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, 2003
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 incorporation (I.R.S. Employer identification
or organization) or Number)
1205 North Cass Street, Wabash, IN 46992
(Address of principal executive offices)
(260) 563-3185
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act of 1934 during the past 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 ___ No _X_
State the number of Shares outstanding of each of the issuer's classes of common
equity, as of the latest date:
As of November 13, 2003, there were 1,292,229 shares of the Registrant's common
stock issued and outstanding.
FFW CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets for September 30, 2003 3
and June 30, 2003
Consolidated Statements of Income and 4
Comprehensive Income for the three months
ended September 30, 2003 and 2002.
Consolidated Statements of Cash Flows for the 5
three months ended September 30, 2003 and 2002.
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
Item 3. Controls and Procedures 13
PART II. OTHER INFORMATION
Items 1-6 14
Signature Page 15
Exhibit Index 16
PART I: FINANCIAL INFORMATION
FFW CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS : September 30 June 30
2003 2003
------------- -------------
Cash and due from financial institutions ........................................ $ 5,051,943 $ 8,235,956
Interest-earning deposits in other financial institutions - short term .......... 1,179,714 1,588,877
------------- -------------
Cash and cash equivalents .................................................... 6,231,657 9,824,833
Securities available for sale ................................................... 89,272,470 89,636,775
Loans receivable, net of allowance for loan losses of $2,446,030 at September 30,
2003 and $2,592,092 at June 30, 2003 ......................................... 128,563,120 128,726,793
Federal Home Loan Bank stock, at cost ........................................... 3,488,700 3,445,900
Accrued interest receivable ..................................................... 1,189,970 1,388,322
Premises and equipment, net ..................................................... 2,680,873 2,677,102
Mortgage servicing rights asset ................................................. 617,782 614,638
Cash surrender value of life insurance .......................................... 4,785,021 4,718,031
Other assets .................................................................... 2,540,630 1,738,687
------------- -------------
Total Assets .............................................................. $ 239,370,223 $ 242,771,081
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Noninterest-bearing demand deposits ............................................. $ 10,276,650 $ 11,238,092
Savings, NOW and MMDA deposits .................................................. 70,793,874 70,450,282
Other time deposits ............................................................. 78,114,573 81,758,120
------------- -------------
Total Deposits ............................................................... 159,185,097 163,446,494
Federal Home Loan Bank advances ................................................. 55,288,331 52,038,331
Accrued interest payable ........................................................ 641,752 120,640
Accrued expenses and other liabilities .......................................... 1,524,481 3,525,548
------------- -------------
Total Liabilities ......................................................... 216,639,661 219,131,013
Shareholders' Equity:
Preferred stock, $.01 par; 500,000 shares authorized, none issued ............... -- --
Common stock, $.01 par; 2,000,000 shares authorized; issued: 1,829,828;
outstanding: 1,292,229 - September 30, 2003; 1,311,800 - June 30, 2003 ....... 18,298 18,298
Additional paid-in capital ...................................................... 9,345,123 9,345,123
Retained earnings ............................................................... 19,657,976 19,266,267
Accumulated other comprehensive income .......................................... (194,678) 720,765
Unearned management retention plan shares ....................................... (40,567) (48,172)
Treasury stock at cost, shares: 537,599 - September 30, 2003 and
518,028 - June 30, 2003 ...................................................... (6,055,590) (5,662,213)
------------- -------------
Total Shareholders' Equity ................................................ 22,730,562 23,640,068
------------- -------------
Total Liabilities and Shareholders' Equity .................... $ 239,370,223 $ 242,771,081
============= =============
See accompanying notes.
