
|
Recoveries
|
|
|
484,292
|
|
|
|
10,000
|
|
|
|
21,679
|
|
|
|
250,738
|
|
|
|
15,351
|
|
|
|
89,196
|
|
|
|
242
|
|
|
|
871,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at June 30, 2013
|
|
$
|
4,197,251
|
|
|
$
|
313,360
|
|
|
$
|
1,362,437
|
|
|
$
|
5,474,123
|
|
|
$
|
990,527
|
|
|
$
|
1,587,840
|
|
|
$
|
803
|
|
|
$
|
13,926,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Begining balance at June 30, 2011
|
|
$
|
8,841,454
|
|
|
$
|
1,266,740
|
|
|
$
|
1,767,336
|
|
|
$
|
8,458,942
|
|
|
$
|
1,663,894
|
|
|
$
|
7,891,305
|
|
|
$
|
107,222
|
|
|
$
|
29,996,893
|
|
Provision for loan losses
|
|
|
4,176,679
|
|
|
|
321,391
|
|
|
|
753,393
|
|
|
|
1,375,624
|
|
|
|
(482,403
|
)
|
|
|
934,922
|
|
|
|
(97,606
|
)
|
|
|
6,982,000
|
|
Charge-offs
|
|
|
(7,398,876
|
)
|
|
|
(1,287,819
|
)
|
|
|
(617,591
|
)
|
|
|
(4,884,634
|
)
|
|
|
(546,789
|
)
|
|
|
(7,068,348
|
)
|
|
|
|
|
|
|
(21,804,057
|
)
|
Recoveries
|
|
|
146,019
|
|
|
|
5,000
|
|
|
|
|
|
|
|
134,247
|
|
|
|
293,341
|
|
|
|
299,422
|
|
|
|
|
|
|
|
878,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at June 30, 2012
|
|
$
|
5,765,276
|
|
|
$
|
305,312
|
|
|
$
|
1,903,138
|
|
|
$
|
5,084,179
|
|
|
$
|
928,043
|
|
|
$
|
2,057,301
|
|
|
$
|
9,616
|
|
|
$
|
16,052,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2011, the Company implemented an enhanced loan accounting system,
which provides for the systematic recording of charged-off loans for financial recognition without losing its ability to track the legal contractual amounts. As such, during the fiscal year ended June 30, 2012, the Company charged off those
loan amounts which had previously been specifically impaired through the use of the specific valuation allowance. As of June 30, 2013, any remaining specific impairments known in prior periods as specific valuation allowances were tracked as
specific allocations to the allowance. In addition to reducing loan balances, including nonperforming loans, this new enhanced loan accounting system had the impact of elevating reported charge-offs for the period and reducing the allowance for loan
losses associated with specific reserves.
75
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents the allowance for loan losses and the
recorded investment in loans by portfolio segment and based on the impairment method as of June 30, 2013. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees, but excludes accrued
interest receivable which is not considered to be material.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
Family
|
|
|
One-to-Four
Family
Construction
|
|
|
Multi-
Family
|
|
|
Commercial
Real
Estate
|
|
|
Commercial
and
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
48,267
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
98,725
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
146,992
|
|
Collectively evaluated for impairment
|
|
|
4,148,984
|
|
|
|
313,360
|
|
|
|
1,362,437
|
|
|
|
5,375,398
|
|
|
|
990,527
|
|
|
|
1,587,840
|
|
|
|
803
|
|
|
|
13,779,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance balance
|
|
$
|
4,197,251
|
|
|
$
|
313,360
|
|
|
$
|
1,362,437
|
|
|
$
|
5,474,123
|
|
|
$
|
990,527
|
|
|
$
|
1,587,840
|
|
|
$
|
803
|
|
|
$
|
13,926,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
10,957,300
|
|
|
$
|
114,639
|
|
|
$
|
762,774
|
|
|
$
|
14,858,569
|
|
|
$
|
630,125
|
|
|
$
|
3,460,250
|
|
|
$
|
|
|
|
$
|
30,783,657
|
|
Loans collectively evaluated for impairment
|
|
|
169,135,248
|
|
|
|
2,747,547
|
|
|
|
54,919,056
|
|
|
|
224,734,548
|
|
|
|
48,917,922
|
|
|
|
17,871,046
|
|
|
|
635,717
|
|
|
|
518,961,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loans balance
|
|
$
|
180,092,548
|
|
|
$
|
2,862,186
|
|
|
$
|
55,681,830
|
|
|
$
|
239,593,117
|
|
|
$
|
49,548,047
|
|
|
$
|
21,331,296
|
|
|
$
|
635,717
|
|
|
$
|
549,744,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents the allowance for loan losses and the
recorded investment in loans by portfolio segment and based on the impairment method as of June 30, 2012. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees, but excludes accrued
interest receivable which is not considered to be material.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four
Family
|
|
|
One-to-Four
Family
Construction
|
|
|
Multi-
Family
|
|
|
Commercial
Real Estate
|
|
|
Commercial
and
Industrial
|
|
|
Land
|
|
|
Consumer
|
|
|
Total
|
|
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending allowance balance attributable to loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment
|
|
$
|
665,033
|
|
|
$
|
101,716
|
|
|
$
|
|
|
|
$
|
98,725
|
|
|
$
|
300,860
|
|
|
$
|
252,000
|
|
|
$
|
|
|
|
$
|
1,418,334
|
|
Collectively evaluated for impairment
|
|
|
5,100,243
|
|
|
|
203,596
|
|
|
|
1,903,138
|
|
|
|
4,985,454
|
|
|
|
627,183
|
|
|
|
1,805,301
|
|
|
|
9,616
|
|
|
|
14,634,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending allowance balance
|
|
$
|
5,765,276
|
|
|
$
|
305,312
|
|
|
$
|
1,903,138
|
|
|
$
|
5,084,179
|
|
|
$
|
928,043
|
|
|
$
|
2,057,301
|
|
|
$
|
9,616
|
|
|
$
|
16,052,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans individually evaluated for impairment
|
|
$
|
13,243,350
|
|
|
$
|
880,749
|
|
|
$
|
622,228
|
|
|
$
|
11,902,730
|
|
|
$
|
740,297
|
|
|
$
|
7,189,109
|
|
|
$
|
|
|
|
$
|
34,578,463
|
|
Loans collectively evaluated for impairment
|
|
|
180,404,558
|
|
|
|
1,239,018
|
|
|
|
58,789,996
|
|
|
|
221,936,205
|
|
|
|
34,662,439
|
|
|
|
23,959,404
|
|
|
|
2,110,297
|
|
|
|
523,101,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ending loans balance
|
|
$
|
193,647,908
|
|
|
$
|
2,119,767
|
|
|
$
|
59,412,224
|
|
|
$
|
233,838,935
|
|
|
$
|
35,402,736
|
|
|
$
|
31,148,513
|
|
|
$
|
2,110,297
|
|
|
$
|
557,680,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents loans individually evaluated for impairment
by class of loans as of June 30, 2013 and the average recorded investment and interest income recognized by class for the twelve months ended June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
Unpaid
Principal
Balance (1)
|
|
|
Recorded
Investment
|
|
|
Allowance
for Loan
Losses
Allocated
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
|
Cash Basis
Interest
Recognized
|
|
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
5,479,639
|
|
|
$
|
4,845,151
|
|
|
$
|
|
|
|
$
|
5,167,827
|
|
|
$
|
71,333
|
|
|
$
|
71,333
|
|
1-4 Family Non-Owner Occupied
|
|
|
2,662,099
|
|
|
|
2,129,806
|
|
|
|
|
|
|
|
2,083,965
|
|
|
|
22,758
|
|
|
|
22,758
|
|
1-4 Family Second Mortgage
|
|
|
947,442
|
|
|
|
730,169
|
|
|
|
|
|
|
|
881,692
|
|
|
|
8,259
|
|
|
|
8,259
|
|
Home Equity Lines of Credit
|
|
|
2,789,849
|
|
|
|
2,296,353
|
|
|
|
|
|
|
|
2,080,189
|
|
|
|
12,560
|
|
|
|
12,560
|
|
Home Equity Investment Lines of Credit
|
|
|
794,419
|
|
|
|
617,690
|
|
|
|
|
|
|
|
360,490
|
|
|
|
18,599
|
|
|
|
18,599
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
121,505
|
|
|
|
114,639
|
|
|
|
|
|
|
|
211,399
|
|
|
|
|
|
|
|
|
|
Multi- Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
769,047
|
|
|
|
762,774
|
|
|
|
|
|
|
|
657,743
|
|
|
|
25,781
|
|
|
|
25,781
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
10,550,383
|
|
|
|
10,285,138
|
|
|
|
|
|
|
|
8,609,119
|
|
|
|
428,303
|
|
|
|
428,303
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
3,220,651
|
|
|
|
3,217,538
|
|
|
|
|
|
|
|
1,722,940
|
|
|
|
80,190
|
|
|
|
80,190
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
482,911
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
742,854
|
|
|
|
630,125
|
|
|
|
|
|
|
|
310,857
|
|
|
|
24,323
|
|
|
|
24,323
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
1,948,260
|
|
|
|
1,367,822
|
|
|
|
|
|
|
|
2,996,763
|
|
|
|
39,704
|
|
|
|
39,704
|
|
Acquisition and Development Loans
|
|
|
4,745,607
|
|
|
|
2,092,428
|
|
|
|
|
|
|
|
2,239,033
|
|
|
|
42,526
|
|
|
|
42,526
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with no related allowance recorded
|
|
$
|
34,771,755
|
|
|
$
|
29,089,633
|
|
|
$
|
|
|
|
$
|
27,804,928
|
|
|
$
|
774,336
|
|
|
$
|
774,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
|
224,885
|
|
|
|
224,667
|
|
|
|
39,981
|
|
|
|
227,728
|
|
|
|
5,157
|
|
|
|
5,157
|
|
1-4 Family Non-Owner Occupied
|
|
|
113,574
|
|
|
|
113,464
|
|
|
|
8,286
|
|
|
|
114,939
|
|
|
|
3,616
|
|
|
|
3,616
|
|
1-4 Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,584
|
|
|
|
|
|
|
|
|
|
Home Equity Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240,663
|
|
|
|
|
|
|
|
|
|
Home Equity Investment Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,491
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
391,833
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
1,357,202
|
|
|
|
1,355,893
|
|
|
|
98,725
|
|
|
|
1,355,736
|
|
|
|
|
|
|
|
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,393
|
|
|
|
98,756
|
|
|
|
98,756
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,494
|
|
|
|
|
|
|
|
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with an allowance recorded
|
|
$
|
1,695,661
|
|
|
$
|
1,694,024
|
|
|
$
|
146,992
|
|
|
$
|
2,817,861
|
|
|
$
|
107,529
|
|
|
$
|
107,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans evaluated for impairment
|
|
$
|
36,467,416
|
|
|
$
|
30,783,657
|
|
|
$
|
146,992
|
|
|
$
|
30,622,789
|
|
|
$
|
881,865
|
|
|
$
|
881,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $17.6 million of loans individually identified for impairment accruing interest.
