EXHIBIT 99
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December 5, 2005
FOR IMMEDIATE RELEASE:
CONTACT:
Trent Troyer, President
FFD Financial Corporation
321 North Wooster Avenue
Dover, Ohio 44622-0038
(330) 364-7777
FFD Financial Corporation Responds to Ancora
DOVER, OHIO - FFD Financial Corporation, parent company of First Federal
Community Bank, announced today that it has responded to Ancora Advisors, LLC
and the members of its filing group, regarding the views expressed in their
Schedule 13D filed recently with the Securities and Exchange Commission. In a
letter to Ancora dated December 5, 2005, a copy of which is included with this
release, FFD's Board of Directors advised that it has determined that it is not
presently in the best interests of FFD's shareholders, or its employees and the
customers and communities it serves, to pursue a sale of the company. According
to Schedule 13D, as amended, filed with the SEC, Ancora and the members if its
group, own 109,034 shares of FFD, which they began acquiring in September 2005.
FFD's President and Chief Executive Officer, Trent B. Troyer, commented, "During
the past few years, we have spent considerable time, effort and resources
building a management team, improving our technology, opening new branches and
loan production offices and developing a business plan that would carry our
company into the future. We are now beginning to see the benefits of these
infrastructure investments in facilitating the company's growth. The Board
believes that the company is best served by continuing to implement its business
plan, which focuses on serving Tuscarawas County and the surrounding areas as an
independent community bank."
FFD Financial Corporation is traded on the NASDAQ Capital Market under the
symbol FFDF. First Federal Community Bank has full service offices in downtown
Dover, downtown New Philadelphia, on the Boulevard in Dover, and loan production
offices in Coshocton and Sugarcreek, Ohio. The Corporation maintains an
interactive web site at www.onlinefirstfed.com.
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FFD Financial Corporation
TELEPHONE (330) 364-7777
FACSIMILE (330) 364-7779
321 North Wooster Avenue P.O. BOX 38 DOVER, OHIO 44622
December 5, 2005
Mr. Richard A. Barone, Chairman & Portfolio Manager
Mr. Fred Disanto, Managing Partner
Ancora Advisors, LLC
One Chagrin Highlands
2000 Auburn Drive, #420
Cleveland, OH 44122
VIA FACSIMILE & FEDERAL EXPRESS
Gentlemen:
I am responding to your letter dated November 7, 2005.
We appreciate the compliments you extend for the results of operations of
FFD Financial Corporation ("FFD" or the "Company") and the capabilities of our
chief executive officer, Trent Troyer. The board of directors shares your
assessment of Trent's capabilities. We are proud of Trent and our entire
management team. The positive results that the Company has achieved under their
leadership demonstrate that our confidence is well-placed. We do not, however,
share your conclusion that it is in the best interest of all shareholders to
sell the Company.
You assert in your letter that "operating under the current business
model, the Company will never achieve more than modest profitability at best".
It is difficult to respond to such a subjective statement, but let me try. We
recently engaged an independent investment banking firm with significant
expertise in the financial services industry to review our past performance and
help our board assess the Company's future prospects. When compared against a
peer group consisting of all thrift institutions in Midwestern states with
assets between $100 million and $250 million, the investment banker noted the
following:
o FFD's return on assets for the 12 months ended September 30, 2005
was 83 basis points, compared to the median of 67 basis points for
the peer group.
o Our return on average equity was 6.94% for the September 30, 2005
12-month period, compared to 6.40% for the peer group. Considering
that our capital to assets ratio exceeds the peer group, our ROE
compares very favorably. We will continue our efforts to achieve a
more efficient capital to assets ratio, recognizing the important
relationship between that ratio and the return on equity measure.
o Our net interest margin of 3.55% exceeds the peer group median of
3.26%. In fact, there are only four companies out of the 18 in the
peer group which have a higher net interest margin for the 12 months
ended September 30, 2005. Our favorable net interest margin reflects
our efforts to change the composition of our loan portfolio by
pursuing growth in higher-yielding nonresidential real estate and
commercial loans. Since June 30, 2002, we have increased
nonresidential real estate loans as a percent of our total loan
portfolio from 23.1% to 31.9%, while reducing the size of our one-
to four-family portfolio from 59.9% to 45.4% of total loans.
o We have an asset sensitive balance sheet, making us well positioned
for earnings growth in a rising interest rate environment.
In the context of our performance relative to our peer group on the key
measures discussed above, your reference to "the current business model"
suggests that perhaps you do not favor the independent community bank model per
se. I cannot speak to the viability of the community bank model in a regional
banking center such as Cleveland, where you are located, but I can address the
opportunities for an independent community bank in Tuscarawas and contiguous
counties. The business owners on our board of directors understand the banking
needs of the local businesses we serve. They also understand how small and
medium-size businesses in our community do not always fit comfortably into the
business model of the large commercial banks in our market area. Our employees
and directors frequently hear from our customers how our larger competitors,
perhaps the very companies that you describe as being better positioned than FFD
to "take advantage of untapped opportunities in the New Philadelphia/Dover
area," are not sufficiently responsive to the needs of many of the businesses in
the communities we serve.
The board of directors of FFD understands fully our duties to act in the
best interests of the corporation. As directors of an Ohio corporation, acting
in the best interests of the corporation means that we must, of course, consider
the interests of our shareholders. Through asset growth, earnings growth,
capital management strategies such as stock repurchases, and a history of
dividend growth, we have served our shareholders well. We are confident that we
have a business plan that will continue to serve our shareholders well. The
standards that guide directors under Ohio law speak to the long-term as well as
short-term interests of the shareholders, recognizing that those interests "may
be best served by the continued independence" of the Company. Those standards
also permit us to consider the interests of FFD's employees and customers, as
well as community and societal considerations. We believe that all of these
interests are well-served at this time by the independence of FFD and First
Federal Community Bank.
We also recognize that the interests of our shareholders, our employees,
our customers and our community are not necessarily competing interests. To the
contrary, they overlap in many important ways. First Federal Community Bank has
served Tuscarawas County since 1898. We converted to a stock company in 1996,
through an offering process that focused on our customers and community members
becoming our shareholders. Many of our shareholders today are also our banking
customers, and many of our shareholders have owned their FFD shares since our
1996 initial public offering. Through our employee stock ownership plan and
other stock
benefit plans, many of our employees are also our shareholders. We believe those
shareholders are more focused on the long-term future of FFD than short-term
returns.
In your letter you ask that we add Mr. Disanto to our board of directors.
A little more than a month ago, the shareholders of FFD elected directors for
the next year. The five directors who now serve on the board were each
re-elected by at least 95% of the votes cast at the annual meeting. With our
shareholders having spoken so recently and so clearly on the composition of our
board, we see no need to make a change at this time.
Because your letter was made a matter of public record through your
Schedule 13D filing, it is important to FFD that our shareholders and the
investment community have the benefit of our response. Accordingly, we intend to
issue a press release that will include the letter as an attachment, and we will
file the release and the letter with the Securities and Exchange Commission on
Form 8-K.
We welcome you as a new shareholder of FFD, and we thank you for sharing
your views with us.
Sincerely,
/s/ E. L. Loader
E. L. Loader
Chairman of the Board