SOURCE: FFW Corporation

April 24, 2009 10:31 ET

FFW Corporation Announces Operating Results for the Quarter and Year to Date Ended March 31, 2009

WABASH, IN--(Marketwire - April 24, 2009) - FFW Corporation (OTCBB: FFWC) (4/23/2009 Close: $11.00), parent corporation (the "Corporation") of Crossroads Bank, announced operating results for the three and nine months ended March 31, 2009.

For the three months ended March 31, 2009, the Corporation reported net loss of ($89,000). After deducting preferred stock dividends and preferred stock accretion, the net loss attributable to common shareholders for the same period was ($206,000) or ($0.18) per diluted share. This is compared to net income of $752,000 or $0.64 per diluted share for the quarter ended March 31, 2008. The earnings decrease for the third quarter of fiscal year 2009 reflected a decrease of approximately 127.4% over the same period in fiscal year 2008. The decrease is primarily due to a loss on exchange of a security and additional provision for loan losses.

For the nine months ended March 31, 2009, the Corporation reported net loss of ($2,495,000). After deducting preferred stock dividends and preferred stock accretion, the net loss for common shareholders for the same period was ($2,626,000) or ($2.37) per diluted share. This is compared to net income of $2,037,000 or $1.72 per diluted share for the nine months ended March 31, 2008. The nine month period ended March 31, 2009 includes a loss on exchange of security of $682,000, an increase in the loan loss provision of $869,000 and a non-cash impairment charge of $6,692,000 related to certain Federal National Mortgage Association ("Fannie Mae") preferred stocks offset by the ordinary tax benefit of $2,748,000 on the sale of the Fannie Mae preferred stock. Excluding the aforementioned items, net income available to common shareholders for the nine months ended March 31, 2009 would have been approximately $2,869,000, which represents an increase of approximately 40.8% from the nine months ended March 31, 2008.

Roger K. Cromer, President and Chief Executive Officer, stated, "The economic pressures experienced by the banking industry over the last nine months have been extensive; however, our management team has done a good job of navigating through these pressures and ensuring we act appropriately. The increase in loan loss reserves and security write-downs were actions we believe were warranted in this environment. Despite the pressures, our balance sheet remains strong with large levels of liquidity. Our community banking model has us well positioned to take advantage of opportunities that may arise in the markets we serve."

The three and nine month periods ended March 31, 2009 represent a return on average common equity of (4.00%) and (16.50%), respectively. Return on average total assets for the three and nine month periods ended March 31, 2009 was (0.10%) and (1.04%).

The allowance for loan losses as a percentage of gross loans receivable was 1.59% at March 31, 2009 and 1.20% at June 30, 2008. Nonperforming assets increased to $5.0 million at March 31, 2009 from $3.3 million at June 30, 2008.

As of March 31, 2009, FFWC's equity-to-assets ratio was 8.41% compared to 7.46% at June 30, 2008. Total assets at March 31, 2009 were $318.2 million compared to $315.9 million at June 30, 2008. Shareholders' equity was $26.8 million at March 31, 2009 compared to $23.6 million at June 30, 2008. Equity is impacted by unrealized losses on available for sale investments of $1,484,000. At this time, these losses are determined not to be credit related and, therefore, not charged to earnings. At March 31, 2009, 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 Bulletin Board under the symbol "FFWC.OB." Our website address is www.crossroadsbanking.com.


                             FFW Corporation
                      Selected Financial Information


Consolidated Balance Sheets

                                                3/31/2009      6/30/2008
                                              -------------  -------------
                                                Unaudited
Assets

Cash and due from financial institutions      $   6,022,484  $   6,095,999
Interest-earning deposits in other financial
 institutions - short term                        3,351,716      2,347,131
                                              -------------  -------------
Cash and cash equivalents                         9,374,200      8,443,130

Securities available for sale                    57,145,930     60,367,678
Loans receivable, net of allowance for loan
 losses of $3,682,825 at March 31, 2009 and
 $2,768,622 at June 30, 2008                    228,566,325    227,839,891
Loans held for sale                               1,060,139         77,000
Federal Home Loan Bank stock, at cost             3,627,100      3,627,100
Accrued interest receivable                       1,354,619      1,560,163
Premises and equipment, net                       4,149,169      4,040,369
Mortgage servicing rights                           279,332        488,452
Cash surrender value of life insurance            6,025,559      5,815,227
Goodwill                                          1,213,898      1,213,898
Other assets                                      5,363,323      2,412,579
                                              -------------  -------------
Total Assets                                  $ 318,159,594  $ 315,885,487
                                              =============  =============

Liabilities and Shareholders' Equity

Liabilities:
Noninterest-bearing deposits                  $  14,376,108  $  13,737,624
Interest-bearing deposits                       235,188,496    230,446,720
                                              -------------  -------------
Total Deposits                                  249,564,604    244,184,344

Federal Home Loan Bank advances                  38,098,030     45,283,087
Accrued expenses and other liabilities            3,732,326      2,856,193
                                              -------------  -------------
Total Liabilities                               291,394,960    292,323,624

