-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KbKswqW58nqpEIyXuE6i9IkkQTGs8Urcaepm3wER6+iB6DjE2I6zl7B4j8Med9n4 WE6rh7tgvGmo8+TStnA8lw== /in/edgar/work/0000914317-00-000797/0000914317-00-000797.txt : 20001121 0000914317-00-000797.hdr.sgml : 20001121 ACCESSION NUMBER: 0000914317-00-000797 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FFW CORP CENTRAL INDEX KEY: 0000895401 STANDARD INDUSTRIAL CLASSIFICATION: [6035 ] IRS NUMBER: 351875502 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-21170 FILM NUMBER: 773525 BUSINESS ADDRESS: STREET 1: 1205 N CASS STREET STREET 2: PO BOX 419 CITY: WABASH STATE: IN ZIP: 46992-1027 BUSINESS PHONE: 2195633185 MAIL ADDRESS: STREET 1: 1205 N CASS ST STREET 2: PO BOX 419 CITY: WABASH STATE: IN ZIP: 46992 10QSB 1 0001.txt 10QSB FOR FFW CORPORATION SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 0-21170 FFW CORPORATION ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 35-1875502 - -------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer identification incorporation or organization) or Number) 1205 North Cass Street, Wabash, IN 46992 -------------------------------------------- (Address of principal executive offices) (219) 563-3185 --------------------------- (Issuer's telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Transitional Small Business Disclosure Format (check one): Yes [ X ] No [ ] State the number of Shares outstanding of each of the issuer's classes of common equity, as of the latest date: As of November 14, 2000, there were 1,424,627 shares of the Registrant's common stock issued and outstanding. FFW CORPORATION INDEX PART I. FINANCIAL INFORMATION PAGE NO. Item 1. Consolidated Condensed Financial Statements Consolidated Balance Sheets September 30, 2000 3 and June 30, 2000 Consolidated Statements of Income for the 4 three months ended September 30, 2000 and 1999. Consolidated Statements of Cash Flows for the three 5 months ended September 30, 2000 and 1999. Notes to Consolidated Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial 8 Condition and Results of Operations PART II. OTHER INFORMATION Items 1-6 12 Signature Page 13 2 PART I: FINANCIAL INFORMATION FFW CORPORATION CONSOLIDATED BALANCE SHEETS ASSETS : - -------
(Unaudited) September 30 June 30 2000 2000 ----- ---- Cash and due from financial institutions ........................................... $ 6,180,228 $ 4,152,652 Interest-earning deposits in financial institutions - short term ................... 2,845,653 1,101,766 Cash and cash equivalents ............................................ 9,025,881 5,254,418 Securities available for sale ...................................................... 51,007,596 52,026,138 Loans receivable, net of allowance for loan losses of $2,897,271 at September 30 and $1,961,318 at June 30 ............................................ 152,153,900 150,810,106 Federal Home Loan Bank stock, at cost .............................................. 3,400,900 3,400,900 Accrued interest receivable ........................................................ 1,537,224 1,666,265 Premises and Equipment-net ......................................................... 1,985,413 2,028,386 Investment in limited partnership ................................................... 548,754 561,254 Other assets ....................................................................... 2,934,010 3,289,565 Total Assets .......................................... $ 222,593,678 $ 219,037,032 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY: Liabilities: Non-interest-bearing demand deposits ............................................... $ 9,446,542 $ 8,875,968 Savings, Now and MMDA deposits ..................................................... 47,442,567 48,198,026 Other time deposits ................................................................ 79,838,652 76,030,606 ------------- ------------- Total Deposits ....................................................... 136,727,761 133,104,600 Federal Home Loan Bank advances .................................................... 62,167,542 64,167,542 Obligation relative to limited partnership ......................................... 0 75,000 Accrued Interest Payable ........................................................... 984,474 285,680 Accrued expenses and other liabilities ............................................. 2,949,337 1,789,290 ------------- ------------- Total Liabilities .................................................... 202,829,114 199,422,112 Shareholders' Equity: Preferred stock, $.01 par value, 500,000 shares authorized none issued ............. -- -- Common stock, $.01 par value, 2,000,000 shares authorized, 1,808,013 shares Issued and 1,424,627 outstanding at September, 30 2000; 1,807,013 shares issued and 1,423,627 shares outstanding at June 30, 2000 ...................... 18,080 18,070 Additional paid-in capital ......................................................... 9,233,118 9,228,128 Retained earnings - substantially restricted ....................................... 15,325,297 15,547,131 Accumulated other comprehensive income ............................................. (1,119,471) (1,479,969) Unearned Management Retention Plan shares .......................................... (66,374) (72,354) Treasury Stock at cost, 383,386 on September 30, 2000 and 383,386 at June 30, 2000 ........................................................ (3,626,086) (3,626,086) ------------- ------------- Total Shareholders' equity ......................................... 19,764,564 19,614,920 Total Liabilities and Shareholders' Equity ............ $ 222,593,678 $ 217,488,894 ============= =============
