April 18, 2001
Point of Contact: Charles J.Viater
President/CEO
MFB Corp. ANNOUNCES QUARTERLY EARNINGS
AND QUARTERLY DIVIDEND
Mishawaka, Indiana - MFB Corp. (NASDAQ/MFBC),(the "Corporation"), parent
company of MFB Financial (the "Bank"), today reported consolidated net
income on an unaudited basis of $809,000 or $.59 diluted earnings per share
for the three months ended March 31, 2001 compared to $724,000 or $.51
diluted earnings per share for the three months ended March 31, 2000, an
earnings per share increase of 15.7%. Net income for the six months ended
March 31, 2001 was $674,000 or $.49 diluted earnings per share compared to
$1,413,000 or $.99 diluted earnings per share for the six months ended March
31, 2000.
Net interest income after provision for loan losses for the most recent
three and six month periods totaled $2.8 million and $4.0 million compared
to $2.8 million and $5.6 million for the same periods one year ago. During
the three months ended March 31, 2001 total interest income increased by
$725,000 compared to the same period one year ago, primarily as a result of
increased volumes of loans receivable, particularly commercial and consumer
loans, offset by lower yields generated on these loans related to interest
rate decreases in the period. In the past twelve months, commercial loan
receivables increased $36.7 million and consumer loan receivables, which
include home equity term loans and lines of credit, increased $5.4 million,
while mortgage loan receivables decreased $33.1 million. Total interest
expense increased $650,000 during the three months ended March 31, 2001, as
compared to the same period a year ago, reflecting the growth in deposits
and FHLB advances. For the six months ended March 31, 2001, total interest
income increased $1.9 million while total interest expense increased $1.6
million. The bank's provision for loan loss reserves was increased from
$155,000 for the period ended March 31, 2000 to $2.1 million for the period
ended March 31, 2001. The current year's provision includes a one-time
addition of $1.8 million ($1.1 million after tax) that was established as a
result of a Chapter 11 bankruptcy filing by a commercial borrower.
Noninterest income increased from $295,000 and $653,000 for the three and
six months ended March 31, 2000 to $602,000 and $1.3 million for the most
recent three and six month periods. These increases are primarily due to
fees generated from the increasing number of core deposit account
relationships, income generated from the Bank's trust department, net gains
from loan sales and the servicing fees retained on these sold loans.
Noninterest expenses increased from $2.0 million during the three months
ended March 31, 2000 to $2.2 million during the three months ended March 31,
2001 and from $4.0 million to $4.3 million for the comparable six month
periods. The noninterest expense increases are primarily attributable to
staffing increases and expenses incurred in the offering of additional
services to the Bank's customers.
The Corporation has increased total assets from $396.0 million as of
September 30, 2000 to $412.0 million as of March 31, 2001, an increase of
$16.0 million (or 4.0%). Total cash and cash equivalents increased $14.6
million from $14.5 million to $29.1 million, total securities available for
sale increased $8.3 million from $41.6 million to $49.9 million, and time
deposits in other financial institutions increased $2.5 million during the
six month period ended March 31, 2001. Offsetting these increases was the
$10.5 million decrease in total net loans outstanding during this same six
month period.
Total liabilities increased from $363.5 million at September 30, 2000 to
$378.6 million at March 31, 2001 primarily as the result of the $14.1
million increase in total deposits from $239.4 million to $253.6 million.
Federal Home Loan Bank advances increased $2.6 million from $112.2 million
to $114.8 million during the three month period, while securities sold under
repurchase agreements decreased $1.9 million.
Total shareholders' equity increased from $32.5 million as of September 30,
2000 to $33.4 million as of March 31, 2001 mainly from net income of
$674,000, $259,000 generated from stock option exercises, and a $609,000
adjustment to reflect the increase in the market value of securities
available for sale, net of tax. These increases were offset by the
repurchase of 18,260 shares of outstanding common stock during this period
at a cost of $325,000 and cash dividend payments of $263,000. Book value per
common share was $24.69 at March 31, 2001 compared to $23.93 at September
30, 2000.
While achieving substantial growth, the Corporation maintains asset quality
that compares favorably to its industry peer group. The ratio of
nonperforming assets to total assets at March 31, 2001 was .65%.
In addition, MFB Corp. announced today that the Corporation has declared a
cash dividend of $ .10 per share of Common Stock for the quarter ended
March 31, 2001. The dividend is payable on May 15, 2001 to holders of record
on May 1, 2001. This dividend will be the 20th consecutive quarter of
dividends paid to shareholders.
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)
March 31, 2001 and September 30, 2000
(in thousands)
March 31, September 30,
2001 2000
ASSETS
Cash and due from financial institutions $ 10,525 $ 9,693
Interest-bearing deposits in other financial
institutions - short term 18,621 4,851
Total cash and cash equivalents 29,146 14,544
Interest-bearing time deposits in other
financial institutions 2,500 -
Securities available-for-sale 49,895 41,623
Federal Home Loan Bank (FHLB) stock, at cost 6,308 6,308
Loans held for sale, net unrealized losses
of $0 at 3/31/01 and $131,618 at 9/30/00 1,810 6,494
Loans receivable, net of allowance for loan
Losses of $3,680,000 at 3/31/01 and
$1,672,000 at 9/30/00 309,722 315,506
Accrued interest receivable 1,852 1,894
Premises and equipment, net 5,060 4,688
Mortgage servicing rights, net 747 611
Investment in limited partnership 2,915 2,948
Other assets 2,059 1,387
Total Assets $412,014 $396,003
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing demand deposits $ 13,194 $ 11,802
Savings, NOW and MMDA deposits 69,373 56,569
Other time deposits 171,024 171,023
Total deposits 253,591 239,394
Securities sold under agreements to repurchase 7,244 9,143
Federal Home Loan Bank advances 114,802 112,152
Advances from borrowers for taxes and insurance 1,989 2,116
Accrued expenses and other liabilities 1,017 684
Total Liabilities 378,643 363,489
Shareholders' Equity
Common Stock, 5,000,000 shares authorized;
shares issued: 1,689,417 - 3/31/01 and 9/30/00
shares outstanding: 1,351,789 - 3/31/01,
1,358,449 - 9/30/00 13,037 13,136
Retained earnings - substantially restricted 28,123 27,711
Accumulated other comprehensive income
(loss), net of tax (307) (916)
Treasury Stock, 337,628 common shares - 3/31/01
330,968 common shares - 9/30/00 (7,482) (7,417)
Total shareholders' equity 33,371 32,514
Total Liabilities and Shareholders'
Equities $412,014 $396,003
MFB CORP. AND SUBSIDIARY
Consolidated Statement of Income (Unaudited)
Three Months and Six Months Ended March 31, 2001 and 2000
(in thousands)
Three Months Ended March 31, Six Months Ended March31,
2001 2000 2001 2000
Total interest income $7,619 $6,894 $15,362 $13,413
Total interest expense 4,622 3,972 9,258 7,656
Net interest income 2,997 2,922 6,104 5,757
Provision for loan losses 150 80 2,107 155
Net interest income after
provision for loan losses 2,847 2,842 3,997 5,602
Total non-interest income 602 295 1,263 653
Total non-interest expense 2,231 1,978 4,280 3,989
Income before income taxes 1,218 1,159 980 2,266
Income tax expense 409 435 306 853
Net Income $809 $724 $674 $1,413
Basic Earnings per
common share $ .60 $ .52 $ .50 $ 1.02
Diluted Earnings per
common share $ .59 $ .51 $ .49 $ .99