FFW Corporation Announces Fourth Quarter and June 30, 2009 Year End Results

 | Source: FFW Corporation FFW Corporation

WABASH, IN--(Marketwire - August 14, 2009) - FFW Corporation (the "Corporation") (OTCBB: FFWC) (8/13/2009 Close: $9.80), parent corporation of Crossroads Bank, announced operating results for the three and twelve months ended June 30, 2009.

For the three months ended June 30, 2009, the Corporation reported net income of $109,000. This is compared to net income of $565,000 for the quarter ended June 30, 2008. The earnings decrease for the fourth quarter of fiscal year 2009 reflected a decrease of approximately 80.7% over the same period in fiscal year 2008. The decrease is primarily due to an increase to the provision for loan losses, recognition of other-than-temporary impairments on certain securities and expense for the Federal Deposit Insurance Corporation (FDIC) special assessment insurance premium. During the quarter, the FDIC issued a final rule imposing a 5 basis point special assessment on depository institution's total assets (less Tier 1 capital) as reported at June 30, 2009. The special assessment is payable September 30, 2009.

For the twelve months ended June 30, 2009, the Corporation reported net loss of ($2,387,000). This is compared to net income of $2,602,000 for the twelve months ended June 30, 2008. The twelve month period ended June 30, 2009 includes security losses of approximately $7,743,000, an increase in the loan loss provision of $1,078,000 and an increase in FDIC insurance assessments of approximately $517,000. The security losses include the 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.

Roger K. Cromer, President and Chief Executive Officer, stated, "The past fiscal year has proven to be very challenging financially to our company. Based on the current economic environment, we wrote down securities and continued to build our allowance for loan loss reserve. Our capital levels are strong and we had growth in loans and deposits during the year. While we are disappointed in our results, we believe the actions taken will preserve and protect our franchise value over the long term."

The three and twelve month periods ended June 30, 2009 represent a return on average common equity of (0.18%) and (12.57%), respectively. Return on average total assets for the three and twelve month periods ended June 30, 2009 was 0.16% and (0.74%).

The allowance for loan losses as a percentage of gross loans receivable was 1.53% at June 30, 2009 and 1.20% at June 30, 2008. Nonperforming assets increased to $4.8 million at June 30, 2009 from $3.3 million at June 30, 2008.

As of June 30, 2009, FFWC's equity-to-assets ratio was 8.26% compared to 7.46% at June 30, 2008. Total assets at June 30, 2009 were $332.6 million compared to $315.9 million at June 30, 2008. The combined $10.4 million increase in available for sale securities and net loans receivable was funded through a $17.4 million increase in total deposits. The deposit growth was also used to pay down outstanding Federal Home Loan Bank advances by $7.2 million. The $2.6 million increase in other assets was largely attributable to the deferred tax asset that resulted from the sale of Fannie Mae preferred stock. The $2.6 million increase in accrued expenses and other liabilities is attributable to a trade date payable for a security that was purchased prior to year-end, but did not settle until after year-end. Shareholders' equity was $27.5 million at June 30, 2009 compared to $23.6 million at June 30, 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 Sheet

                                                        June 30
                                              ----------------------------
                                                  2009           2008
                                              -------------  -------------
                                                Unaudited

Assets
Cash and due from financial institutions      $   3,830,526  $   6,095,999
Interest-earning deposits in other financial
 institutions - short term                        7,284,371      2,347,131
                                              -------------  -------------
  Cash and cash equivalents                      11,114,897      8,443,130
                                              -------------  -------------

Securities available for sale                    66,273,786     60,367,678
Loans receivable, net of allowance for loan
 losses of $3,605,204 at June 30, 2009 and
 $2,768,622 at June 30, 2008                    232,378,508    227,839,891
Loans held for sale                               1,049,519         77,000
Federal Home Loan Bank stock, at cost             3,627,100      3,627,100
Accrued interest receivable                       1,425,374      1,560,163
Premises and equipment, net                       4,096,623      4,040,369
Mortgage servicing rights                           392,839        488,452
Cash surrender value of life insurance            6,094,321      5,815,227
Goodwill                                          1,213,898      1,213,898
Other assets                                      4,964,787      2,412,579
                                              -------------  -------------
  Total assets                                $ 332,631,652  $ 315,885,487
                                              =============  =============

Liabilities
Noninterest-bearing deposits                  $  12,924,010  $  13,737,624
Interest-bearing deposits                       248,643,498    230,446,720
                                              -------------  -------------
  Total deposits                                261,567,508    244,184,344
                                              -------------  -------------

Federal Home Loan Bank advances                  38,098,030     45,283,087
Accrued expenses and other liabilities            5,477,874      2,856,193
                                              -------------  -------------
  Total liabilities                             305,143,412    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                     6,922,771            ---
  Series B, 9% Fixed Rate Cumulative
   Perpetual Preferred Stock - 364 shares
   outstanding March 31, 2009                       402,629            ---
Common stock, $.01 par; 2,000,000 shares
 authorized;                                         18,363         18,363
  issued: 1,836,328, outstanding: 1,112,260 -
   June 30, 2009
  issued: 1,836,328, outstanding: 1,100,260 -
   June 30, 2008
Additional paid-in capital                        9,448,627      9,530,608
Retained earnings                                22,351,652     25,965,339
Accumulated other comprehensive income (loss)      (541,380)      (653,825)
Treasury stock at cost, shares: 724,068 -
 June 30, 2009 and 736,068 - June 30, 2008      (11,114,422)   (11,298,622)
                                              -------------  -------------
  Total shareholders' equity                     27,488,240     23,561,863
                                              -------------  -------------