3 PART I: FINANCIAL INFORMATION FFW CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended September 30 2000 1999 ---- ---- Interest Income: Loans Receivable Mortgage loans ..................... $ 1,507,412 $ 1,448,176 Consumer and other loans ........... 1,869,445 1,763,937 Securities Taxable ............................ 849,311 771,092 Nontaxable ......................... 112,777 112,634 Other Interest-earning assets .................... 29,315 32,807 Total Interest Income .............. 4,368,260 4,128,646 Interest Expense : Deposits ......................................... 1,651,863 1,456,162 Other ............................................ 984,535 910,309 ----------- ----------- Total Interest Expense ............. 2,636,398 2,366,471 ----------- ----------- Net Interest Income ................................... 1,731,862 1,762,175 Provision for Loan Losses .............. 1,035,000 135,000 ----------- ----------- Net interest income after provision for loan losses ... 696,862 1,627,175 Non-interest income : Net (loss) on sale of interest-earning assets .... (33,427) (33,550) Net unrealized gain or loss on loans held for sale -- -- Other ............................................ 328,520 305,771 ----------- ----------- Total Non-Interest Income .......... 295,093 272,221 Non-Interest Expense : Compensation and Benefits ........................ 520,901 543,410 Occupancy and equipment .......................... 96,527 94,786 Data Processing Expense .......................... 115,228 107,561 Other ............................................ 340,866 321,014 ----------- ----------- Total Non-Interest Expense ......... 1,073,522 1,066,771 ----------- ----------- Income (Loss) before income taxes ..................... (81,567) 832,625 Income Tax Expense (Benefit) ........... (46,973) 298,584 ----------- ----------- Net Income (Loss) ..................................... $ (34,594) $ 534,041 =========== =========== Comprehensive Income (Loss) ........................... $ 325,904 $ (60,278) =========== =========== Earnings (Losses) per common and common equivalent shares : Basic .................................. $ (.02) $ .37 Diluted ................................ $ (.02) $ .37
4 PART I: FINANCIAL INFORMATION FFW CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended September 30 2000 1999 ---- ---- Cash flows from operating activities : Net Income (Loss) ..................................................... $ (34,594) $ 534,041 Adjustments to reconcile net income to net cash from operating activities : Depreciation and amortization, net of accretion .................. (12,524) (3,970) Provision for loan losses ........................................ 1,035,000 135,000 Net (gains) losses on sale of : Securities available for sale ........................... 0 34,207 Loans held for sale ..................................... (8,010) (657) Foreclosed estate owned and repossessed assets .......... 0 (10,506) Origination of loans held for sale ............................... (784,000) (132,000) Proceeds from sale of loans held for sale ........................ 792,010 132,657 ESOP expenses .................................................... 0 79,710 Net change in accrued interest receivable and other assets .................................................. 228,006 (275,216) Amortization of goodwill and core deposit intangibles ............ 39,087 39,087 Net change in accrued interest payable, accrued expenses and other liabilities .......................... 1,864,821 1,085,143 ----------- ----------- Total adjustments ........................ 3,154,390 1,083,455 ----------- ----------- Net cash from operating activities ...................... 3,119,796 1,617,496 Cash flows from investing activities : Proceeds from : sales/calls of securities available for sale ............ 1,750,000 2,980,940 Maturities of securities available for sale ............. 95,000 415,000 Purchase of : Securities available for sale .......................... (212,499) (3,997,786) Federal Home Loan Bank Stock ............................ 0 0 Principal collected on mortgage- backed securities ............... 45,922 84,832 Net change in loans receivable ................................... (2,482,509) (1,109,119) Net purchases premises and equipment ............................. (7,533) (17,891) Investment in limited partnership ................................ (75,000) 0 Proceeds from sales of other real estate and Repossessed assets ...................................... 97,365 229,759 ----------- ----------- Net cash from investing activities ...................... (789,254) (1,414,265)
