SOURCE: FFW Corporation

April 23, 2014 10:54 ET

FFW Corporation Announces Earnings for the Three and Nine Months Ended March 31, 2014

WABASH, IN--(Marketwired - Apr 23, 2014) -  FFW Corporation (the "Corporation") (OTCBB: FFWC) (04/22/14 Close: $18.05), parent corporation of Crossroads Bank, announced earnings for the three and nine months ended March 31, 2014.

For the three months ended March 31, 2014, the Corporation reported net income of $1,912,000 or $1.59 per common share compared to $643,000 or $0.47 per common share for the three months ended March 31, 2013. The net interest margin for the three months ended March 31, 2014 was $2,760,000 compared to $2,294,000 for the three months ended March 31, 2013. The provision for loan losses was $210,000 for the period ended March 31, 2013 and a negative provision of $1,820,000 was recognized in the period ended March 31, 2014. The income recognized through provision was attributable to a large loan loss recovery received during the quarter offset by the current period provision expense. Total noninterest income was $725,000 for the three months ended March 31, 2014 compared to $782,000 for the three months ended March 31, 2013. Noninterest expense was $2,436,000 for the three months ended March 31, 2014 and $2,164,000 for the three months ended March 31, 2013. 

For the nine months ended March 31, 2014, the Corporation reported net income of $3,320,000 or $2.62 per common share compared to $2,031,000 or $1.50 per common share for the nine months ended March 31, 2013. The net interest margin for the nine months ended March 31, 2014 was $7,904,000 compared to $6,981,000 for the nine months ended March 31, 2013. The provision for loan losses decreased from $630,000 expense for the period ended March 31, 2013 to $1,460,000 income for the period ended March 31, 2014. Total noninterest income was $2,147,000 for the nine months ended March 31, 2014 compared to $2,465,000 for the nine months ended March 31, 2013. Noninterest expense was $6,850,000 for the nine months ended March 31, 2014 and $6,431,000 for the nine months ended March 31, 2013.

The three and nine months ended March 31, 2014 represented a return on average common equity of 29.80% and 16.33%, respectively, compared to 8.49% and 9.12% for the three and nine month periods ended March 31, 2013. The three and nine months ended March 31, 2014 represented a return on average assets of 2.29% and 1.29%, respectively, compared to 0.77% and 0.81%, for the three and nine month periods ended March 31, 2013.

The allowance for loan losses as a percentage of gross loans receivable was 1.25% at March 31, 2014 compared to 1.43% at June 30, 2013. Nonperforming assets were $7,814,000 at March 31, 2014 compared to $9,794,000 at June 30, 2013.

As of March 31, 2014, FFWC's equity-to-assets ratio was 9.79% compared to 9.27% at June 30, 2013. Total assets at March 31, 2014 were $333,346,000 compared to $337,818,000 at June 30, 2013. Shareholders' equity was $32,643,000 at March 31, 2014 compared to $31,322,000 at June 30, 2013. Crossroads Bank exceeds all applicable regulatory requirements to be considered "well capitalized." 

On February 3, 2014, the Corporation redeemed 4,750 of the Corporation's shares of Fixed Rate Cumulative Preferred Stock, Series A, for $4,750,000, plus accrued dividends. Following the redemption, the Corporation continues to have outstanding 2,539 shares of its Fixed Rate Cumulative Preferred Stock, Series A and 364 shares of its Fixed Rate Cumulative Preferred Stock, Series B, which now pay dividends at 9% per year. The Corporation also has 3,250 shares of its Series C Preferred Stock issued on December 31, 2013. The Series C Preferred Stock is perpetual and non-voting, has a liquidation preference of $1,000, and pays annual dividends of 5% for the first three years, subject to possible increases to a maximum of 9% thereafter depending on changes in the prime rate of interest, payable quarterly. It is redeemable immediately for 100% of its liquidation preference plus declared and unpaid dividends.

