SOURCE: FFW Corporation

January 24, 2014 11:32 ET

FFW Corporation Announces Earnings for the Three and Six Months Ended December 31, 2013

WABASH, IN--(Marketwired - Jan 24, 2014) -  FFW Corporation (the "Corporation") (OTCBB: FFWC) (01/23/14 Close: $18.00), parent corporation of Crossroads Bank, announced earnings for the three and six months ended December 31, 2013.

For the three months ended December 31, 2013, the Corporation reported net income of $770,000 or $0.58 per common share compared to $858,000 or $0.66 per common share for the three months ended December 31, 2012. The net interest margin for the three months ended December 31, 2013 was $2,584,000 compared to $2,321,000 for the three months ended December 31, 2012. The provision for loan losses decreased from $210,000 for the period ended December 31, 2012 to $180,000 for the period ended December 31, 2013. Total noninterest income was $817,000 for the three months ended December 31, 2013 compared to $1,035,000 for the three months ended December 31, 2012. Noninterest expense was $2,217,000 for the three months ended December 31, 2013 and $2,145,000 for the three months ended December 31, 2012. 

For the six months ended December 31, 2013, the Corporation reported net income of $1,408,000 or $1.04 per common share compared to $1,388,000 or $1.03 per common share for the six months ended December 31, 2012. The net interest margin for the six months ended December 31, 2013 was $5,144,000 compared to $4,687,000 for the six months ended December 31, 2012. The provision for loan losses decreased from $420,000 for the period ended December 31, 2012 to $360,000 for the period ended December 31, 2013. Total noninterest income was $1,423,000 for the six months ended December 31, 2013 compared to $1,683,000 for the six months ended December 31, 2012. Noninterest expense was $4,414,000 for the six months ended December 31, 2013 and $4,267,000 for the six months ended December 31, 2012.

The three and six months ended December 31, 2013 represented a return on average common equity of 10.73% and 9.74%, respectively, compared to 11.95% and 9.43% for the three and six month periods ended December 31, 2012. The three and six months ended December 31, 2013 represented a return on average assets of 0.85% and 0.80%, respectively, compared to 1.01% and 0.83%, for the three and six month periods ended December 31, 2012.

The allowance for loan losses as a percentage of gross loans receivable was 1.52% at December 31, 2013 compared to 1.43% at June 30, 2013. Nonperforming assets were $8,832,000 at December 31, 2013 compared to $9,794,000 at June 30, 2013.

As of December 31, 2013, FFWC's equity-to-assets ratio was 9.98% compared to 9.27% at June 30, 2013. Total assets at December 31, 2013 were $347,834,000 compared to $337,818,000 at June 30, 2013. Shareholders' equity was $34,715,000 at December 31, 2013 compared to $31,322,000 at June 30, 2013. Crossroads Bank exceeds all applicable regulatory requirements to be considered "well capitalized." 

The Corporation announced December 31, 2013 that it has closed the sale of 3,250 shares of a new series of Fixed Rate Cumulative Perpetual Preferred Stock, Series C ("Series C Preferred Stock"), for an aggregate subscription price of $3,250,000. The shares were offered to a select group of investors in a private placement exempt from registration under Section 4(2) and Rule 506 of the Securities Act of 1933 (the "Act"). The Corporation intends to use the net proceeds of the offering along with a dividend of approximately $1,500,000 paid by the Bank to FFW to redeem 4,750 of the Corporation's shares of Fixed Rate Cumulative Preferred Stock, Series A ("Series A Preferred Stock"), for $4,750,000, plus accrued dividends, as soon as it receives regulatory non-objection to that redemption. The Series A stock was paying dividends at 5% per year, and those dividends are scheduled to increase to 9% on February 15, 2014. Following the redemption, FFW will continue to have outstanding 364 shares of its Fixed Rate Cumulative Preferred Stock, Series B, which pays dividends at 9% per year, and 2,539 shares of its Series A Preferred Stock. The Series A and B Preferred Stock had been issued under the Treasury Department's TARP Capital Purchase Program.

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 7% 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  
   
    December 31     June 30  
    2013     2013  
    Unaudited        
Assets            
Cash and due from financial institutions   7,171,693     4,353,619  
Interest-earning deposits in other financial institutions   15,366,494     11,647,346  
  Cash and cash equivalents   22,538,187     16,000,965  
             
Securities available for sale   82,605,897     85,122,447  
Loans receivable, net of allowance for loan losses of $3,424,000 at December 31, 2013 and $3,132,000 at June 30, 2013  
221,149,576
   
215,347,079
 
Loans held for sale   453,600     113,600  
Federal Home Loan Bank stock, at cost   2,717,300     2,717,300  
Accrued interest receivable   1,737,436     1,719,787  
Premises and equipment, net   3,257,160     3,348,926  
Mortgage servicing rights   661,780     629,050  
Cash surrender value of life insurance   7,340,810     7,206,897  
Goodwill   1,213,898     1,213,898  
Deferred tax asset   2,588,763     2,392,638  
Other assets   1,570,037     2,005,096  
  Total assets   347,834,444     337,817,683  
             
Liabilities and shareholders' equity            
Deposits            
  Noninterest-bearing deposits   28,173,951     27,397,357  
  Interest-bearing deposits   279,882,876     272,581,131  
    Total deposits   308,056,827     299,978,488  
             
