UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): OCTOBER 21, 1998
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
POST OFFICE BOX 528
MISHAWAKA, INDIANA 46544
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 255-3146
ITEM 5. OTHER EVENTS.
Pursuant to General Instruction F to Form 8-K, the press release issued
October 21, 1998 concerning the Fourth Quarter Earnings and cash dividend
announcement is incorporated herein by reference and is attached hereto as
Exhibit 1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit 1 -- Press Release dated October 21, 1998.
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.
_______________________________________
Timothy C. Boenne, Vice President
Dated: December 21, 1998
October 21,1998 Point of Contact: Charles J. Viater
MFB CORP. ANNOUNCES FOURTH QUARTER EARNINGS
AND QUARTERLY DIVIDEND
Mishawaka, Indiana - MFB Corp. (NASDAQ/MFBC),(the"Corporation"),
parent company of MFB Financial(the "Bank"), today reported consolidated
net income of $580,000 or $.39 per share for the three months ended September
30, 1998, compared to $496,000 or $.29 per share for the three months
ended September 30, 1997, an increase of 16.9%. Net income on an unaudited
basis for the fiscal year ended September 30, 1998 was $2,236,000 or $1.39
per share compared to $2,002,000 or $1.16 per share for the twelve months
ended September 30, 1997, an increase of 11.7%.
Net interest income after provision for loan losses for the most
recent three and twelve month periods totaled $2.2 million and $8.6 million
respectively compared to $2.0 million and $7.5 million for the same periods
one year ago. During the three months ended September 30, 1998 total
interest income increased by $722,000 compared to the same period one year
ago primarily as a result of a $18.9 million increase in first mortgage
loan receivables and a $26.6 million increase in commercial and consumer
loan receivables. Total interest expense increased $487,000 reflecting the
growth in savings account deposits and borrowed funds. For the twelve
months ended September 30, 1998 total interest income increased $3.2 million
while total interest expense increased $2.0 million.
Noninterest income increased from $118,000 and $425,000 for the three
and twelve months ended September 30, 1997 to $430,000 and $939,000
for the comparable periods ended September 30, 1998. The noninterest income
increases are primarily due to the recognition of mortgage servicing rights,
gains from loan sales and servicing fees retained on these sold loans, and
fees generated from the growing number of core deposit account
relationships. Noninterest expense increased from $1.3 million during the
three months ended September 30, 1997 to $1.5 million during the three
months ended September 30,1998, and from $4.6 million to $5.6 million
for the comparable twelve month periods ending September 30. These
noninterest expense increases are primarily attributable to staffing
increases and renovated facilities to support lending operations, along
with expenses incurred in the offering of additional services to the Bank's
customers.
The Corporation has increased total assets from $255.9 million as of
September 30, 1997 to $310.0 million as of September 30, 1998, an increase
of $54.1 million (or 21.1%). Total net loans have increased from $200.9
million at September 30, 1997 to $246.3 million at September 30, 1998, an
increase of $45.4 million (or 22.6%). The loan growth has been funded
primarily by additional borrowings through Federal Home Loan Bank advances,
by total savings deposit growth, and by decreases in securities available for
sale.
Total shareholders'equity decreased from $33.5 million as of September 30,
1997 to $30.9 million as of September 30, 1998. The decreases to equity
resulted mainly from the repurchase of 245,200 shares of outstanding
common stock during this period at a cost of $5.9 million along with the
payment of cash dividends of $544,000. These decreases were offset by $2.2
million in net income and $1.1 million generated from the exercise of
stock options.
While achieving substantial growth, the Corporation continues to
maintain asset quality that compares favorably to its industry peer group.
The ratio of nonperforming assets to total assets as of September 30, 1998
was .04% compared to .09% as of September 30, 1997.
In addition, MFB Corp. announced today that the Corporation has declared
a cash dividend of $.085 on each share of its Common Stock for the quarter
ended September 30, 1998. The dividend is payable on November 17,1998
to holders of record on November 3, 1998.
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 four banking centers located in St. Joseph
and Elkhart counties.
MFB CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, 1998 and September 30, 1997
(in thousands)
September 30, September 30,
1998 1997
ASSETS
Cash and due from financial institutions $ 3,019 $ 2,906
Interest-earning deposits in other financial
institutions 14,885 6,576
Cash and cash equivalents 17,904 9,482
Interest-earning time deposits in other financial
institutions --- ---
Securities available-for-sale 36,889 39,628
Federal Home Loan Bank stock 4,636 2,400
Loans held for sale, net of unrealized losses 13,516 12,671
Loans receivable, net of allowance for loan losses
of $454,000 in 1998 and $370,000 in 1997 232,832 188,264
Accrued interest receivable 968 719
Premises and equipment, net 2,795 2,613
Other assets 490 144
TOTAL ASSETS $310,030 $255,921
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing demand deposits 4,299 2,047
Savings, NOW and MMDA deposits 40,835 38,130
Other time deposits 135,532 131,710
Total deposits $180,666 $171,887
Securities sold under agreements to
repurchase 2,366 389
Advances from borrowers for taxes and insurance 2,316 1,854
FHLB advances 92,726 47,500
Accrued expenses and other liabilities 1,070 770
Total Liabilities 279,144 222,400
Shareholders' Equity
Common Stock, 5,000,000 shares authorized;
shares issued: 1,689,417
shares outstanding:1,474,217-1998,1,650,567-1997 12,847 13,079
Retained earnings - substantially restricted 23,730 22,038
Unearned Employee Stock Ownership Plan (ESOP) shares (445) (665)
Unearned Recognition and Retention Plan (RRP) shares (38) (115)
Net unrealized depreciation on securities
available-for sale, net of tax (45) 73
Treasury Stock, 215,200 common shares at cost (5,163) (889)
Total shareholders' equity 30,886 33,521
TOTAL LIABILITIES AND SHAREHOLDERS'EQUITIES $310,030 $255,921
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS AND TWELVE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(in thousands)
Three Months Ended Twelve Months Ended
September 30, September 30,
1998 1997 1998 1997
Total interest income $5,519 $4,797 $20,883 $17,685
Total interest expense 3,266 2,779 12,203 10,157
Net interest income 2,253 2,018 8,680 7,528
Provision for loan losses 70 7 120 30
Net interest income after
provision for loan losses 2,183 2,011 8,560 7,498
Total non-interest income 430 118 939 425
Total non-interest expense 1,510 1,304 5,646 4,599
Income before income taxes 1,103 825 3,853 3,324
Income tax expense 523 329 1,617 1,322
NET INCOME $580 $496 $2,236 $2,002
Basic earnings per share $ .40 $ .31 $ 1.46 $ 1.21
Diluted earnings per share $ .39 $ .29 $ 1.39 $ 1.16