FFBW, Inc. /MD/ [FFBW] Filings

10-Q 1 ffbw-20220930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2022.

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: 001-39182

FFBW, INC.

(Exact name of registrant as specified in its charter)

Maryland		37-1962248
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1360 South Moorland Road		53005
Brookfield, Wisconsin
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (262) 542-4448

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	FFBW	The NASDAQ Stock Market, LLC

Securities registered pursuant to Section 12(g) of the Act: None

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 ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

As of October 31, 2022 there were 5,554,311 issued and outstanding shares of the Registrant’s Common Stock.

Table of Contents

FFBW, Inc.

Form 10-Q

Index


		Page
Part I. Financial Information		3

Item 1.	Financial Statements	3

	Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	3

	Statements of Income for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	4

	Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	5

	Statements of Changes in Equity for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	6

	Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	7

	Notes to Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38

Item 4.	Controls and Procedures	38

Part II. Other Information		39

Item 1.	Legal Proceedings	39

Item 1A.	Risk Factors	39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3.	Defaults upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	40

Item 6.	Exhibits	41

	Signature Page	42

Table of Contents

Part I. – Financial Information

Item 1. Financial Statements

FFBW, Inc.

Balance Sheets

September 30, 2022 (Unaudited) and December 31, 2021

(In thousands, except share data)


	September 30,		December 31,
	2022		2021
Assets
Cash and due from banks	$	15,722	$	52,483
Fed funds sold		327		14,519
Cash and cash equivalents		16,049		67,002
Available for sale securities, stated at fair value		47,472		48,398
Loans held for sale		—		500
Loans, net of allowance for loan and lease losses of $2,530 and $2,430, respectively		228,300		222,104
Premises and equipment, net		6,684		5,506
Other equity investments		1,463		1,353
Accrued interest receivable		901		813
Cash value of life insurance		10,238		10,029
Other assets		2,676		1,372
TOTAL ASSETS	$	313,783	$	357,077


Liabilities and Equity

Deposits	$	233,954	$	255,250
Advance payments by borrowers for taxes and insurance		1,313		102
FHLB advances		—		6,500
Accrued interest payable		139		7
Other liabilities		917		1,246
Total liabilities	$	236,323	$	263,105
Preferred stock ($0.01 par value, 50,000,000 authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021, respectively)	$	—	$	—
Common stock ($0.01 par value, 100,000,000 authorized, 5,565,823 and 6,734,970 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)		55		67
Additional paid in capital		44,075		58,273
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") (527,568 and 550,509 shares at September 30, 2022 and December 31, 2021, respectively)		(5,276)		(5,506)
Retained earnings		42,081		40,365
Accumulated other comprehensive income (loss), net of income taxes		(3,475)		773
Total equity	$	77,460	$	93,972
TOTAL LIABILITIES AND EQUITY	$	313,783	$	357,077

See accompanying notes to financial statements.

Table of Contents

FFBW, Inc.

Statements of Income

Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

(In thousands, except per share data)


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
Interest and dividend income:
Loans, including fees	$	2,734	$	2,392	$	7,932	$	7,862
Securities
Taxable		282		204		737		617
Tax-exempt		48		46		142		140
Other		103		32		207		64

Total interest and dividend income		3,167		2,674		9,018		8,683

Interest expense:
Interest-bearing deposits		247		236		629		733
Borrowed funds		3		10		16		44

Total interest expense		250		246		645		777

Net interest income		2,917		2,428		8,373		7,906
Provision for loan losses		93		—		93		—

Net interest income after provision for loan losses		2,824		2,428		8,280		7,906

Noninterest income:
Service charges and other fees		148		127		439		354
Net gain on sale of loans		—		12		31		232
Increase in cash surrender value of insurance		73		70		209		188
Other noninterest income		27		117		81		167

Total noninterest income		248		326		760		941

Noninterest expense:
Salaries and employee benefits		1,383		1,209		3,942		3,957
Occupancy and equipment		315		269		874		795
Data processing		240		258		626		853
Technology		77		84		200		203
Foreclosed assets		—		(1)		—		—
Professional fees		124		110		404		325
Other noninterest expense		255		247		705		728

Total noninterest expense		2,394		2,176		6,751		6,861

Income before income taxes		678		578		2,289		1,986
Provision for income taxes		168		119		573		405

Net income	$	510	$	459	$	1,716	$	1,581

Earnings per share
Basic	$	0.10	$	0.07	$	0.31	$	0.24
Diluted	$	0.10	$	0.07	$	0.30	$	0.24

See accompanying notes to financial statements.

Table of Contents

FFBW, Inc.

Statements of Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2022 and 2021, (Unaudited)

(In thousands)


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income	$	510	$	459	$	1,716	$	1,581
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period		(2,247)		(188)		(5,821)		(704)
Reclassification adjustment for (gains) losses realized in net income		—		—		—		—
Other comprehensive income (loss) before tax effect		(2,247)		(188)		(5,821)		(704)
Tax effect of other comprehensive income (loss) items		608		50		1,573		203
Other comprehensive income (loss), net of tax		(1,639)		(138)		(4,248)		(501)
Comprehensive income (loss)	$	(1,129)	$	321	$	(2,532)	$	1,080

See accompanying notes to financial statements.

Table of Contents

FFBW, Inc.

