PVF agrees to redeem trust preferreds for cash, shares and warrants

By Susanna Moon

Chicago, Oct. 16 - PVF Capital Corp. said it agreed to acquire trust preferred securities issued by PVF Capital Trust II with a liquidation amount of $10 million.

Under agreements with investors, PVF will acquire the securities in exchange for $400,000 in cash and common shares valued at $600,000 based on the average daily closing price of the stock over the 20 trading days before the closing.

Investors also will receive warrants to purchase 769,608 common shares plus a number of shares equal to 9.9% of the shares to be issued to the investors as well as 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 give investors the right to acquire additional shares of common stock so that the total number of shares they could acquire under all warrants entitles them to purchase 4.9% of the company's common stock outstanding following the offering or offerings completed during that one-year period.

The warrants are exercisable for five years at the lesser of $4.00 per share, the 20-day average closing price and the price at which shares are sold in a public or private offering.

The company's board members are some of the investors, according to a press release. As a result, the exchange is subject to the approval of the company's stockholders.

If completed, the exchange is expected to generate after-tax income of about $5.9 million.

PVF Capital Corp. is the Solon, Ohio-based holding company for Park View Federal Savings Bank.

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