SOURCE: FFW Corporation

April 23, 2008 10:59 ET

FFW Corporation Announces Earnings for the Quarter and Nine Months Ended March 31, 2008

WABASH, IN--(Marketwire - April 23, 2008) - FFW Corporation (OTCBB: FFWC) (4/22/2008 Close: $22.90), parent corporation of Crossroads Bank, announced operating results for the third fiscal quarter of 2008 and nine months ended March 31, 2008. Net income and diluted net income per share for the three months ended March 31, 2008 were $752,000 and $0.64 compared to $618,000 and $0.50 for the three months ended March 31, 2007. Net income and diluted net income per share for the nine months ended March 31, 2008 were $2,037,000 and $1.72 compared to $2,244,000 and $1.81 at March 31, 2007.

Net interest income increased $281,000 and 14.3% from the prior year's same quarter and $583,000 and 9.9% from the prior fiscal year to date. The increase in net interest income is due to mortgage, commercial and lease interest income associated with portfolio growth, investment mix changes to enhance yield and lower Federal Home Loan Bank advances. Noninterest income decreased $288,000 and 14.1% from the prior fiscal year to date primarily due to a fiscal year 2007 gain on sales of certain securities that did not recur in fiscal year 2008. The quarter to quarter comparison indicates an increase in noninterest income of $28,000 and 4.6% from the quarter ended March 31, 2007. Noninterest expense increased $125,000 and 7.5% from the prior year's same quarter and $236,000 and 4.8% from the prior fiscal year to date. These increases are primarily driven by salaries and benefits, marketing expenses and supplies expense offset by decreases in correspondent bank charges, data processing, expense on life insurance and contribution expense.

Roger K. Cromer, President and Chief Executive Officer, stated, "We are pleased to see improvement in our earnings and net interest margin compared to prior year's quarter. Our continued focus on changing our balance sheet mix has led us to these improvements. Furthermore, given the current economic condition, we continue to place loan quality as our highest priority."

The fiscal 2008 third quarter and year to date earnings represent a return on average shareholders' equity of 11.58% and 10.57% compared to 9.89% and 11.97% for the periods ended March 31, 2007. Return on average total assets for the three and nine-month periods ended March 31, 2008 were 0.99% and 0.91% compared to 0.87% and 1.05% for the periods ended March 31, 2007.

The allowance for loan losses as a percentage of gross loans receivable was 1.24% at March 31, 2008 and 1.26% at June 30, 2007. Nonperforming assets were $2.5 million at March 31, 2008 and June 30, 2007.

As of March 31, 2008, FFWC's equity-to-assets ratio was 7.76% compared to 8.60% at June 30, 2007. Shareholders' equity was $24.0 million compared to $25.0 million at June 30, 2007. The primary driver of the decrease in equity is due to the share repurchase program, which has resulted in an increase in treasury stock of $2.6 million. Total assets at March 31, 2008 were $308.6 million compared to $290.5 million at June 30, 2007. The increase in total assets is due to enhancements in the investment portfolio and net loans. Total deposits increased $20 million primarily due to the municipal deposit program.

"We have purchased over 100,000 shares of our stock over the last fiscal year, with approximately 71,000 of those shares purchased within the last quarter," said Emily Boardman, Treasurer. "The purchases during the quarter finalized our repurchase plan announced in November of 2007. A new plan to repurchase approximately 55,000 shares has been approved during the current quarter. Of those initial shares approved, only 34,000 remain to be purchased."

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

                                                3/31/2008      6/30/2007
                                              -------------  -------------
                                                Unaudited
                                              -------------
Assets

Cash and due from financial institutions      $   7,113,409  $   5,250,292
Interest-earning deposits in other financial
 institutions - short term                        3,607,498      2,372,525
                                              -------------  -------------
Cash and cash equivalents                        10,720,907      7,622,817

Securities available for sale                    62,884,264     55,673,248
Loans receivable, net of allowance for loan
 losses of $2,707,582 at March 31, 2008 and
 $2,654,064 at June 30, 2007                    215,071,804    207,776,065
Loans held for sale                               1,287,830        178,250
Federal Home Loan Bank stock, at cost             3,627,100      3,627,100
Accrued interest receivable                       1,686,806      1,730,689
Premises and equipment, net                       4,086,714      4,184,657
Mortgage servicing rights                           394,543        572,548
Cash surrender value of life insurance            5,755,288      5,579,962
Goodwill                                          1,213,898      1,213,898
Other assets                                      1,877,242      2,386,208
                                              -------------  -------------
Total Assets                                  $ 308,606,396  $ 290,545,442
                                              =============  =============

Liabilities and Shareholders' Equity

Liabilities:
Noninterest-bearing deposits                  $  15,616,335  $  13,706,178
Interest-bearing deposits                       214,906,300    196,758,171
                                              -------------  -------------
Total Deposits                                  230,522,635    210,464,349