|
78
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents loans individually evaluated for impairment
by class of loans as of June 30, 2012 and the average recorded investment and interest income recognized by class for the twelve months ended June 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
|
Unpaid
Principal
Balance (1)
|
|
|
Recorded
Investment
|
|
|
Allowance
for Loan
Losses
Allocated
|
|
|
Average
Recorded
Investment
|
|
|
Interest
Income
Recognized
|
|
|
Cash Basis
Interest
Recognized
|
|
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
6,380,803
|
|
|
$
|
5,671,079
|
|
|
$
|
0
|
|
|
$
|
5,437,834
|
|
|
$
|
30,882
|
|
|
$
|
30,882
|
|
1-4 Family Non-Owner Occupied
|
|
|
4,597,708
|
|
|
|
2,453,581
|
|
|
|
0
|
|
|
|
3,503,049
|
|
|
|
48,828
|
|
|
|
48,828
|
|
1-4 Family Second Mortgage
|
|
|
1,455,914
|
|
|
|
1,230,284
|
|
|
|
0
|
|
|
|
1,374,161
|
|
|
|
3,958
|
|
|
|
3,958
|
|
Home Equity Lines of Credit
|
|
|
1,834,685
|
|
|
|
1,832,595
|
|
|
|
0
|
|
|
|
1,344,562
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
157,120
|
|
|
|
156,943
|
|
|
|
0
|
|
|
|
204,703
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
52,573
|
|
|
|
4,821
|
|
|
|
4,821
|
|
1-4 Family Construction Models/Speculative
|
|
|
678,779
|
|
|
|
354,986
|
|
|
|
0
|
|
|
|
475,027
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
635,053
|
|
|
|
622,228
|
|
|
|
0
|
|
|
|
550,760
|
|
|
|
4,081
|
|
|
|
4,081
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
10,902,253
|
|
|
|
9,286,678
|
|
|
|
0
|
|
|
|
8,005,131
|
|
|
|
147,148
|
|
|
|
147,148
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
192,399
|
|
|
|
1,660
|
|
|
|
1,660
|
|
Commercial Lines of Credit
|
|
|
617,240
|
|
|
|
616,536
|
|
|
|
0
|
|
|
|
2,413,942
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
828,490
|
|
|
|
643,863
|
|
|
|
0
|
|
|
|
575,159
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
801,075
|
|
|
|
439,781
|
|
|
|
0
|
|
|
|
2,335,961
|
|
|
|
662
|
|
|
|
662
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
5,235,050
|
|
|
|
3,678,550
|
|
|
|
0
|
|
|
|
2,955,360
|
|
|
|
5,519
|
|
|
|
5,519
|
|
Acquisition and Development Loans
|
|
|
5,986,575
|
|
|
|
3,375,100
|
|
|
|
0
|
|
|
|
2,258,295
|
|
|
|
19,132
|
|
|
|
19,132
|
|
Consumer Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with no related allowance recorded
|
|
$
|
40,110,745
|
|
|
$
|
30,362,204
|
|
|
$
|
0
|
|
|
$
|
31,678,916
|
|
|
$
|
266,691
|
|
|
$
|
266,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
232,751
|
|
|
$
|
232,485
|
|
|
$
|
39,981
|
|
|
$
|
526,956
|
|
|
$
|
0
|
|
|
$
|
0
|
|
1-4 Family Non-Owner Occupied
|
|
|
117,360
|
|
|
|
117,226
|
|
|
|
8,286
|
|
|
|
1,243,154
|
|
|
|
10,112
|
|
|
|
10,112
|
|
1-4 Family Second Mortgage
|
|
|
247,293
|
|
|
|
247,011
|
|
|
|
14,685
|
|
|
|
175,881
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Lines of Credit
|
|
|
895,875
|
|
|
|
894,852
|
|
|
|
299,759
|
|
|
|
1,629,256
|
|
|
|
0
|
|
|
|
0
|
|
Home Equity Investment Lines of Credit
|
|
|
407,757
|
|
|
|
407,293
|
|
|
|
302,322
|
|
|
|
470,382
|
|
|
|
0
|
|
|
|
0
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
526,363
|
|
|
|
525,762
|
|
|
|
218,257
|
|
|
|
1,064,520
|
|
|
|
14,047
|
|
|
|
14,047
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
92,056
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Multi-Family Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
1,357,202
|
|
|
|
1,355,653
|
|
|
|
98,725
|
|
|
|
3,796,149
|
|
|
|
37,340
|
|
|
|
37,340
|
|
Commercial Second Mortgage
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
34,220
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Lines of Credit
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
48,854
|
|
|
|
0
|
|
|
|
0
|
|
Commercial Construction
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
711,804
|
|
|
|
0
|
|
|
|
0
|
|
Commercial and Industrial Loans
|
|
|
300,860
|
|
|
|
300,517
|
|
|
|
300,860
|
|
|
|
1,404,807
|
|
|
|
0
|
|
|
|
0
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
135,614
|
|
|
|
135,459
|
|
|
|
135,459
|
|
|
|
962,537
|
|
|
|
0
|
|
|
|
0
|
|
Acquisition and Development Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
2,397,176
|
|
|
|
0
|
|
|
|
0
|
|
Consumer Loans
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total with an allowance recorded
|
|
$
|
4,221,075
|
|
|
$
|
4,216,258
|
|
|
$
|
1,418,334
|
|
|
$
|
14,557,752
|
|
|
$
|
61,499
|
|
|
$
|
61,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans evaluated for impairment
|
|
$
|
44,331,820
|
|
|
$
|
34,578,462
|
|
|
$
|
1,418,334
|
|
|
$
|
46,236,668
|
|
|
$
|
328,190
|
|
|
$
|
328,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $13.9 million of loans individually identified for impairment accruing interest.
|
The average recorded investment in impaired loans for the year ended June 30, 2011 amounted to $61,642,944. Interest
recognized on impaired loans while considered impaired in 2011 was not material.
79
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Past Due and Non-Accrual Loans
The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual
by class of loans as of June 30, 2013 and 2012. Nonaccrual loans and loans past due over 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired
loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
June 30, 2012
|
|
|
|
Nonaccrual (1)
|
|
|
Loans Past Due
Over 90 Days
Still Accruing (2)
|
|
|
Nonaccrual (1)
|
|
|
Loans Past Due
Over 90 Days
Still Accruing (2)
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
2,325,335
|
|
|
$
|
|
|
|
$
|
2,871,746
|
|
|
$
|
|
|
1-4 Family Non-Owner Occupied
|
|
|
2,082,951
|
|
|
|
|
|
|
|
2,461,281
|
|
|
|
|
|
1-4 Family Second Mortgage
|
|
|
455,793
|
|
|
|
|
|
|
|
566,444
|
|
|
|
|
|
Home Equity Lines of Credit
|
|
|
2,233,115
|
|
|
|
|
|
|
|
2,727,447
|
|
|
|
|
|
Home Equity Investment Lines of Credit
|
|
|
617,860
|
|
|
|
|
|
|
|
564,235
|
|
|
|
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
114,645
|
|
|
|
|
|
|
|
355,355
|
|
|
|
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
479,729
|
|
|
|
|
|
|
|
324,602
|
|
|
|
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
2,172,150
|
|
|
|
|
|
|
|
3,310,170
|
|
|
|
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
1,302,838
|
|
|
|
|
|
|
|
616,537
|
|
|
|
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
644,072
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
99,903
|
|
|
|
|
|
|
|
437,729
|
|
|
|
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
552,498
|
|
|
|
|
|
|
|
3,815,778
|
|
|
|
|
|
Acquisition and Development Loans
|
|
|
794,731
|
|
|
|
|
|
|
|
1,380,199
|
|
|
|
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
13,231,548
|
|
|
$
|
|
|
|
$
|
20,075,595
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Nonaccrual status denotes loans on which, in the opinion of management, the collection of additional interest is unlikely, or loans that meet the
nonaccrual criteria established by regulatory authorities. Payments received on a nonaccrual loan are either applied to the outstanding principal balance or recorded as interest income, depending on an assessment of the collectability of the
principal balance of the loan.
|
(2)
|
At June 30, 2013 and 2012, the Company had balances of approximately $2.8 million and $6.3 million, respectively, in loans that have matured
and continue to make current payments. These loans are not considered past due as a result of their payment status being current.
|
80
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents the aging of the recorded investment in
past due loans as of June 30, 2013 by class of loan. Performing loans are accruing loans less than 90 days past due. Nonperforming loans are all loans not accruing or greater than 90 days past due and accruing. At June 30, 2013, the
Company had a balance of approximately $2.8 million in loans that were contractually past maturity but were not considered past due as a result of the payment status being current.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing Loans
|
|
30-59 Days
Past
Due
|
|
|
60-89
Days Past
Due
|
|
|
Greater
Than 90
Days Past
Due
|
|
|
Total Past
Due
|
|
|
Loans Not
Past Due
|
|
|
Total
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
532,012
|
|
|
$
|
274,104
|
|
|
$
|
|
|
|
$
|
806,116
|
|
|
$
|
60,727,704
|
|
|
$
|
61,533,820
|
|
1-4 Family Non-Owner Occupied
|
|
|
551,606
|
|
|
|
|
|
|
|
|
|
|
|
551,606
|
|
|
|
24,323,039
|
|
|
|
24,874,645
|
|
1-4 Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,871,822
|
|
|
|
26,871,822
|
|
Home Equity Lines of Credit
|
|
|
113,436
|
|
|
|
572,211
|
|
|
|
|
|
|
|
685,647
|
|
|
|
57,184,507
|
|
|
|
57,870,154
|
|
Home Equity Investment Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,227,053
|
|
|
|
1,227,053
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,226,128
|
|
|
|
2,226,128
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
521,413
|
|
|
|
521,413
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
263,030
|
|
|
|
|
|
|
|
|
|
|
|
263,030
|
|
|
|
52,884,341
|
|
|
|
53,147,371
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,721
|
|
|
|
62,721
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,992,009
|
|
|
|
1,992,009
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
39,239
|
|
|
|
|
|
|
|
|
|
|
|
39,239
|
|
|
|
198,820,588
|
|
|
|
198,859,827
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,476,549
|
|
|
|
4,476,549
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,677,443
|
|
|
|
21,677,443
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,104,310
|
|
|
|
11,104,310
|
|
Commercial and Industrial Loans
|
|
|
244,413
|
|
|
|
|
|
|
|
|
|
|
|
244,413
|
|
|
|
49,203,731
|
|
|
|
49,448,144
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
8,622
|
|
|
|
148,049
|
|
|
|
|
|
|
|
156,671
|
|
|
|
9,153,892
|
|
|
|
9,310,563
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,673,504
|
|
|
|
10,673,504
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
635,717
|
|
|
|
635,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performing Loans
|
|
$
|
1,752,358
|
|
|
$
|
994,364
|
|
|
$
|
|
|
|
$
|
2,746,722
|
|
|
$
|
533,766,471
|
|
|
$
|
536,513,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
248,032
|
|
|
$
|
|
|
|
$
|
1,722,230
|
|
|
$
|
1,970,262
|
|
|
$
|
355,073
|
|
|
$
|
2,325,335
|
|
1-4 Family Non-Owner Occupied
|
|
|
|
|
|
|
|
|
|
|
1,171,039
|
|
|
|
1,171,039
|
|
|
|
911,912
|
|
|
|
2,082,951
|
|
1-4 Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
406,502
|
|
|
|
406,502
|
|
|
|
49,291
|
|
|
|
455,793
|
|
Home Equity Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
2,001,546
|
|
|
|
2,001,546
|
|
|
|
231,570
|
|
|
|
2,233,115
|
|
Home Equity Investment Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
278,891
|
|
|
|
278,891
|
|
|
|
338,968
|
|
|
|
617,860
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,645
|
|
|
|
114,645
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
479,729
|
|
|
|
479,729
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
47,978
|
|
|
|
1,873,561
|
|
|
|
1,921,539
|
|
|
|
250,612
|
|
|
|
2,172,150
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
115,141
|
|
|
|
494,495
|
|
|
|
609,636
|
|
|
|
693,203
|
|
|
|
1,302,838
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,903
|
|
|
|
99,903
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
44,052
|
|
|
|
426,126
|
|
|
|
470,178
|
|
|
|
82,320
|
|
|
|
552,498
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
61,431
|
|
|
|
61,431
|
|
|
|
733,300
|
|
|
|
794,731
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Nonperforming Loans
|
|
|
248,032
|
|
|
|
207,171
|
|
|
|
8,435,821
|
|
|
|
8,891,024
|
|
|
|
4,340,526
|
|
|
|
13,231,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans
|
|
$
|
2,000,390
|
|
|
$
|
1,201,535
|
|
|
$
|
8,435,821
|
|
|
$
|
11,637,746
|
|
|
$
|
538,106,997
|
|
|
$
|
549,744,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents the aging of the recorded investment in
past due loans as of June 30, 2012 by class of loan. Performing loans are accruing loans less than 90 days past due. Nonperforming loans are all loans not accruing or greater than 90 days past due and accruing. At June 30, 2012, the
Company had a balance of approximately $6.3 million in loans that were contractually past maturity but were not considered past due as a result of the payment status being current.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing Loans
|
|
30-59 Days
Past Due
|
|
|
60-89
Days Past
Due
|
|
|
Greater
Than 90
Days Past
Due
|
|
|
Total Past
Due
|
|
|
Loans Not
Past Due
|
|
|
Total
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
584,430
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
584,430
|
|
|
$
|
55,220,718
|
|
|
$
|
55,805,148
|
|
1-4 Family Non-Owner Occupied
|
|
|
375,660
|
|
|
|
303,667
|
|
|
|
|
|
|
|
679,327
|
|
|
|
31,188,492
|
|
|
|
31,867,819
|
|