PART I: FINANCIAL INFORMATION
FFW CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
September 30
2003 2002
----------- -----------
Interest and dividend income :
Loans, including fees.............................. $ 2,271,094 $ 2,735,061
Taxable securities................................. 629,209 748,365
Nontaxable securities.............................. 252,716 229,186
Other interest-earning assets ..................... 6,231 23,869
----------- -----------
Total interest income .......................... 3,159,250 3,736,481
Interest expense :
Deposits .......................................... 935,749 1,314,668
Other ............................................. 635,599 707,632
----------- -----------
Total interest expense ......................... 1,571,348 2,022,300
----------- -----------
Net interest income .................................. 1,587,902 1,714,181
Provision for loan losses ......................... 210,000 225,000
----------- -----------
Net interest income after provision for loan losses .. 1,377,902 1,489,181
Non-interest income :
Net gain on sale of securities .................... 3,712 1,222
Net gain on sale of loans ......................... 270,663 180,183
Commission income ................................. 35,761 39,306
Service charges and fees .......................... 157,490 234,012
Earnings on life insurance ........................ 73,101 16,258
Other ............................................. 16,373 13,270
----------- -----------
Total non-interest income ...................... 557,100 484,251
Non-interest expense :
Compensation and benefits ......................... 579,353 579,905
Occupancy and equipment ........................... 103,951 100,272
Deposit insurance premium ......................... 18,926 18,028
Regulatory assessment ............................. 15,431 23,538
Correspondent bank charges ........................ 60,967 55,567
Data processing expense ........................... 128,511 119,361
Printing, postage and supplies .................... 38,879 38,353
Amortization of core deposit premium .............. -- 18,286
Other ............................................. 293,328 244,199
----------- -----------
Total non-interest expense ..................... 1,239,346 1,197,509
----------- -----------
Income before income taxes ........................... 695,656 775,923
Income tax expense ................................ 94,059 200,183
----------- -----------
Net income ........................................... $ 601,597 $ 575,740
=========== ===========
Change in unrealized appreciation (depreciation) on
securities available for sale, net of tax ......... (915,443) 716,854
----------- -----------
Comprehensive income ................................. $ (313,846) $ 1,292,594
=========== ===========
Earnings per common share :
Basic ............................................. $ .46 $ .42
Diluted ........................................... $ .45 $ .42
See accompanying notes.
PART I: FINANCIAL INFORMATION
FFW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 30
2003 2002
------------ ------------
Cash flows from operating activities :
Net income ............................................. $ 601,597 $ 575,740
Adjustments to reconcile net income to net cash
from operating activities :
Depreciation and amortization ....................... 303,195 113,795
Provision for loan losses ........................... 210,000 225,000
Net (gains) losses on sale of :
Securities ....................................... (3,712) (1,222)
Loans held for sale .............................. (270,663) (180,183)
REOs and repossessed assets ...................... 626 1,981
Originations of loans held for sale ................. (13,972,750) (8,741,414)
Proceeds from sale of loans held for sale ........... 14,120,453 8,834,183
Increase in cash surrender value of life insurance .. (66,990) (15,282)
Amortization of MRP contribution .................... 7,605 9,387
Net change in accrued interest receivable and other
assets ........................................... 373,723 205,634
Amortization of core deposit intangibles ............ -- 18,286
Net change in accrued interest payable
and other liabilities ............................ (1,479,955) 460,907
------------ ------------
Net cash from operating activities ............... (176,871) 1,506,812
Cash flows from investing activities :
Proceeds from :
Sales and calls of securities available for sale .... 3,540,191 3,252,317
Maturities of securities available for sale ......... 240,000 150,000
Sales of REOs and repossessed assets ................ 105,624 185,185
Purchase of:
Securities available for sale ....................... (7,688,649) (7,069,083)
FHLB stock .......................................... (42,800) --
Life insurance ...................................... -- (4,500,000)
Principal collected on mortgage-backed securities ...... 2,891,203 3,097,579
Net change in loans receivable ......................... (795,827) 5,050,797
Purchases of premises and equipment, net ............... (51,385) (33,957)
------------ ------------
Net cash from investing activities .................. (1,801,643) 132,838
Cash flows from financing activities :
Net change in deposits ................................. (4,261,397) 2,591,502
Proceeds from borrowings ............................... 9,000,000 --
Repayment on borrowings ................................ (5,750,000) (5,500,000)
Purchase of treasury stock ............................. (393,377) (167,280)
Cash dividends paid .................................... (209,888) (204,492)
------------ ------------
Net cash from financing activities .................. (1,614,662) (3,280,270)
Net change in cash and cash equivalents ................... (3,593,176) (1,640,620)
Beginning cash and cash equivalents ....................... 9,824,833 9,318,513
------------ ------------
Ending cash and cash equivalents .......................... $ 6,231,657 $ 7,677,893
============ ============
Supplemental disclosure of cash flow information
Transfer of loans to REO and repossessed assets ........... $ 749,500 $ 285,875
See accompanying notes.
