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FFW Corporation: FFW Corporation Announces Operating Results for the Quarter and Year to Date Ended December 31, 2008

^{Published on 2009-01-28 09:27:23, Last Modified on 2009-01-28 09:30:01 - Market Wire}
 

WABASH, IN--(Marketwire - January 28, 2009) - FFW Corporation (OTCBB: [ FFWC ]) (1/27/2009 Close: $14.00), parent corporation (the "Corporation") of Crossroads Bank, announced operating results for the three and six months ended December 31, 2008.

For the three months ended December 31, 2008, the Corporation reported net income of $749,000. After deducting preferred stock dividends, the net income available to common shareholders for the same period was $736,000 or $0.69 per diluted share. This is compared to net income of $651,000 or $0.55 per diluted share for the quarter ended December 31, 2007. The earnings increase for the second quarter of fiscal year 2009 reflected an increase of approximately 13.1% over the same period in fiscal year 2008. The increase is due to higher net interest income, partially offset by an increase to the provision for loan losses.

For the six months ended December 31, 2008, the Corporation reported net loss of ($2,406,000). After deducting preferred stock dividends, the net loss for common shareholders for the same period was ($2,419,000) or ($2.19) per diluted share. This is compared to net income of $1,285,000 or $1.08 per diluted share for the six months ended December 31, 2007. The six months ended December 31, 2008 includes a non-cash impairment charge of $6,692,000 related to certain Federal National Mortgage Association ("Fannie Mae") preferred stocks. These securities were sold prior to December 31, 2008. Losses on these securities are considered ordinary with respect to federal income taxes; therefore, an ordinary tax benefit of $2,748,000 was recognized. Excluding the non-cash impairment charge and related tax benefit, net income available to common shareholders for the six months ended December 31, 2008 would have been approximately $1,525,000, which represents an increase of approximately 18.7% from the six months ended December 31, 2007.

Roger K. Cromer, President and Chief Executive Officer, stated, "We are pleased with our quarterly performance in a challenging economic environment. We were able to grow our loan portfolio by $5.5 million during the first six months of our fiscal year. Our participation in the Capital Purchase Program will further increase our capacity to support economic activity and growth in each of the communities we serve through responsible lending."

The three and six month periods ended December 31, 2008 represent a return on average common equity of 14.09% and (22.49%), respectively. Return on average total assets for the three and six month periods ended December 31, 2008 was 0.94% and (1.50%).

The allowance for loan losses as a percentage of gross loans receivable was 1.42% at December 31, 2008 and 1.20% at June 30, 2008. Nonperforming assets decreased to $2.4 million at December 31, 2008 from $3.3 million at June 30, 2008.

