UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD
FROM ____________________ TO
Commission file number: 0-23374
MFB CORP.
(Exact name of registrant as specified in its charter)
Indiana 35-1907258
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
121 South Church Street
P.O. Box 528
Mishawaka, Indiana 46546
(Address of principal executive offices,
including Zip Code)
(219) 255-3146
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes X No
(2) Yes X No
The number of shares of the registrant's common stock, without
par value, outstanding as of
June 30, 1996 was 1,973,980.
MFB CORP. AND SUBSIDIARY
FORM 10-Q
INDEX
Page No.
Part I. Financial Information 2
Item 1. Financial Statements 2
Consolidated Balance Sheets, (Unaudited)
June 30, 1996 and September 30, 1995 2
Consolidated Statements of Income, (Unaudited)
Three and nine months ended June 30, 1996 and 1995 3
Consolidated Statements of Changes in
Shareholders' Equity, (Unaudited)
Nine months ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows, (Unaudited)
Nine months ended June 30, 1996 and 1995 5
Notes to Unaudited Consolidated Financial
Statements June 30, 1996 7
Item 2. Management's Discussion and Analysis of
Financial Condition and
Results of Operations 9
Part II. Other Information 13
Items 1-6. 13
Signatures 14
1
MFB CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30, 1996 and September 30, 1995
(in thousands)
June 30, September 30,
1996 1995
ASSETS
Cash and due from financial institutions $ 579 $
2,063
Interest-earning deposits in other
financial institutions 646 5,391
Cash and cash equivalents 1,225 7,454
Interest-earning time deposits in
other financial institutions 991 1,880
Securities available-for-sale 40,267
---
Securities held-to-maturity ---
40,117
Other securities - Federal Home Loan
Bank stock 1,336 1,271
Mortgage-backed and related securities
available-for-sale 24,780 ---
Mortgage-backed and related securities
held-to-maturity --- 11,905
Total loans 139,095 121,491
Less allowance for loan losses (333) (310)
Loans receivable, net 138,762 121,181
Accrued interest receivable 857 818
Premises and equipment, net 1,939 1,977
Other assets 402
462
Total Assets $210,559 $187,065
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits $153,962 $144,552
Advances from borrowers for taxes
and insurance 1,129 2,169
Borrowed Funds 17,500 ---
Accrued expenses and other liabilities 277 2,345
Total Liabilities 172,868 149,066
Shareholders' Equity
Common Stock 18,284 19,657
Retained earnings 20,904 19,732
Employee stock ownership plan (950)
(1,100)
Recognition and retention plans (210) (290)
Net unrealized depreciation on
securities available-for
sale, net of tax (337) ---
Total shareholders' equity 37,691 37,999
Total Liabilities and
Shareholders' Equities $210,559 $187,065
2
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Nine months ended June 30, 1996 and 1995
(In thousands)
Three Months Ended Nine
Months Ended June 30,
June 30,
1996 1995 1996 1995
Interest income
Loans receivable
First mortgage loans $ 2,524 $ 2,212 $ 7,251
$ 6,522
Consumer and other loans 55 9 99
24
Financing leases and
Commercial loans 30 - 76
- Securities 547 615
1,655 1,815
Mortgage-backed and
related securities 378 172 829
525
Other interest-earning
assets 99 117 338
353
-- --- ---
---
3,633 3,125
10,248 9,239
Interest expense
Deposits 1,886 1,743 5,568
4,969
Borrowed funds 164 - 248
-
--- --
- --- --
2,050 1,743
5,816 4,969
Net interest income 1,583 1,382
4,432 4,270
Provision for loan losses 8 7 23
23
Net interest income after
provision for loan losses 1,575 1,375
4,409 4,247
Noninterest income
Insuance commissions 38 39 94
91
Other 53 41 201
145
Total noninterest income 91 80 295
236
Noninterest expense
Compensation and
employee benefits 541 576 1,551
1,757 Occupancy and equipment 107 104
312 281
SAIF deposit ins. premium 83 83 249
249
Other 232 172 646
540
Total noninterest expense 963 935 2,758
2,827
Income before income taxes 703 520
1,946 1,656
Income tax expense 279 207 774
659
Net income $ 424 $ 313 $
1,172 $ 997
Earnings per common and common
equivalent share (Note 2) $ 0.22 $ 0.15 $
0.60 $ 0.49
Earnings per share-assuming
full dilution $ 0.22 $ 0.15 $ 0.60
$ 0.49
(Note 2)
See accompanying notes to (unaudited)
consolidated financial statements.