5 PART I: FINANCIAL INFORMATION FFW CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Three Months Ended September 30 2000 1999 ---- ---- Cash flows from financing activities : Net increase in deposits ...................... $ 3,623,161 $ 5,113,475 Proceeds from short-term borrowings ........... 20,889,047 7,662,781 Payment on short-term borrowings .............. (22,889,047) (8,085,907) Purchase of Treasury Stock .................... 0 (415,895) Proceeds from exercising of stock options ..... 5,000 49,885 Cash dividends paid ........................... (187,240) (172,614) ------------ ------------ Net cash from financing activities ... 1,440,921 4,151,725 Net increase (decrease) in cash and cash equivalents 3,771,463 4,354,956 Cash and cash equivalents at beginning of period ... 5,254,418 4,839,235 ------------ ------------ Cash and cash equivalents at end of period ......... $ 9,025,881 $ 9,194,191 ============ ============
6 FFW CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (1) Basis of Presentation The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the Consolidated Condensed Financial Statements contain all adjustments (consisting only of normal recurring adjustments) necessary to represent fairly the financial condition of FFW Corporation as of September 30, 2000 and June 30, 2000 and the results of its operations, for the three months ended September 30, 2000 and 1999. Financial Statement reclassifications have been made for the prior period to conform to classifications used as of and for the period ended September 30, 2000. Operating results for the three months ended September 30, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ended June 30, 2001. (2) Securities Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138, requires derivative instruments be carried at fair value on the balance sheet. The statement continues to allow derivative instruments to be used to hedge various risks and sets fourth specific criteria to be used to determine when hedge accounting can be used. The statement also provides for offsetting changes in fair value or cash flows of both the derivative and the hedged asset or liability to be recognized in earnings in the same period; however, any changes in fair value of cash flow that represent the ineffective portion of a hedge are required to be recognized in earnings and cannot be deferred. For derivative instruments not accounted for as hedges, changes in fair value are required to be recognized in earnings. The adoption of this statement on July 1, 2000, did not have a material effect on the consolidated financial statements. 7 PART II FFW CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The accompanying Consolidated Condensed Financial Statements include the accounts of FFW Corporation (the "Company") and its wholly owned subsidiaries, First Federal Savings Bank of Wabash (the "Bank") and FirstFed Financial of Wabash, Inc. All significant inter-company transactions and balances are eliminated in consolidation. The Company's results of operations are primarily dependent on the Bank's net interest margin, which is the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. The Bank's net income is also affected by the level of its non-interest expenses, such as employee compensation and benefits, occupancy expenses, and other expenses. FORWARD-LOOKING STATEMENTS Except for historical information contained herein, the matters discussed in this document, and other information contained in the Company's SEC filings, may express "forward-looking statements." Those "forward-looking statements" may involve risk and uncertainties, including statements concerning future events, performance and assumptions and other statements that are other than statements of historical facts. The Company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Readers are advised that various factors--including, but not limited to, changes in laws, regulations or generally accepted accounting principles; the Company's competitive position within the markets served; increasing consolidation within the banking industry; unforeseen changes in interest rates; any unforeseen downturns in the local, regional or national economies--could cause the Company's actual results or circumstances for future periods to differ materially from those anticipated or projected. The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. COMPARISON OF THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999 Net loss for the three-month period ended September 30, 2000 was $(35,000) compared to net income of $534,000 for the equivalent period in 1999. This substantial decrease and loss was primarily the result of a $900,000 increase in the provision for loan loss for the period in 2000. Diluted net loss per common share was $(0.02) for the three-month period ending September 30, 2000 compared to diluted net income per common share of $0.37 for the equivalent period in 1999. Return on average shareholders' equity was (0.69)% for the three months ended September 30, 2000, compared to 10.94% in 1999. The return on total average assets was (0.06)% for the three months ended September 30, 2000, compared to 0.96% in 1999. 