FFW Corporation Announces Earnings for the Three and Nine Months Ended March 31, 2014

WABASH, IN--(Marketwired - Apr 23, 2014) -  FFW Corporation (the "Corporation") (OTCBB: FFWC) (04/22/14 Close: $18.05), parent corporation of Crossroads Bank, announced earnings for the three and nine months ended March 31, 2014.

For the three months ended March 31, 2014, the Corporation reported net income of $1,912,000 or $1.59 per common share compared to $643,000 or $0.47 per common share for the three months ended March 31, 2013. The net interest margin for the three months ended March 31, 2014 was $2,760,000 compared to $2,294,000 for the three months ended March 31, 2013. The provision for loan losses was $210,000 for the period ended March 31, 2013 and a negative provision of $1,820,000 was recognized in the period ended March 31, 2014. The income recognized through provision was attributable to a large loan loss recovery received during the quarter offset by the current period provision expense. Total noninterest income was $725,000 for the three months ended March 31, 2014 compared to $782,000 for the three months ended March 31, 2013. Noninterest expense was $2,436,000 for the three months ended March 31, 2014 and $2,164,000 for the three months ended March 31, 2013. 

For the nine months ended March 31, 2014, the Corporation reported net income of $3,320,000 or $2.62 per common share compared to $2,031,000 or $1.50 per common share for the nine months ended March 31, 2013. The net interest margin for the nine months ended March 31, 2014 was $7,904,000 compared to $6,981,000 for the nine months ended March 31, 2013. The provision for loan losses decreased from $630,000 expense for the period ended March 31, 2013 to $1,460,000 income for the period ended March 31, 2014. Total noninterest income was $2,147,000 for the nine months ended March 31, 2014 compared to $2,465,000 for the nine months ended March 31, 2013. Noninterest expense was $6,850,000 for the nine months ended March 31, 2014 and $6,431,000 for the nine months ended March 31, 2013.

The three and nine months ended March 31, 2014 represented a return on average common equity of 29.80% and 16.33%, respectively, compared to 8.49% and 9.12% for the three and nine month periods ended March 31, 2013. The three and nine months ended March 31, 2014 represented a return on average assets of 2.29% and 1.29%, respectively, compared to 0.77% and 0.81%, for the three and nine month periods ended March 31, 2013.

The allowance for loan losses as a percentage of gross loans receivable was 1.25% at March 31, 2014 compared to 1.43% at June 30, 2013. Nonperforming assets were $7,814,000 at March 31, 2014 compared to $9,794,000 at June 30, 2013.

As of March 31, 2014, FFWC's equity-to-assets ratio was 9.79% compared to 9.27% at June 30, 2013. Total assets at March 31, 2014 were $333,346,000 compared to $337,818,000 at June 30, 2013. Shareholders' equity was $32,643,000 at March 31, 2014 compared to $31,322,000 at June 30, 2013. Crossroads Bank exceeds all applicable regulatory requirements to be considered "well capitalized." 

On February 3, 2014, the Corporation redeemed 4,750 of the Corporation's shares of Fixed Rate Cumulative Preferred Stock, Series A, for $4,750,000, plus accrued dividends. Following the redemption, the Corporation continues to have outstanding 2,539 shares of its Fixed Rate Cumulative Preferred Stock, Series A and 364 shares of its Fixed Rate Cumulative Preferred Stock, Series B, which now pay dividends at 9% per year. The Corporation also has 3,250 shares of its Series C Preferred Stock issued on December 31, 2013. 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 9% 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
				March 31				June 30
				2014				2013
				Unaudited
Assets
Cash and due from financial institutions				$	6,996,368			$	4,353,619
Interest-earning deposits in other financial institutions					4,270,081				11,647,346
	Cash and cash equivalents				11,266,449				16,000,965
Securities available for sale					83,269,469				85,122,447
Loans receivable, net of allowance for loan losses of $2,777,000 at March 31, 2014 and $3,132,000 at June 30, 2013					218,601,129				215,347,079
Loans held for sale					137,400				113,600
Federal Home Loan Bank stock, at cost					2,717,300				2,717,300
Accrued interest receivable					1,572,298				1,719,787
Premises and equipment, net					3,312,135				3,348,926
Mortgage servicing rights					661,819				629,050
Cash surrender value of life insurance					7,406,567				7,206,897
Goodwill					1,213,898				1,213,898
Deferred tax asset					1,863,295				2,392,638
Other assets					1,324,352				2,005,096
	Total assets			$	333,346,111			$	337,817,683
Liabilities and shareholders' equity
Deposits
	Noninterest-bearing deposits			$	28,025,472			$	27,397,357
	Interest-bearing deposits				263,900,395				272,581,131
		Total deposits			291,925,867				299,978,488
Borrowings					5,758,400				4,758,400
Accrued expenses and other liabilities					3,018,509				1,758,769
	Total liabilities				300,702,776				306,495,657
Shareholders' equity
	Preferred stock, $.01 par; $1,000 liquidation value per share; 500,000 shares authorized;
	Series A, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 2,539 shares outstanding March 31, 2014, $2,568,000 liquidation preference				2,539,000				7,248,308
	Series B, 9% Fixed Rate Cumulative Perpetual Preferred Stock - 364 shares outstanding March 31, 2014, $368,000 liquidation preference				364,000				368,292
	Series C, 5% Fixed Rate Cumulative Perpetual Preferred Stock - 3,250 shares outstanding March 31, 2014, $3,271,000 liquidation preference				3,250,000				-
Common stock, $.01 par; 2,000,000 shares authorized;
	issued shares: 1,836,328
	outstanding shares: 1,132,084 at March 31, 2014 and 1,122,084 at June 30, 2013				18,363				18,363
Additional paid-in capital					9,432,380				9,531,646
Retained earnings					28,334,486				25,737,557
Accumulated other comprehensive income					(484,770	)			(618,516	)
Treasury stock, at cost: 704,244 shares at March 31, 2014 and 714,244 at
	June 30, 2013				(10,810,124	)			(10,963,624	)
	Total shareholders' equity				32,643,335				31,322,026
	Total liabilities and shareholders' equity			$	333,346,111			$	337,817,683