3
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
Nine months ended June 30, 1996 and 1995
(In thousands)
Common Common
Net Unrealized
Stock Stock
Appreciation
Acquired Acquired
on Securities Total
Common Retained By
By Available- Shareholders'
Stock Earnings ESOP RRP
for-Sale Equity
Nine months ended
June 30, 1995
Balance - October 1, 1994 $ 21,049 $ 18,496 $(1,300) $
(540) $ - $ 37,705
Retirement of 109,361 shares
of common stock (1,530) - - -
- (1,530)
Contribution to fund ESOP 86 - 150
- - - 236
Amortization of RRP Contribution - - -
205 - 205
Net income for the nine months
ended June 30, 1995 - 997 -
- - - 997
Balance at June 30, 1995 $ 19,605 $ 19,493 $ (1,150) $
(335) $ - $ 37,613
Nine months ended
June 30, 1996
Balance-October 1, 1995 $ 19,657 $ 19,732 $ (1,100) $ (
290) $ - $ 37,999
Retirement of 103,893 shares
of common stock (Note 2) (1,499) - - -
- (1,499)
Contribution to fund ESOP - - 150 -
- 150
Market Adjustment of ESOP
shares 126 - - -
- 126
Amortization of RRP
contribution - - - 80
- 80
Change in securities classification
to available-for-sale (Note 1) - - - -
119 119
Net change in unrealized
appreciation on securities
available-for-sale - - - -
(456) (456)
Net income for the nine months
ended June 30, 1996 - 1,172 - -
- - 1,172
Balance at June 30, 1996 $18,284 $20,904 $ (950) $
(210 $ (337) $ 37,691
See accompanying notes to (unaudited ) consolidated financial
statements.
4
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended June 30, 1996 and 1995
(In thousands)
Nine
Months Ended
June 30,
1996
1995
Cash flows from operating activities
Net income $ 1,172 $ 997
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 104
71 Amortization of:
Premiums and discounts on securities, net 111
142 RRP contribution 80
205
Provision for loan losses 23
23
Market adjustment of ESOP shares 127
86
ESOP expense 150 150
Net change in:
Net deferred loan origination fees 15
(55)
Accrued interest receivable (39)
(47)
Other assets 191
(61)
Accrued expenses and other liabilities (1,977)
(6) Total adjustments (1,215)
508
Net cash provided (used)
by operating activities (43) 1,505
Cash Flows from investing activities
Net change in loans (13,903)
(4,573)
Purchase of:
Mortgage-backed and related securities
available-for-sale (20,680) -
Financing leases receivable (2,001)
-
Mortgage loans (1,715)
-
Securities available-for-sale (16,091)
(95)
Securities held-to-maturity -
(8,766)
Premises and equipment, net (68)
(157)
Proceeds from:
Maturities of securities held-to-maturity 4,300
10,700
Maturities of securities available-for-sale 9,050
-
Principal payments of mortgage-backed and
related securities available-for-sale 1,456 -
Principal payments of mortgage-backed and
related securities held-to-maturity -
862
Sales of mortgage-backed and related
securities available-for-sale 5,856 -
Sales of securities available-for-sale 2,350
-
Net change in interest-earning time deposits
in other financial institutions 889 1,486
Net cash used by investing activities (30,557)
(543)
(Continued)
5
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended June 30, 1996 and 1995
(In thousands)
Nine Months
Ended
June 30,
1996 1995
Cash flows from financing activities
Net change in deposits 9,410
(485) Net change in advances from borrowers
for taxes and insurance (1,040)
(669) Proceeds from Federal Home Loan Bank advances 17,500
-
Retirement of shares of common stock (1,499)
(1,530)
Net cash provided (used) by
financing activities 24,371 (2,684)
Net change in cash and cash equivalents (6,229)
(1,722)
Cash and cash equivalents at beginning of period 7,454
6,153
Cash and cash equivalents at end of period $ 1,225
$ 4,431
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest on deposits $ 5,552 $ 4,962
Income taxes 692 671
Supplemental schedule of non-cash investing activities
Transfer from:
Securities held-to-maturity to
securities available-for-sale $36,281,499 $
- -
Mortgage-backed and related securities
held-to-maturity to mortgage-backed and
related securities available-for-sale $11,616,526 $
- -
Investment securities to
securities available-for-sale $ - $
1,175
See accompanying notes to (unaudited ) consolidated financial
statements.