1-4 Family Second Mortgage
|
|
|
14,221
|
|
|
|
|
|
|
|
|
|
|
|
14,221
|
|
|
|
28,588,155
|
|
|
|
28,602,376
|
|
Home Equity Lines of Credit
|
|
|
114,558
|
|
|
|
23,230
|
|
|
|
|
|
|
|
137,788
|
|
|
|
62,968,449
|
|
|
|
63,106,237
|
|
Home Equity Investment Lines of Credit
|
|
|
200,657
|
|
|
|
|
|
|
|
|
|
|
|
200,657
|
|
|
|
4,874,516
|
|
|
|
5,075,173
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
145,771
|
|
|
|
|
|
|
|
145,771
|
|
|
|
367,695
|
|
|
|
513,466
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,250,946
|
|
|
|
1,250,946
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,573,280
|
|
|
|
53,573,280
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,476
|
|
|
|
145,476
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,368,866
|
|
|
|
5,368,866
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
744,536
|
|
|
|
|
|
|
|
|
|
|
|
744,536
|
|
|
|
194,006,468
|
|
|
|
194,751,004
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,743,721
|
|
|
|
5,743,721
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,693,593
|
|
|
|
21,693,593
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,079,839
|
|
|
|
7,079,839
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,965,008
|
|
|
|
34,965,008
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,261,518
|
|
|
|
8,261,518
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,691,018
|
|
|
|
17,691,018
|
|
Consumer Loans
|
|
|
|
|
|
|
58,394
|
|
|
|
|
|
|
|
58,394
|
|
|
|
2,051,903
|
|
|
|
2,110,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performing Loans
|
|
$
|
2,034,062
|
|
|
$
|
531,062
|
|
|
$
|
|
|
|
$
|
2,565,124
|
|
|
$
|
535,039,661
|
|
|
$
|
537,604,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
105,333
|
|
|
$
|
|
|
|
$
|
2,124,062
|
|
|
$
|
2,229,395
|
|
|
$
|
642,351
|
|
|
$
|
2,871,746
|
|
1-4 Family Non-Owner Occupied
|
|
|
|
|
|
|
|
|
|
|
2,405,774
|
|
|
|
2,405,774
|
|
|
|
55,507
|
|
|
|
2,461,281
|
|
1-4 Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
499,154
|
|
|
|
499,154
|
|
|
|
67,290
|
|
|
|
566,444
|
|
Home Equity Lines of Credit
|
|
|
14,607
|
|
|
|
|
|
|
|
2,371,962
|
|
|
|
2,386,569
|
|
|
|
340,878
|
|
|
|
2,727,447
|
|
Home Equity Investment Lines of Credit
|
|
|
|
|
|
|
134,195
|
|
|
|
430,041
|
|
|
|
564,236
|
|
|
|
|
|
|
|
564,236
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
235,945
|
|
|
|
235,945
|
|
|
|
119,410
|
|
|
|
355,355
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
324,602
|
|
|
|
324,602
|
|
|
|
|
|
|
|
324,602
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
|
|
|
|
3,166,992
|
|
|
|
3,166,992
|
|
|
|
143,178
|
|
|
|
3,310,170
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
|
|
|
|
122,129
|
|
|
|
494,407
|
|
|
|
616,536
|
|
|
|
|
|
|
|
616,536
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
644,072
|
|
|
|
644,072
|
|
|
|
|
|
|
|
644,072
|
|
Commercial and Industrial Loans
|
|
|
|
|
|
|
|
|
|
|
237,957
|
|
|
|
237,957
|
|
|
|
199,772
|
|
|
|
437,729
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
|
|
|
|
|
|
|
|
3,144,721
|
|
|
|
3,144,721
|
|
|
|
671,057
|
|
|
|
3,815,778
|
|
Acquisition and Development Loans
|
|
|
|
|
|
|
|
|
|
|
1,380,199
|
|
|
|
1,380,199
|
|
|
|
|
|
|
|
1,380,199
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Nonperforming Loans
|
|
|
119,940
|
|
|
|
256,324
|
|
|
|
17,459,888
|
|
|
|
17,836,152
|
|
|
|
2,239,443
|
|
|
|
20,075,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans
|
|
$
|
2,154,002
|
|
|
$
|
787,386
|
|
|
$
|
17,459,888
|
|
|
$
|
20,401,276
|
|
|
$
|
537,279,104
|
|
|
$
|
557,680,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Troubled Debt Restructurings:
Included in loans individually impaired are loans with recorded investment of $18,640,130 and $15,590,705 for which the
Company has allocated $138,706 and $153,391 of specific reserves to customers whose terms have been modified in troubled debt restructurings as of June 30, 2013 and 2012, respectively. Included in troubled debt restructurings are $1,179,167 and
$1,805,855 of restructured loans on nonaccrual at June 30, 2013 and 2012, respectively. Of the restructured loans, 5 loans totaling $1,219,300 are not performing in accordance with their modified terms. There are no commitments to lend
additional amounts at June 30, 2013 and 2012.
The following table presents the aggregate balance of
loans by loan class whose terms have been modified in troubled debt restructurings as of June 30, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Loans
|
|
|
Outstanding
Recorded
Investment
6/30/2013
|
|
|
Number
of Loans
|
|
|
Outstanding
Recorded
Investment
6/30/2012
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
|
18
|
|
|
$
|
3,267,298
|
|
|
|
19
|
|
|
$
|
3,775,715
|
|
1-4 Family Non-Owner Occupied
|
|
|
1
|
|
|
|
47,412
|
|
|
|
2
|
|
|
|
53,993
|
|
1-4 Family Second Mortgage
|
|
|
4
|
|
|
|
412,185
|
|
|
|
5
|
|
|
|
912,147
|
|
Home Equity Lines of Credit
|
|
|
1
|
|
|
|
63,771
|
|
|
|
1
|
|
|
|
63,782
|
|
Home Equity Investment Lines of Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction Models/Speculative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
1
|
|
|
|
283,323
|
|
|
|
1
|
|
|
|
297,979
|
|
Multi-Family Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
12
|
|
|
|
10,000,561
|
|
|
|
12
|
|
|
|
8,264,020
|
|
Commercial Second Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Lines of Credit
|
|
|
4
|
|
|
|
1,916,553
|
|
|
|
|
|
|
|
|
|
Commercial Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial Loans
|
|
|
3
|
|
|
|
530,843
|
|
|
|
2
|
|
|
|
40,696
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
1
|
|
|
|
816,672
|
|
|
|
|
|
|
|
|
|
Acquisition and Development Loans
|
|
|
2
|
|
|
|
1,301,512
|
|
|
|
2
|
|
|
|
2,182,373
|
|
Consumer Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
47
|
|
|
$
|
18,640,130
|
|
|
|
44
|
|
|
$
|
15,590,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The summary of activity for troubled debt restructuring loans at June 30, 2013 and
2012 was as follows:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Troubled Debt Restructuring
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
$
|
15,590,705
|
|
|
$
|
15,883,869
|
|
Additions
|
|
|
7,793,487
|
|
|
|
4,111,941
|
|
Charge-offs
|
|
|
(149,853
|
)
|
|
|
(1,990,653
|
)
|
Payoffs or paydowns
|
|
|
(4,594,209
|
)
|
|
|
(2,414,452
|
)
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
18,640,130
|
|
|
$
|
15,590,705
|
|
|
|
|
|
|
|
|
|
|
83
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
During 2013 and 2012, the terms of certain loans to borrowers
experiencing financial difficulty were modified as troubled debt restructurings. The modification of the terms of such loans may include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the
maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. In order to determine whether a borrower is experiencing financial
difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Companys internal underwriting
policy.
Loans modified as troubled debt restructurings during the year ended June 30, 2013 were for
existing classified loans or loans already classified as troubled debt restructurings, and involved an extension of the maturity dates for periods ranging from 12 month to 24 months. The following table presents loans by class modified as troubled
debt restructurings that occurred during the year ended June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
Number
of Loans
|
|
|
Pre-Modification
Outstanding
Recorded
Investment
|
|
|
Post-Modification
Outstanding
Recorded
Investment
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
|
1
|
|
|
|
295,692
|
|
|
|
161,655
|
|
1-4 Family Non-Owner Occupied
|
|
|
3
|
|
|
|
4,579,449
|
|
|
|
4,579,449
|
|
Commercial Real Estate
|
|
|
4
|
|
|
|
1,916,732
|
|
|
|
1,916,732
|
|
Commercial Second Mortgage
|
|
|
3
|
|
|
|
605,614
|
|
|
|
605,614
|
|
Acquisition and Development
|
|
|
1
|
|
|
|
396,000
|
|
|
|
396,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
12
|
|
|
$
|
7,793,487
|
|
|
$
|
7,659,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The troubled debt restructurings resulted in $0.2 million and $1.9 million of charge-offs
during the years ended June 30, 2013 and 2012, respectively of which $0.0 million and $1.1 million were specifically reserved prior to the charge off. During the year ended June 30, 2013, there was no increase in the allowance for loan
losses associated with troubled debt restructurings, whereas the increase in the allowance for loan losses associated with the troubled debt restructuring was $0.8 million for the year ended June 30, 2012.
The following table presents loans by class that was modified as troubled debt restructurings at June 30, 2012. All
modifications during 2012 involved a reduction of the stated interest rate of the loan and were for periods ranging from 12 months to 24 months, additionally three loans involved a permanent reduction in the recorded investment in the loan totaling
approximately $932,000. No maturity dates were extended in these modifications.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
|
Number
of Loans
|
|
|
Pre-Modification
Outstanding
Recorded
Investment
|
|
|
Post-Modification
Outstanding
Recorded
Investment
|
|
Troubled Debt Restructurings:
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
|
1
|
|
|
$
|
234,441
|
|
|
$
|
234,441
|
|
1-4 Family Non-Owner Occupied
|
|
|
1
|
|
|
|
106,976
|
|
|
|
106,976
|
|
Commercial Real Estate
|
|
|
3
|
|
|
|
2,437,542
|
|
|
|
1,544,149
|
|
Commercial Second Mortgage
|
|
|
1
|
|
|
|
295,362
|
|
|
|
295,362
|
|
Acquisition and Development
|
|
|
1
|
|
|
|
1,037,620
|
|
|
|
998,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
7
|
|
|
$
|
4,111,941
|
|
|
$
|
3,179,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The troubled debt restructurings resulted in $1.9 million of charge-offs
during the period ended June 30, 2012 of which $1.1 million were specifically reserved prior to the charge off. As a result the increase in the allowance for loan losses associated with the troubled debt restructuring was $0.8 million for the
period ended June 30, 2012 and included charge off recognized in previous periods.
For the purpose of
this disclosure, a loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.
The troubled debt restructurings that subsequently defaulted did not result in an increase in the allowance for loan losses or result in charge-offs during the periods ended June 30, 2013 and 2012.
Credit Quality Indicators:
The Company categorizes loans into risk strata based on relevant borrower information about the ability to service debt. This information includes a review of current financial information, historic
payment experience, credit documentation, relevant public information and other factors, as determined by credit underwriting guidelines. Through its analysis of individual borrowers, the Company classifies each loan as to credit risk. All loans
considered non-homogeneous, specifically those that are deemed commercial and industrial or commercial real estate loans, are subject to review by the Company, regardless of loan size. In practice, these loans are reviewed continually and changes to
the risk rating, if necessary, occur on a quarterly basis. Loans that are considered homogeneous, or those which fall into the categories of one-to-four family loans or into consumer loans, are not individually rated annually. The payment
performance of the homogeneous loans serves as the clear credit indicator of classification into the categories of pass-rated loans or into substandard, nonaccrual loans. Homogeneous loans that are less than 90 days past due are generally
reported as pass-rated loans, unless related to a rated commercial and industrial or commercial real estate loan. Homogeneous loans which are greater than 90 days past due are placed on nonaccrual and rated substandard. Payment performance
indicators are based on performance through June 30, 2013. The Company uses the following definitions for adverse risk ratings:
Special Mention
Loans classified as special mention have a potential weakness that requires close attention. If left unattended, the potential weaknesses may result in further deterioration in the
repayment prospects of the loan or of the institutions credit position at a future date.
Substandard
Loans classified as substandard are protected inadequately by the current financial means of the
borrower or through the liquidation of collateral pledged. Loans classified as substandard have a well-defined weakness, and without substantial intervention, there is a distinct possibility that the institution may incur a loss. As a matter of
practice, if the Bank feels that a total loss is imminent, it designates nearly all of these loans to charge off. Accordingly, the Bank uses the loan classification of doubtful, as defined below, sparingly.