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 Indiana banking centers located in Columbia City, North Manchester, South Whitley, and Syracuse. 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 Markets under the symbol "FFWC." Our website address is www.crossroadsbanking.com.

   
   
FFW Corporation  
Selected Financial Information  
   
Consolidated Balance Sheet  
   
    March 31     June 30  
    2014     2013  
    Unaudited        
Assets                
Cash and due from financial institutions   $ 6,996,368     $ 4,353,619  
Interest-earning deposits in other financial institutions     4,270,081       11,647,346  
  Cash and cash equivalents     11,266,449       16,000,965  
                 
Securities available for sale     83,269,469       85,122,447  
Loans receivable, net of allowance for loan losses of $2,777,000 at March 31, 2014 and $3,132,000 at June 30, 2013     218,601,129       215,347,079  
Loans held for sale     137,400       113,600  
Federal Home Loan Bank stock, at cost     2,717,300       2,717,300  
Accrued interest receivable     1,572,298       1,719,787  
Premises and equipment, net     3,312,135       3,348,926  
Mortgage servicing rights     661,819       629,050  
Cash surrender value of life insurance     7,406,567       7,206,897  
Goodwill     1,213,898       1,213,898  
Deferred tax asset     1,863,295       2,392,638  
Other assets     1,324,352       2,005,096  
  Total assets   $ 333,346,111     $ 337,817,683  
                 
Liabilities and shareholders' equity                
Deposits                
  Noninterest-bearing deposits   $ 28,025,472     $ 27,397,357  
  Interest-bearing deposits     263,900,395       272,581,131  
    Total deposits     291,925,867       299,978,488  
                 
Borrowings     5,758,400       4,758,400  
Accrued expenses and other liabilities     3,018,509       1,758,769  
  Total liabilities     300,702,776       306,495,657  
                 
Shareholders' equity                
  Preferred stock, $.01 par; $1,000 liquidation value per share; 500,000 shares authorized;                
  Series A, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 2,539 shares outstanding March 31, 2014, $2,568,000 liquidation preference     2,539,000       7,248,308  
  Series B, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 364 shares outstanding March 31, 2014, $368,000 liquidation preference     364,000       368,292  
  Series C, 5% Fixed Rate Cumulative Perpetual Preferred Stock - 3,250 shares outstanding March 31, 2014, $3,271,000 liquidation preference     3,250,000       -  
Common stock, $.01 par; 2,000,000 shares authorized;                
  issued shares: 1,836,328                
  outstanding shares: 1,132,084 at March 31, 2014 and 1,122,084 at June 30, 2013     18,363       18,363  
Additional paid-in capital     9,432,380       9,531,646  
Retained earnings     28,334,486       25,737,557  
Accumulated other comprehensive income     (484,770 )     (618,516 )
Treasury stock, at cost: 704,244 shares at March 31, 2014 and 714,244 at                
  June 30, 2013     (10,810,124 )     (10,963,624 )
  Total shareholders' equity     32,643,335       31,322,026  
                 
  Total liabilities and shareholders' equity   $ 333,346,111     $ 337,817,683  
                 
                 
                 
FFW Corporation  
Selected Financial Information  
   
Consolidated Statement of Income  
   
    Three Months Ended March 31     Nine Months Ended March 31  
    2014     2013     2014     2013  
    Unaudited     Unaudited     Unaudited     Unaudited  
Interest and dividend income:                                
  Loans, including fees   $ 2,655,788     $ 2,522,505     $ 7,910,628     $ 7,908,368  
  Taxable securities     354,702       379,743       1,049,652       1,279,902  
  Tax exempt securities     305,965       254,733       905,363       699,478  
  Other     8,793       9,437       35,838       18,105  
    Total interest and dividend income     3,325,248       3,166,418       9,901,481       9,905,853  
                                 
Interest expense:                                
  Deposits     532,286       816,099       1,885,736       2,634,621  
  Borrowings     32,942       56,363       111,372       290,618  
    Total interest expense     565,228       872,462       1,997,108       2,925,239  
                                 
