SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 23, 2003
MFB CORP.
(Exact name of registrant as specified in its charter)
INDIANA
(State or other jurisdiction of incorporation)
0-23374 35-1907258
(Commission File Number) (IRS Employer Identification No.)
121 South Church Street
P.O. Box 528
Mishawaka, Indiana 46544
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (574) 255-3146
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release dated April 23, 2003.
Item 9. Regulation FD Disclosure.
Information Provided Under Item 12 of Form 8-K.
MFB Corp., an Indiana corporation ("Registrant"), issued a press release which
was publicly disseminated on April 23, 2003 announcing its results of operations
for the quarter ended March 31, 2003. A copy of the press release is furnished
herewith as Exhibit 99.1. Pursuant to General Instruction B.6 of Form 8-K, this
exhibit is not "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, but is instead furnished as required by that instruction. Further,
pursuant to SEC Release No. 34-47583, Registrant is including the foregoing Item
12 information under Item 9 because Item 12 has not yet been added to the EDGAR
system.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
/s/ Thomas J Flournoy
Thomas J. Flournoy, Chief Financial Officer
Dated: April 23, 2003
Exhibit 99.1
April 23, 2003 Contact: Charles J.Viater
President/CEO
MFB Corp. ANNOUNCES SECOND QUARTER EARNINGS
AND QUARTERLY DIVIDEND DECLARATION
Mishawaka, Indiana - MFB Corp. (NASDAQ/MFBC), parent company
of MFB Financial, reported today that consolidated net income on an unaudited
basis of $470,000, or $0.36 diluted earnings per share, for the three months
ended March 31, 2003 increased over the $371,000, or $0.26 diluted earnings per
share, for the three months ended March 31, 2002. MFB Corp's consolidated net
income for the six months ended March 31, 2003 is $1,231,000, or 0.92 diluted
earning per share, compared to $1,270,000, or $0.92 diluted earnings per share,
for the same period last year.
Charles Viater, President and CEO, stated that "Despite continued
downward pressure on net interest margins created by the historically low
interest rate environment, we have continued to significantly increase our
noninterest revenue related to home mortgage originations, trust operations and
deposit fees to offset the reduced net interest income."
In addition, Mr. Viater announced today that the Board of
Directors has declared a cash dividend of $0.11 per share of Common Stock for
the quarter ended March 31, 2003, a 4.8% increase over the dividend for the same
quarter last year. The dividend is payable on May 20, 2003 to holders of record
on May 6, 2003.
MFB Corp's net interest income before provision for loan losses for
the three month period ending
March 31, 2003 totaled $2.5 million compared to $2.9 million for the same
period last year. For the six month period ending March 31, 2003, net interest
income totaled $5.2 million compared to $5.9 million for the same period last
year. These reductions were the result of greater sensitivity to interest rate
declines of MFB Corp's interest earning assets over its interest bearing
liabilities.
The provision for loan losses for the second quarter ending
March 31, 2003 was $450,000 compared to $452,000 for the second quarter last
year. For the six months ending March 31, 2003, the provision for loan losses
was $900,000 compared to $685,000 for the same period last year. The increased
provision for this year is based on several factors including the current
economic environment, current and past delinquency trends, change in the
character and mix of the loan portfolio, adequacy of collateral on loans and
historical and estimated loan charge offs.
Noninterest income has more than doubled from the second quarter
last year to the second quarter this year, increasing from $696,000 to $1.43
million. Noninterest income has increased from $1.62 million for the six months
ended March 31, 2002 to $2.76 million for the six months ended March 31, 2003.
Significant growth occurred in deposit fees, trust fees, gains on sales of
mortgage loans and other fee income for both the three and six month periods.
Noninterest expense increased 10.1% from $2.61 million for the second quarter
last year to $2.88 million for the second quarter this year primarily due to
increases in salaries and employee benefits, occupancy and equipment, data
processing and other expense. For the year, noninterest expense has increased
10.9% due to increases in salaries and employee benefits, data processing and
other expense. Income tax expense has declined from last year for both the three
and the six month periods ended March 31, 2003 due to increased non-taxable
income.
MFB Corp's total assets of $435.2 million as of March 31, 2003 have
increased 3.2% over the $421.6 million at March 31, 2002. Total loans at March
31, 2003 of $307.8 million represented a decline of $1.8 million from last year.
Due to increased volume of mortgage loan sales into the secondary market,
mortgage loans declined from $154.2 million at March 31, 2002 to $131.3 million
at March 31, 2003. Commercial loans increased from $131.5 million last year to
$150.8 million this year. Investment securities decreased from $61.0 million at
March 31, 2002 to $47.7 million at March 31, 2003.
