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