SOURCE: FFW Corporation

August 17, 2012 10:47 ET

FFW Corporation Announces Earnings for the Year Ended June 30, 2012

WABASH, IN--(Marketwire - Aug 17, 2012) -  FFW Corporation (the "Corporation") (OTCBB: FFWC) (8/16/2012 Close: $13.75), parent corporation of Crossroads Bank, announced earnings for the quarter and year ended June 30, 2012. 

For the year ended June 30, 2012, the Corporation reported net income of $593,000 or $0.11 per common share compared to $2,674,000 or $1.96 per common share for the year ended June 30, 2011. The net interest margin for the year ended June 30, 2012 was $9,365,000 compared to $9,868,000 for the year ended June 30, 2011. The provision for loan losses increased from $1,445,000 for the year ended June 30, 2011 to $4,800,000 for the year ended June 30, 2012. The additional provision recorded in fiscal year 2012 is primarily due to a loss on a commercial credit in which Crossroads Bank (the "Bank"), the wholly owned subsidiary of FFW Corporation, was a participating lender and not the lead loan servicer. The loan was secured by a life insurance policy, whose value was dissipated through fraudulent actions of the borrower. The reasons for the loss are still being investigated, but the Bank is vigorously pursuing actions necessary to seek recovery of the loss. Total noninterest income was $3,339,000 for the year ended June 30, 2012 and $3,201,000 for the year ended June 30, 2011. Noninterest expense was $8,252,000 for the year ended June 30, 2012 and $7,990,000 for the year ended June 30, 2011. 

Due to the aforementioned loan loss, the quarter ended June 30, 2012 resulted in a net loss of $1,536,000 or negative $1.47 per common share. As a result of the loss, the Corporation will not declare and pay a common shareholder dividend for the quarter ended September 30, 2012. The Corporation expects to resume the common dividend when the Corporation returns to profitable status in succeeding quarters. 

Roger K. Cromer, President and Chief Executive Officer, stated, "The loan loss we experienced in the current quarter was both unexpected and disappointing. The Bank has made significant efforts in reduction of nonperforming assets and capital strengthening. Without the impact of the loss, the Bank would have reported net income of approximately $2.8 million for the fiscal year ended June 30, 2012. While the final earnings were not what we had anticipated, the additional provision recorded in the current year and the efforts to otherwise reduce nonperforming assets have improved the overall balance sheet condition of the Bank in that the nonperforming ratios are the lowest in 8 quarters and the strength of the loan loss allowance as a percentage of loans is the highest it has ever been. We continue to remain positive in these difficult economic times and are committed to working through the issues we have faced. We are taking all possible steps to seek a recovery of the significant loan loss we experienced this year."

The twelve months ended June 30, 2012 represented a return on average common equity of 0.51% compared to 10.03% for the twelve months ended June 30, 2011. The twelve months ended June 30, 2012 represented a return on average assets of 0.18% compared to 0.80% for the twelve months ended June 30, 2011. 

The allowance for loan losses as a percentage of gross loans receivable was 1.68% at June 30, 2012 and 1.39% at June 30, 2011. Nonperforming assets were $10,234,000 at June 30, 2012 and $13,141,000 at June 30, 2011.

As of June 30, 2012, FFWC's equity-to-assets ratio was 9.34% compared to 9.23% at June 30, 2011. Total assets at June 30, 2012 were $329,042,000 compared to $323,018,000 at June 30, 2011. Shareholders' equity was $30,746,000 at June 30, 2012 compared to $29,830,000 at June 30, 2011. Crossroads Bank exceeds all applicable regulatory requirements to be considered "well capitalized." 

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
    June 30     June 30  
    2012     2011  
    Unaudited        
Assets                
Cash and due from financial institutions   $ 3,478,709     $ 3,711,671  
Interest-earning deposits in other financial institutions     13,360,765       2,840,994  
    Cash and cash equivalents     16,839,474       6,552,665  
                 
Securities available for sale     83,665,458       71,219,096  
Loans receivable, net of allowance for loan losses of $3,520,110 at June 30, 2012 and $3,147,896 at June 30, 2011     205,934,060       222,348,968  
Loans held for sale     337,000       241,400  
Federal Home Loan Bank stock, at cost     2,717,300       2,717,300  
Accrued interest receivable     1,647,845       1,635,370  
Premises and equipment, net     3,550,515       3,695,172  
Mortgage servicing rights     486,617       444,950  
Cash surrender value of life insurance     6,938,977       6,655,864  
Goodwill     1,213,898       1,213,898  
Deferred tax asset     2,558,162       1,653,133  
Other assets     3,152,807       4,640,682  
    Total assets   $ 329,042,113     $ 323,018,498  
                 
Liabilities and shareholders' equity                
Deposits                
    Noninterest-bearing deposits   $ 20,029,966     $ 17,954,304  
    Interest-bearing deposits     262,519,228       257,585,276  
      Total deposits     282,549,194       275,539,580  
                 
Borrowings     14,258,400       15,986,695  
Accrued expenses and other liabilities     1,488,058       1,662,503  
    Total liabilities     298,295,652       293,188,778  
                 