Shareholders' Equity:
Preferred stock, $.01 par; 500,000 shares
 authorized;
  Series A, 5% Fixed Rate Cumulative
   Perpetual Preferred Stock - 7,289 shares
   outstanding March 31, 2009                     6,902,425            ---
  Series B, 9% Fixed Rate Cumulative
   Perpetual Preferred Stock - 364 shares
   outstanding March 31, 2009                       404,775            ---
Common stock, $.01 par; 2,000,000 shares
 authorized;                                         18,363         18,363
  issued: 1,836,328, outstanding: 1,112,260 -
   March 31, 2009

  issued: 1,836,328, outstanding: 1,100,260 -
   June 30, 2008
Additional paid-in capital                        9,438,010      9,530,608
Retained earnings                                22,605,311     25,965,339
Accumulated other comprehensive income (loss)    (1,484,263)      (653,825)
Treasury stock at cost, shares: 724,068 -
 March 31, 2009 and
  736,068 - June 30, 2008                       (11,119,987)   (11,298,622)
                                              -------------  -------------
Total Shareholders' Equity                       26,764,634     23,561,863
                                              -------------  -------------

Total Liabilities and Shareholders' Equity    $ 318,159,594  $ 315,885,487
                                              =============  =============



Consolidated Statements of Income


                        Three Months Ended          Nine Months Ended
                      3/31/2009     3/31/2008     3/31/2009     3/31/2008
                    ------------  ------------- ------------  -------------
                      Unaudited     Unaudited     Unaudited     Unaudited
Interest and
 dividend income:
  Loans, including
   fees             $  3,557,179  $   3,894,841 $ 11,516,071  $  11,786,765
  Taxable
   securities            588,187        741,127    1,861,829      2,019,378
  Nontaxable
   securities            187,194        146,846      551,385        452,235
  Other                    4,578         30,869       33,451         84,268
                    ------------  ------------- ------------  -------------
    Total interest
     and dividend
     income            4,337,138      4,813,683   13,962,736     14,342,646

Interest expense:
  Deposits             1,505,622      1,941,525    5,002,888      5,836,482
  Borrowings             455,467        627,172    1,443,615      2,049,181
                    ------------  ------------- ------------  -------------
    Total interest
     expense           1,961,089      2,568,697    6,446,503      7,885,663

Net interest income    2,376,049      2,244,986    7,516,233      6,456,983

Provision for loan
 losses                  515,000        120,000    1,229,000        360,000

Net interest income
 after provision
 for loan losses       1,861,049      2,124,986    6,287,233      6,096,983

Noninterest income:
  Net gains on
   sales of
   securities           (682,004)        10,395     (494,668)        59,225
  Net gains on
   sales of loans        280,108        106,967      338,134        154,408
  Net gains
   (losses) on
   fixed assets                -              -            -              -
  Other than
   temporary
   impairment on
   securities                  -              -   (6,692,000)             -
  Commission income      129,910        137,460      418,555        399,112
  Service charges
   and fees              241,655        211,890      644,886        768,474
  Earnings on life
   insurance              78,497         67,307      223,551        200,272
  Other                   60,550         88,172      114,369        175,847
                    ------------  ------------- ------------  -------------
    Total
     noninterest
     income (loss)       108,716        622,191   (5,447,173)     1,757,338

Noninterest
 expense:
  Salaries and
   benefits              921,757        855,566    2,753,777      2,588,296
  Occupancy and
   equipment             228,814        211,917      642,596        617,685
  Professional            68,122         48,890      189,156        171,320
  Marketing               31,578         96,258      113,882        222,153
  Deposit insurance
   premium                70,522          6,177      153,875         18,368
  Regulatory
   assessment             23,946         22,187       70,107         65,403
  Correspondent
   bank charges           18,208         20,700       58,146         65,797
  Data processing        131,066        131,320      388,809        426,637
  Printing, postage
   and supplies           62,623         62,757      182,193        157,279
  Expense on life
   insurance              13,809         24,688       60,190         51,318
  Contribution
   expense                10,283          7,778       39,364         19,780
  Other                  198,342        298,690      664,579        749,044
                    ------------  ------------- ------------  -------------
    Total
     noninterest
     expense           1,779,070      1,786,928    5,316,674      5,153,080

Income (loss)
 before income
 taxes                   190,695        960,249   (4,476,614)     2,701,241

Income tax expense
 (benefit)               279,629        208,569   (1,981,420)       664,068

Net income (loss)   $    (88,934) $     751,680 $ (2,495,194) $   2,037,173
                    ============  ============= ============  =============




                           Three Months Ended         Nine Months Ended
                         3/31/2009    3/31/2008    3/31/2009    3/31/2008
                        -----------  -----------  -----------  -----------
                         Unaudited    Unaudited    Unaudited    Unaudited
Earnings per common
 share:
Primary                 $     (0.18) $      0.64  $     (2.37) $      1.73
Fully diluted           $     (0.18) $      0.64  $     (2.37) $      1.72
Dividend paid per share $      0.22  $      0.21  $      0.66  $      0.63
Average shares
 outstanding              1,112,260    1,162,943    1,111,158    1,179,498
Shares outstanding end
 of period                1,112,260    1,100,910    1,112,260    1,100,910

Supplemental data:
Net interest margin **         3.20%        3.14%        3.32%        3.06%
Return on average
 assets ***                   -0.10%        0.99%       -1.04%        0.91%
Return on average
 common equity ***            -4.00%       11.58%      -16.50%       10.57%

                          3/31/2009    6/30/2008
                        -----------  -----------
Nonperforming assets *  $ 4,989,175  $ 3,262,262
Repossessed assets      $ 1,116,459  $   846,785

*   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

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