Doubtful
Loans classified as doubtful have all of the inherent weaknesses of those loans classified as substandard
with the added structural weakness rendering the collection in full highly unlikely. As such, this category is used sparingly by the Bank.
85
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
As of June 30, 2013, and based on the most recent analysis
performed by the Company, the risk category of loans by class of loan was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass (1)
|
|
|
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Total
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
61,257,203
|
|
|
$
|
|
|
|
$
|
2,601,952
|
|
|
$
|
|
|
|
$
|
63,859,155
|
|
1-4 Family Non-Owner Occupied
|
|
|
24,038,183
|
|
|
|
392,989
|
|
|
|
2,526,424
|
|
|
|
|
|
|
|
26,957,596
|
|
1-4 Family Second Mortgage
|
|
|
26,670,034
|
|
|
|
201,348
|
|
|
|
456,234
|
|
|
|
|
|
|
|
27,327,616
|
|
Home Equity Lines of Credit
|
|
|
57,818,409
|
|
|
|
49,585
|
|
|
|
2,235,276
|
|
|
|
|
|
|
|
60,103,270
|
|
Home Equity Investment Lines of Credit
|
|
|
1,226,455
|
|
|
|
|
|
|
|
618,457
|
|
|
|
|
|
|
|
1,844,912
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
2,226,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,226,128
|
|
1-4 Family Construction Models/Speculative
|
|
|
521,302
|
|
|
|
|
|
|
|
114,756
|
|
|
|
|
|
|
|
636,058
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
53,146,905
|
|
|
|
|
|
|
|
480,194
|
|
|
|
|
|
|
|
53,627,099
|
|
Multi-Family Second Mortgage
|
|
|
62,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,721
|
|
Multi-Family Construction
|
|
|
1,992,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,992,009
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
190,339,333
|
|
|
|
2,675,662
|
|
|
|
8,016,982
|
|
|
|
|
|
|
|
201,031,977
|
|
Commercial Second Mortgage
|
|
|
4,476,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,476,549
|
|
Commercial Lines of Credit
|
|
|
19,614,489
|
|
|
|
|
|
|
|
3,365,793
|
|
|
|
|
|
|
|
22,980,282
|
|
Commercial Construction
|
|
|
11,104,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,104,310
|
|
Commercial and Industrial Loans
|
|
|
48,837,939
|
|
|
|
80,535
|
|
|
|
629,573
|
|
|
|
|
|
|
|
49,548,047
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
8,825,048
|
|
|
|
|
|
|
|
1,038,012
|
|
|
|
|
|
|
|
9,863,060
|
|
Acquisition and Development Loans
|
|
|
9,462,497
|
|
|
|
|
|
|
|
2,005,738
|
|
|
|
|
|
|
|
11,468,235
|
|
Consumer Loans
|
|
|
635,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
635,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
522,255,231
|
|
|
$
|
3,400,119
|
|
|
$
|
24,089,391
|
|
|
$
|
|
|
|
$
|
549,744,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are $1.0 million in non-homogeneous loans which are subject to individual review for risk rating included in the pass risk category based on
payment status as they have not yet been individually reviewed.
|
86
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
As of June 30, 2012, and based on the most recent analysis
performed by the Company, the risk category of loans by class of loans is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass (1)
|
|
|
Mention
|
|
|
Substandard
|
|
|
Doubtful
|
|
|
Total
|
|
One-to-Four Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Owner Occupied
|
|
$
|
55,526,297
|
|
|
$
|
0
|
|
|
$
|
3,150,598
|
|
|
$
|
0
|
|
|
$
|
58,676,895
|
|
1-4 Family Non-Owner Occupied
|
|
|
30,621,009
|
|
|
|
1,117,122
|
|
|
|
2,590,969
|
|
|
|
0
|
|
|
|
34,329,100
|
|
1-4 Family Second Mortgage
|
|
|
28,147,735
|
|
|
|
206,701
|
|
|
|
814,384
|
|
|
|
0
|
|
|
|
29,168,820
|
|
Home Equity Lines of Credit
|
|
|
63,030,206
|
|
|
|
49,585
|
|
|
|
2,753,893
|
|
|
|
0
|
|
|
|
65,833,684
|
|
Home Equity Investment Lines of Credit
|
|
|
4,828,651
|
|
|
|
200,886
|
|
|
|
609,872
|
|
|
|
0
|
|
|
|
5,639,409
|
|
One-to-Four Family Construction Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family Construction
|
|
|
513,466
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
513,466
|
|
1-4 Family Construction Models/Speculative
|
|
|
724,177
|
|
|
|
0
|
|
|
|
882,124
|
|
|
|
0
|
|
|
|
1,606,301
|
|
Multi-Family Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
52,448,152
|
|
|
|
1,124,756
|
|
|
|
324,974
|
|
|
|
0
|
|
|
|
53,897,882
|
|
Multi-Family Second Mortgage
|
|
|
145,476
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
145,476
|
|
Multi-Family Construction
|
|
|
5,368,866
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,368,866
|
|
Commercial Real Estate Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
183,422,738
|
|
|
|
3,100,295
|
|
|
|
11,538,141
|
|
|
|
0
|
|
|
|
198,061,174
|
|
Commercial Second Mortgage
|
|
|
5,743,721
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,743,721
|
|
Commercial Lines of Credit
|
|
|
19,401,017
|
|
|
|
0
|
|
|
|
2,909,112
|
|
|
|
0
|
|
|
|
22,310,129
|
|
Commercial Construction
|
|
|
7,079,104
|
|
|
|
0
|
|
|
|
644,807
|
|
|
|
0
|
|
|
|
7,723,911
|
|
Commercial and Industrial Loans
|
|
|
34,042,381
|
|
|
|
91,634
|
|
|
|
1,268,721
|
|
|
|
0
|
|
|
|
35,402,736
|
|
Land Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lot Loans
|
|
|
8,217,784
|
|
|
|
39,374
|
|
|
|
3,820,138
|
|
|
|
0
|
|
|
|
12,077,296
|
|
Acquisition and Development Loans
|
|
|
16,486,141
|
|
|
|
0
|
|
|
|
2,585,076
|
|
|
|
0
|
|
|
|
19,071,217
|
|
Consumer Loans
|
|
|
2,110,297
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
2,110,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
517,857,218
|
|
|
$
|
5,930,353
|
|
|
$
|
33,892,809
|
|
|
$
|
0
|
|
|
$
|
557,680,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There is $2.6 million in non-homogeneous loans which are subject to individual review for risk rating included in the pass risk category based on
payment status as they have not yet been individually reviewed.
|
87
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Note 6MORTGAGE BANKING ACTIVITIES
Loans held for sale at June 30, 2013 and 2012 were $28,835,018 and $25,062,786, respectively.
The Company accounts for loans held for sale at fair value. The fair value of loans held for sale exceeded
the unpaid principal balance of these loans by $719,505 and $738,742 as of June 30, 2013 and 2012, respectively. The gain on loans held for sale as of June 30, 2013 was reported in the mortgage banking activities line of the consolidated
statement of operations. Interest on loans held for sale was reported in interest income.
The Company
services real estate loans for investors that are not included in the accompanying Consolidated Financial Statements. Mortgage servicing rights are established based on the fair value of servicing rights retained on loans originated by the Company
and subsequently sold in the secondary market. Mortgage servicing rights are included in the Consolidated Statements of Financial Condition under the caption
Prepaid Expenses and Other Assets
. At June 30, 2013 and 2012, the
mortgage loan servicing portfolio was approximately $1.1 billion.
Originated mortgage servicing rights
capitalized and amortized during the years ended June 30, 2013, 2012 and 2011 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Servicing rights:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
$
|
6,867,334
|
|
|
$
|
7,519,287
|
|
|
$
|
6,960,969
|
|
Additions
|
|
|
4,309,341
|
|
|
|
3,473,077
|
|
|
|
3,862,505
|
|
Amortized to expense
|
|
|
(3,780,263
|
)
|
|
|
(3,612,550
|
)
|
|
|
(3,000,186
|
)
|
Change in valuation allowance for impairment
|
|
|
(178,087
|
)
|
|
|
(512,480
|
)
|
|
|
(304,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
7,218,325
|
|
|
$
|
6,867,334
|
|
|
$
|
7,519,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity in the valuation allowance for mortgage servicing rights over the years ended
June 30, 2013, 2012 and 2011 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Balance, beginning of period
|
|
$
|
(816,481
|
)
|
|
$
|
(304,001
|
)
|
|
$
|
0
|
|
Impairment charges
|
|
|
(765,858
|
)
|
|
|
(698,468
|
)
|
|
|
(1,183,799
|
)
|
Impairment recoveries
|
|
|
587,771
|
|
|
|
185,988
|
|
|
|
879,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
(994,568
|
)
|
|
$
|
(816,481
|
)
|
|
$
|
(304,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of capitalized mortgage servicing rights was $7,774,125 and $7,928,789 at
June 30, 2013 and 2012, respectively. Fair value was determined using discount rates ranging from 10.0% to 12.0% and prepayment speeds ranging from 213.0% to 593.0%, depending on the stratification of the specific rights. The weighted average
life was determined to be 4.95 years. At June 30, 2013 there were ten tranches of the Companys mortgage servicing asset that were considered impaired. The weighted average coupon of the loans serviced represented by these tranches was
3.97%, and the Company recorded a valuation allowance for impairment of $994,568 on these tranches. At June 30, 2012, an impairment of $816,481 was recorded.
88
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Mortgage banking activities, net, as presented in the consolidated
statements of operations consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended June 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Mortgage loan servicing fees
|
|
$
|
2,718,150
|
|
|
$
|
2,314,186
|
|
|
$
|
2,580,089
|
|
Amortization of mortgage servicing rights
|
|
|
(3,780,263
|
)
|
|
|
(3,612,550
|
)
|
|
|
(3,000,186
|
)
|
Recovery (impairment) of mortgage servicing rights
|
|
|
(178,087
|
)
|
|
|
(512,480
|
)
|
|
|
(304,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loan servicing (loss), net
|
|
|
(1,240,200
|
)
|
|
|
(1,810,844
|
)
|
|
|
(724,098
|
)
|
Changes in fair value of loans held for sale
|
|
|
(19,237
|
)
|
|
|
556,778
|
|
|
|
(142,208
|
)
|
Changes in fair value of mortgage banking derivatives
|
|
|
(964,244
|
)
|
|
|
1,370,796
|
|
|
|
(438,949
|
)
|
Realized gains on sale of loans
|
|
|
13,679,113
|
|
|
|
9,020,634
|
|
|
|
7,920,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking activities, net
|
|
$
|
11,455,432
|
|
|
$
|
9,137,364
|
|
|
$
|
6,615,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above amounts do not include non-interest expense related to mortgage banking
activities.
At June 30, 2013 and 2012, the Bank had IRLCs on $34,672,027 and $65,996,365,
respectively, of loans intended for sale in the secondary market. These commitments are considered to be free-standing derivatives and the change in fair value is recorded in the Consolidated Financial Statements. The fair value of these commitments
as of June 30, 2013 and 2012 was estimated to be $118,090 and $1,773,453, respectively, which is included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. To mitigate the interest rate risk
represented by these IRLCs, the Bank entered into contracts to sell mortgage loans of $50,000,000 and $69,150,472 as of June 30, 2013 and 2012, respectively. These contracts are also considered to be free-standing derivatives, and the
change in fair value also is recorded in the financial statements. The fair value of these contracts at June 30, 2013 and 2012 was estimated to be $573,401 and ($117,718), respectively. These amounts are added to (netted against) the fair value
of IRLCs recorded in accrued expenses and other liabilities. Changes in fair value for both types of derivatives are reported in mortgage banking activities in the consolidated statements of operations.