PART I: FINANCIAL INFORMATION
FFW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) Basis of Presentation
The accompanying unaudited Consolidated Financial Statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America 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 accounting principles generally
accepted in the United States of America for complete financial statements.
In the opinion of management, the Consolidated 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,
2003 and June 30, 2003 and the results of its operations, for the three months
ended September 30, 2003 and 2002. Financial Statement reclassifications have
been made for the prior period to conform to classifications used as of and for
the period ended September 30, 2003.
Operating results for the three months ended September 30, 2003 are not
necessarily indicative of the results that may be expected for the fiscal year
ending June 30, 2004.
(2) Earnings Per Share:
Basic earnings per share are calculated solely on weighted-average common
shares outstanding. Diluted earnings per share will reflect the potential
dilution of stock options and other common stock equivalents. For the three
month periods ending September 30, 2003 and 2002, the weighted average shares
outstanding in calculating basic earnings per share were 1,304,567 and 1,364,507
while the weighted average number of shares for diluted earnings per share were
1,326,791 and 1,380,315.
(3) Stock Based Compensation:
Compensation expense under stock options is reported using the intrinsic
value method. No stock-based compensation cost is reflected in net income, as
all options granted had an exercise price equal to or greater than the market
price of the underlying common stock at date of grant. The following table
illustrates the effect on net income and earnings per share if expense was
measured using the fair value recognition provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation.
Three Months Ending
September 30,
2003 2002
---- ----
Net income as reported $601,597 $575,740
Less: Stock-based compensation
expense determined under fair value
based method 5,314 7,370
-------- --------
Pro forma net income $596,283 $568,370
======== ========
Basic earnings per share as reported $ .46 $ .42
Pro forma basic earnings per share .46 .42
Diluted earnings per share as reported .45 .42
Pro forma diluted earnings per share .45 .41
There were no stock options granted during the three months ended September
30, 2003 or 2002.
In future years, as additional options are granted, the proforma effect on
net income and earnings per share may increase. Stock options are used to reward
directors and certain executive officers and provide them with an additional
equity interest. Options are issued for ten year periods and have varying
vesting schedules.
(4) Recently Adopted Accounting Standards:
On July 1, 2003, the Company adopted Interpretation 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees. On July 1, 2003, the
Company adopted Statement 149, amendment of Statement 133 on Derivative
Instruments and Hedging Activities, and Statement 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equities. On
October 1, 2003, the Company adopted Interpretation 46, Consolidation of
Variable Interest Entities. Adoption of the new standards did not materially
affect the Company's operating results or financial condition.
PART I: ITEM 2
FFW CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The accompanying Consolidated 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, Inc ("FirstFed
Financial"). 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 income and 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 accounting principles generally accepted in the
United States of America; 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.
CRITICAL ACCOUNTING POLICIES
Certain of the Company's accounting policies are important to the portrayal
of the Company's financial condition, since they require management to make
difficult, complex or subjective judgments, some of which may relate to matters
that are inherently uncertain. Estimates associated with these policies are
susceptible to material changes as a result of changes in facts and
circumstances. Facts and circumstances that could effect these judgments
include, but without limitation, changes in interest rates, in the performance
of the economy or in the financial condition of borrowers. Management believes
that its critical accounting policies include determining the allowance for loan
losses ("ALL") and the valuation of mortgage servicing rights.