                                              -------------  -------------
Total liabilities and shareholders' equity    $ 332,631,652  $ 315,885,487
                                              =============  =============




Consolidated Statement of Income

                    Three Months Ended June 30  Twelve Months Ended June 30
                    --------------------------  --------------------------
                        2009          2008          2009          2008
                    ------------  ------------  ------------  ------------
                      Unaudited     Unaudited     Unaudited
Interest and
 dividend income:
  Loans, including
   fees             $  3,610,537  $  3,762,848  $ 15,126,609  $ 15,549,609
  Taxable securities     591,655       733,397     2,453,482     2,752,774
  Nontaxable
   securities            179,786       156,473       731,171       608,708
  Other                    5,300        24,988        38,750       109,255
                    ------------  ------------  ------------  ------------
    Total interest
     and dividend
     income            4,387,278     4,677,706    18,350,012    19,020,346
                    ------------  ------------  ------------  ------------

Interest expense:
  Deposits             1,475,880     1,783,400     6,478,769     7,619,880
  Borrowings             459,203       526,918     1,902,819     2,576,098
                    ------------  ------------  ------------  ------------
      Total interest
       expense         1,935,083     2,310,318     8,381,588    10,195,978
                    ------------  ------------  ------------  ------------

Net interest income    2,452,195     2,367,388     9,968,424     8,824,368

Provision for loan
 losses                  451,000       242,000     1,680,000       602,000

Net interest income
 after provision
 for loan losses       2,001,195     2,125,388     8,288,424     8,222,368

Noninterest income:
  Net gains on sales
   of securities               -        11,719      (494,668)       70,944
  Net gains on sales
   of loans              201,401        43,056       539,435       197,464
  Net gains (losses)
   on fixed assets        (3,332)            -        (3,232)            -
  Other than temporary
   impairment on
   securities
     Total impairment
      losses             (556,140)     (308,000)   (7,662,623)    (308,000)
     Loss recognized
      in other
      comprehensive
      income                   -             -       414,483             -
                    ------------  ------------  ------------  ------------
     Net impairment
      loss recognized
      in earnings       (556,140)     (308,000)   (7,248,140)     (308,000)
  Commission income      132,651       135,164       551,205       534,276
  Service charges
   and fees              376,596       396,153     1,021,482     1,164,627
  Earnings on life
   insurance              68,762        68,435       292,313       268,707
  Other                   25,034        29,091       139,402       204,938
                    ------------  ------------  ------------  ------------
     Total
      noninterest
      income (loss)      244,972       375,618    (5,202,203)    2,132,956
                    ------------  ------------  ------------  ------------

Noninterest
 expense:
  Salaries and
   benefits              869,491       908,478     3,623,268     3,496,775
  Occupancy and
   equipment             225,013       220,832       867,610       838,517
  Professional            97,822        42,045       286,979       213,365
  Marketing               44,153        46,158       158,035       268,311
  Deposit insurance
   premium               387,880         5,970       541,755        24,338
  Regulatory
   assessment             23,946        22,187        94,053        87,590
  Correspondent bank
   charges                18,793        22,339        76,938        88,136
  Data processing        168,846       135,026       557,655       561,664
  Printing, postage
   and supplies           53,421        60,449       235,614       217,729
  Expense on life
   insurance              14,445        24,759        74,635        76,076
  Contribution
   expense                13,760        21,106        53,123        40,886
  Other                  183,699       238,057       848,278       987,099
                    ------------  ------------  ------------  ------------
     Total
      noninterest
      expense          2,101,269     1,747,406     7,417,943     6,900,486
                    ------------  ------------  ------------  ------------

Income (loss)
 before income
 taxes                   144,898       753,600    (4,331,722)    3,454,838

Income tax expense
 (benefit)                36,355       188,781    (1,945,065)      852,849

                    ------------  ------------  ------------  ------------
Net income (loss)   $    108,543  $    564,819  $ (2,386,657) $  2,601,989
                    ============  ============  ============  ============
Preferred stock
 dividends               117,503             -       248,245             -
                    ------------  ------------  ------------  ------------
Net income (loss)
 applicable to
 common stock       $     (8,960) $    564,819  $ (2,634,902) $  2,601,989
                    ============  ============  ============  ============





                          Three Months Ended        Twelve Months Ended
                                June 30                    June 30
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
                         Unaudited    Unaudited    Unaudited
Per common share data:
Earnings                $     (0.00) $      0.51  $     (2.38) $      2.24
Diluted earnings        $     (0.00) $      0.51  $     (2.38) $      2.23
Dividends paid          $      0.22  $      0.21  $      0.88  $      0.84
Average shares issued
 and outstanding          1,112,260    1,100,459    1,111,433    1,159,847
Shares outstanding end
 of period                1,112,260    1,100,260    1,112,260    1,100,260

Supplemental data:
Net interest margin **         3.16%        3.22%        3.28%        3.10%
Return on average
 assets ***                    0.16%        0.71%       -0.74%        0.86%
Return on average
 common equity ***            -0.18%        9.32%      -12.57%       10.26%

                                June 30
                        ------------------------
                           2009         2008
                        -----------  -----------
Nonperforming assets *  $ 4,829,152  $ 3,262,262
Repossessed assets      $ 1,334,259  $   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