6
MFB CORP. AND SUBSIDIARY
NOTES TO (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Nature of Operations: MFB Corp. is an Indiana corporation
organized in December, 1993, to become a unitary savings and
loan holding company. MFB Corp. became a unitary savings and
loan holding company upon the conversion of Mishawaka Federal
Savings (the "Bank") from a federal mutual savings and loan
association to a federal stock savings bank in March, 1994. MFB
Corp. is the sole shareholder of the Bank. MFB Corp. and the
Bank (collectively referred to as the "Company") conduct
business from their main office in Mishawaka, Indiana and three
branch locations in St. Joseph County, Indiana. The Bank
offers a variety of lending, deposit and other financial
services to its retail and commercial customers. The Bank's
wholly-owned subsidiary, Mishawaka Financial Services, Inc., is
engaged in the sales of credit life, general fire and accident,
car, home, and life insurance as agent for the Bank's customers
and the general public.
Basis of Presentation: The accompanying unaudited consolidated
financial statements were prepared in accordance with
instructions for Form 10-Q and, therefore, do not include all
disclosures required by generally accepted accounting principles
for complete presentation of financial statements. In the
opinion of management, the consolidated financial statements
contain all adjustments necessary to present fairly the
consolidated balance sheets of MFB Corp. and its subsidiary
Mishawaka Federal Savings as of June 30, 1996 and September 30,
1995, and the consolidated statements of income for the three
and nine months ended June 30, 1996 and 1995, and the
consolidated statements of changes in shareholders' equity and
the consolidated statements of cash flows for the nine months
ended June 30, 1996 and 1995. All significant intercompany
transactions and balances are eliminated in consolidation. The
income reported for the nine months ended June 30, 1996 is not
necessarily indicative of the results that may be expected for
the full year.
Allowance: The allowance for loan losses is increased by
charges to income and decreased by charge-offs (net of
recoveries). Estimating the risk of loss and the amount of loss
on any loan is necessarily subjective. Management's periodic
evaluation of the adequacy of the allowance is based on the
Company's past loan loss experience, known and inherent risks in
the portfolio, adverse situations that may affect the borrower's
ability to repay, the estimated value of any underlying
collateral, and current economic conditions.
(Continued)
7
MFB CORP. AND SUBSIDIARY
NOTES TO (UNAUDITED) CONSOLIDATED FINANCIAL
STATEMENTS
June 30, 1996
The carrying value of impaired loans are periodically adjusted
to reflect cash payments, revised estimates of future cash
flows, and increases in the present value of expected cash
flows due to the passage of time. Cash payments representing
interest income are reported as such. Other cash payments are
reported as reductions in carrying value, while increases or
decreases due to changes in estimates of future payments and due
to the passage of time are reported as provisions for loan
losses, or otherwise as interest income.
Activity in the allowance for loan losses were as follows for
the nine months ended June 30, 1996.
Balance at September 30, 1995 $ 310,000
Provision for loan losses 22,500
Charged-off loans -
Recoveries -
Balance at June 30, 1996 $ 332,500
As of June 30, 1996, the Company had no impaired loans.
NOTE 2 - EARNINGS PER COMMON SHARE
Earnings per common and common equivalent share were computed by
dividing net income by the weighted average number of shares of
common stock and common stock equivalents outstanding.
Employee and director stock options are considered common stock
equivalents. At June 30, 1996, the Company had 105,823
unallocated shares which are excluded from the weighted average
number of shares outstanding used to calculate the earnings per
common and common share equivalent. The weighted-average number
of shares outstanding for the calculation of earnings per common
and common equivalent share were 1,940,389 at June 30, 1996 and
2,053,183 at June 30, 1995. The weighted-average number of
shares outstanding for the calculation of fully-diluted earnings
per share were 1,936,578 at June 30, 1996 and 2,052,534 at June
30, 1995.
During the quarter ended June 30, 1996, 103,693 shares of common
stock, or 5% of the outstanding shares, were purchased and
retired by the Company for $1,499,000.