Allowance for Loan Losses: The ALL is a valuation allowance for probable
incurred credit losses, increased by the provision for loan losses and decreased
by charge-offs less recoveries. Management estimates the ALL balance required
using past loan loss experience, the nature and volume of the portfolio,
information about specific borrower situations and estimated collateral values,
economic conditions, and other factors. Allocations of the ALL may be made for
specific loans, but the entire ALL is available for any loan that, in
management's judgment, should be charged-off. Loan losses are charged against
the ALL when management believes the uncollectibility of a loan balance is
confirmed.
A loan is impaired when full payment under the loan terms is not expected.
Impairment is evaluated in total for small-balance loans of similar nature such
as residential mortgage and consumer loans, and on an individual loan basis for
other loans. If a loan is impaired, a portion of the ALL is allocated so that
the loan is reported, net, at the present value of estimated future cash flows
using the loan's existing rate or at the fair value of collateral if repayment
is expected solely from the collateral.
Mortgage Servicing Rights: Servicing rights represent the allocated value of
servicing rights retained on loans sold. Servicing rights are expensed in
proportion to, and over the period of, estimated net servicing revenues.
Impairment is evaluated based on the fair value of the rights, using groupings
of the underlying loans as to interest rates and prepayment characteristics. Any
impairment of a grouping is reported as a valuation allowance. As of September
30, 2003, mortgage servicing rights had a carrying value of $618,000.
COMPARISON OF THREE MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002
Net income for the three-month period ended September 30, 2003 was $602,000
compared to net income of $576,000 for the equivalent period in 2002. The
increase of $26,000 for the three month period was primarily the result of
increased non-interest income combined with a lower effective tax rate due to
increased nontaxable income and reduced provision for loan losses that was
partially offset by lower net interest income and increased non-interest expense
for the period ended September 30, 2003 compared to September 30, 2002.
Diluted earnings per common share were $0.45 for the three-month period
ended September 30, 2003 compared to $0.42 for the equivalent period in 2002.
Return on average shareholders' equity was 10.26% for the three months ended
September 30, 2003, compared to 10.01% in 2002. The return on total average
assets was 1.00% for the three-month period ended September 30, 2003, compared
to 0.96% in 2002.
NET INTEREST INCOME
The net interest income for the three-month period ended September 30,
2003, was $1,588,000 compared to $1,714,000, a decrease of 7.4% over the same
period in 2002, resulting in a net interest margin of 2.82% compared to 3.01% in
2002.
Total average earning assets decreased $2,159,000 for the three-month
period ended September 30, 2003, over the comparative period in 2002. This
decrease was primarily due to the average cash surrender value of life insurance
being $3.8 million higher in fiscal 2004. Total average investment securities
increased $12.9 million while total average loans decreased $11.9 million
comparing the three-months ended September 30, 2003 and 2002. The yields on
total average earning assets were 5.62% and 6.56% for the three-month periods
ended September 30, 2003, and 2002 as loans refinanced to lower rates, balances
declined and were replaced with securities. The yields on total average
interest-bearing liabilities were 3.09% and 3.97% for the three-month periods
ended September 30, 2003, and 2002 as the cost of deposits and borrowings
reduced by 0.97% and 0.66%.
The following tables set forth consolidated information regarding average
balances and rates.
