FFW Corporation (the "Corporation") (OTCBB: FFWC)
(8/16/2012 Close: $13.75), parent corporation of
Crossroads Bank, announced earnings for the quarter and year ended
June 30, 2012.
For the year ended June 30, 2012, the Corporation reported net
income of $593,000 or $0.11 per common share compared to $2,674,000
or $1.96 per common share for the year ended June 30, 2011. The net
interest margin for the year ended June 30, 2012 was $9,365,000
compared to $9,868,000 for the year ended June 30, 2011. The
provision for loan losses increased from $1,445,000 for the year
ended June 30, 2011 to $4,800,000 for the year ended June 30, 2012.
The additional provision recorded in fiscal year 2012 is primarily
due to a loss on a commercial credit in which Crossroads Bank (the
"Bank"), the wholly owned subsidiary of FFW Corporation, was a
participating lender and not the lead loan servicer. The loan was
secured by a life insurance policy, whose value was dissipated
through fraudulent actions of the borrower. The reasons for the
loss are still being investigated, but the Bank is vigorously
pursuing actions necessary to seek recovery of the loss. Total
noninterest income was $3,339,000 for the year ended June 30, 2012
and $3,201,000 for the year ended June 30, 2011. Noninterest
expense was $8,252,000 for the year ended June 30, 2012 and
$7,990,000 for the year ended June 30, 2011.
Due to the aforementioned loan loss, the quarter ended June 30,
2012 resulted in a net loss of $1,536,000 or negative $1.47 per
common share. As a result of the loss, the Corporation will not
declare and pay a common shareholder dividend for the quarter ended
September 30, 2012. The Corporation expects to resume the common
dividend when the Corporation returns to profitable status in
succeeding quarters.
Roger K. Cromer, President and Chief Executive Officer, stated,
"The loan loss we experienced in the current quarter was both
unexpected and disappointing. The Bank has made significant efforts
in reduction of nonperforming assets and capital strengthening.
Without the impact of the loss, the Bank would have reported net
income of approximately $2.8 million for the fiscal year ended June
30, 2012. While the final earnings were not what we had
anticipated, the additional provision recorded in the current year
and the efforts to otherwise reduce nonperforming assets have
improved the overall balance sheet condition of the Bank in that
the nonperforming ratios are the lowest in 8 quarters and the
strength of the loan loss allowance as a percentage of loans is the
highest it has ever been. We continue to remain positive in these
difficult economic times and are committed to working through the
issues we have faced. We are taking all possible steps to seek a
recovery of the significant loan loss we experienced this
year."
The twelve months ended June 30, 2012 represented a return on
average common equity of 0.51% compared to 10.03% for the twelve
months ended June 30, 2011. The twelve months ended June 30, 2012
represented a return on average assets of 0.18% compared to 0.80%
for the twelve months ended June 30, 2011.
The allowance for loan losses as a percentage of gross loans
receivable was 1.68% at June 30, 2012 and 1.39% at June 30, 2011.
Nonperforming assets were $10,234,000 at June 30, 2012 and
$13,141,000 at June 30, 2011.
As of June 30, 2012, FFWC's equity-to-assets ratio was 9.34%
compared to 9.23% at June 30, 2011. Total assets at June 30, 2012
were $329,042,000 compared to $323,018,000 at June 30, 2011.
Shareholders' equity was $30,746,000 at June 30, 2012 compared to
$29,830,000 at June 30, 2011. 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 Markets under the symbol "FFWC." Our
website address is www.crossroadsbanking.com.
FFW Corporation
Selected Financial Information
Consolidated Balance Sheet
June 30 June 30
------------ ------------
2012 2011
------------ ------------
Unaudited
Assets
Cash and due from financial institutions $ 3,478,709 $ 3,711,671
Interest-earning deposits in other financial
institutions 13,360,765 2,840,994
------------ ------------
Cash and cash equivalents 16,839,474 6,552,665
------------ ------------
Securities available for sale 83,665,458 71,219,096
Loans receivable, net of allowance for loan
losses of $3,520,110 at June 30, 2012 and
$3,147,896 at June 30, 2011 205,934,060 222,348,968
Loans held for sale 337,000 241,400
Federal Home Loan Bank stock, at cost 2,717,300 2,717,300
Accrued interest receivable 1,647,845 1,635,370
Premises and equipment, net 3,550,515 3,695,172
Mortgage servicing rights 486,617 444,950
Cash surrender value of life insurance 6,938,977 6,655,864
Goodwill 1,213,898 1,213,898
Deferred tax asset 2,558,162 1,653,133
Other assets 3,152,807 4,640,682
------------ ------------
Total assets $329,042,113 $323,018,498
============ ============
Liabilities and shareholders' equity
Deposits
Noninterest-bearing deposits $ 20,029,966 $ 17,954,304
Interest-bearing deposits 262,519,228 257,585,276
------------ ------------
Total deposits 282,549,194 275,539,580
------------ ------------
Borrowings 14,258,400 15,986,695