Net interest income     2,760,020       2,293,956       7,904,373       6,980,614  
                                 
Provision for loan losses     (1,820,000 )     210,000       (1,460,000 )     630,000  
                                 
Net interest income after provision for loan losses     4,580,020       2,083,956       9,364,373       6,350,614  
                                 
Noninterest income:                                
  Net gains on sales of securities     (17,413 )     66,751       35,267       246,241  
  Net gains on sales of loans     61,438       203,473       209,994       711,709  
  Net gains (losses) on fixed assets     -       -       6,481       -  
  Other than temporary impairment on securities     -       (2,200 )     -       (82,841 )
  Commission income     261,135       177,903       699,627       572,366  
  Service charges and fees     217,968       227,979       742,875       752,148  
  Earnings on life insurance     65,757       66,628       199,670       200,686  
  Other     135,702       41,492       253,519       64,925  
    Total noninterest income     724,587       782,026       2,147,433       2,465,234  
                                 
Noninterest expense:                                
  Salaries and benefits     1,215,946       1,059,390       3,439,701       3,197,846  
  Occupancy and equipment     262,884       255,603       754,037       755,508  
  Professional     250,200       122,934       579,064       345,543  
  Marketing     41,852       36,202       127,582       127,019  
  Deposit insurance premium     80,762       115,815       237,837       343,995  
  Regulatory assessment     26,588       37,619       78,003       112,060  
  Correspondent bank charges     20,605       23,840       62,462       71,649  
  Data processing     150,790       140,159       467,843       415,106  
  Printing, postage and supplies     69,157       59,473       185,022       184,553  
  Expense on life insurance     18,818       17,418       56,453       52,255  
  Contribution expense     9,300       9,107       29,078       32,805  
  Other     289,322       286,169       833,028       792,302  
    Total noninterest expense     2,436,224       2,163,729       6,850,110       6,430,641  
                                 
Income before income taxes     2,868,383       702,253       4,661,696       2,385,207  
                                 
Income tax expense     956,056       58,795       1,341,535       354,137  
                                 
Net income   $ 1,912,327     $ 643,458     $ 3,320,161     $ 2,031,070  
Preferred stock dividends and discount accretion, net     114,641       117,504       349,649       352,512  
Net income attributable to common shareholders   $ 1,797,686     $ 525,954     $ 2,970,512     $ 1,678,558  
                                 
                                 
                                 
FFW Corporation  
Selected Financial Information  
   
Key Balances and Ratios  
   
    Three Months Ended
March 31
    Nine Months Ended
March 31
 
    2014     2013     2014     2013  
    Unaudited     Unaudited     Unaudited     Unaudited  
Per common share data:                                
Earnings   $ 1.59     $ 0.47     $ 2.62     $ 1.50  
Diluted earnings   $ 1.59     $ 0.47     $ 2.62     $ 1.50  
Dividends paid   $ 0.11     $ 0.11     $ 0.33     $ 0.22  
Average shares issued and outstanding     1,132,084       1,122,084       1,132,084       1,122,084  
Shares outstanding end of period     1,132,084       1,122,084       1,132,084       1,122,084  
                                 
Supplemental data:                                
Net interest margin **     3.49 %     2.98 %     3.22 %     2.98 %
Return on average assets ***     2.29 %     0.77 %     1.29 %     0.81 %
Return on average common equity ***     29.80 %     8.49 %     16.33 %     9.12 %
                         
    March 31     June 30              
    2014     2013              
Nonperforming assets *   $ 7,814,211     $ 9,794,035                  
Repossessed assets   $ 268,720     $ 813,386                  
   
* Includes non-accruing loans, accruing loans delinquent more than 90 days and repossessed assets
** Yields reflected have not been computed on a tax equivalent basis
*** Annualized

Contact Information

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    260-563-3185