FFW Corporation
Selected Financial Information
Consolidated Statement of Income
				Three Months Ended March 31								Nine Months Ended March 31
				2014				2013				2014				2013
				Unaudited				Unaudited				Unaudited				Unaudited
Interest and dividend income:
	Loans, including fees			$	2,655,788			$	2,522,505			$	7,910,628			$	7,908,368
	Taxable securities				354,702				379,743				1,049,652				1,279,902
	Tax exempt securities				305,965				254,733				905,363				699,478
	Other				8,793				9,437				35,838				18,105
		Total interest and dividend income			3,325,248				3,166,418				9,901,481				9,905,853
Interest expense:
	Deposits				532,286				816,099				1,885,736				2,634,621
	Borrowings				32,942				56,363				111,372				290,618
		Total interest expense			565,228				872,462				1,997,108				2,925,239
Net interest income					2,760,020				2,293,956				7,904,373				6,980,614
Provision for loan losses					(1,820,000	)			210,000				(1,460,000	)			630,000
Net interest income after provision for loan losses					4,580,020				2,083,956				9,364,373				6,350,614
Noninterest income:
	Net gains on sales of securities				(17,413	)			66,751				35,267				246,241
	Net gains on sales of loans				61,438				203,473				209,994				711,709
	Net gains (losses) on fixed assets				-				-				6,481				-
	Other than temporary impairment on securities				-				(2,200	)			-				(82,841	)
	Commission income				261,135				177,903				699,627				572,366
	Service charges and fees				217,968				227,979				742,875				752,148
	Earnings on life insurance				65,757				66,628				199,670				200,686
	Other				135,702				41,492				253,519				64,925
		Total noninterest income			724,587				782,026				2,147,433				2,465,234
Noninterest expense:
	Salaries and benefits				1,215,946				1,059,390				3,439,701				3,197,846
	Occupancy and equipment				262,884				255,603				754,037				755,508
	Professional				250,200				122,934				579,064				345,543
	Marketing				41,852				36,202				127,582				127,019
	Deposit insurance premium				80,762				115,815				237,837				343,995
	Regulatory assessment				26,588				37,619				78,003				112,060
	Correspondent bank charges				20,605				23,840				62,462				71,649
	Data processing				150,790				140,159				467,843				415,106
	Printing, postage and supplies				69,157				59,473				185,022				184,553
	Expense on life insurance				18,818				17,418				56,453				52,255
	Contribution expense				9,300				9,107				29,078				32,805
	Other				289,322				286,169				833,028				792,302
		Total noninterest expense			2,436,224				2,163,729				6,850,110				6,430,641
Income before income taxes					2,868,383				702,253				4,661,696				2,385,207
Income tax expense					956,056				58,795				1,341,535				354,137
Net income				$	1,912,327			$	643,458			$	3,320,161			$	2,031,070
Preferred stock dividends and discount accretion, net					114,641				117,504				349,649				352,512
Net income attributable to common shareholders				$	1,797,686			$	525,954			$	2,970,512			$	1,678,558

FFW Corporation
Selected Financial Information
Key Balances and Ratios
		Three Months Ended March 31								Nine Months Ended March 31
		2014				2013				2014				2013
		Unaudited				Unaudited				Unaudited				Unaudited
Per common share data:
Earnings		$	1.59			$	0.47			$	2.62			$	1.50
Diluted earnings		$	1.59			$	0.47			$	2.62			$	1.50
Dividends paid		$	0.11			$	0.11			$	0.33			$	0.22
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 **			3.49	%			2.98	%			3.22	%			2.98	%
Return on average assets ***			2.29	%			0.77	%			1.29	%			0.81	%
Return on average common equity ***			29.80	%			8.49	%			16.33	%			9.12	%
		March 31				June 30
		2014				2013
Nonperforming assets *		$	7,814,211			$	9,794,035
Repossessed assets		$	268,720			$	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