United States
Securities And Exchange Commission
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 29, 2005
MFB Corp.
(Exact Name of Registrant as Specified in Its Charter)
Indiana 0-23374 35-1907258
(State of Incorporation)(Commission File Number)(IRS Employer Identification No)
4100 Edison Lakes Parkway, Suite 300, P.O. Box 528, Mishawaka, IN 46546
(Address of Principal Executive Offices) (Zip Code)
(574) 277-4200
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing
obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item 1.01. Entry Into a Material Definitive Agreement and
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
Introduction
On July 29, 2005, MFB Corp. ("MFB") entered into several agreements
providing for the private placement of $5,000,000 in Fixed/Floating Rate Capital
Securities (the "Capital Securities"). The Capital Securities were
issued by MFB's newly formed Delaware trust subsidiary, MFBC Statutory Trust I
(the "Trust"), to First Tennessee
Bank National Association. (the "Purchaser"). MFB bought $155,000 in
Fixed/Floating Rate Common Securities (the "Common Securities") from the Trust.
The proceeds of the Sale of Capital Securities and Common Securities were
used by the Trust to purchase $5,155,000 in principal amount of Fixed/Floating
Rate Subordinated Debt Securities (the "Debentures") from MFB pursuant to an
Indenture (the "Indenture") between MFB and Wilmington Trust Company
as trustee (the "Trustee").
The Common Securities will mature in 30 years, will require
quarterly distributions and will bear a fixed rate of interest of 6.22% per
annum for the first five years, resetting quarterly thereafter at the
prevailing three-month LIBOR rate plus 1.7% per annum. Interest on the Capital
Securities and Common Securities is payable quarterly in arrears each
September 15, December 15, March 15, and June 15, commencing September 15,
2010. MFB may redeem the Capital Securities and the Common Securities, in
whole or in part, without penalty, on or after September 15, 2010, or
earlier upon the occurrence of certain events described below under "The
Indenture" with the payment of a premium upon redemption.
MFB expects to use the net proceeds from the offering to
increase the capital base of its bank subsidiary, MFB Financial, and for
general corporate purposes.
The principal agreements MFB entered into in connection with this
transaction are briefly described below.
Placement Agreement
MFB and the Trust entered into a Placement Agreement (the "Placement
Agreement:) with FTN Financial
Capital Markets and Keefe, Bruyette & Woods, Inc. (the "Placement Agents"),
which provided the Placement Agents
with the exclusive right to sell the Capital Securities to the Purchaser
for $5,000,000. No commission or
placement fee was paid by MFB or the Trust to the Placement Agents for
their services under the Placement
Agreement.
The Placement Agreement contains certain customary representations
and warranties of MFB and the Trust
which survive the initial sale of the Capital Securities. The
Placement Agreement also provides for
indemnification of the Placement Agents and the Purchaser against
specified losses, claims, damages and
liabilities related to the transaction.
Amended and Restated Declaration of Trust
The Amended and Restated Declaration of Trust (the "Declaration of
Trust") describes the rights and
obligations of MFB, as the holder of all of the Common Securities and the
rights and obligations of the holders
of the Capital Securities. The Declaration of Trust provides for
distributions to be paid on the Capital
Securities and the Common Securities, based on the liquidation amount of
the outstanding Capital and Common Securities, at the same rates and times as
interest is payable on the Debentures. As a result, distributions will
only be paid with respect to the Capital Securities if MFB makes the
corresponding interest payment with respect
to the Debentures. Maturity, redemption, and acceleration features for the
Capital Securities and the Common
Securities are the same as those of the Debentures.
Under the Indenture (described below), MFB has the option, as long
as it is not in default under the
Indenture, at any time, to defer the payment of interest on the Debentures for
up to twenty consecutive quarterly
interest payment periods. If payments are deferred on the Debentures, the
distributions required to be made with
respect to the Capital Securities will also be deferred. During any such
deferral period, or while an event of
default exists under the Indenture, MFB will be subject to various restrictions
which are described below with
respect to the Indenture.
Payment of distributions with respect to the Common Securities is
subordinated to the payment of such
amounts on the Capital Securities.