Federal Home Loan Bank advances                  50,659,914     52,194,061
Accrued expenses and other liabilities            3,469,025      2,898,526
                                              -------------  -------------
Total Liabilities                               284,651,574    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: 1,100,910 -
   Mar. 31, 2008
  issued: 1,836,328, outstanding: 1,201,478 -
   June 30, 2007                                     18,363         18,363
Additional paid-in capital                        9,518,579      9,481,340
Retained earnings                                25,629,477     24,334,484
Accumulated other comprehensive income (loss)        69,725       (164,556)
Treasury stock at cost, shares: 735,418 -
 March 31, 2008 and 634,850 - June 30, 2007     (11,281,322)    (8,681,125)
                                              -------------  -------------
Total Shareholders' Equity                       23,954,822     24,988,506
                                              -------------  -------------

Total Liabilities and Shareholders' Equity    $ 308,606,396  $ 290,545,442
                                              =============  =============




Consolidated Statements of Income

                           Three Months Ended         Nine Months Ended
                         3/31/2008    3/31/2007    3/31/2008    3/31/2007
                        ------------ -----------  ------------ ------------
Interest and dividend
 income:
  Loans, including fees $  3,894,841 $ 3,642,910  $ 11,786,765 $ 10,694,655
  Taxable securities         741,127     650,527     2,019,378    1,987,946
  Nontaxable securities      146,846     170,413       452,235      550,339
  Other                       30,869      30,968        84,268       98,893
                        ------------ -----------  ------------ ------------
    Total interest and
     dividend income       4,813,683   4,494,818    14,342,646   13,331,833

Interest expense:
  Deposits                 1,941,525   1,875,260     5,836,482    5,369,858
  Borrowings                 627,172     655,490     2,049,181    2,088,223
                        ------------ -----------  ------------ ------------
    Total interest
     expense               2,568,697   2,530,750     7,885,663    7,458,081

Net interest income        2,244,986   1,964,068     6,456,983    5,873,752

Provision for loan
 losses                      120,000     120,000       360,000      360,000

Net interest income
 after provision for
 loan losses               2,124,986   1,844,068     6,096,983    5,513,752

Noninterest income:
  Net gains on sales of
   securities                 10,395     (15,554)       59,225      366,706
  Net gains on sales of
   loans                     106,967      36,335       154,408       99,269
  Commission income          137,460     147,243       399,112      395,667
  Service charges and
   fees                      211,890     329,143       768,474      923,448
  Earnings on life
   insurance                  67,307      64,009       200,272      190,180
  Other                       88,172      33,514       175,847       70,060
                        ------------ -----------  ------------ ------------
    Total noninterest
     income                  622,191     594,690     1,757,338    2,045,330

Noninterest expense:
  Salaries and benefits      855,566     823,303     2,588,296    2,428,437
  Occupancy and
   equipment                 211,917     215,399       617,685      634,712
  Professional                48,890      42,880       171,320      165,310
  Marketing                   96,258      12,841       222,153      138,826
  Deposit insurance
   premium                     6,177       6,084        18,368       17,814
  Regulatory assessment       22,187      21,165        65,403       61,081
  Correspondent bank
   charges                    20,700      27,199        65,797       84,882
  Data processing            131,320     160,754       426,637      472,158
  Printing, postage and
   supplies                   62,757      47,191       157,279      155,134
  Expense on life
   insurance                  24,688      47,929        51,318       74,558
  Contribution expense         7,778      72,476        19,780       84,477
  Other                      298,690     184,600       749,044      599,325
                        ------------ -----------  ------------ ------------
    Total noninterest
     expense               1,786,928   1,661,821     5,153,080    4,916,714

Income before income
 taxes                       960,249     776,937     2,701,241    2,642,368

Income tax expense           208,569     158,915       664,068      398,351

Net income              $    751,680 $   618,022  $  2,037,173 $  2,244,017
                        ============ ===========  ============ ============





                                      Unaudited             Unaudited
                                 Three Months Ended     Nine Months Ended
                                3/31/2008  3/31/2007  3/31/2008  3/31/2007
                                ---------  ---------  ---------  ---------
Earnings per common share:
Primary                         $    0.64  $    0.51  $    1.73  $    1.84
Fully diluted                   $    0.64  $    0.50  $    1.72  $    1.81
Dividend paid per share         $    0.21  $    0.19  $    0.63  $    0.57
Average shares outstanding      1,162,943  1,210,681  1,179,498  1,218,117
Shares outstanding end of
 period                         1,100,910  1,216,089  1,100,910  1,216,089

Supplemental data:
Net interest margin **               3.14%      2.95%      3.06%      2.93%
Return on average assets ***         0.99%      0.87%      0.91%      1.05%
Return on average equity ***        11.58%      9.86%     10.57%     11.97%

                                3/31/2008  6/30/2007
Nonperforming assets *          2,457,692  2,492,634
Repossessed assets                885,000    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