Statements of Changes in Equity

For the Nine Months Ended September 30, 2022 and 2021, (Unaudited)

(In thousands, except share data)


						Unallocated				Accumulated
	Number			Additional		Common				Other
	of	Common		Paid-In		Stock of		Retained		Comprehensive
	Shares	Stock		Capital		ESOP		Earnings		Income (Loss)		Total
Balance at December 31, 2020	7,695,214	$	77	$	69,090	$	(5,811)	$	38,382	$	1,527	$	103,265
Net income	—		—		—		—		670		—		670
ESOP shares committed to be released (7,647 shares)	—		—		6		76		—		—		82
Stock based compensation expense	—		—		81		—		—		—		81
Repurchase of common stock	(408,753)		(4)		(4,614)		—		—		—		(4,618)
Other comprehensive loss	—		—		—		—		—		(404)		(404)
Balance at March 31, 2021	7,286,461	$	73	$	64,563	$	(5,735)	$	39,052	$	1,123	$	99,076
Net income	—		—		—		—		452		—		452
ESOP shares committed to be released (15,294 shares)	—		—		9		76		—		—		85
Stock based compensation expense	10,712		—		101		—		—		—		101
Repurchase of common stock	(263,140)		(3)		(2,983)		—		—		—		(2,986)
Other comprehensive income	—		—		—		—		—		41		41
Balance at June 30, 2021	7,034,033	$	70	$	61,690	$	(5,659)	$	39,504	$	1,164	$	96,769
Net income	—		—		—		—		459		—		459
ESOP shares committed to be released (22,941 shares)	—		—		13		77		—		—		90
Stock based compensation expense	7,296		—		118		—		—		—		118
Repurchase of common stock	(125,790)		(1)		(1,471)		—		—		—		(1,472)
Other comprehensive income	—		—		—		—		—		(138)		(138)
Balance at September 30, 2021	6,915,539	$	69	$	60,350	$	(5,582)	$	39,963	$	1,026	$	95,826

Balance at December 31, 2021	6,734,970	$	67	$	58,273	$	(5,506)	$	40,365	$	773	$	93,972
Net income	—		—		—		—		567		—		567
ESOP shares committed to be released (7,647 shares)	—		—		15		77		—		—		92
Stock based compensation expense	—		—		108		—		—		—		108
Repurchase of common stock	(480,769)		(5)		(5,878)		—		—		—		(5,883)
Other comprehensive loss	—		—		—		—		—		(1,670)		(1,670)
Balance at March 31, 2022	6,254,201	$	62	$	52,518	$	(5,429)	$	40,932	$	(897)	$	87,186
Net income	—		—		—		—		639		—		639
ESOP shares committed to be released (15,294 shares)	—		—		15		76		—		—		91
Stock based compensation expense	17,500		—		120		—		—		—		120
Repurchase of common stock	(265,769)		(2)		(3,239)		—		—		—		(3,241)
Other comprehensive loss	—		—		—		—		—		(939)		(939)
Balance at June 30, 2022	6,005,932	$	60	$	49,414	$	(5,353)	$	41,571	$	(1,836)	$	83,856
Net income	—		—		—		—		510		—		510
ESOP shares committed to be released (22,941 shares)	—		—		17		77		—		—		94
Stock based compensation expense	—		—		137		—		—		—		137
Repurchase of common stock	(440,109)		(5)		(5,493)		—		—		—		(5,498)
Other comprehensive loss	—		—		—		—		—		(1,639)		(1,639)
Balance at September 30, 2022	5,565,823	$	55	$	44,075	$	(5,276)	$	42,081	$	(3,475)	$	77,460

See accompanying notes to financial statements.

Table of Contents

FFBW, Inc.

Statements of Cash Flows

For the Nine Months Ended September 30, 2022 and 2021 (Unaudited)

(In thousands)


	Nine months ended
	September 30,
	2022		2021
Increase (decrease) in cash and cash equivalents:
Cash flows from operating activities:
Net income	$	1,716	$	1,581
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		93		—
Depreciation		244		220
Net accretion of loan portfolio discount and amortization of deposit premium		24		183
Net amortization on securities available for sale		247		405
Loss on sales and impairments of foreclosed assets		—		2
Increase in cash surrender value of life insurance		(209)		(188)
ESOP compensation		277		257
Stock based compensation		365		300
Changes in operating assets and liabilities:
Accrued interest receivable		(88)		152
Loans held for sale		500		1,708
Other assets		197		246
Accrued interest payable		132		195
Other liabilities		(329)		(424)
Net cash provided by operating activities	$	3,169	$	4,637
Cash flows from investing activities:
Proceeds from sales of available for sale securities	$	—	$	3
Maturities, calls, paydowns on available for sale securities		5,018		15,917
Purchases of available for sale securities		(10,269)		(2,655)
Net change in loans		(6,242)		8,307
Purchases of premises and equipment		(1,422)		(107)
Purchase of life insurance		—		(2,500)
Proceeds from sale of foreclosed assets		—		122
Net cash provided by (used in) investing activities	$	(12,915)	$	19,087
Cash flows from financing activities:
Net change in deposits and advance payments	$	(20,085)	$	24,975
Repayments of FHLB advances		(6,500)		(6,000)
Proceeds from FHLB advances		—		5,000

FFBW, Inc. /MD/ [FFBW] Filings
10-Q	[2022-11-03]
10-Q	[2022-08-10]
10-Q	[2022-05-10]
10-K	[2022-03-24]
10-Q	[2021-11-03]
10-Q	[2021-08-06]
10-Q	[2021-05-11]
10-K	[2021-03-26]
10-Q	[2020-11-04]
10-Q	[2020-08-06]
10-Q	[2020-05-08]
10-K	[2020-03-26]
S-1	[2019-09-13]