89
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 7OFFICE PROPERTIES AND EQUIPMENT
Office properties and equipment at cost, less accumulated depreciation and amortization at
June 30, 2013 and 2012, are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Land and land improvements
|
|
$
|
1,034,892
|
|
|
$
|
1,034,892
|
|
Building and building improvements
|
|
|
5,553,075
|
|
|
|
5,553,075
|
|
Leasehold improvements
|
|
|
6,651,603
|
|
|
|
6,608,542
|
|
Furniture and equipment
|
|
|
13,589,873
|
|
|
|
13,338,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,829,443
|
|
|
|
26,535,032
|
|
Less accumulated depreciation and amortization
|
|
|
(19,878,214
|
)
|
|
|
(19,297,867
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,951,229
|
|
|
$
|
7,237,165
|
|
|
|
|
|
|
|
|
|
|
NOTE 8DEPOSITS
Scheduled maturities of time deposits were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
Amount
|
|
|
%
|
|
|
Amount
|
|
|
%
|
|
12 months or less
|
|
$
|
173,731,565
|
|
|
|
53.2
|
%
|
|
$
|
293,579,515
|
|
|
|
76.3
|
%
|
13 to 24 months
|
|
|
113,502,736
|
|
|
|
34.7
|
|
|
|
53,750,152
|
|
|
|
14.0
|
|
25 to 36 months
|
|
|
10,896,268
|
|
|
|
3.3
|
|
|
|
14,845,083
|
|
|
|
3.9
|
|
Over 36 months months
|
|
|
28,633,354
|
|
|
|
8.8
|
|
|
|
22,392,207
|
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
326,763,923
|
|
|
|
100.00
|
%
|
|
$
|
384,566,957
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average rate on certificate of deposits
|
|
|
|
|
|
|
0.96
|
%
|
|
|
|
|
|
|
1.24
|
%
|
Time deposits in amounts of $100,000 or more totaled approximately $126,761,299 and
$150,740,270 at June 30, 2013 and 2012, respectively.
Deposits of related parties totaled $2,321,971 and
$2,391,702 at June 30, 2013 and June 30, 2012.
No brokered deposits were held at June 30, 2013
or 2012.
90
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 9ADVANCES FROM THE FEDERAL HOME LOAN BANK OF CINCINNATI
Short-Term Advances
: The Bank maintains two lines of credit totaling $230,000,000 with the FHLB.
The $200,000,000 repurchase line matures on February 8, 2014. No borrowings were outstanding on the repurchase line of credit as of June 30, 2013 and June 30, 2012, respectively. The Bank has chosen to take daily advances from this
line, with the interest rate set daily. The $30,000,000 cash management line matures on September 28, 2013. No borrowings were outstanding on the cash management line as of June 30, 2013 and June 30, 2012, respectively. The borrowing
capacity on these lines of credit is limited to collateral pledged. At June 30, 2013, Park View Federal had an available borrowing capacity of $14.8 million on these lines.
In order to secure these advances, the Bank has pledged mortgage loans with unpaid principal balances aggregating
approximately $49,764,912 and $45,393,890 at June 30, 2013 and 2012, respectively, and FHLB stock.
Long-Term Advances
: Long-term advances from the FHLB, with maturities and interest rates thereon at June 30,
2013 and 2012, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity
|
|
Interest Rate
|
|
|
2013
|
|
|
2012
|
|
January 2015
|
|
|
2.82
|
%
|
|
$
|
15,000,000
|
|
|
$
|
15,000,000
|
|
January 2015
|
|
|
3.04
|
%
|
|
|
15,000,000
|
|
|
|
15,000,000
|
|
April 2018
|
|
|
3.17
|
%
|
|
|
5,000,000
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
35,000,000
|
|
|
$
|
35,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average interest rate
|
|
|
|
|
|
|
2.96
|
%
|
|
|
2.96
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The advances outstanding at June 30, 2013 and 2012 were putable fixed-rate advances.
They can be terminated at the option of the FHLB after a stated lockout period. If the option is exercised, the Bank could repay this advance without a prepayment penalty.
NOTE 10NOTE PAYABLE
On November 24, 2008, one of PVFs subsidiaries obtained a $1.4 million dollar loan from
another financial institution which has a principal balance of $939,445 as of June 30, 2013. The loan was a refinance of a line of credit loan and is collateralized by PVFs Solon, Ohio headquarters building. The note carries a variable
interest rate that adjusts to The Wall Street Journal published prime lending rate plus 50 basis points. The loan required interest only payments for the first six months and then converted to an amortizing loan for a term of 15 years. At
June 30, 2013, the interest rate was 3.75%.
NOTE 11REPURCHASE AGREEMENT
In March 2006, the Bank entered into a $50 million repurchase agreement with another institution
(Citigroup) collateralized by mortgage-backed securities and securities. The repurchase was for a five-year term and matured in March 2011. Interest was adjustable quarterly during the first year based on the three-month LIBOR rate minus 100 basis
points. After year one, the rate adjusted to 4.99% and the repurchase agreement became callable quarterly at the option of the issuer.
On March 21, 2011 the repurchase agreement matured and the Bank repurchased the securities for $50 million utilizing cash on deposit at the Federal Reserve Bank of Cleveland. Interest expense
associated with this borrowing was approximately $1.8 million during the year ended June 30, 2011.
91
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 12FEDERAL INCOME TAXES
Income tax expense (benefit) was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Current expense (benefit)
|
|
$
|
194,261
|
|
|
$
|
|
|
|
$
|
(450,281
|
)
|
Deferred expense (benefit)
|
|
|
2,607,154
|
|
|
|
(218,999
|
)
|
|
|
(2,978,446
|
)
|
Benefit of operating loss carryforwards
|
|
|
|
|
|
|
|
|
|
|
|
|
Establishment (reversal) of valuation allowance
|
|
|
(3,920,094
|
)
|
|
|
369,528
|
|
|
|
3,550,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(1,118,679
|
)
|
|
$
|
150,529
|
|
|
$
|
121,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2013, $868,105 of the valuation allowance was reversed through other comprehensive
income. For 2012, the tax benefit reflected in continuing operations relates to adjustments between other comprehensive income and continuing operations tax expense due to accounting rules related to intraperiod allocation of tax between components
of the financial statements.
The provision for federal income taxes differs from the amounts computed by
applying the U.S. federal income tax statutory rate to income before federal income taxes. These differences are reconciled as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
Amount
|
|
|
%
|
|
|
Amount
|
|
|
%
|
|
|
Amount
|
|
|
%
|
|
Computed expected tax
|
|
$
|
2,778,794
|
|
|
|
35.0
|
%
|
|
$
|
(542,526
|
)
|
|
|
35.0
|
%
|
|
$
|
(3,349,248
|
)
|
|
|
35.0
|
|
Increase (decrease) in tax resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of graduated rates
|
|
|
(79,394
|
)
|
|
|
(1.0
|
)
|
|
|
15,501
|
|
|
|
(1.0
|
)
|
|
|
95,693
|
|
|
|
(1.0
|
)
|
Bank-owned life insurance
|
|
|
(52,773
|
)
|
|
|
(0.7
|
)
|
|
|
(77,715
|
)
|
|
|
5.0
|
|
|
|
(93,859
|
)
|
|
|
1.0
|
|
Stock compensation
|
|
|
20,707
|
|
|
|
0.3
|
|
|
|
12,536
|
|
|
|
(0.8
|
)
|
|
|
39,849
|
|
|
|
(0.4
|
)
|
Incr (decr) in deferred tax valuation allowance
|
|
|
(3,920,094
|
)
|
|
|
(49.3
|
)
|
|
|
369,528
|
|
|
|
(23.9
|
)
|
|
|
3,550,566
|
|
|
|
(37.1
|
)
|
Nondeductible merger costs
|
|
|
220,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(86,398
|
)
|
|
|
1.6
|
|
|
|
3,677
|
|
|
|
(0.2
|
)
|
|
|
(121,162
|
)
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($
|
1,118,679
|
)
|
|
|
(14.1
|
)%
|
|
$
|
(218,999
|
)
|
|
|
14.1
|
%
|
|
$
|
121,839
|
|
|
|
(1.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The net tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and liabilities at June 30, 2013 and 2012 were:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Loan loss reserves
|
|
$
|
6,751,513
|
|
|
$
|
7,314,023
|
|
Deferred compensation
|
|
|
225,878
|
|
|
|
179,258
|
|
Deferred loan fees, net
|
|
|
50,375
|
|
|
|
123,361
|
|
Unrealized gains on loans and securities held for sale
|
|
|
320,140
|
|
|
|
108,246
|
|
Net operating loss carryforward
|
|
|
2,958,959
|
|
|
|
5,532,746
|
|
Other
|
|
|
230,837
|
|
|
|
93,425
|
|
|
|
|
|
|
|
|
|
|
Total gross deferred tax assets
|
|
|
10,537,702
|
|
|
|
13,351,059
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
FHLB stock dividend
|
|
|
(2,041,343
|
)
|
|
|
(2,041,343
|
)
|
Originated mortgage servicing asset
|
|
|
(2,454,231
|
)
|
|
|
(2,334,894
|
)
|
Fixed assets
|
|
|
(297,859
|
)
|
|
|
(293,669
|
)
|
Prepaid franchise tax
|
|
|
(111,228
|
)
|
|
|
(122,767
|
)
|
Debt discharge income deferral
|
|
|
(2,788,000
|
)
|
|
|
(2,788,000
|
)
|
Other
|
|
|
(698,467
|
)
|
|
|
(982,187
|
)
|
|
|
|
|
|
|
|
|
|
Total gross deferred tax liabilities
|
|
|
(8,391,128
|
)
|
|
|
(8,562,860
|
)
|
|
|
|
|
|
|
|
|
|
Deferred tax asset before valuation allowance
|
|
$
|
2,146,574
|
|
|
$
|
4,788,199
|
|
|
|
|
|
|
|
|
|
|
Deferred tax valuation allowance
|
|
|
0
|
|
|
|
(4,788,199
|
)
|
|
|
|
|
|
|
|
|
|
Total net deferred tax asset
|
|
$
|
2,146,574
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Management recorded net deferred tax assets at year end 2013 and 2012 of $2.1 million and
$0 respectively. A valuation allowance is established to reduce the deferred tax asset if it is more likely than not that the related tax benefits will not be realized. In managements opinion, it is more likely than not that the tax benefits
will be realized; consequently, the valuation allowance that was established as of June 30, 2011 and increased as of June 30, 2012, was reversed as of June 30, 2013. When determining the amount of deferred tax assets that are
more-likely-than-not to be realized, and therefore recorded as a benefit, the Company conducts a regular assessment of all available information. This information includes, but is not limited to, taxable income in prior periods, projected future
income, and projected future reversals of deferred tax items. Based on these criteria, the Company determined that it was necessary to carry a valuation allowance against deferred tax assets of $4.8 million at June 30, 2012 to reduce the
carrying amount of the Companys net deferred tax asset to zero. Based primarily on six consecutive quarters of profitability, management assessed the likelihood that the deferred tax asset would more likely than not be realized from future
taxable income, which led to the determination that no valuation allowance was needed at June 30, 2013.
As of June 30, 2013, the Company has net operating loss carryforwards of approximately $4,286,000 from the year
ended June 30, 2012, and $4,417,000 from June 30, 2011. The related net operating loss carry-forward periods expire in 2032 and 2031, respectively.
Accumulated deficits at June 30, 2013 and 2012 include approximately $4,516,000 for which no provision for federal income tax has been made. The related unrecorded deferred tax liability was
approximately $1,535,000 at June 30, 2013 and 2012. This amount represents allocations of income during years prior to 1988 to bad debt reserve deductions for tax purposes only. These reserves will be recaptured into taxable income in the event
of certain distributions and redemptions. Such recapture would create income for tax purposes only, which would be subject to
93
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
income taxes at the then current corporate income tax rate, resulting in a charge to income tax expense. Recapture would not occur upon the reorganization, merger, or acquisition of Park View
Federal, or if the Bank is merged or liquidated tax-free into a bank or undergoes a charter change. If Park View Federal fails to qualify as a bank or merges into a nonbank entity, these reserves will be recaptured into taxable income, resulting in
a charge to income tax expense.
NOTE 13LEASES
The Company leases certain premises from unrelated and related parties. Future minimum payments under
noncancelable operating leases with initial or remaining terms of one year or more consisted of the following at June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases With
|
|
|
Leases With
|
|
|
|
|
|
|
Unrelated
|
|
|
Related
|
|
|
Total
|
|
Year ending June 30,
|
|
Parties
|
|
|
Parties
|
|
|
Leases
|
|
2014
|
|
$
|
512,509
|
|
|
$
|
304,868
|
|
|
$
|
817,377
|
|
2015
|
|
|
513,456
|
|
|
|
215,439
|
|
|
|
728,895
|
|
2016
|
|
|
423,821
|
|
|
|
215,439
|
|
|
|
639,260
|
|
2017
|
|
|
398,093
|
|
|
|
169,842
|
|
|
|
567,935
|
|
2018
|
|
|
328,571
|
|
|
|
75,124
|
|
|
|
403,695
|
|
Thereafter
|
|
|
482,141
|
|
|
|
20,247
|
|
|
|
502,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total minimum lease payment
|
|
$
|
2,658,591
|
|
|
$
|
1,000,959
|
|
|
$
|
3,659,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the years ended June 30, 2013, 2012 and 2011, rental expense was $885,691,
$942,416, and $962,863, respectively. Rental expense related to related party leases was $303,820, $296,159, and $233,357 for the years ended June 30, 2013, 2012 and 2011, respectively.