8 NET INTEREST INCOME The net interest income for the three-month period ended September 30, 2000, was $1,732,000 compared to $1,762,000, a decrease of 1.7% over the same period in 1999, resulting in a net yield of 3.29% compared to 3.35% in 1999. Total average earning assets increased slightly, by $94,000, for the three-month period ended September 30, 2000, over the comparative period in 1999. Total average investment securities increased $1,288,000 for the three-month period over one-year ago. Total average loans decreased $210,000 for the three-month period over one-year ago. The yields on total average earning assets were 8.30% and 7.85% for the three-month periods ended September 30, 2000, and 1999. The following tables set forth consolidated information regarding average balances and rates. FFW Corp Three Months Ending (In Thousands)
9/30/2000 9/30/1999 Average Average Average Average Balance Interest Rate Balance Interest Rate ------- -------- ---- ------- -------- ---- Interest-earning assets: - ------------------------ Loans ............................................ $ 154,059 $ 3,377 8.77% $ 154,269 $ 3,211 8.33% Securities ....................................... 55,341 962 6.95% 54,053 884 6.54% Other interest-earning assets .................... 1,032 30 10.99% 2,016 33 6.55% --------- --------- --------- --------- Total interest-earning assets ............... 210,432 4,369 8.30% 210,338 4,128 7.85% Non interest-earning assets Cash and due from ................................ 5,012 5,163 Allowance for loan losses ........................ (2,045) (1,633) Other non interest-earning assets ................ 5,852 6,659 --------- --------- Total assets ................................ $ 219,251 $ 220,527 ========= ========= Interest-bearing liabilities: - ----------------------------- Interest-bearing deposits ........................ $ 125,038 1,652 5.28% $ 124,738 1,456 4.67% FHLB advances .................................... 64,017 985 6.15% 65,949 910 5.52% --------- --------- --------- --------- Total interest-bearing liabilities .......... 189,055 2,637 5.58% 190,687 2,366 4.96% --------- --------- --------- --------- Non interest-bearing deposit accounts ............ 9,195 8,838 Other non interest-bearing liabilities ........... 1,059 1,586 --------- --------- Total liabilities ........................... 199,309 201,111 Shareholders' equity ............................. 19,942 19,416 --------- --------- Total liabilities and shareholders equity ... $ 219,251 $ 220,527 ========= ========= Net interest income .............................. $ 1,732 $ 1,762 ========= ========= Net interest margin .............................. 3.29% 3.35%
9 PROVISION FOR LOAN LOSSES The provision for loan losses was $1,035,000 for the three-month period ended September 30, 2000 and $135,000 for the same period in 1999. Changes in the provision for loan losses are attributed to management's analysis of the adequacy of the allowance for loan losses to address recognizable and currently anticipated losses. Net charge-offs of $99,000 have been recorded for the three-month period ended September 30, 2000, compared to $106,000 of net charge-offs for the same period in 1999. The allowance for loan losses was $2,897,000 or 1.90% of net loans as of September 30, 2000, compared to $1,962,000 or 1.30% of net loans at June 30, 2000. Subsequent to September 30, 2000, the Company became aware of circumstances that had occurred involving loans the Bank had originated to a single borrower. Management is currently in the process of evaluating the applicable collateral of automobiles and lease receivables. As a result of these circumstances and based on the information currently available, management has concluded that a loss is probable and, accordingly, has classified $900,000 of the Bank's allowance for loan losses as a specific reserve on the borrower's outstanding balance of approximately $1.9 million. In addition, these loans are considered to be impaired at September 30, 2000. These circumstances have necessitated an increase of $900,000 in the Bank's provision for loan loss compared to the like period in 1999. Information regarding impaired loans is as follows for the periods ended:
Sept. 30, 2000 June 30, 2000 ----- ----- Impaired loans with no allowance for loan losses allocated Impaired loans with allowance for loan losses allocated 2,620,281 754,116 Amount of allowance allocated 1,232,711 234,667
