WABASH, Ind., April 24 - FFW Corporation (OTC Bulletin Board: FFWC.OB; 4/21/2006 Close: $22.00), parent corporation of First Federal Savings Bank of Wabash, Indiana, announced operating results for the third fiscal quarter of 2006 and nine months ended March 31, 2006. Net income for the quarter ended March 31, 2006, was $705,000 compared to $646,000 for the quarter ended March 31, 2005. Diluted net income per share for the third fiscal quarter of 2006 amounted to $0.55 compared to $0.50 reported in the third fiscal quarter of 2005. Net income and diluted net income per share for the nine months ended March 31, 2006 were $1,953,000 and $1.53 compared to $40,000 and $0.03 at March 31, 2005.
The nine month results for fiscal 2005 were impacted by an other-than- temporary non-cash impairment charge (OTTI) of approximately $1.8 million, or $1.40 per diluted share, recorded in the second fiscal quarter of 2005 related to certain Fannie Mae ("FNMA") and Freddie Mac ("FHLMC") preferred stocks. Since capital was unaffected, the non-cash impairment charge had no effect on the Company's book value per share which was $19.26 at March 31, 2006.
Without the OTTI charge, fiscal 2005 net income and diluted net income per share would have been $1,844,000 and $1.42 for the nine-months ended March 31, 2005.
The fiscal 2006 third quarter and year to date earnings represent a return on average shareholders' equity of 11.79% and 10.91% compared to 10.99% and 0.23% for the periods ended March 31, 2005 or 10.48% without the OTTI charge for the nine-month period. Return on average total assets for the three and nine-month periods ended March 31, 2006 were 1.07% and 0.99% compared to 1.04% and 0.02% for the periods ended March 31, 2005 or 0.98% without the OTTI charge.
The allowance for loan losses as a percentage of net loans receivable was 1.63% at March 31, 2006 and 1.60% at December 31, September 30 and June 30, 2005. Nonperforming assets at March 31, 2006 were $1.1 million compared to $3.1 million at December 31, 2005 and $1.9 million at June 30, 2005.
The reduction in nonperforming assets contributed seven and three basis points to the net interest margins of 3.22% and 3.02% for the three and nine- month periods ended March 31, 2006 compared to 2.94% and 2.92% for the periods ended March 31, 2005. Roger K. Cromer, President and Chief Executive Officer, stated, "We are pleased with the strong core earnings experienced, not only this quarter, but during all of fiscal 2006. Despite our success this year, we recognize that the current interest rate environment with continued Fed rate increases and a flat or, at times, inverted yield curve and increasing costs on deposit rates could adversely affect operating results in future quarters. To offset this risk, we will continue to diversify our loan and deposit mix in our efforts to provide attractive shareholder returns."
As of March 31, 2006, FFWC's equity-to-assets ratio was 8.97% compared to 9.08% at June 30, 2005. Shareholders' equity was $24.2 million compared to $23.3 million at June 30, 2005. Total assets at March 31, 2006 were $269.4 million compared to $256.9 million at June 30, 2005. Loans receivable increased $9.4 million during the first nine months of fiscal 2006. Total
deposits at March 31, 2006 increased by $6.0 million from June 30, 2005 while total FHLB borrowings increased by $4.4 million.
First Federal Savings 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 http://www.ffsbwabash.com .