94
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 14LOAN COMMITMENTS AND OTHER RELATED ACTIVITIES
In the normal course of business, the Bank enters into commitments with off-balance-sheet risk to meet
the financing needs of its customers. Commitments to extend credit involve elements of credit risk and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The Banks exposure to credit
loss in the event of nonperformance by the other party to the commitment is represented by the contractual amount of the commitment. The Bank uses the same credit policies in making commitments as it does for on-balance-sheet instruments. Interest
rate risk on commitments to extend credit results from the possibility that interest rates may have moved unfavorably from the position of the Bank since the time the commitment was made.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed expiration dates of 60 to 120 days or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.
The Bank evaluates each customers
creditworthiness on a case-by-case basis. The amount of collateral obtained by the Bank upon extension of credit is based on managements credit evaluation of the applicant. Collateral held is generally residential and commercial real estate.
The Banks lending is concentrated in Northeastern Ohio, and as a result, the economic conditions and
market for real estate in Northeastern Ohio could have a significant impact on the Bank.
At June 30,
2013 and 2012, the Bank had the following commitments to originate loans intended to be held in the portfolio:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Commitments to fund variable-rate mortgage loans
|
|
$
|
1,484,250
|
|
|
$
|
743,250
|
|
Commitments to fund equity lines of credit
|
|
|
53,293,160
|
|
|
|
51,691,583
|
|
Undisbursed portion of loan proceeds
|
|
|
2,329,489
|
|
|
|
849,345
|
|
Standby letters of credit
|
|
|
997,700
|
|
|
|
762,700
|
|
At June 30, 2013 and 2012, the Bank had IRLCs on $34,672,027 and $65,996,365 of
loans intended for sale in the secondary market. These commitments are considered to be free-standing derivatives, and the change in fair value is recorded in the financial statements. The fair value of these commitments as of June 30, 2013 and
2012 was estimated to be $118,090 and $1,773,453, respectively. To mitigate the interest rate risk represented by these IRLCs the Bank entered into contracts to sell mortgage loans of $50,000,000 and $69,150,472 as of June 30, 2013 and 2012,
respectively. These contracts are also considered to be free-standing derivatives and the change in fair value also is recorded in the financial statements. The fair value of these contracts at June 30, 2013 and 2012 was estimated to be
$573,401 and ($117,718), respectively.
95
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 15REGULATORY MATTERS
The Company and the Bank are subject to various regulatory capital requirements, which are now
administered by the Board of Governors of the Federal Reserve System (the Federal Reserve Board) and the Office of the Comptroller of the Currency (OCC). Failure to meet minimum capital requirements can result in certain
mandatory and possibly additional discretionary actions by banking regulators that, if undertaken, could have a direct material effect on the Companys consolidated financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting
practices. The Banks capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Prompt corrective action regulations provide five classifications: well capitalized; adequately capitalized;
undercapitalized; significantly undercapitalized; and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. The most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action. There are no conditions or events since that notification that management believes have changed the Banks category.
Federal regulations require savings institutions to maintain certain minimum levels of regulatory capital. An institution that fails to comply with its regulatory capital requirements must obtain approval
of a capital plan and can be subject to a capital directive and certain restrictions on its operations. At June 30, 2013, the adjusted total minimum regulatory capital regulations require institutions to have a minimum tangible capital to
adjusted total assets ratio of 1.5%; a minimum leverage ratio of core (Tier 1) capital to adjusted total assets of 4.0%; a minimum ratio of core (Tier 1) capital to risk-weighted assets of 4.0%; and a minimum ratio of total capital to risk-weighted
assets of 8.0%. At June 30, 2013 and 2012, respectively, the Bank exceeded all of the aforementioned regulatory capital requirements.
On October 19, 2009, the Company and the Bank each entered into a Stipulation and Consent to the Issuance of Order to Cease and Desist with the Office of Thrift Supervision (the OTS),
whereby the Company and the Bank each consented to the issuance of an Order to Cease and Desist (the Company Order and the Bank Order) without admitting or denying that grounds existed for the OTS to initiate an
administrative proceeding against the Company or the Bank. Effective July 21, 2011, the OCC and the Federal Reserve Board succeeded to all powers, authorities, rights, and duties of the OTS relating to the enforcement of the Bank and Company
Orders, respectively, as a result of the regulatory transition under the Dodd-Frank Wall Street Reform and Consumer Protection Act. On August 27, 2012, the Bank was released from the Bank Order. On December 15, 2012, the Company was
released from the Company Order.
Regulations limit capital distributions by savings institutions. Generally,
capital distributions are limited to undistributed net income for the current and prior two years.
96
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
At June 30, 2013 and 2012, the Bank was in compliance with
regulatory capital requirements as set forth below (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
|
Required
For Capital
Adequacy Purposes
|
|
|
To Be Well
Capitalized Under
Prompt Corrective
Action Regulations
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital to risk weighted assets
|
|
$
|
87,289
|
|
|
|
14.34
|
%
|
|
$
|
48,709
|
|
|
|
8.00
|
%
|
|
$
|
60,886
|
|
|
|
10.00
|
%
|
Tier 1 (Core) Capital to risk weighted assets
|
|
|
79,600
|
|
|
|
13.07
|
%
|
|
|
24,354
|
|
|
|
4.00
|
%
|
|
|
36,532
|
|
|
|
6.00
|
%
|
Tier 1 (Core) Capital to adjusted total assets
|
|
|
79,600
|
|
|
|
10.16
|
%
|
|
|
31,340
|
|
|
|
4.00
|
%
|
|
|
39,175
|
|
|
|
5.00
|
%
|
Tangible Capital to adjusted total assets
|
|
|
79,600
|
|
|
|
10.16
|
%
|
|
|
11,760
|
|
|
|
1.50
|
%
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
|
|
Actual
|
|
|
Required
For Capital
Adequacy Purposes
|
|
|
To Be Well
Capitalized Under
Prompt Corrective
Action Regulations
|
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital to risk weighted assets
|
|
$
|
77,332
|
|
|
|
13.00
|
%
|
|
$
|
47,605
|
|
|
|
8.00
|
%
|
|
$
|
59,506
|
|
|
|
10.00
|
%
|
Tier 1 (Core) Capital to risk weighted assets
|
|
|
69,787
|
|
|
|
11.73
|
%
|
|
|
23,802
|
|
|
|
4.00
|
%
|
|
|
35,704
|
|
|
|
6.00
|
%
|
Tier 1 (Core) Capital to adjusted total assets
|
|
|
69,787
|
|
|
|
8.66
|
%
|
|
|
32,224
|
|
|
|
4.00
|
%
|
|
|
40,280
|
|
|
|
5.00
|
%
|
Tangible Capital to adjusted total assets
|
|
|
69,787
|
|
|
|
8.66
|
%
|
|
|
12,084
|
|
|
|
1.50
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
2012 has been revised to reflect the adjustment described in Note 2 Adjustment for
Freddie Mac Interest.
NOTE 16RELATED PARTY TRANSACTIONS
Loans to principal officers, directors, and their affiliates in 2013 were as follows.
|
|
|
|
|
Beginning balance
|
|
$
|
14,127,747
|
|
Effect of changes in the composition of the Board of Directors
|
|
|
(7,357,258
|
)
|
New loans
|
|
|
2,432,590
|
|
Repayments
|
|
|
(5,038,744
|
)
|
|
|
|
|
|
Ending balance
|
|
$
|
4,164,335
|
|
|
|
|
|
|
97
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The business relationships between the Company and its directors and
directors affiliated companies that were considered by the Board of Directors were: (i) current director Mr. Calabreses position as the managing partner of Calabrese, Racek and Markos, Inc., a firm that performs appraisals on
properties securing loans made by the Bank, and CRM Construction Services, Inc., a firm that provides asset positioning services for the Bank relative to Bank-owned real estate and other assets; and (ii) current director Mr. Fedelis
position as President and Chief Executive Officer of the Fedeli Group, which acts as the Banks agent in connection with its purchase of certain insurance coverage. During the years ended June 30, 2013 and 2012 the Bank paid a total of
$48,000 and $56,261, respectively in appraisal fees to CRM and $8,261 and $292,841, respectively, to CRMC for asset positioning services.
NOTE 17STOCK-BASED COMPENSATION
The 2010 Equity Incentive Plan (the 2010 Plan) replaced the 2008 Equity Incentive Plan and
all remaining available shares from the 2008 Equity Incentive Plan will be available for distribution under the 2010 Plan. Generally, the Company can issue incentive stock options, nonqualified stock options, stock appreciation rights, restricted
stock and other stock-based compensation under the 2010 PlanGenerally, for incentive stock options, a percentage of the options awarded become exercisable on the date of grant and on each anniversary date of grant, and for nonqualified stock options
a percentage of the options awarded become exercisable on each anniversary of the date of grant. The option period expires ten years from the date of grant, except for awards to individuals who own more than 10% of the Companys outstanding
stock. Awards to these individuals expire after five years from the date of grant and are exercisable at 110% of the market price at the date of grant.
Previously, nonqualified stock options have been granted to directors, which vest immediately. The option period expires ten years from the date of grant, and the exercise price is the market price at the
date of grant.
For the years ended June 30, 2013, 2012, and 2011, compensation expense of $205,597,
$138,785, and $117,203, respectively, was recognized in the income statement related to the vesting of option awards.
As of June 30, 2013, there was $363,000 of compensation expense related to unvested awards not yet recognized in the financial statements. The weighted-average period over which this expense is to be
recognized is 1.4 years.
The aggregate intrinsic value of all options that were exercisable at June 30,
2013 was $486,000. The aggregate intrinsic value of all options outstanding at June 30, 2013 was $1,315,000. The Company has not issued any stock option awards to directors of the Company since the institution of the regulatory orders detailed
in Note 15 Regulatory Matters.
Options outstanding at June 30, 2013 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
Exercisable
|
|
Range of
Exercise
Price
|
|
Number
|
|
|
Weighted
Average
Remaining
Life
|
|
|
Number
|
|
|
Weighted
Average
Exercise
Price
|
|
$1.39 to $4.42
|
|
|
693,300
|
|
|
|
8.2
|
|
|
|
268,765
|
|
|
$
|
2.20
|
|
$8.32 to $12.40
|
|
|
141,221
|
|
|
|
2.1
|
|
|
|
159,259
|
|
|
$
|
8.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
834,521
|
|
|
|
7.1
|
|
|
|
428,024
|
|
|
$
|
4.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
98
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
A summary of stock-based compensation activity is as follows:
|
|
|
|
|
|
|
|
|
|
|
2013
Total
options
outstanding
|
|
|
|
Shares
|
|
|
Weighted-
Average
Exercise
Price
|
|
Options outstanding, beginning of year
|
|
|
740,256
|
|
|
$
|
4.15
|
|
Forfeited
|
|
|
(42,800
|
)
|
|
$
|
2.01
|
|
Expired
|
|
|
(40,435
|
)
|
|
$
|
8.63
|
|
Exercised
|
|
|
(106,500
|
)
|
|
$
|
1.84
|
|
Granted
|
|
|
284,000
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, end of year
|
|
|
834,521
|
|
|
$
|
3.67
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of year
|
|
|
428,024
|
|
|
$
|
4.53
|
|
|
|
|
|
|
|
|
|
|
The weighted-average remaining contractual life of options outstanding as of
June 30, 2013 was 7.1 years. The weighted-average remaining contractual life of vested options outstanding as of June 30, 2013 was 5.0 years.
No options were exercised in the twelve-month period ended June 30, 2012.