Shareholders' equity                
Preferred stock, $.01 par; $1,000 liquidation value per share; 500,000 shares authorized;                
    Series A, 5% Fixed Rate Cumulative Perpetual Preferred Stock - 7,289 shares outstanding June 30, 2012, $7,336,000 liquidation preference     7,166,924       7,085,539  
    Series B, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 364 shares outstanding June 30, 2012, $368,000 liquidation preference     376,876       385,461  
Common stock, $.01 par; 2,000,000 shares authorized; issued shares: 1,836,328 outstanding shares: 1,122,084 and 1,121,884, respectively     18,363       18,363  
Additional paid-in capital     9,495,807       9,435,162  
Retained earnings     23,848,467       24,095,722  
Accumulated other comprehensive income     803,648       (223,833 )
Treasury stock, at cost: 714,244 shares and 714,444 shares, respectively     (10,963,624 )     (10,966,694 )
    Total shareholders' equity     30,746,461       29,829,720  
                 
    Total liabilities and shareholders' equity   $ 329,042,113     $ 323,018,498  
                     
                     
                     
FFW Corporation
Selected Financial Information
 
Consolidated Statement of Income
 
    Three Months Ended
June 30
  Twelve Months Ended
June 30
    2012     2011   2012     2011
    Unaudited     Unaudited   Unaudited      
Interest and dividend income:                            
  Loans, including fees   $ 2,567,679     $ 3,056,603   $ 11,191,505     $ 12,217,074
  Taxable securities     513,721       610,803     2,067,341       2,459,676
  Tax exempt securities     159,656       143,485     555,348       601,087
  Other     13,556       3,685     32,786       30,688
    Total interest and dividend income     3,254,612       3,814,576     13,846,980       15,308,525
                             
Interest expense:                            
  Deposits     946,701       1,088,143     3,951,857       4,657,152
  Borrowings     130,421       134,197     529,894       783,724
    Total interest expense     1,077,122       1,222,340     4,481,751       5,440,876
                             
Net interest income     2,177,490       2,592,236     9,365,229       9,867,649
                             
Provision for loan losses     3,900,000       300,000     4,800,000       1,445,000
                             
Net interest income after provision for loan losses     (1,722,510 )     2,292,236     4,565,229       8,422,649
                             
Noninterest income:                            
  Net gains on sales of securities     155,078       142,850     463,225       400,589
  Net gains on sales of loans     159,576       26,464     736,506       480,642
  Net gains (losses) on fixed assets     -       -     -       5,001
  Other than temporary impairment on securities     (3,253 )     -     (93,826 )     -
  Commission income     199,141       155,821     743,116       637,247
  Service charges and fees     237,798       276,003     1,042,903       1,318,363
  Earnings on life insurance     70,416       70,243     283,113       280,870
  Other     18,785       21,326     164,041       78,761
    Total noninterest income     837,541       692,707     3,339,078       3,201,473
                             
Noninterest expense:                            
  Salaries and benefits     993,848       980,910     4,162,397       3,961,729
  Occupancy and equipment     322,254       238,359     1,068,252       981,005
  Professional     91,930       106,696     364,840       398,358
  Marketing     45,790       35,511     183,767       151,468
  Deposit insurance premium     112,446       134,201     429,268       513,024
  Regulatory assessment     35,752       25,899     138,989       102,680
  Correspondent bank charges     25,318       26,136     80,555       86,942
  Data processing     131,706       102,368     502,993       426,295
  Printing, postage and supplies     43,890       63,032     218,684       231,767
  Expense on life insurance     16,108       14,902     64,433       41,018
  Contribution expense     14,879       17,546     65,173       72,563
  Other     214,212       246,869     972,780       1,023,592
    Total noninterest expense     2,048,133       1,992,429     8,252,131       7,990,441
                             
Income before income taxes     (2,933,102 )     992,514     (347,824 )     3,633,681
                             
Income tax expense     (1,397,499 )     255,730     (940,823 )     959,845
                             
Net income   $ (1,535,603 )   $ 736,784   $ 592,999     $ 2,673,836
Preferred stock dividends and discount accretion, net     117,504       117,504     470,016       470,016
Net income attributable to common shareholders   $ (1,653,107 )   $ 619,280   $ 122,983     $ 2,203,820
                             
                             
                             
FFW Corporation
Selected Financial Information
 
Key Balances and Ratios
 
    Three Months Ended
June 30
    Twelve Months Ended
June 30
 
    2012     2011     2012     2011  
    Unaudited     Unaudited     Unaudited        
Per common share data:                                
Earnings   $ (1.47 )   $ 0.55     $ 0.11     $ 1.96  
Diluted earnings   $ (1.47 )   $ 0.55     $ 0.11     $ 1.96  
Dividends paid   $ 0.11     $ 0.22     $ 0.33     $ 0.88  
Average shares issued and outstanding     1,122,084       1,121,884       1,121,945       1,122,694  
Shares outstanding end of period     1,122,084       1,121,884       1,122,084       1,121,884  
                                 
Supplemental data:                                
Net interest margin **     2.92 %     3.22 %     3.01 %     3.15 %
Return on average assets ***     -1.82 %     0.90 %     0.18 %     0.80 %
Return on average common equity ***     -26.25 %     11.22 %     0.51 %     10.03 %
                                 
    June 30     June 30              
    2012     2011              
Nonperforming assets *   $ 10,233,539     $ 13,140,830                  
Repossessed assets   $ 1,402,764     $ 2,502,944                  
                                 
* 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