October 16, 1996                             Point of Contact: Charles J. Viater
                                                                   President/CEO


                      MFB CORP. ANNOUNCES DIVIDEND INCREASE

         Mishawaka,  Indiana - MFB  Corp.  (NASDAQ//MFBC)  (the  "Corporation"),
parent  company of Mishawaka  Federal  Savings (the "Bank")  based in Mishawaka,
Indiana,  announced  today that the  Corporation has declared a cash dividend of
$.08 on each share of its Common Stock for the quarter ended September 30, 1996.
The dividend is payable on November 19, 1996 to holders of record on November 5,
1996.

         "This dividend is part of our ongoing effort to reward our shareholders
for the  confidence  they have shown in the Bank over the  years.  We trust that
this action today will serve to reinforce that confidence," according to Charles
J.  Viater,  President  and CEO of both  the  Corporation  and the  Bank.  "This
dividend  represents a 33% increase  over the dividend  declared for the quarter
ended June 30, 1996.  This  increase is directly  attributable  to the continued
growth  in the  Bank's  core  earnings,"  he added.  The Bank is a wholly  owned
subsidiary of MFB Corp. with assets of $224 million as of September 30, 1996.