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FFW Corporation Announces Impact of Preferred Holdings
| Source: FFW Corporation
WABASH, IN--(Marketwire - September 15, 2008) - FFW Corporation (OTCBB : FFWC ) (the Company),
parent corporation of Crossroads Bank, announced today that the U.S.
government's actions with respect to the Federal National Mortgage
Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation
(Freddie Mac) and the related restrictions on their outstanding preferred
stock will adversely impact the value of the Company's perpetual preferred
stock investments in Fannie Mae. For the year ended June 30, 2008, the
Company recognized a $308,000 non-cash charge to earnings for the
other-than-temporary decline in fair value of these securities. The
determination that the Fannie Mae preferred stock was
other-than-temporarily impaired at June 30, 2008 was largely attributable
to events occurring subsequent to the balance sheet date of June 30, 2008
and subsequent to the earnings release dated July 30, 2008. Due to the
September 7, 2008 announcement to place Fannie Mae under conservatorship
and the simultaneous elimination of the preferred stock dividend, the
Company intends to record an additional non-cash charge to earnings for the
quarter ending September 30, 2008. The Company estimates the non-cash
charge to be between $6.1 and $6.7 million. The Company does not hold any
common or other equity securities issued by Fannie Mae or Freddie Mac.
Based on management's current projections, even if the shares of Fannie Mae
preferred stock are ultimately deemed to have no value, the capital of the
Company's subsidiary, Crossroads Bank, will continue to exceed the ratios
that must be maintained to be considered "adequately capitalized" under the
applicable regulatory capital requirements.
This report contains certain forward-looking statements about the Company's
securities activities. The final impact on the Company's quarterly
financial results could differ from the quarter-to-date impact disclosed
above.
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 banking
centers located in Columbia City, North Manchester, South Whitley, and
Syracuse, IN. 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.