FFW Corp
Three Months Ending
(Dollars in thousands)
9/30/2003 9/30/2002
Average Average Average Average
Interest-earning assets: Balance Interest Rate Balance Interest Rate
- ------------------------ ------- -------- ---- ------- -------- ----
Loans $130,234 $2,271 6.94% $142,120 $2,735 7.63%
Securities 91,798 882 3.85% 78,863 978 4.96%
Other interest-earning assets 2,410 6 0.99% 5,618 24 1.69%
-------- ------ -------- ------
Total interest-earning assets 224,442 3,159 5.62% 226,601 3,737 6.56%
Non interest-earning assets:
Cash and due from 6,267 5,277
Allowance for loan losses (2,551) (2,390)
Other non interest-earning assets 11,568 7,357
-------- --------
Total assets $239,726 $236,845
======== ========
Interest-bearing liabilities:
Interest-bearing deposits $150,763 936 2.47% $151,474 1,315 3.44%
FHLB advances 51,807 635 4.88% 50,728 708 5.54%
-------- ------ -------- ------
Total interest-bearing liabilities 202,570 1,571 3.09% 202,202 2,023 3.97%
-------- ------ -------- ------
Non interest-bearing deposit accounts 11,011 9,640
Other non interest-bearing liabilities 2,815 2,248
-------- --------
Total liabilities 216,396 214,090
Shareholders' equity 23,330 22,755
-------- --------
Total liabilities and shareholders' equity $239,726 $236,845
======== ========
Net interest income $ 1,588 $ 1,714
======= =======
Net interest margin 2.82% 3.01%
==== ====
PROVISION FOR LOAN LOSSES
The provision for loan losses was $210,000 for the three month period ended
September 30, 2003 and $225,000 for the same period in 2002. Changes in the
provision for loan losses are attributable to management's analysis of the
adequacy of the allowance for loan losses (ALL) to address probable and incurred
losses. Net charge-offs of $356,000 have been recorded for the three month
period ended September 30, 2003, compared to $320,000 of net charge-offs for the
same period in 2002. For the three month periods ended September 30, 2003, gross
charge-offs were $388,000. The ALL was $2,466,000 or 1.90% of net loans as of
September 30, 2003 compared to $2,592,000 or 2.01% of net loans at June 30,
2003. Non-performing loans, which include non-accruing loans and accruing loans
delinquent more than 90 days, were $1,742,000 at September 30, 2003 compared to
$2,616,000 at June 30, 2003. This reduction in nonperforming loans includes the
transfer of $750,000 to REO and repossessed assets that occurred in the quarter
ended September 30, 2003. Management believes that the Bank will realize the
carrying value of these other assets upon their sale. Based on an analysis of
the collateral on these loans, management believes that the reserves currently
allocated in the ALL on these loans are adequate to absorb the currently
estimated potential losses on these loans.
The Company establishes an ALL 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 economic
outlook and the resulting impact on real estate and other values in the
Company's primary market area, regulatory issues and historical loan loss
experience. Although management believes it uses the best information available
to determine the ALL, 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, the Bank, as to the classification of its assets and the amount of
its valuation allowances is subject to review by the OTS which may order the
establishment of additional general or specific reserve allowances. It is
management's opinion that the ALL is adequate to absorb existing losses in the
loan portfolio as of September 30, 2003.
NON-INTEREST INCOME
Non-interest income for the three-month period ended September 30, 2003 was
$557,000 compared to $484,000 for the same period in 2002. The three-month
increase of $73,000 from the prior period benefited from a $57,000 increase in
earnings on the cash surrender value of bank owned life insurance that was
purchased in September 2002. Net gain on sale of loans increased $90,000 but was
offset by a $77,000 decrease in service fees and charges. Service fees and
charges were lower due to $120,000 amortization of the mortgage servicing rights
asset for the three-month period ended September 30, 2003 compared to $46,000
amortization for the period ended September 30, 2002. Net gain on sale of
securities, commission income and other non-interest income were relatively
unchanged from fiscal 2003.
