FFW Corporation Announces Earnings for the Year Ended June 30, 2014

WABASH, IN--(Marketwired - Aug 11, 2014) -  FFW Corporation (the "Corporation") (OTCBB: FFWC) (08/08/14 Close: $21.00), parent corporation of Crossroads Bank, announced earnings for the year ended June 30, 2014.

For the three months ended June 30, 2014, the Corporation reported net income of $766,000 or $0.58 per common share compared to $698,000 or $0.52 per common share for the three months ended June 30, 2013. The net interest margin for the three months ended June 30, 2014 was $2,752,000 compared to $2,432,000 for the three months ended June 30, 2013. The provision for loan losses was $180,000 for the period ended June 30, 2014 and $210,000 for the period ended June 30, 2013. Total noninterest income was $764,000 for the three months ended June 30, 2014 compared to $818,000 for the three months ended June 30, 2013. Noninterest expense was $2,277,000 for the three months ended June 30, 2014 and $2,187,000 for the three months ended June 30, 2013. 

For the twelve months ended June 30, 2014, the Corporation reported net income of $4,086,000 or $3.21 per common share compared to $2,729,000 or $2.01 per common share for the twelve months ended June 30, 2013. The net interest margin for the twelve months ended June 30, 2014 was $10,656,000 compared to $9,413,000 for the twelve months ended June 30, 2013. The provision for loan losses was $840,000 expense for the period ended June 30, 2013 and $1,280,000 income for the period ended June 30, 2014. The income recognized through provision was attributable to a large loan loss recovery received during the third fiscal quarter of 2014. Total noninterest income was $2,911,000 for the twelve months ended June 30, 2014 compared to $3,284,000 for the twelve months ended June 30, 2013. Noninterest expense was $9,127,000 for the twelve months ended June 30, 2014 and $8,617,000 for the twelve months ended June 30, 2013.

The three and twelve months ended June 30, 2014 represented a return on average common equity of 9.64% and 14.50%, respectively, compared to 9.17% and 9.14% for the three and twelve month periods ended June 30, 2013. The three and twelve months ended June 30, 2014 represented a return on average assets of 0.89% and 1.19%, respectively, compared to 0.82% and 0.81%, for the three and twelve month periods ended June 30, 2013.

The allowance for loan losses as a percentage of gross loans receivable was 1.29% at June 30, 2014 compared to 1.43% at June 30, 2013. Nonperforming assets were $7,084,000 at June 30, 2014 compared to $9,794,000 at June 30, 2013.

As of June 30, 2014, FFWC's equity-to-assets ratio was 10.06% compared to 9.27% at June 30, 2013. Total assets at June 30, 2014 were $336,296,000 compared to $337,818,000 at June 30, 2013. Shareholders' equity was $33,830,000 at June 30, 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
				June 30				June 30
				2014				2013
				Unaudited
Assets
Cash and due from financial institutions				$	6,729,693			$	4,353,619
Interest-earning deposits in other financial institutions					5,706,136				11,647,346
	Cash and cash equivalents				12,435,829				16,000,965
Securities available for sale					83,751,842				85,122,447
Loans receivable, net of allowance for loan losses of $2,851,000 at June 30, 2014 and $3,132,000 at June 30, 2013					217,629,375				215,347,079
Loans held for sale					286,800				113,600
Federal Home Loan Bank stock, at cost					2,717,300				2,717,300
Accrued interest receivable					1,769,840				1,719,787
Premises and equipment, net					3,278,681				3,348,926
Mortgage servicing rights					680,362				629,050
Cash surrender value of life insurance					7,473,117				7,206,897
Goodwill					1,213,898				1,213,898
Deferred tax asset					1,858,201				2,392,638
Other assets					3,200,907				2,005,096
	Total assets			$	336,296,152			$	337,817,683
Liabilities and shareholders' equity
Deposits
	Noninterest-bearing deposits			$	29,462,977			$	27,397,357
	Interest-bearing deposits				266,730,899				272,581,131
		Total deposits			296,193,876				299,978,488
Borrowings					3,258,400				4,758,400
Accrued expenses and other liabilities					3,013,732				1,758,769
	Total liabilities				302,466,008				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 June 30, 2014 and 7,289 shares outstanding June 30, 2013, $2,568,000 liquidation preference June 30, 2014 and $7,336,000 liquidation preference June 30, 2013				2,539,000				7,248,308
	Series B, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 364 shares outstanding June 30, 2014 and 2013, $368,000 liquidation preference June 30, 2014 and 2013				364,000				368,292
	Series C, 5% Fixed Rate Cumulative Perpetual Preferred Stock - 3,250 shares outstanding June 30, 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 June 30, 2014 and 1,122,084 at June 30, 2013					18,363				18,363
Additional paid-in capital					9,446,708				9,531,646
Retained earnings					28,870,083				25,737,557
Accumulated other comprehensive income					152,114				(618,516	)
Treasury stock, at cost: 704,244 shares at June 30, 2014 and 714,244 at June 30, 2013					(10,810,124	)			(10,963,624	)
	Total shareholders' equity				33,830,144				31,322,026
	Total liabilities and shareholders' equity			$	336,296,152			$	337,817,683

