January 26, 2001 Point of Contact: CharlesJ.Viater
President/CEO
MFB CORP. REVISES QUARTERLY EARNINGS
Mishawaka, Indiana - MFB Corp. (NASDAQ/MFBC), (the "Corporation"), parent
company of MFB Financial (the "Bank"), based in Mishawaka, Indiana, announced
today that it is amending its earlier announcement of financial results for
the quarter ended December 31, 2000. The amended results report a net loss of
$(135,000), or $(.10) diluted earnings per share for the three months ended
December 31, 2000 compared to $689,000 or $.48 diluted earnings per share for
the three months ended December 31, 1999. Net income as previously released
on January 17, 2001 was $972,000 or $.70 diluted earnings per share.
The previously announced results did not take into account recently discovered
information concerning a $2.5 million loan as of December 31, 2000, to one of
its commercial borrowers. On January 22, 2001 this commercial customer filed
an emergency petition for protection under chapter 11 of the United States
Bankruptcy Code. Because of this bankruptcy filing and uncertainty as to the
status of the underlying collateral for the loan, the Bank is unable to
determine at this time how much of the loan it will ultimately recover from
the commercial customer. Therefore, the Bank has recorded an additional $1.8
million provision to loan loss reserves in the quarter ended December 31, 2000
which has an approximate after tax effect to net income of $(1.1) million, or
$(.80) diluted earnings per share. The Bank is aggressively pursuing steps to
recover the loan proceeds from the customer, but there is no assurance at this
time that the Bank will be successful in its recovery efforts.
Cash dividends, which were announced on January 17, 2001 in the amount of $.10
per share will be paid on February 13, 2001 to shareholders of record on
January 31, 2001. Shareholders' equity at December 31, 2000 was $32.4 million
compared to $32.5 million at September 30, 2000. The end of period equity to
assets ratio was 8.08% compared to 8.21% at the earlier date. "The Bank
continues to have net worth far in excess of regulatory requirements and
anticipates continuing to reward shareholders with dividends and stock
repurchase programs" according to Charles Viater, President and CEO. This
will be the 19th consecutive quarter of dividends paid to shareholders.
This press release may contain forward-looking statements, which are based on
management's current expectations regarding economic, legislative and
regulatory issues. Factors which may cause future results to vary materially
include, but are not limited to, general economic conditions, changes in
interest rates, loan demand, and competition. Additional factors include
changes in accounting principles, policies or guidelines; changes in
legislation or regulation; and other economic, competitive, regulatory and
technological factors affecting each company's operations, pricing, products
and services. Although management believes it uses the best information
available to determine valuation allowances, unforeseen market conditions or
other unforeseen events could result in adjustments and net earnings could be
significantly affected if circumstances differ substantially from the
assumptions used in making such determination. The determination by the Bank
as to the classification of its assets and the amount of its valuation
allowances is also subject to review by the Office of Thrift Supervision.
The Bank is a wholly owned subsidiary of MFB Corp. providing retail and small
business financial services to the Michiana area through its main office in
Mishawaka and six banking centers located in St. Joseph and Elkhart counties.
MFB CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, 2000 and September 30, 2000
(in thousands)
December 31, September 30,
2000 2000
ASSETS
Cash and due from financial institutions $ 12,260 $ 9,693
Interest-bearing deposits in other financial
institutions - short term 10,154 4,851
Total cash and cash equivalents 22,414 14,544
Securities available-for-sale 45,927 41,623
Federal Home Loan Bank (FHLB) stock, at cost 6,308 6,308
Loans held for sale, net unrealized losses
of $0 at 12/31/00 and $131,618 at 9/30/00 872 6,494
Loans receivable, net of allowance for loan
losses of $3,531,000 at 12/31/00 and
$1,672,000 at 9/30/00 313,969 315,506
Accrued interest receivable 2,279 1,894
Premises and equipment, net 4,743 4,688
Mortgage servicing rights, net 693 611
Investment in limited partnership 2,922 2,948
Other assets 1,316 1,387
TOTAL ASSETS $401,443 $396,003
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing demand deposits $ 12,114 $ 11,802
Savings, NOW and MMDA deposits 64,488 56,569
Other time deposits 172,127 171,023
Total deposits 248,729 239,394
Securities sold under agreements to
repurchase 8,465 9,143
Federal Home Loan Bank advances 109,802 112,152
Advances from borrowers for taxes and insurance 971 2,116
Accrued expenses and other liabilities 1,054 684
Total Liabilities 369,021 363,489
Shareholders' Equity
Common Stock, 5,000,000 shares authorized;
shares issued:1,689,417-12/31/00 and 9/30/00
shares outstanding:1,346,489-12/31/00,
1,358,449-9/30/00 13,130 13,136
Retained earnings-substantially restricted 27,448 27,711
Accumulated other comprehensive income (loss),
net of tax (535) (916)
Treasury Stock, 342,928 common shares-12/31/00
330,968 common shares-9/30/00 (7,621) (7,417)
Total shareholders' equity 32,422 32,514
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITIES $401,443 $396,003
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(in thousands)
Three Months Ended December 31,
2000 1999
Total interest income $7,744 $6,520
Total interest expense 4,637 3,685
Net interest income 3,107 2,835
Provision for loan losses 1,957 75
Net interest income after provision
for loan losses 1,150 2,760
Total noninterest income 661 358
Total noninterest expense 2,049 2,010
Income before income taxes (238) 1,108
Income tax expense (103) 419
NET INCOME $(135) $689
Basic earnings per common share $ (.10) $ .49
Diluted earnings per common share (.10) .48