SOURCE: FFW Corporation

January 23, 2008 10:43 ET

FFW Corporation Announces Earnings for the Quarter and Six Months Ended December 31, 2007

WABASH, IN--(Marketwire - January 23, 2008) - FFW Corporation (OTCBB: FFWC) (1/22/2008 Close: $23.00), parent corporation of Crossroads Bank, formerly First Federal Savings Bank of Wabash, announced operating results for the second fiscal quarter of 2008 and six months ended December 31, 2007. Net income and diluted net income per share for the three months ended December 31, 2007 were $651,000 and $0.55 compared to $695,000 and $0.56 at December 31, 2006. Net income and diluted net income per share for the six months ended December 31, 2007 were $1,285,000 and $1.08 compared to $1,626,000 and $1.31 at December 31, 2006.

Net interest income increased $302,000 or 7.7% from the prior fiscal year to date. The increase is due to both interest earning assets and interest bearing liabilities responding to the current rate environment. Noninterest income decreased $315,000 or 21.7% from the prior fiscal year to date. The decrease is due to a fiscal year 2007 gain on sales of certain securities that did not recur in fiscal year 2008. The decrease in noninterest income was offset by a swing in sales of repossessed assets of $39,000. Noninterest expense increased $111,000 or 3.4% from the prior fiscal year to date. The increase was significantly due to planned increases in salaries and benefits and expenses associated with the bank name change. Net income was also impacted by an increase in income tax expense of $216,000 from the prior fiscal year to date.

Roger K. Cromer, President and Chief Executive Officer, stated, "We are pleased with our solid performance for the quarter. During the quarter, we surpassed $300 million in assets and continue to improve our net interest margin from the prior year. We also completed our name change to Crossroads Bank. This was a strategic decision as a number of competitors in our current and future markets also use the 'First Federal' name."

The fiscal 2008 second quarter and year to date earnings represent a return on average shareholders' equity of 10.14% and 10.07% compared to 10.91% and 13.00% for the periods ended December 31, 2006. Return on average total assets for the three and six-month periods ended December 31, 2007 were 0.87% and 0.87% compared to 0.97% and 1.14% for the periods ended December 31, 2006.

The allowance for loan losses as a percentage of net loans receivable was 1.31% at December 31, 2007 and 1.26% at June 30, 2007. Nonperforming assets were $2.7 million at December 31, 2007 compared to $2.5 million at June 30, 2007.

As of December 31, 2007, FFWC's equity-to-assets ratio was 8.34% compared to 8.60% at June 30, 2007. Shareholders' equity was $25.7 million compared to $25.0 million at June 30, 2007. Total assets at December 31, 2007 were $307.6 million compared to $290.5 million at June 30, 2007. Cash and cash equivalents increased $2.3 million from June 30, 2007 to December 31, 2007 while securities available for sale increased by $7.2 million. Total deposits at December 31, 2007 increased by $10.4 million from June 30, 2007 while total FHLB borrowings increased by $6.5 million.

Crossroads Bank is a wholly owned subsidiary of FFW Corporation providing an extensive array of banking services and a wide range of investments and securities products through its main office in Wabash and four banking centers located in Columbia City, North Manchester, South Whitley, and Syracuse, IN. The Bank provides leasing services at its banking centers and its Carmel, IN leasing and commercial loan office. Insurance products are offered through an affiliated company, Insurance 1 Services, Inc. The corporation's stock is traded on the OTC Bulletin Board under the symbol "FFWC.OB." Our website address is www.crossroadsbanking.com.

                             FFW Corporation
                      Selected Financial Information

Consolidated Balance Sheets
                                                12/31/2007     6/30/2007
                                              -------------  -------------
                                                Unaudited
                                              -------------
Assets

Cash and due from financial institutions      $   6,691,047  $   5,250,292
Interest-earning deposits in other financial
 institutions - short term                        3,207,451      2,372,525
                                              -------------  -------------
Cash and cash equivalents                         9,898,498      7,622,817

Securities available for sale                    62,849,492     55,673,248
Loans receivable, net of allowance for loan
 losses of $2,856,109 at December 31, 2007
 and $2,654,064 at June 30, 2007                215,263,661    207,776,065
Loans held for sale                                 271,875        178,250
Federal Home Loan Bank stock, at cost             3,627,100      3,627,100
Accrued interest receivable                       2,178,490      1,730,689
Premises and equipment, net                       4,131,542      4,184,657
Mortgage servicing rights                           457,037        572,548
Cash surrender value of life insurance            5,696,406      5,579,962
Goodwill                                          1,213,898      1,213,898
Other assets                                      2,038,640      2,386,208
                                              -------------  -------------
Total Assets                                  $ 307,626,639  $ 290,545,442
                                              =============  =============

Liabilities and Shareholders' Equity

Liabilities:
Noninterest-bearing deposits                  $  12,549,807  $  13,706,178
Interest-bearing deposits                       208,295,481    196,758,171
                                              -------------  -------------
Total Deposits                                  220,845,288    210,464,349

Federal Home Loan Bank advances                  58,721,514     52,194,061
Accrued expenses and other liabilities            2,406,578      2,898,526
                                              -------------  -------------
Total Liabilities                               281,973,380    265,556,936