Indenture
The Indenture describes the rights and obligations of the Trust and the
Trustee, as the holder of all of the Debentures, and certain rights and
obligations of the holders of the Capital Securities. The Debentures bear
interest at the same rate and on the same dates as interest is payable on the
Capital Securities and the Common Securities.
Under the Indenture, MFB has the option, as long as it is not in
default under the Indenture, at any time and from time to time, to defer the
payment of interest on the Debentures for up to twenty consecutive
quarterly interest payment periods. During any such deferral period, or while
an event of default exists under the Indenture, MFB may not declare or pay
dividends or distributions on, redeem, purchase, or make a liquidation
payment with respect to, any of its capital stock, or make payments of
principal, interest or premium on, or repay or repurchase, any other debt
securities that rank equal or junior to the Debentures, subject to certain
limited exceptions.
The Debentures mature 30 years after their date of issuance, and can
be redeemed in whole or in part by MFB, without penalty, at any time after
September 15, 2010. MFB may also redeem the Debentures upon the
occurrence of a "capital treatment event," an "investment company event"
or a "tax event" as defined in the Indenture, but if such redemption occurs
prior to September 15, 2010, a premium will be payable to Debenture
holders upon the redemption. The payment of principal and interest on the
Debentures is subordinate and subject to the right of payment of all "Senior
Indebtedness" of MFB as described in the Indenture.
Guarantee Agreement
MFB, as Guarantor, entered into a Guarantee Agreement with
Wilmington Trust Company, as Guarantee Trustee, for the benefit of the
holders of the Capital Securities. Pursuant to the Guarantee Agreement, MFB
unconditionally agreed to pay to the holders of the Capital Securities all
amounts becoming due and payable with respect to the Capital Securities, to
the extent that the Trust has funds available for such payment at the time.
MFB's guarantee obligation under the Guarantee Agreement is a general
unsecured obligation of MFB and is subordinate and junior in right of payment
to all of MFB's Senior Indebtedness.
The Guarantee Agreement also requires MFB to indemnify and hold
harmless the Guarantee Trustee from losses, damages, and other liabilities
in connection with its service as Guarantee Trustee. In the event MFB
elects to defer payments with respect to the Debentures, or while an event of
default exists under the Guarantee Agreement, MFB will be subject to the same
restrictions which arise in similar situations under the Declaration
of Trust.
Press Release
On July 29, 2005, MFB issued a press release regarding the
issuance of the Capital Securities, the Common Securities, and the Debentures.
A copy of the press release is filed as Exhibit 99.1 to this report.
Item 2.02 Results of Operations and Financial Condition.
MFB Corp., an Indiana coproration ("Registrant"), issued a press release
which was publicly disseminated on July 29, 2005 announcing third quarter
earnings and quarterly dividend declaration. A copy of the press release is
furnished herewith as Exhibit 99.2. 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.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
1.1 Placement Agreement, dated July 29, 2005, among MFB Corp., Keefe,
Bruyette & Woods, Inc. and FTN Financial Capital Markets.
4.1 Indenture, dated as of July 29, 2005, between MFB Corp. and
Wilmington Trust Company as Trustee.
4.2 Amended and Restated Declaration of Trust of MFBC Statutory Trust
I, dated as of July 29, 2005.
10.1 Guarantee Agreement of MFB Corp., dated as of July 29, 2005.
99.1 Press Release issued July 29, 2005.
99.2 Press Release issued July 29, 2005.
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 hereto duly authorized.
Date: July 29, 2005 MFB Corp.
By:/s/ Terry L Clark
Terry L. Clark, Vice President
and Controller
Exhibit Index
Exhibit No. Description Location
1.1 Placement Agreement, dated July 29, 2005, among MFB Corp., Keefe, Attached
Bruyette & Woods, Inc. and FTN Financial Capital Markets.
4.1 Indenture, dated as of July 29, 2005, between MFB Corp. and Attached
Wilmington Trust Company, as Trustee.
4.2 Amended and Restated Declaration of Trust of MFBC Statutory Trust I, Attached
dated as of July 29, 2005.
10.1 Guarantee Agreement of MFB Corp., dated as of July 29, 2005. Attached
99.1 Press Release issued July 29, 2005. Attached
99.2 Press Release issued July 29, 2005 Attached