99
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The fair value for stock options granted to executive officers and
certain other employees was determined at the date of grant using a Black-Scholes options-pricing model and the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Expected weighted average risk-free interest rate
|
|
|
0.83
|
%
|
|
|
2.43
|
%
|
|
|
3.32
|
%
|
Expected weighted average life (in years)
|
|
|
6.00
|
|
|
|
6.00
|
|
|
|
6.00
|
|
Expected volatility
|
|
|
56.75
|
%
|
|
|
34.00
|
%
|
|
|
34.00
|
%
|
Expected dividend yield
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
|
|
0.00
|
%
|
The weighted-average fair value of the fiscal 2013 grants was $1.17 per option. The
expected average risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the life of the option. The expected average life represents the weighted-average period of time that options
granted are expected to be outstanding giving consideration to vesting schedules, historical exercise and forfeiture patterns. Expected volatility is based on historical volatilities of the Companys common stock. The expected dividend yield is
based on historical information.
There were 420,790 shares of restricted stock issued to directors, executive
officers and certain other employees with a weighted average fair value of $1.84 per share at June 30, 2013. The total fair value of restricted shares issued at June 30, 2013 was $773,148. For the years ended June 30, 2013, 2012 and
2011 compensation expense related to the vesting of restricted stock awards of $261,844, $215,813 and $166,124, respectively was recognized. As of June 30, 2013, there was $115,930 of compensation expense related to unvested awards not yet
recognized in the financial statements. The weighted-average period of time over which this expense is to be recognized was 1.1 years at June 30, 2013.
A summary of changes in the Companys restricted stock for the twelve months ended June 30, 2013 is as follows:
|
|
|
|
|
|
|
|
|
Nonvested Shares
|
|
Shares
|
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|
Nonvested at July 1, 2012
|
|
|
162,333
|
|
|
$
|
303,537
|
|
Granted
|
|
|
77,937
|
|
|
|
157,433
|
|
Vested
|
|
|
(132,604
|
)
|
|
|
(259,606
|
)
|
Forfeited
|
|
|
(5,000
|
)
|
|
|
(8,950
|
)
|
|
|
|
|
|
|
|
|
|
Nonvested at June 30, 2013
|
|
|
102,666
|
|
|
$
|
192,414
|
|
|
|
|
|
|
|
|
|
|
There were 1,963,210 shares available for future issuance under the existing stock plan
at June 30, 2013.
100
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 18EARNINGS (LOSS) PER SHARE
The following table discloses earnings (loss) per share for the years ended June 30, 2013, 2012
and 2011, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
Net Income
(Loss)
|
|
|
Shares
|
|
|
Per
Share
Amount
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) available to common shareholders
|
|
$
|
9,058,090
|
|
|
|
25,955,006
|
|
|
$
|
0.35
|
|
Effect of dilutive securitiesstock options and warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
612,144
|
|
|
($
|
0.01
|
)
|
Income (loss) available to common shareholders
|
|
$
|
9,058,090
|
|
|
|
26,567,150
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
Net Income
(Loss)
|
|
|
Shares
|
|
|
Per
Share
Amount
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) available to common shareholders
|
|
$
|
(1,930,822
|
)
|
|
|
25,707,395
|
|
|
$
|
(0.08
|
)
|
Effect of dilutive securitiesstock options and warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) available to common shareholders
|
|
$
|
(1,930,822
|
)
|
|
|
25,707,395
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
Net Income
(Loss)
|
|
|
Shares
|
|
|
Per
Share
Amount
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) available to common shareholders
|
|
$
|
(9,691,120
|
)
|
|
|
25,656,081
|
|
|
$
|
(0.38
|
)
|
Effect of dilutive securitiesstock options and warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) available to common shareholders
|
|
$
|
(9,691,120
|
)
|
|
|
25,656,081
|
|
|
$
|
(0.38
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There were 967,688 options not considered in the diluted earnings per share calculation
for the year ended June 30, 2013, because they were not dilutive as the exercise price is higher than the average stock price for the periods. There was no dilution attributable to stock options for the years ended June 30, 2012 and 2011
since the Company was in a net loss position for the periods.
Also included for consideration in the diluted
earnings per share calculation for the year ended June 30, 2013, were warrants to acquire common shares issued as part of two separate exchange offerings. The warrants issued on March 16, 2010 included warrants to purchase 1,246,179 common
shares, of which 1,083,009 remain unexercised and are exercisable at any time before March 16, 2015 at a price of $1.75 per share. The warrants issued on March 16, 2010 were considered for potential dilution for the year ended
June 30, 2013.
101
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 19FAIR VALUE
Fair value is the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the company has
the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than
Level 1 prices, such as quoted prices for similar assets or liabilities, quoted market prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market
participants would use to price an asset or liability.
The Company used the following methods and significant
assumptions to estimate fair value:
Securities and mortgage-backed securities
. The fair value of
securities available for sale is determined by obtaining quoted market prices on nationally recognized securities exchanges, if available (Level 1 inputs). For securities where quoted prices are not available, fair values are calculated based on
market prices of similar securities. The fair value of mortgage-backed securities is determined through matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted
prices for the specific securities but rather by relying on the securities relationship to other benchmark quoted securities (Level 2 inputs).
Loans held for sale at fair value
. The fair value of loans held for sale, which consist of single-family residential loans, is determined using quoted secondary market prices, adjusted for specific
attributes of that loan or other observable data, such as outstanding commitments from third party investors (Level 2 inputs).
102
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Mortgage banking pipeline derivatives
. The fair value of loan
commitments is measured using current market rates for the associated mortgage loans (Level 2 inputs). The fair value of mandatory forward sales contracts is measured using secondary market pricing for similar product types (Level 2 inputs):
Impaired loans
. The fair value of impaired loans with specific allocations of the allowance for loan
losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal
process by the independent appraisers to adjust for differences between the comparable sales and income data available as well as type and status of the property. Such adjustments are usually significant and typically result in a Level 3
classification of the inputs for determining fair value.
Other real estate owned.
Nonrecurring
adjustments to certain commercial and residential real estate properties classified as other real estate owned are measured at fair value, less costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single
valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and
income data approach. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.
Appraisals for both collateral dependent impaired loans and other real estate owned are performed by certified general appraisers for commercial properties or certified residential appraisers for
residential properties, whose qualifications and licenses have been reviewed and verified by the Company. When the appraisals are received, Credit Administration reviews the assumptions and approaches utilized in the appraisal as well as the overall
resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. The Company currently utilizes a 9% discount for selling costs and it is applied to all properties, regardless of size. This
discount is supported by the Companys most recent analysis. Also, an additional 10% discount is applied to properties with appraisals performed greater than 12 months ago.
Loan Servicing Rights.
On a quarterly basis, loan servicing rights are evaluated for impairment based upon the
fair value of the rights as compared to carrying amount. If the carrying amount on an individual tranche exceeds fair value, impairment is recorded on that tranche so that the servicing asset is carried at fair value. Fair value is determined at a
tranche level based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilizes assumptions that market participants would use in estimating future net servicing income and that can
be validated against available market data (Level 2).
103
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Assets and liabilities measured at fair value on a recurring basis at
June 30, 2013 and 2012 are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust preferred securities
|
|
$
|
20,214,199
|
|
|
$
|
|
|
|
$
|
20,214,199
|
|
|
$
|
|
|
Mortgage-backed GSE securities
|
|
|
28,936,340
|
|
|
|
|
|
|
|
28,936,340
|
|
|
|
|
|
Loans held-for-sale
|
|
|
28,835,018
|
|
|
|
|
|
|
|
28,835,018
|
|
|
|
|
|
Interest rate-lock commitments
|
|
|
118,090
|
|
|
|
|
|
|
|
118,090
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory forward sales contracts
|
|
|
573,401
|
|
|
|
|
|
|
|
573,401
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FNMA structured note
|
|
$
|
2,009,320
|
|
|
$
|
|
|
|
$
|
2,009,320
|
|
|
$
|
|
|
Trust preferred securities
|
|
|
21,261,762
|
|
|
|
|
|
|
|
21,261,762
|
|
|
|
|
|
Mortgage-backed GSE securities
|
|
|
15,386,963
|
|
|
|
|
|
|
|
15,386,963
|
|
|
|
|
|
Loans held-for-sale
|
|
|
25,062,786
|
|
|
|
|
|
|
|
25,062,786
|
|
|
|
|
|
Interest rate-lock commitments
|
|
|
1,773,453
|
|
|
|
|
|
|
|
1,773,453
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandatory forward sales contracts
|
|
|
(117,718
|
)
|
|
|
|
|
|
|
(117,718
|
)
|
|
|
|
|
There were no transfers between Level 1 and Level 2 in the period ended June 30,
2013 or June 30, 2012. The Companys policy is to transfer assets or liabilities from one level to another when the methodology to obtain the fair value changes such that there are more or fewer unobservable inputs as of the end of the
reporting period.
104
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Assets measured at fair value on a nonrecurring basis at June 30,
2013 and 2012 are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
$
|
2,984,394
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,984,394
|
|
1-4 Family Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Real Estate
|
|
|
2,859,282
|
|
|
|
|
|
|
|
|
|
|
|
2,859,282
|
|
Commercial Non-Real Estate
|
|
|
112,011
|
|
|
|
|
|
|
|
|
|
|
|
112,011
|
|
Land
|
|
|
1,136,256
|
|
|
|
|
|
|
|
|
|
|
|
1,136,256
|
|
Real estate owned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
|
2,134,123
|
|
|
|
|
|
|
|
|
|
|
|
2,134,123
|
|
Commercial Real Estate
|
|
|
2,174,939
|
|
|
|
|
|
|
|
|
|
|
|
2,174,939
|
|
Land
|
|
|
2,611,185
|
|
|
|
|
|
|
|
|
|
|
|
2,611,185
|
|
Impaired mortgage servicing rights
|
|
|
7,128,171
|
|
|
|
|
|
|
|
7,128,171
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2012
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
$
|
4,033,385
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,033,385
|
|
1-4 Family Construction
|
|
|
660,862
|
|
|
|
|
|
|
|
|
|
|
|
660,862
|
|
Multi-Family
|
|
|
324,974
|
|
|
|
|
|
|
|
|
|
|
|
324,974
|
|
Commercial Real Estate
|
|
|
5,688,747
|
|
|
|
|
|
|
|
|
|
|
|
5,688,747
|
|
Commercial Non-Real Estate
|
|
|
238,229
|
|
|
|
|
|
|
|
|
|
|
|
238,229
|
|
Land
|
|
|
4,223,074
|
|
|
|
|
|
|
|
|
|
|
|
4,223,074
|
|
Real estate owned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 Family
|
|
|
2,042,573
|
|
|
|
|
|
|
|
|
|
|
|
2,042,573
|
|
Commercial Real Estate
|
|
|
923,262
|
|
|
|
|
|
|
|
|
|
|
|
923,262
|
|
Land
|
|
|
2,914,174
|
|
|
|
|
|
|
|
|
|
|
|
2,914,174
|
|
Impaired mortgage servicing rights
|
|
|
6,499,157
|
|
|
|
|
|
|
|
6,499,157
|
|
|
|
|
|
Impaired loans that are measured for impairment using the fair value of the collateral
for collateral dependent loans, had a principal balance of $11.7 million after the application of impaired charge-offs of $4.4 million, with a specific valuation allowance of $0.1 million at June 30, 2013. Impaired loans that are measured for
impairment using the fair value of the collateral for collateral dependent loans, had a principal balance of $26.3 million after the application of impaired charge-offs and impaired recasting of $9.7 million, with a specific valuation allowance of
$1.4 million at June 30, 2012. The provision for loan losses related to changes in the fair value of impaired loans was $1.3 million and $.4 million for the years ended June 30, 2013 and 2012, respectively.
Tranches of mortgage servicing rights carried at fair value totaled $7.1 million, which is made up of the outstanding
balance of $8.1, net of a valuation allowance of $1.0 million at June 30, 2013. During the year ended June 30, 2013, the Company recognized an impairment charge of $0.2 million. Tranches of mortgage servicing rights carried at fair value
totaled $6.5 million, which is made up of the outstanding balance of $7.3 million, net of a valuation allowance of $0.8 million at June 30, 2012. Mortgage servicing rights are valued by an independent third party that is active in purchasing
and selling these instruments. The value reflects the characteristics of the underlying loans discounted at a market multiple.