FFW Corporation
Selected Financial Information
Consolidated Balance Sheets
ASSETS: 3/31/2006 6/30/2005
Unaudited
Cash and due from financial institutions 5,089,475 5,823,003
Interest-earning deposits in other financial
institutions - short term 5,067,229 2,215,642
Cash and cash equivalents 10,156,704 8,038,645
Securities available for sale 67,203,652 66,916,209
Loans receivable, net of allowance for loan
losses of $2,818,096 at March 31, 2006 and
$2,670,277 at June 30, 2005 172,982,071 163,162,230
Loans held for sale --- 547,500
Federal Home Loan Bank stock, at cost 3,774,100 3,774,100
Accrued interest receivable 1,346,989 1,515,803
Premises and equipment, net 4,467,475 4,097,606
Mortgage servicing rights 618,168 521,852
Cash surrender value of life insurance 5,301,279 5,142,513
Goodwill 1,249,123 975,468
Other assets 2,312,603 2,248,250
Total Assets 269,412,164 256,940,176
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Noninterest-bearing deposits 17,723,368 15,433,002
Interest-bearing deposits 166,200,641 162,479,591
Total Deposits 183,924,009 177,912,593
Federal Home Loan Bank advances 57,975,285 53,625,292
Accrued expenses and other liabilities 3,353,211 2,074,277
Total Liabilities 245,252,505 233,612,162
Shareholders' Equity:
Common stock, $.01 par; 2,000,000 shares
authorized; issued: 1,836,328, outstanding:
1,254,381 - March 31, 2006; issued:
1,836,328, outstanding: 1,268,135 -
June 30, 2005 18,363 18,363
Additional paid-in capital 9,565,923 9,526,611
Retained earnings 21,889,140 20,657,787
Accumulated other comprehensive income 32,865 201,639
Unearned management retention plan shares (96,649) (135,783)
Treasury stock at cost, shares: 581,947 -
March 31, 2006 and 568,193 - June 30, 2005 (7,249,983) (6,940,603)
Total Shareholders' Equity 24,159,659 23,328,014
Total Liabilities and Shareholders' Equity 269,412,164 256,940,176
Consolidated Statements of Income
Unaudited Unaudited
3 months ended March 9 months ended March
2006 2005 2006 2005
Interest and dividend income:
Loans, including fees $3,055,940 $2,469,388 $8,593,750 $7,070,446
Taxable securities 593,552 612,350 1,710,325 1,908,167
Nontaxable securities 206,637 220,603 636,084 642,155
Other interest-earning
assets 52,539 20,255 127,502 46,575
Total interest income 3,908,668 3,322,596 11,067,661 9,667,343
Interest expense:
Deposits 1,198,312 900,418 3,448,616 2,584,544
Other 716,845 674,781 2,054,815 1,949,041
Total interest expenses 1,915,157 1,575,199 5,503,431 4,533,585
Net interest income 1,993,511 1,747,397 5,564,230 5,133,758
Provision for loan losses 131,000 120,000 371,000 360,000
Net interest income after
provision for loan
losses 1,862,511 1,627,397 5,193,230 4,773,758
Non-interest income (loss):
Net gain on sale of
securities 0 27,532 60,599 27,532
Net gain on sale of loans 24,598 43,231 96,964 118,603
Commission income 178,546 119,679 379,007 220,123
Service charges and fees 358,958 291,738 1,098,119 837,238
Earnings on life insurance 60,641 58,760 181,222 175,575
Other than temporary
impairment on securities --- --- --- (1,804,750)
Other 77,070 36,051 103,478 236,931
Total non-interest income
(loss) 699,813 576,991 1,919,389 (188,748)
Non-interest expense:
Compensation and benefits 878,445 657,375 2,354,003 1,974,226
Occupancy and equipment 208,340 181,899 592,538 514,802
Deposit insurance premium 6,083 5,833 17,773 17,539
Regulatory assessment 19,724 17,477 57,737 50,158
Correspondent bank charges 30,499 64,262 115,499 195,004
Data processing expense 150,205 131,200 417,938 359,427
Printing, postage and
supplies 57,142 41,667 161,460 122,748
Other 364,783 290,531 1,048,698 941,149
Total non-interest
expense 1,715,221 1,390,244 4,765,646 4,175,053
Income before income
taxes 847,103 814,144 2,346,973 409,957
Income tax expense 142,060 167,651 393,686 370,237
Net income $705,043 $646,493 $1,953,287 $39,720
Unaudited Unaudited
Three Months Ended Nine Months Ended
3/31/2006 3/31/2005 3/31/2006 3/31/2005
Earnings per common &
common equivalent shares
Primary $0.57 $0.50 $1.56 $0.03
Fully diluted $0.55 $0.50 $1.53 $0.03
Dividend paid per share $0.18 $0.17 $0.54 $0.51
Average shares
outstanding 1,249,445 1,279,373 1,255,537 1,279,771
Shares outstanding end
of period 1,254,381 1,284,243 1,254,381 1,284,243
Supplemental data:
Net interest margin ** 3.22% 2.94% 3.02% 2.92%
Return on average assets *** 1.07% 1.04% 0.99% 0.02%
Return on average equity *** 11.79% 10.99% 10.91% 0.23%
3/31/2006 6/30/2005
Nonperforming assets * 1,148 1,917
Repossessed assets 963 893
* 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