Total deposits increased from $253.5 million last year to $279.4
million this year. Significant increases have occurred in both demand and
savings deposits. Federal Home Loan Bank advances slightly decreased from $119.3
million last year to $118.9 million this year.
Total shareholders' equity decreased from $34.6 million at March
31, 2002 to $33.1 million at March 31, 2003. An increase in the repurchase of
the company's stock accounts for the decline. MFB Corp's equity to asset ratio
was 7.61% at March 31, 2003 compared to 8.21% last year. The book value of MFB
Corp stock increased from $25.90 at March 31, 2002 to $26.16 at March 31, 2003.
MFB Corp's allowance for loan losses at March 31, 2003 increased to
1.82% of loans compared to 1.09% at March 31, 2002. The ratio of nonperforming
assets to loans was 1.21% at March 31, 2003 compared to 1.30% at March 31, 2002.
For the second quarter ending March 31, 2003, net charge offs were $428,000.
However, a charge off of $400,000 on one commercial loan had been specifically
provided for in the prior year loan loss provision.
MFB Corp's wholly owned bank subsidiary, MFB Financial, provides
retail and small business financial services to the Michiana area through its
seven banking centers in St. Joseph and Elkhart counties.
MFB CORP. AND SUBSIDIARY
Consolidated Balance Sheets (Unaudited)
March 31, 2003 and March 31, 2002
(in thousands, except share information)
March 31, March 31,
2003 2002
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ASSETS
Cash and due from financial institutions $ 12,040 $ 11,458
Interest-bearing deposits in other financial institutions - short term 43,337 20,853
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Total cash and cash equivalents 55,377 32,311
Interest-bearing time deposits in other financial institutions 500 1,000
Securities available-for-sale 47,659 61,041
Federal Home Loan Bank (FHLB) stock, at cost 6,308 6,308
Loans held for sale, net unrealized losses
of $-0- at 03/31/03 and $-0- at 03/31/02 3,171 1,236
Loans receivable 307,771 309,571
Less: allowance for loan losses (5,603) (3,388)
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Loans receivable, net 302,168 306,183
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Accrued interest receivable 1,635 1,803
Premises and equipment, net 5,211 4,948
Mortgage servicing rights, net of accumulated amortization
of $1,179 - 03/31/03 and $420 - 03/31/02 1,753 1,396
Investment in limited partnership 2,642 2,785
Cash Surrender Value of Life Insurance 5,082 -
Other assets 3,707 2,583
Total Assets $435,213 $421,594
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing demand deposits $ 21,624 $ 15,395
Savings, NOW and MMDA deposits 98,786 81,025
Other time deposits 158,954 157,109
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Total deposits 279,364 253,529
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Securities sold under agreements to repurchase - 11,363
Federal Home Loan Bank advances 118,915 119,335
Loans from Correspondent Banks 300 -
Advances from borrowers for taxes and insurance 1,264 1,592
Accrued expenses and other liabilities 2,231 1,157
Total Liabilities 402,074 386,976
Shareholders' Equity
Common Stock, 5,000,000 shares authorized;
shares issued: 1,689,417 - 03/31/03 and 03/31/02
shares outstanding: 1,266,610 - 03/31/03, 1,336,839 - 03/31/02 12,778 12,940
Retained earnings - substantially restricted 30,133 30,084
Accumulated other comprehensive income (loss),
net of tax of $(9) - 03/31/03 and $(246) - 03/31/02 (438) (646)
Treasury Stock, 422,807 common shares - 03/31/03
352,578 common shares - 03/31/02, at cost (9,334) (7,760)
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Total shareholders' equity 33,139 34,618
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Total Liabilities and Shareholders' Equity $435,213 $421,594
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MFB CORP. AND SUBSIDIARY
Consolidated Statements of Income (Unaudited)
Three Months and Six Months Ended March 31, 2003 and 2002
(in thousands, except per share information)
Three Month Ended Six Months Ended
March 31, March 31,
2003 2002 2003 2002
Total interest income $5,568 $6,319 $11,607 $13,059
Total interest expense 3,113 3,442 6,372 7,158
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Net interest income 2,455 2,877 5,235 5,901
Provision for loan losses 450 452 900 685
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Net interest income after provision for loan losses 2,005 2,425 4,335 5,216
Other noninterest income 1,434 696 2,716 1,620
Gain (losses) on securities - - 40 -
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Total noninterest income 1,434 696 2,756 1,620
Total noninterest expense 2,878 2,615 5,461 4,924
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Income before income taxes 561 506 1,630 1,912
Income tax expense 91 135 399 642
Net Income $ 470 $ 371 $ 1,231 $ 1,270
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Basic Earnings per common share $ .37 $ .28 $ .95 $ .95
Diluted Earnings per common share $ .36 $ .26 $ .92 $ .92