Accrued expenses and other liabilities 1,488,058 1,662,503
------------ ------------
Total liabilities 298,295,652 293,188,778
------------ ------------
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
June 30, 2012, $7,336,000 liquidation
preference 7,166,924 7,085,539
Series B, 9% Fixed Rate Cumulative Perpetual
Preferred Stock - 364 shares outstanding
June 30, 2012, $368,000 liquidation
preference 376,876 385,461
Common stock, $.01 par; 2,000,000 shares
authorized; issued shares: 1,836,328
outstanding shares: 1,122,084 and 1,121,884,
respectively 18,363 18,363
Additional paid-in capital 9,495,807 9,435,162
Retained earnings 23,848,467 24,095,722
Accumulated other comprehensive income 803,648 (223,833)
Treasury stock, at cost: 714,244 shares and
714,444 shares, respectively (10,963,624) (10,966,694)
------------ ------------
Total shareholders' equity 30,746,461 29,829,720
------------ ------------
------------ ------------
Total liabilities and shareholders' equity $329,042,113 $323,018,498
============ ============
FFW Corporation
Selected Financial Information
Consolidated Statement of Income
Three Months Ended Twelve Months Ended
June 30 June 30
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
Unaudited Unaudited Unaudited
Interest and dividend
income:
Loans, including fees $ 2,567,679 $ 3,056,603 $11,191,505 $12,217,074
Taxable securities 513,721 610,803 2,067,341 2,459,676
Tax exempt securities 159,656 143,485 555,348 601,087
Other 13,556 3,685 32,786 30,688
----------- ----------- ----------- -----------
Total interest and
dividend income 3,254,612 3,814,576 13,846,980 15,308,525
----------- ----------- ----------- -----------
Interest expense:
Deposits 946,701 1,088,143 3,951,857 4,657,152
Borrowings 130,421 134,197 529,894 783,724
----------- ----------- ----------- -----------
Total interest expense 1,077,122 1,222,340 4,481,751 5,440,876
----------- ----------- ----------- -----------
Net interest income 2,177,490 2,592,236 9,365,229 9,867,649
Provision for loan losses 3,900,000 300,000 4,800,000 1,445,000
Net interest income after
provision for loan losses (1,722,510) 2,292,236 4,565,229 8,422,649
Noninterest income:
Net gains on sales of
securities 155,078 142,850 463,225 400,589
Net gains on sales of
loans 159,576 26,464 736,506 480,642
Net gains (losses) on
fixed assets - - - 5,001
Other than temporary
impairment on
securities (3,253) - (93,826) -
Commission income 199,141 155,821 743,116 637,247
Service charges and fees 237,798 276,003 1,042,903 1,318,363
Earnings on life
insurance 70,416 70,243 283,113 280,870
Other 18,785 21,326 164,041 78,761
----------- ----------- ----------- -----------
Total noninterest
income 837,541 692,707 3,339,078 3,201,473
----------- ----------- ----------- -----------
Noninterest expense:
Salaries and benefits 993,848 980,910 4,162,397 3,961,729
Occupancy and equipment 322,254 238,359 1,068,252 981,005
Professional 91,930 106,696 364,840 398,358
Marketing 45,790 35,511 183,767 151,468
Deposit insurance
premium 112,446 134,201 429,268 513,024
Regulatory assessment 35,752 25,899 138,989 102,680
Correspondent bank
charges 25,318 26,136 80,555 86,942
Data processing 131,706 102,368 502,993 426,295
Printing, postage and
supplies 43,890 63,032 218,684 231,767
Expense on life
insurance 16,108 14,902 64,433 41,018
Contribution expense 14,879 17,546 65,173 72,563
Other 214,212 246,869 972,780 1,023,592
----------- ----------- ----------- -----------
Total noninterest
expense 2,048,133 1,992,429 8,252,131 7,990,441
----------- ----------- ----------- -----------
Income before income taxes (2,933,102) 992,514 (347,824) 3,633,681
Income tax expense (1,397,499) 255,730 (940,823) 959,845
----------- ----------- ----------- -----------
Net income $(1,535,603) $ 736,784 $ 592,999 $ 2,673,836
=========== =========== =========== ===========
Preferred stock dividends
and discount accretion,
net 117,504 117,504 470,016 470,016
----------- ----------- ----------- -----------
Net income attributable to
common shareholders $(1,653,107) $ 619,280 $ 122,983 $ 2,203,820
=========== =========== =========== ===========
FFW Corporation
Selected Financial Information
Key Balances and Ratios
Three Months Ended Twelve Months Ended
June 30 June 30
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
Unaudited Unaudited Unaudited
Per common share data:
Earnings $ (1.47) $ 0.55 $ 0.11 $ 1.96
Diluted earnings $ (1.47) $ 0.55 $ 0.11 $ 1.96
Dividends paid $ 0.11 $ 0.22 $ 0.33 $ 0.88
Average shares issued
and outstanding 1,122,084 1,121,884 1,121,945 1,122,694
Shares outstanding end
of period 1,122,084 1,121,884 1,122,084 1,121,884
Supplemental data:
Net interest margin ** 2.92% 3.22% 3.01% 3.15%
Return on average assets
*** -1.82% 0.90% 0.18% 0.80%
Return on average common
equity *** -26.25% 11.22% 0.51% 10.03%
June 30 June 30
----------- -----------
2012 2011
----------- -----------
Nonperforming assets * $10,233,539 $13,140,830
Repossessed assets $ 1,402,764 $ 2,502,944
* 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
FOR MORE INFORMATION Contact: Emily Boardman Treasurer
260-563-3185
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