As of December 31, 2008, FFWC's equity-to-assets ratio was 8.46% compared to 7.46% at June 30, 2008. Total assets at December 31, 2008 were $327.4 million compared to $315.9 million at June 30, 2008. Shareholders' equity was $27.7 million at December 31, 2008 compared to $23.6 million at June 30, 2008. Shareholders' equity at December 31, 2008 was increased by $7.3 million upon completion of the sale of preferred stock under the U.S. Department of the Treasury's Capital Purchase Program. The transaction was completed on December 19, 2008 and resulted in FFW Corporation issuing 7,289 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, with a liquidation preference of $1,000 per share paying dividends at an annual rate of 5% and 364 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B, with a liquidation preference of $1,000 per share paying dividends at an annual rate of 9%. At December 31, 2008, 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 12/31/2008 6/30/2008 ------------ ------------ Unaudited Assets Cash and due from financial institutions $ 6,374,271 $ 6,095,999 Interest-earning deposits in other financial institutions - short term 8,039,441 2,347,131 ------------ ------------ Cash and cash equivalents 14,413,712 8,443,130 Securities available for sale 57,098,872 60,367,678 Loans receivable, net of allowance for loan losses of $3,355,057 at December 31, 2008 and $2,768,622 at June 30, 2008 232,732,254 227,839,891 Loans held for sale 752,100 77,000 Federal Home Loan Bank stock, at cost 3,627,100 3,627,100 Accrued interest receivable 1,894,090 1,560,163 Premises and equipment, net 4,102,618 4,040,369 Mortgage servicing rights 223,273 488,452 Cash surrender value of life insurance 5,946,427 5,815,227 Goodwill 1,213,898 1,213,898 Other assets 5,404,335 2,412,579 ------------ ------------ Total Assets $327,408,679 $315,885,487 ============ ============ Liabilities and Shareholders' Equity Liabilities: Noninterest-bearing deposits $ 12,593,381 $ 13,737,624 Interest-bearing deposits 245,140,803 230,446,720 ------------ ------------ Total Deposits 257,734,184 244,184,344 Federal Home Loan Bank advances 38,848,030 45,283,087 Accrued expenses and other liabilities 3,124,896 2,856,193 ------------ ------------ Total Liabilities 299,707,110 292,323,624 Shareholders' Equity: Preferred stock, $.01 par; 500,000 shares authorized; Series A, 5% Fixed Rate Cumulative Perpetual Preferred Stock - 7,289 shares outstanding December 31, 2008 6,882,079 -- Series B, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 364 shares outstanding December 31, 2008 406,921 -- Common stock, $.01 par; 2,000,000 shares authorized; 18,363 18,363 issued: 1,836,328, outstanding: 1,112,260 - December 31, 2008 issued: 1,836,328, outstanding: 1,100,260 - June 30, 2008 Additional paid-in capital 9,415,709 9,530,608 Retained earnings 23,056,443 25,965,339 Accumulated other comprehensive income (loss) (957,959) (653,825) Treasury stock at cost, shares: 724,068 - December 31, 2008 and 736,068 - June 30, 2008 (11,119,987) (11,298,622) ------------ ------------ Total Shareholders' Equity 27,701,569 23,561,863 ------------ ------------ Total Liabilities and Shareholders' Equity $327,408,679 $315,885,487 ============ ============ Consolidated Statements of Income Three Months Ended Six Months Ended 12/31/2008 12/31/2007 12/31/2008 12/31/2007 ----------- ----------- ----------- ----------- Unaudited Unaudited Unaudited Unaudited Interest and dividend income: Loans, including fees $ 3,833,061 $ 3,970,507 $ 7,958,892 $ 7,891,925 Taxable securities 565,538 664,188 1,273,642 1,278,251 Nontaxable securities 187,476 163,581 364,191 305,389 Other 6,327 23,006 28,873 53,398 ----------- ----------- ----------- ----------- Total interest and dividend income 4,592,402 4,821,282 9,625,598 9,528,963 Interest expense: Deposits 1,660,641 1,954,652 3,497,268 3,894,956 Borrowings 481,435 714,313 988,148 1,422,009 ----------- ----------- ----------- ----------- Total interest expense 2,142,076 2,668,965 4,485,416 5,316,965 Net interest income 2,450,326 2,152,317 5,140,182 4,211,998 Provision for loan losses 285,000 120,000 714,000 240,000 Net interest income after provision for loan losses 2,165,326 2,032,317 4,426,182 3,971,998 Noninterest income: Net gains on sales of securities 187,336 48,830 187,336 48,830 Net gains on sales of loans 38,217 24,821 58,026 47,441 Other than temporary impairment on securities - - (6,692,000) - Commission income 142,322 135,058 288,645 261,652 Service charges and fees 97,103 250,905 403,231 556,584 Earnings on life insurance 75,282 66,617 145,055 132,965 Other 54,926 44,027 53,819 87,674 ----------- ----------- ----------- ----------- Total noninterest income (loss) 595,186 570,258 (5,555,888) 1,135,146 Noninterest expense: Salaries and benefits 915,578 866,737 1,832,020 1,732,730 Occupancy and equipment 209,804 202,856 413,782 405,768 Professional 67,037 70,186 121,034 122,430 Marketing 31,875 90,538 82,304 125,895 Deposit insurance premium 44,274 6,066 83,353 12,190 Regulatory assessment 23,080 21,608 46,161 43,216 Correspondent bank charges 18,426 20,881 39,938 45,097 Data processing 127,423 135,452 257,743 295,317 Printing, postage and supplies 61,927 50,518 119,570 94,522 Expense on life insurance 21,507 900 46,381 26,629 Contribution expense 16,540 6,828 29,081 12,001 Other 232,524 248,445 466,234 450,355 ----------- ----------- ----------- ----------- Total noninterest expense 1,769,995 1,721,015 3,537,601 3,366,150 Income (loss) before income taxes 990,517 881,560 (4,667,307) 1,740,994 Income tax expense (benefit) 241,514 230,457 (2,261,050) 455,499 Net income (loss) $ 749,003 $ 651,103 $(2,406,257) $ 1,285,495 =========== =========== =========== =========== Three Months Ended Six Months Ended 12/31/2008 12/31/2007 12/31/2008 12/31/2007 ---------- ---------- ---------- ---------- Unaudited Unaudited Unaudited Unaudited Earnings per common share: Primary $ 0.69 $ 0.56 $ (2.19) $ 1.09 Fully diluted $ 0.69 $ 0.55 $ (2.19) $ 1.08 Dividend paid per share $ 0.22 $ 0.21 $ 0.44 $ 0.42 Average shares outstanding 1,112,260 1,180,496 1,110,619 1,187,686 Shares outstanding end of period 1,112,260 1,170,768 1,112,260 1,170,768 Supplemental data: Net interest margin ** 3.23% 3.05% 3.38% 3.02% Return on average assets *** 0.94% 0.87% -1.50% 0.87% Return on average common equity *** 14.09% 10.14% -22.49% 10.07% 12/31/2008 6/30/2008 ---------- ---------- Nonperforming assets * $2,396,978 $3,262,262 Repossessed assets $ 955,759 $ 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