Shareholders' Equity:
Preferred stock, $.01 par; 500,000 shares
 authorized, none issued                                ---            ---
Common stock, $.01 par; 2,000,000 shares
 authorized;
   issued: 1,836,328, outstanding: 1,170,768
    - Dec. 31, 2007
   issued: 1,836,328, outstanding: 1,201,478
    - June 30, 2007                                  18,363         18,363
Additional paid-in capital                        9,509,386      9,481,340
Retained earnings                                25,122,722     24,334,484
Accumulated other comprehensive income (loss)       535,030       (164,556)
Treasury stock at cost, shares: 665,560 -
 December 31, 2007 and 634,850 - June 30, 2007   (9,532,242)    (8,681,125)
                                              -------------  -------------
Total Shareholders' Equity                       25,653,259     24,988,506
                                              -------------  -------------

Total Liabilities and Shareholders' Equity    $ 307,626,639  $ 290,545,442
                                              =============  =============




Consolidated Statements of Income

                              Three Months Ended       Six Months Ended
                            12/31/2007  12/31/2006  12/31/2007  12/31/2006
                            ----------- ----------- ----------- -----------
Interest and dividend
 income:
   Loans, including fees    $ 3,970,507 $ 3,593,767 $ 7,891,925 $ 7,051,745
   Taxable securities           664,188     644,379   1,278,251   1,337,419
   Nontaxable securities        163,581     190,551     305,389     379,926
   Other                         23,006      40,353      53,398      67,925
                            ----------- ----------- ----------- -----------
      Total interest and
       dividend income        4,821,282   4,469,050   9,528,963   8,837,015

Interest expense:
   Deposits                   1,954,652   1,802,234   3,894,956   3,494,598
   Borrowings                   714,313     703,651   1,422,009   1,432,733
                            ----------- ----------- ----------- -----------
      Total interest
       expense                2,668,965   2,505,885   5,316,965   4,927,331

Net interest income           2,152,317   1,963,165   4,211,998   3,909,684

Provision for loan losses       120,000     120,000     240,000     240,000

Net interest income after
 provision for
   loan losses                2,032,317   1,843,165   3,971,998   3,669,684

Noninterest income:
   Net gains on sales of
    securities                   48,830      22,209      48,830     382,260
   Net gains on sales of loans   24,821      42,342      47,441      62,934
   Net gains (losses) on
    fixed assets                      -           -           -           -
   Other than temporary
    impairment on securities          -           -           -           -
   Commission income            135,058     127,663     261,652     248,424
   Service charges and fees     250,905     322,675     556,584     594,305
   Earnings on life
    insurance                    66,617      63,211     132,965     126,171
                            ----------- ----------- ----------- -----------
   Other                         44,027      36,872      87,674      36,546
      Total noninterest
       income                   570,258     614,972   1,135,146   1,450,640

Noninterest expense:
   Salaries and benefits        866,737     804,208   1,732,730   1,605,134
   Occupancy and equipment      202,856     212,995     405,768     419,313
   Professional                  70,186      59,327     122,430     111,571
   Marketing                     90,538      70,013     125,895     105,371
   Deposit insurance premium      6,066       5,991      12,190      11,730
   Regulatory assessment         21,608      19,958      43,216      39,916
   Correspondent bank
    charges                      20,881      28,525      45,097      57,683
   Data processing              135,452     159,484     295,317     311,404
   Printing, postage and
    supplies                     50,518      56,200      94,522     107,943
   Expense on life insurance        900      23,270      26,629      48,999
   Contribution expense           6,828      33,815      12,001      38,989
                            ----------- ----------- ----------- -----------
   Other                        248,445     163,000     450,355     396,840
      Total noninterest
       expense                1,721,015   1,636,786   3,366,150   3,254,893

Income before income taxes      881,560     821,351   1,740,994   1,865,431

Income tax expense              230,457     126,787     455,499     239,436

Net income                  $   651,103 $   694,564 $ 1,285,495 $ 1,625,995
                            =========== =========== =========== ===========



                                  Unaudited               Unaudited
                              Three Months Ended       Six Months Ended
                            12/31/2007  12/31/2006  12/31/2007  12/31/2006
                            ----------  ----------  ----------  ----------
Earnings per common share:
Primary                     $     0.56  $     0.57  $     1.09  $     1.33
Fully diluted               $     0.55  $     0.56  $     1.08  $     1.31
Dividend paid per share     $     0.21  $     0.19  $     0.21  $     0.38
Average shares outstanding   1,180,496   1,224,885   1,187,686   1,221,754
Shares outstanding end of
 period                      1,170,768   1,224,573   1,170,768   1,224,573

Supplemental data:
Net interest margin **            3.05%       2.92%       3.02%       2.92%
Return on average assets ***      0.87%       0.97%       0.87%       1.14%
Return on average equity ***     10.14%      10.91%      10.07%      13.00%

                            12/31/2007   6/30/2007
Nonperforming assets *       2,723,359   2,492,634
Repossessed assets             825,000     750,766

*   Includes non-accruing loans, accruing loans delinquent more than 90
    days and foreclosed assets
**  Yields reflected have not been computed on a tax equivalent basis
*** Annualized

Contact Information

  • Contact:
    Emily Boardman
    Treasurer
    260-563-3185 x290