NON-INTEREST EXPENSE
Non-interest expense for the three-month period ended September 30, 2003,
was $1,239,000, an increase of $42,000, or 3.5%, compared to the same period in
2002. Other non-interest expense increased $49,000 from the prior year due
primarily to higher professional, loan and real estate owned expense including
$20,000 in higher expenses on bank owned life insurance. The Company completed,
as of June 2003, the amortization of the core deposit premium associated with
the 1997 purchase of the South Whitley branch and will realize the accompanying
$18,000 per quarter expense reduction compared to fiscal 2003. For the
three-month period ended September 30, 2003, compensation and employee benefits
decreased 0.1%, occupancy and equipment expense increased 3.7%, data processing
expense increased 7.7% and all other non-interest expense increased 7.4% over
the same period in 2002.
INCOME TAXES
The provisions for income taxes for the three-month period ended September
30, 2003, were $94,000 compared to $200,000 for the same period in 2002. The
provision for income taxes dropped for the three months ended September 30, 2003
due to lower net income before taxes, a lower effective tax rate stemming from
increased nontaxable securities income and nontaxable income from the cash
surrender value of bank owned life insurance purchased in September 2002.
Additionally, the Bank's state tax expense is lower in fiscal 2004 due to the
establishment, effective May 2003, of a domestic operating subsidiary that
manages a portion of the Bank's investment portfolio. The subsidiary is located
in a state with no corporate income tax.
REGULATORY CAPITAL REQUIREMENTS
The Bank is required to maintain specific amounts of regulatory capital
pursuant to regulations of the OTS. At September 30, 2003, the Bank exceeded all
regulatory capital standards as is shown in the following table.
Minimum
To Be Well
Minimum Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
------ ----------------- -----------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
As of September 30, 2003
Total Risk-Based Capital $ 20,841 14.27% $11,680 8.00% $14,601 10.00%
Tier I (Core) Capital 19,009 13.02% 5,840 4.00% 8,760 6.00%
(to risk weighted assets)
Tier I (Core) Capital 19,009 8.07% 9,418 4.00% 11,772 5.00%
(to adjusted total assets)
PART I: ITEM 3
FFW CORPORATION
CONTROLS AND PROCEDURES
As of the end of the fiscal quarter covered by this report, an evaluation
was carried out under the supervision and with the participation of FFW
Corporation's management, including our Chief Executive Officer and Chief
Financial Accounting Officer, of the effectiveness of our disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934). Based on their evaluation, our Chief
Executive Officer and Chief Financial Accounting Officer have concluded that the
Company's disclosure controls and procedures are, to the best of their
knowledge, effective to ensure that information required to be disclosed by FFW
Corporation in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.
Subsequent to the date of their evaluation, our Chief Executive Officer and
Chief Financial Accounting Officer have concluded that there were no significant
changes in FFW Corporation's internal controls or in other factors that could
significantly affect its internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Part II - Other Information
As of September 30, 2003, 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 28, 2003. 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........................................... 1,152,228 4,420
Ronald D. Reynolds...................................... 1,152,893 3,755
FOR AGAINST ABSTAIN
--- ------- -------
Ratification of Crowe Chizek and Company LLC as
auditors for the fiscal year ending June 30, 2004................ 1,149,570 6,565 513
Item 5 - Other Information
Not Applicable
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
31(1) Certification required by 17 C.F.R. Section 240.13a-14(a)
31(2) Certification required by 17 C.F.R. Section 240.13a-14(a)
32 Certification pursuant to 18 U.S.C. Section 1350
(b) Reports on Form 8-K
Form 8-K for Fiscal Year End Earnings Release filed on July 28,
2003.
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 13, 2003 By: /s/ Roger K. Cromer
--------------------------------------
Roger K. Cromer
President and Chief Executive Officer
Date: November 13, 2003 By: /s/ Timothy A. Sheppard
--------------------------------------
Timothy A. Sheppard
Treasurer and Chief Accounting Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page
- ----------- ---------------------- ----
31(1) Certification required by 17 C.F.R. Section 240.13a-14(a) 17
31(2) Certification required by 17 C.F.R. Section 240.13a-14(a) 18
32 Certification pursuant to 18 U.S.C. Section 1350 19