FFW Corporation
Selected Financial Information
Consolidated Statement of Income
				Three Months Ended June 30							Twelve Months Ended June 30
				2014			2013				2014				2013
				Unaudited			Unaudited				Unaudited
Interest and dividend income:
	Loans, including fees			$	2,620,741		$	2,604,953			$	10,531,363			$	10,513,322
	Taxable securities				312,946			359,961				1,362,600				1,639,864
	Tax exempt securities				311,154			279,881				1,216,517				979,359
	Other				11,419			16,826				47,257				34,931
		Total interest and dividend income			3,256,260			3,261,621				13,157,737				13,167,476
Interest expense:
	Deposits				471,381			779,344				2,357,116				3,413,966
	Borrowings				32,802			50,090				144,174				340,708
		Total interest expense			504,183			829,434				2,501,290				3,754,674
Net interest income					2,752,077			2,432,187				10,656,447				9,412,802
Provision for loan losses					180,000			210,000				(1,280,000	)			840,000
Net interest income after provision for loan losses					2,572,077			2,222,187				11,936,447				8,572,802
Noninterest income:
	Net gains on sales of securities				50,625			70,102				85,892				316,343
	Net gains on sales of loans				107,578			169,403				317,572				881,112
	Net gains (losses) on fixed assets				2,186			-				8,668				-
	Other than temporary impairment on securities				-			(21,685	)			-				(104,526	)
	Commission income				243,963			212,637				943,590				785,003
	Service charges and fees				233,269			271,314				976,143				1,023,462
	Earnings on life insurance				66,550			67,233				266,220				267,920
	Other				59,682			49,356				313,203				114,281
		Total noninterest income			763,853			818,360				2,911,288				3,283,595
Noninterest expense:
	Salaries and benefits				1,186,474			1,062,417				4,626,176				4,260,263
	Occupancy and equipment				249,913			251,497				1,003,951				1,007,006
	Professional				177,949			156,999				757,015				502,541
	Marketing				30,604			41,694				158,185				168,713
	Deposit insurance premium				63,233			71,138				301,071				415,133
	Regulatory assessment				26,588			38,415				104,591				150,475
	Correspondent bank charges				22,271			24,325				84,733				95,974
	Data processing				153,078			152,632				620,921				567,738
	Printing, postage and supplies				54,540			49,487				239,562				234,039
	Expense on life insurance				18,817			17,418				75,270				69,673
	Contribution expense				12,933			7,745				42,010				40,550
	Other				280,379			312,902				1,113,401				1,105,205
		Total noninterest expense			2,276,779			2,186,669				9,126,886				8,617,310
Income before income taxes					1,059,151			853,878				5,720,849				3,239,087
Income tax expense					293,083			155,565				1,634,618				509,702
Net income				$	766,068		$	698,313			$	4,086,231			$	2,729,385
Preferred stock dividends and discount accretion, net					105,941			117,504				455,590				470,010
Net income attributable to common shareholders				$	660,127		$	580,809			$	3,630,641			$	2,259,375

FFW Corporation
Selected Financial Information
Key Balances and Ratios
		Three Months Ended June 30								Twelve Months Ended June 30
		2014				2013				2014				2013
		Unaudited				Unaudited				Unaudited
Per common share data:
Earnings		$	0.58			$	0.52			$	3.21			$	2.01
Diluted earnings		$	0.58			$	0.52			$	3.21			$	2.01
Dividends paid		$	0.11			$	0.11			$	0.44			$	0.33
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 **			3.42	%			3.00	%			3.27	%			2.99	%
Return on average assets ***			0.89	%			0.82	%			1.19	%			0.81	%
Return on average common equity ***			9.64	%			9.17	%			14.50	%			9.14	%
		June 30				June 30
		2014				2013
Nonperforming assets *		$	7,084,099			$	9,794,035
Repossessed assets		$	2,003,040			$	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