October 19, 2009 (FinancialWire) — PVF Capital Corp. (NASDAQ: PVFC) has entered into agreements with investors who hold trust preferred securities issued by PVF Capital Trust II with an aggregate liquidation amount of $10.0 million.

Under the agreements, PVF Capital Corp. will acquire those securities in exchange for aggregate consideration consisting of (i) $400,000 in cash,  shares of common stock valued at $600,000 based on the average daily closing price of the common stock over the 20 trading days prior to the closing of the transaction (the “20-Day Average Closing Price) and  warrants to purchase 769,608 shares of common stock plus a number of shares of common stock equal to 9.9% of the shares to be issued to the investors as described in clause  above. In addition, the investors will receive additional warrants that become exercisable in the event PVF Capital Corp. completes one or more public or private offerings of its common stock within a year.

The additional warrants will give the investors the right to acquire additional shares of common stock so that the total number of shares they could acquire under all warrants would entitle them to purchase an aggregate of 4.9% of the company’s common stock outstanding following the offering or offerings completed during that one-year period. The exercise price for the warrants is the lesser of (i) $4.00 per share,  the 20-Day Average Closing Price, or  if during the term of the warrants the company sells shares of common stock in a public or private offering, the price at which shares are sold in that offering.

The warrants are exercisable for five years. The shares of stock, warrants and stock issuable upon the exercise of warrants have not been registered under the Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

Among the investors are certain members of the company’s board of directors. As a result, the exchange is subject to the approval of the company’s stockholders under the NASDAQ Marketplace Rules. The company intends to submit a proposal for the approval of the exchange for the consideration of its stockholders at its upcoming 2009 annual meeting of stockholders. All members of the company’s board of directors have executed voting agreements in which they have agreed to vote in favor of the proposal. Upon completion of the exchange, the company intends to cancel the $10.0 million in trust preferred securities.

If completed, the exchange is expected to generate after tax income of approximately $5.9 million, although the exact amount is subject to variation based on the valuation of the warrants at closing. The income would be recorded during the quarter in which the trust preferred securities were canceled, which is expected to be the fourth quarter of calendar year 2009. This amount is in addition to the approximately $5.7 million of after tax income that will be recorded during the quarter ending September 30, 2009 resulting from the cancellation of trust preferred securities with an aggregate liquidation amount of $10.0 million issued by PVF Capital Trust I, as previously reported.

PVF Capital Corp. is the holding company for Park View Federal Savings Bank, headquartered in Solon, Ohio, serving the Greater Cleveland area with 17 full-service branch offices. Additional information on the company may be found at www.myparkview.com.

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