August 17, 2007
Contact: Charles J. Viater
President/CEO
MFB Corp. ASSET QUALITY CONTINUES TO RISE
NO EXPOSURE TO SUBPRIME LENDING MARKET
Mishawaka, Indiana - MFB Corp. (NASDAQ/MFBC), parent company of MFB Financial
(the "Bank"), reported today that focused attention on asset quality continues
to positively impact operating results. In addition, the Bank has no exposure
to the sub prime mortgage arena that has created significant concern across
financial markets recently.
Charles J. Viater, President and CEO, stated that "Our attention to asset
quality is paying dividends to our shareholders. Asset quality is the
cornerstone of future earnings and shareholder value and we remain committed
to this principle. The bank has never originated nor owned the kind of sub
prime mortgage assets that have produced the broad-based financial market
turmoil of recent weeks."
The table below depicts recent history of the Bank's Non-Performing Loans and
Real Estate Owned:
June 30 March 31 December 31 September 30
2007 2007 2006 2006
Consumer Loans greater than 90 days past due 30 5 57 63
Mortgage Loans greater than 90 days past due 316 868 908 319
Commercial Loans greater than 90 days past due 4,353 5,001 5,753 6,008
----- ----- ----- -----
Total Non-Accrual Loans 4,699 5,874 6,718 6,390
Restructured Loans 408 446 - -
Loans over 90 days past due still accruing 120 20 - 619
----- ----- ----- -----
Total Non-Performing Loans 5,227 6,340 6,718 7,009
Real Estate Owned 235 179 80 1,245
----- ----- ----- -----
Total Non-Performing Assets 5,462 6,519 6,798 8,254
----- ----- ----- -----
Ratio of Non-Performing Assets to Total Loans 1.37% 1.68% 1.77% 2.18%
Non-performing assets have been reduced by $2.8 million, or 33.8% in the past
nine months A significant portion of the non-performing commercial loans relate
to credit facilities provided to three separate entities, two of which have
common ownership. Management continues to actively manage these situations in
an effort to further reduce the Bank's exposure. The ratio of non-performing
assets to total loans has decreased from 2.18% at September 30, 2006 to
1.37% as of June 30, 2007, or a decrease of 37.1%. According to Viater, "We
will continue to be attentive to this issue as part of an overall strategy of
intelligent growth that creates long term value for our stakeholders."
MFB Corp.'s wholly owned federal savings bank subsidiary, MFB Financial
(the "Bank") conducts business in Indiana from their corporate office in
Mishawaka and ten banking centers in St. Joseph and Elkhart Counties and
provide private client services to the Indianapolis market through the Bank's
office in Hamilton County. The Bank offers a variety of lending, deposit and
other financial services to its retail and business customers. The Wealth
Management Group of the Bank attracts high net worth clients and offers
trust, investment, insurance, broker advisory, retirement plan and private
banking services. The Bank has also recently added a New Buffalo mortgage loan
office located in Berrien County, Michigan. For more information, go to
www.mfbbank.com.
The foregoing discussion contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which
involve a number of risks and uncertainties. A number of factors could cause
results to differ materially from the objectives and estimates expressed in
such forward-looking statements. These factors include, but are not limited
to, changes in economic conditions in the Company's market area, changes in
policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area, and competition, all or some of which
could cause actual results to differ materially from historical earnings and
those presently anticipated or projected. These factors should be
considered in evaluating any forward-looking statements, and undue
reliance should not be placed on such statements. MFB Corp. does not
undertake and specifically disclaims any obligation to update any
forward-looking statements to reflect occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.