Borrowings   3,258,400     4,758,400  
Accrued expenses and other liabilities   1,804,086     1,758,769  
    Total liabilities   313,119,313     306,495,657  
             
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 December 31, 2013, $7,335,000 liquidation preference   7,289,000     7,248,308  
  Series B, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 364 shares outstanding December 31, 2013, $368,000 liquidation preference   364,000     368,292  
  Series C, 5% Fixed Rate Cumulative Perpetual Preferred Stock - 3,250 shares outstanding December 31, 2013, $3,250,000 liquidation preference            
Common stock, $.01 par; 2,000,000 shares authorized;   3,250,000     -  
  issued shares: 1,836,328            
  outstanding shares: 1,132,084 at December 31, 2013 and 1,122,084 at June 30, 2013   18,363     18,363  
Additional paid-in capital   9,414,302     9,531,646  
Retained earnings   26,661,325     25,737,557  
Accumulated other comprehensive income   (1,471,735 )   (618,516 )
Treasury stock, at cost: 704,244 shares at December 31, 2013 and 714,244 at June 30, 2013   (10,810,124 )   (10,963,624 )
  Total shareholders' equity   34,715,131     31,322,026  
             
  Total liabilities and shareholders' equity   347,834,444     337,817,683  
   
   
   
Consolidated Statement of Income  
   
    Three Months Ended December 31     Six Months Ended December 31  
    2013   2012     2013   2012  
    Unaudited   Unaudited     Unaudited   Unaudited  
Interest and dividend income:                            
  Loans, including fees   $ 2,598,970   $ 2,673,449     $ 5,254,840   $ 5,385,865  
  Taxable securities     49,161     341,728       1,294,349     900,158  
  Tax exempt securities     599,398     312,418       -     444,745  
  Other     17,978     4,541       27,044     8,668  
    Total interest and dividend income     3,265,507     3,332,136       6,576,233     6,739,436  
                             
Interest expense:                            
  Deposits     648,337     903,745       1,353,450     1,818,524  
  Borrowings     33,122     107,222       78,430     234,255  
    Total interest expense     681,459     1,010,967       1,431,880     2,052,779  
                             
Net interest income     2,584,048     2,321,169       5,144,353     4,686,657  
                             
Provision for loan losses     180,000     210,000       360,000     420,000  
                             
Net interest income after provision for loan losses     2,404,048     2,111,169       4,784,353     4,266,657  
Noninterest income:                            
  Net gains on sales of securities     52,679     186,767       52,679     179,490  
  Net gains on sales of loans     104,923     331,233       148,556     508,235  
  Other than temporary impairment on securities     -     (79,983 )     -     (80,641 )
  Commission income     227,034     196,788       438,492     394,463  
  Service charges and fees     261,014     334,506       524,907     524,170  
  Earnings on life insurance     66,692     67,696       133,913     134,059  
  Other     98,480     (2,172 )     117,817     23,433  
    Total noninterest income     817,303     1,034,835       1,422,845     1,683,209  
                             
Noninterest expense:                            
  Salaries and benefits     1,124,954     1,070,252       2,223,756     2,138,455  
  Occupancy and equipment     242,680     243,604       491,153     499,905  
  Professional     161,204     136,276       328,865     222,610  
  Marketing     43,855     58,815       85,729     90,817  
  Deposit insurance premium     77,868     112,375       157,076     228,180  
  Regulatory assessment     22,530     37,955       51,415     74,441  
  Correspondent bank charges     20,303     23,680       41,857     47,809  
  Data processing     147,366     136,851       317,053     274,947  
  Printing, postage and supplies     60,500     66,437       115,865     125,079  
  Expense on life insurance     18,818     17,418       37,635     34,837  
  Contribution expense     6,957     10,681       19,778     23,698  
  Other     289,549     230,340       543,706     506,132  
    Total noninterest expense     2,216,584     2,144,684       4,413,888     4,266,910  
                             
Income before income taxes     1,004,767     1,001,320       1,793,310     1,682,956  
                             
Income tax expense     234,809     143,742       385,479     295,342  
                             
Net income   $ 769,958   $ 857,578     $ 1,407,831   $ 1,387,614  
Preferred stock dividends and discount accretion, net     117,504     117,504       235,008     235,008  
Net income attributable to common shareholders   $ 652,454   $ 740,074     $ 1,172,823   $ 1,152,606  
   
   
   
Key Balances and Ratios  
   
      Three Months Ended December 31     Six Months Ended December 31  
      2013     2012     2013     2012  
      Unaudited     Unaudited     Unaudited     Unaudited  
Per common share data:                                
Earnings   $ 0.58     $ 0.66     $ 1.04     $ 1.03  
Diluted earnings   $ 0.58     $ 0.66     $ 1.04     $ 1.03  
Dividends paid   $ 0.11     $ 0.11     $ 0.22     $ 0.11  
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 **     3.01 %     2.92 %     3.09 %     2.98 %
Return on average assets ***     0.85 %     1.01 %     0.80 %     0.83 %
Return on average common equity ***     10.73 %     11.95 %     9.74 %     9.43 %
                                   
      December 31     June 30                  
      2013     2013                  
Nonperforming assets *   $ 8,831,678     $ 9,794,035                  
Repossessed assets   $ 408,245     $ 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

  • FOR MORE INFORMATION CONTACT:
    Emily Boardman
    Treasurer
    260-563-3185