8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
GENERAL
The principal business of Mishawaka Federal Savings (the "Bank")
has historically consisted of attracting deposits from the
general public and making loans secured by residential and other
real estate. The Bank, like other financial institutions, is
significantly affected by prevailing economic conditions, as
well as government policies and regulations concerning, among
other things, monetary and fiscal affairs, housing and
financial institutions. Deposit flows are influenced by a
number of factors, including interest rates paid on competing
investments, account maturities and level of personal income
and savings. In addition, deposit growth is affected by how
customers perceive the stability of the financial services
industry amid various current events such as regulatory changes
and financing of the deposit insurance fund. Lending activities
are influenced by the demand for and supply of housing lenders,
the availability and cost of funds and various other items.
Sources of funds for lending activities of the Bank include
deposits, payments on loans, Federal Home Loan Bank advances and
income provided from operations. The Company's earnings are
primarily dependent upon the Bank's net interest income, the
difference between interest income and interest expense.
Interest income is a function of the balances of loans and
securities outstanding during a given period and the yield
earned on such loans and securities. Interest expense is a
function of the amount of deposits and borrowings outstanding
during the same period and interest rates paid on such deposits
and borrowings. The Company's earnings are also affected by
the Bank's provisions for loan and real estate losses, service
charges, income from subsidiary activities, operating expenses
and income taxes.
LIQUIDITY
Liquidity relates primarily to the Company's ability to fund
loan demand, meet deposit customers' withdrawal requirements and
provide for operating expenses. Assets used to satisfy these
needs consist of cash and other investments with five years or
less remaining until maturity. These assets, commonly referred
to as liquid assets, include deposits in other financial
institutions, mortgage-backed and related securities and other
securities, excluding FHLB stock. Liquid assets were $47.6
million as of June 30, 1996 compared to $61.4 million as of
September 30, 1995. This $13.8 million reduction was primarily
the result of the sale of $5.9 million of mortgage-backed
securities and decreases of $6.2 million in cash and cash
equivalents. The above decreases, along with $17.5 million in
Federal Home Loan Bank advances and increases of $9.4 million in
customer deposits were used to fund the $17.6 million increase
in net loans and the purchase of $20.7 million in collateralized
mortgage obligations with maturities greater than five years.
The Company uses its liquidity mainly to fund existing and
future loan commitments, to fund deposit withdrawals, to invest
in securities, and to meet operating expenses. At June 30,
1996, the Company had outstanding loan commitments amounting to
$20.5 million (including $7.6 million in available equity lines
of credit) . Management believes that loan repayments and other
sources of funds will be adequate to meet the Company's
liquidity needs.
The cash flow statements provide an indication of the Company's
sources and uses of cash as well as an indication of the ability
of the Company to
9
maintain an adequate level of liquidity. A discussion of the
changes in the cash flow statements for the nine months ended
June 30, 1996 and 1995 follows.
The Company experienced a $43,000 net decrease in cash from
operating activities for the period ended June 30, 1996,
compared to a $1.5 million net increase in cash from operating
activities for the period ended June 30, 1995. The decrease in
the most recent period was primarily due to a $2.0 million
decrease in accrued expenses and other liabilities partially
offset by net income during the period of $1.2 million and a
decrease in other assets of $191,000.
Net cash used in investing activities was $30.6 million and
$543,000 for the nine months ended June 30, 1996 and 1995,
respectively. This change in net cash includes the results from
normal maturities and reinvestments of securities, the net
change in loans and principal reductions of mortgage-backed
securities. Additionally, the Bank acquired $20.7 million in
collateralized mortgage obligations, $2.0 million of financing
leases, and $1.7 million of one to four family mortgage loans,
and sold $2.3 million in securities and $5.9 million of
mortgage-backed securities during the nine months ended June 30,
1996.
Net cash of $24.4 million was generated from financing
activities during the nine months ended June 30, 1996 compared
to $2.7 million used in financing activities during the nine
months ended June 30, 1995. As previously discussed, $17.5
million in Federal Home Loan Bank advances and $9.4 million in
net deposits were used to fund the investing activities for the
nine months ended June 30, 1996. Offsetting the funds derived
from these sources were $1.0 million in escrow payments for
borrower's taxes and the purchase and retirement of 103,893
shares of common stock totaling $1.5 million during the period
ending June 30, 1996. The retirement of 109,361 shares of common
stock, a decrease in total deposits, and escrow payments for
borrower's taxes led to the $1.5 million decrease in financing
cash flows in 1995.