The Company establishes an allowance for loan losses based on an evaluation of risk factors in the loan portfolio and changes in the nature and volume of its loan activity. This evaluation includes, among other factors, the level of the Company's classified and non-performing assets and their estimated value, the national outlook which may tend to inhibit economic activity and depress real estate and other values in the Company's primary market area, regulatory issues and historical loan loss experience. Accordingly, the calculation of the adequacy of loan losses is not based directly on the level of non-performing loans. Although management believes it uses the best information available to determine the allowances, unforeseen market conditions or other unforeseen events could result in adjustments and net earnings could be significantly affected if circumstances differ substantially from the assumptions used in making the determination. In addition, a determination by the Company's main operating subsidiary, First Federal, as to the classification of its assets and the amount of its valuation allowances is subject to review by the Office of Thrift Supervision, which may order the establishment of additional general or specific reserve allowances. It is management's opinion that the allowance for loan losses is adequate to absorb existing losses in the loan portfolio as of September 30, 2000. NON-INTEREST INCOME Non-interest income for the three-month periods ended September 30, 2000 and 1999 was $295,000 and $272,000, respectively. This $23,000 increase from the prior period is primarily the result of increased fee income collected. 10 NON-INTEREST EXPENSE Non-interest expense for the three-month period ended September 30, 2000, was $1,074,000, an increase of $7,000, 0.6%, compared to the same period in 1999. For the three-month period ended September 30, 2000, compensation and employee benefits decreased 4.1%, occupancy and equipment expense increased 1.8%, data processing expense increased 7.1% and other non-interest expense increased 6.2% over the same period in 1999. INCOME TAXES The provision for income taxes for the three-month period ended September 30, 2000, was a benefit of $(47,000). This compares to an expense of $299,000 for the comparable period in 1999. The provision for income taxes for the three months ended September 30, 2000, is at a rate which management believes approximates the effective rate for the year ending June 30, 2001. REGULATORY CAPITAL REQUIREMENTS Pursuant to the Financial Institution Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), savings institutions must meet three separate minimum capital-to-asset requirements. As of September 30, 2000, the Bank maintains risk-based, core capital and tangible capital ratios of 13.27%, 7.72% and 7.72% compared to capital requirements of 8.00%, 4.00% and 1.50%, respectively. LIQUIDITY The standard measure of liquidity for savings associations is the ratio of cash and eligible investments to a certain percentage of net withdrawable savings accounts and borrowings due within one year. The minimum required ratio is currently set by the Office of Thrift Supervision Regulation at 5.0%. At September 30, 2000, the Bank's liquidity ratio was 10.23%. 11 Part II - Other Information As of September 30, 2000, management is not aware of any current recommendations by regulatory authorities which, if they were to be implemented, would have or are reasonably likely to have a material adverse effect on the Company's liquidity, capital resources or operations. Item 1 - Legal Proceedings ----------------- Not Applicable. Item 2 - Changes in Securities --------------------- Not Applicable. Item 3 - Defaults upon Senior Securities ------------------------------- Not Applicable. Item 4 - Submission of Matters to a vote of Security Holders --------------------------------------------------- The Annual Meeting of Shareholders (the "Meeting") of FFW Corporation was held on October 24, 2000. The matters approved by shareholders at the Meeting and the number of votes cast for, against or withheld (as well as the number of abstentions and broker non-votes) as to each matter are set below:
PROPOSAL NUMBER OF VOTES -------- --------------- FOR WITHHELD --- -------- Election of the following Directors for a three-year term Wayne W. Rees ............................... 1,197,627 13,400 Ronald D. Reynolds............................. 1,208,927 2,100
FOR AGAINST ABSTAIN --- ------- ------- Ratification of Crowe Chizek as auditors for the fiscal year ending June 30, 2001..................................... 1,099,622 108,605 2,800
Item 5 - Other Information Not Applicable Item 6 - Exhibits and Reports on Form 8-K Not Applicable 12 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FFW CORPORATION Registrant Date: November 20, 2000 /S/ Roger K. Cromer --------------------------- ------------------------------- Roger K. Cromer President and Chief Executive Officer Date: November 20, 2000 /S/ Timothy A. Sheppard --------------------------- ------------------------------- Timothy A. Sheppard Treasurer and Chief Accounting Officer 13 EX-27 2 0002.txt FDS - FFW CORPORATION
9 1,000 3-MOS JUN-30-2001 SEP-30-2000 6,180 2,846 0 0 51,008 0 0 155,051 2,897 222,594 136,728 48,500 3,933 13,668 0 0 18 19,747 222,594 3,377 962 30 4,369 1,652 2,637 1,732 1,035 (33) 1,074 (82) (82) 0 0 (35) (.02) (.02) 3.29 902 0 0 0 1,961 136 37 2,897 2,060 0 837
-----END PRIVACY-ENHANCED MESSAGE-----