WABASH, IN — (Marketwire) — 08/17/12 — FFW Corporation (the “Corporation”) (OTCBB: FFWC) , 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 .
Contact:
Emily Boardman
Treasurer
260-563-3185