105
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Other real estate owned, which is maintained at fair value less costs to
sell, had a net carrying amount of $6,920,247 and $7,733,578 at June 30, 2013, and June 30, 2012, respectively. The carrying amount of other real estate owned is not re-measured to fair value on a recurring basis, but is subject to fair
value adjustments when the carrying amount exceeds the fair value, less estimated selling costs. For the year ended June 30, 2013, the Company recognized a net loss of $0.2 on the disposal of other real estate owned and recorded a provision for
other real estate owned losses of $1.1. These direct write-downs recognized for the period are the result of obtaining updated appraisal valuations and reflect declining property values while holding the asset. The Company values all other real
estate owned by obtaining updated appraisal valuations every twelve months. There have been no upward adjustments made in determining fair value.
106
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The following table presents quantitative information about Level 3 fair
value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value at
June 30, 2013
|
|
|
Valuation
Techniques
|
|
Unobservable
Inputs
|
|
Range
(Weighted
Average)
|
1-4 Family
|
|
$
|
2,984,394
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
0% - 9%
|
1-4 Family Construction
|
|
|
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
0% - 9%
|
Multi-Family
|
|
|
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
0% - 9%
|
Commercial Real Estate
|
|
|
2,859,282
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
0% - 9%
|
Commercial Non-Real Estate
|
|
|
112,011
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
0% - 9%
|
Land
|
|
|
1,136,256
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
0% - 9%
|
Other real estate owned
|
|
|
6,920,247
|
|
|
Appraisal value -
sales comparison
approach
|
|
Adjustment by
management to
reflect current
conditions and
selling costs
|
|
9% - 19%
|
Impaired mortgage servicing rights
|
|
|
7,128,171
|
|
|
Discounted Cash
Flow
|
|
Discount Rate
|
|
N/A
|
107
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The Company has elected the fair value option for loans held for sale.
These loans are intended for sale and are hedged with derivative instruments, and the Company believes the fair value is the best indicator of the valuation of these loans. Interest income is recorded based on the contractual terms of the loan and
in accordance with the Companys policy on loans held for investment. None of these loans are 90 days or more past due or on nonaccrual as of June 30, 2013 and 2012.
As of June 30, 2013 and 2012, the aggregate fair value, contractual balance (including accrued interest), and gain
or loss was as follows:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Aggregate fair value
|
|
$
|
28,835,018
|
|
|
$
|
25,062,786
|
|
Contractual balance
|
|
|
28,115,513
|
|
|
|
24,324,044
|
|
Gain (loss)
|
|
|
719,505
|
|
|
|
738,742
|
|
The total amount of gains (losses) from changes in fair value included in earnings for
the years ended June 30, 2011, 2012 and 2013 for loans held for sale were ($142,208) $556,778 and ($19,237).
The carrying amounts and estimated fair values of financial instruments at June 30, 2013 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at June 30, 2013
|
|
|
|
Carrying
Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(dollars in thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and amounts due from financial institutions
|
|
$
|
22,760
|
|
|
$
|
22,760
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
22,760
|
|
Interest-bearing deposits
|
|
|
77,825
|
|
|
|
77,825
|
|
|
|
|
|
|
|
|
|
|
|
77,825
|
|
Securities available for sale
|
|
|
49,151
|
|
|
|
|
|
|
|
49,151
|
|
|
|
|
|
|
|
49,151
|
|
Loans receivable, net
|
|
|
535,818
|
|
|
|
|
|
|
|
|
|
|
|
561,101
|
|
|
|
561,101
|
|
Loans receivable held for sale, net
|
|
|
28,835
|
|
|
|
|
|
|
|
28,835
|
|
|
|
|
|
|
|
28,835
|
|
Federal Home Loan Bank stock
|
|
|
12,811
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Accrued interest receivable
|
|
|
1,944
|
|
|
|
|
|
|
|
126
|
|
|
|
1,818
|
|
|
|
1,944
|
|
Commitments to make loans intended to be sold
|
|
|
118
|
|
|
|
|
|
|
|
118
|
|
|
|
|
|
|
|
118
|
|
Mandatory forward sale contract
|
|
|
573
|
|
|
|
573
|
|
|
|
|
|
|
|
|
|
|
|
573
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and savings
|
|
|
(303,850
|
)
|
|
|
(303,850
|
)
|
|
|
|
|
|
|
|
|
|
|
(303,850
|
)
|
Time deposits
|
|
|
(326,764
|
)
|
|
|
|
|
|
|
(327,789
|
)
|
|
|
|
|
|
|
(327,789
|
)
|
Notes payable
|
|
|
(939
|
)
|
|
|
|
|
|
|
(939
|
)
|
|
|
|
|
|
|
(939
|
)
|
Advances from the Federal Home Loan Bank
|
|
|
(35,000
|
)
|
|
|
|
|
|
|
(36,561
|
)
|
|
|
|
|
|
|
(36,561
|
)
|
Accrued interest payable
|
|
|
(116
|
)
|
|
|
(31
|
)
|
|
|
(85
|
)
|
|
|
|
|
|
|
(116
|
)
|
108
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
The carrying amounts and estimated fair values of financial instruments
at June 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at June 30, 2012
|
|
|
|
Carrying
Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
(dollars in thousands)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and amounts due from financial institutions
|
|
$
|
5,841
|
|
|
$
|
5,841
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,841
|
|
Interest-bearing deposits
|
|
|
114,270
|
|
|
|
114,270
|
|
|
|
|
|
|
|
|
|
|
|
114,270
|
|
Securities available for sale
|
|
|
38,658
|
|
|
|
|
|
|
|
38,658
|
|
|
|
|
|
|
|
38,658
|
|
Loans receivable, net
|
|
|
541,628
|
|
|
|
|
|
|
|
|
|
|
|
569,603
|
|
|
|
569,603
|
|
Loans receivable held for sale, net
|
|
|
25,063
|
|
|
|
|
|
|
|
25,063
|
|
|
|
|
|
|
|
25,063
|
|
Federal Home Loan Bank stock
|
|
|
12,811
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Accrued interest receivable
|
|
|
2,047
|
|
|
|
|
|
|
|
174
|
|
|
|
1,873
|
|
|
|
2,047
|
|
Commitments to make loans intended to be sold
|
|
|
1,773
|
|
|
|
|
|
|
|
1,773
|
|
|
|
|
|
|
|
1,773
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and savings
|
|
|
(271,412
|
)
|
|
|
(271,412
|
)
|
|
|
|
|
|
|
|
|
|
|
(271,412
|
)
|
Time deposits
|
|
|
(384,567
|
)
|
|
|
|
|
|
|
(385,872
|
)
|
|
|
|
|
|
|
(385,872
|
)
|
Notes payable
|
|
|
(1,046
|
)
|
|
|
|
|
|
|
(1,046
|
)
|
|
|
|
|
|
|
(1,046
|
)
|
Advances from the Federal Home Loan Bank
|
|
|
(35,000
|
)
|
|
|
|
|
|
|
(37,222
|
)
|
|
|
|
|
|
|
(37,222
|
)
|
Mandatory forward sale contract
|
|
|
(118
|
)
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
(118
|
)
|
Accrued interest payable
|
|
|
(120
|
)
|
|
|
(112
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
(120
|
)
|
The estimated fair value amounts have been determined by the Company using
available market information and appropriate valuation methodologies. However, considerable judgment is involved in interpreting market data so as to develop the estimates of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
The Company used the following methods and assumptions to estimate fair value for items not described above:
Cash and amounts due from financial institutions, interest-bearing deposits, and federal funds sold.
The carrying
amount is a reasonable estimate of fair value because of the short maturity of these instruments and therefore are classified as Level 1.
Loans receivable
. For performing variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a level 3
classification. For other performing loans receivable, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources adjusted to reflect differences in
servicing and credit costs resulting in a Level 3 classification.
109
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
Federal Home Loan Bank stock.
It is not practical to determine
the fair value of FHLB stock due to restrictions placed on its transferability.
Accrued interest
receivable and accrued interest payable
. The carrying amount is a reasonable estimate of the fair value. The fair value level classification is consistent with the related financial instrument.
Demand deposits and time deposits.
The fair value of demand deposits, savings accounts, and certain money market
deposits is the amount payable on demand at the reporting date resulting in a Level 1 classification. The fair value of
fixed-maturity
certificates of deposit is estimated using discounted cash flows and rates
currently offered for deposits of similar remaining maturities resulting in a Level 2 classification.
Note
payable.
The carrying amount is a reasonable estimate of the fair value resulting in a Level 2 classification.
Federal Home Loan Bank Advance.
The fair value of the Companys FHLB debt is estimated based on the current rates offered to the Company for debt of the same remaining maturities resulting in
a Level 2 classification.
NOTE 20PARENT COMPANY
The following are condensed statements of financial condition as of June 30, 2013 and 2012 and
related condensed statements of operations and cash flows for the years ended June 30, 2013, 2012 and 2010 for the parent company.
CONDENSED STATEMENTS OF FINANCIAL CONDITION
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
Cash and amounts due from depository institutions
|
|
$
|
990,840
|
|
|
$
|
348,883
|
|
Prepaid expenses and other assets
|
|
|
2,822,059
|
|
|
|
2,817,484
|
|
Investment in Bank subsidiary
|
|
|
80,063,468
|
|
|
|
69,315,485
|
|
Investment in non-Bank subsidiaries
|
|
|
785,648
|
|
|
|
5,915,618
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
84,662,015
|
|
|
$
|
78,397,470
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities
|
|
$
|
3,630,729
|
|
|
$
|
8,866,339
|
|
Stockholders equity
|
|
|
81,031,286
|
|
|
|
70,130,876
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
84,662,015
|
|
|
$
|
78,997,215
|
|
|
|
|
|
|
|
|
|
|
110
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
CONDENSED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking activities
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Gain on cancellation of subordinated debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
1,224,164
|
|
|
|
331,883
|
|
|
|
385,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,224,164
|
|
|
|
331,883
|
|
|
|
385,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before federal income taxes and equity in undistributed net income of subsidiaries
|
|
|
(1,224,164
|
)
|
|
|
(331,883
|
)
|
|
|
(385,073
|
)
|
Federal income tax benefit (expense)
|
|
|
232,846
|
|
|
|
152,455
|
|
|
|
130,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in undistributed net income of subsidiaries
|
|
|
(991,318
|
)
|
|
|
(179,428
|
)
|
|
|
(254,149
|
)
|
Equity in undistributed net income (loss) of subsidiaries
|
|
|
10,049,408
|
|
|
|
(1,751,394
|
)
|
|
|
(9,436,971
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
9,058,090
|
|
|
$
|
(1,930,822
|
)
|
|
$
|
(9,691,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
CONDENSED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
9,058,090
|
|
|
$
|
(1,930,822
|
)
|
|
$
|
(9,691,120
|
)
|
Equity in undistributed net loss (income) of subsidiaries
|
|
|
(9,149,408
|
)
|
|
|
1,751,394
|
|
|
|
9,436,971
|
|
Gain on cancellation of subordinated debt
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(371,396
|
)
|
|
|
1,350,759
|
|
|
|
(128,778
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) operating activities
|
|
|
(462,714
|
)
|
|
|
1,171,331
|
|
|
|
(382,927
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance (to) from subsidiary
|
|
|
4,498,450
|
|
|
|
(763,359
|
)
|
|
|
(1,102,217
|
)
|
Investment in subsidiary
|
|
|
(3,625,000
|
)
|
|
|
(3,000,000
|
)
|
|
|
(4,000,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash from (used in) investing activities
|
|
|
873,450
|
|
|
|
(3,763,359
|
)
|
|
|
(5,102,217
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from common stock issuance
|
|
|
231,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from financing activities
|
|
|
231,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
641,957
|
|
|
|
(2,592,028
|
)
|
|
|
(5,485,144
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
348,883
|
|
|
|
2,940,911
|
|
|
|
8,426,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
990,840
|
|
|
$
|
348,883
|
|
|
$
|
2,940,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112
PVF CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 2013, 2012 and 2011
NOTE 21 EMPLOYEE BENEFIT PLANS
401(k) Savings Plan: Employees who have reached age 18 and have completed three months of eligibility
service are eligible to participate in the Companys 401(k) Savings Plan. The plan allows eligible employees to contribute up to 50% of their compensation with the Company matching up to 50% of the first 4% contributed by the employee, as
determined by the Company for the contribution period. The plan also permits the Company to make a profit sharing contribution at its discretion of up to 4% of the employees compensation. Participants vest in the Companys contributions
ratably over six years.
The total of the Companys matching and profit sharing contribution cost related
to the plan for the years ended June 30, 2013, 2012 and 2011 was $0.
113