BIF-SAIF FUND AND CHARTER MERGER
The House and Senate Banking Committees continue to mark up
proposals to recapitalize the Savings Association Insurance Fund
("SAIF") from a one-time special assessment and, effective
January 1, 1998: 1) merge the SAIF fund with the Bank Insurance
Fund ("BIF") , 2) require federally-chartered thrifts to opt
for a national or state bank charter, and 3) abolish the Office
of Thrift Supervision ("OTS").
A most recent estimate is for a SAIF one-time special assessment
in the amount of approximately 87.5 basis points levied upon
the thrifts deposits at June 30, 1996. Based on the Company's
deposits at June 30, 1996 in the amount of $154.0 million, the
Company's share of the one-time assessment could be
approximately $1.3 million. If , after the one-time assessment,
the Company's regular premium decreases from 23 basis points to
the current BIF level of 4 basis points, the Company's regular
annualized insurance premium would decrease, based on deposits
at September 30, 1995, approximately $275,000 from $333,000 to
$58,000 or a 4.7 year recovery period for the special assessment.
CAPITAL RESOURCES
Total shareholders' equity decreased $300,000 from $38.0 million
as of September 30, 1995 to $37.7 million as of June 30, 1996.
This reduction was primarily related to the outlay of $1.5
million to repurchase 5% of the
10
outstanding shares of common stock partially offset by $1.2
million in
net income for the nine months ended June 30, 1996.
Federal regulations require savings banks to have minimum
regulatory tangible capital equal to 1.5% of total assets, a 3%
core capital ratio and an 8.0% risk-based capital ratio. At
June 30, 1996, the Bank meets the regulatory tangible capital,
core capital and risk-based capital requirements. Tangible
capital was $31.3 million or 14.9% of total bank assets, core
capital was $31.3 million of 14.9% of total bank assets and
risk-based capital was $31.7 million or 35.7% of risk-based bank
assets.
As of June 30, 1996, other than the proposed one-time special
SAIF assessment discussed previously, management is not aware
of any current recommendations by regulatory authorities which,
if they were to be implemented, would have, or are reasonably
likely to have, a material adverse effect on the Company's
liquidity, capital resources or operations.
MATERIAL CHANGES IN FINANCIAL CONDITION
June 30, 1996 Compared to September 30, 1995
Total assets increased $23.5 million from $187.1 million as of
September 30, 1995 to $210.6 million as of June 30, 1996.
Net loans increased by $17.6 million from $121.2 million at
September 30, 1995 to $138.8 million at June 30, 1996, primarily
due to loan originations exceeding principal payments by
approximately $13.9 million along with the purchase of $2.0
million in financial leases and $1.7 million in mortgage loans.
Mortgage-backed and related securities increased $13.4 million
during this period due to the purchase of $20.7 million in
collateralized mortgage obligations partially offset by the sale
of $5.9 million of mortgage-backed securities, and $ 1.4
million in mortgage-backed security principal repayments. Cash
and cash equivalents decreased $6.2 million during this same
period.
Total liabilities increased from $149.1 million at September 30,
1995 to $172.9 million at June 30, 1996. Significant liability
changes included the addition of $17.5 million in Federal Home
Loan Bank advances and increased savings deposits of $9.4
million which were used to fund the increase in net loans and
the purchases of various investment securities. The FHLB
advances have a weighted average interest rate of 5.41% and
mature in three years or less. Additionally, accrued expenses
and other liabilities decreased $2.0 million due to the October
settlement of September commitments to purchase securities.
.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Three and nine months ended June 30, 1996 compared to the three
and nine months ended June 30, 1995
The Company's consolidated net income for the three and nine
months ended June 30, 1996 was $424,000 and $1,172,000,
respectively, compared to $313,000 and $997,000 for the three
and nine months ended June 30, 1995.
Net interest income for the most recent three month and nine
month periods totaled $1.58 million and $4.41 million
respectively compared to $1.38 million and $4.25 million for the
same periods one year ago. During the three months and nine
months ended June 30, 1996, total interest income increased by
$508,000 and $1,009,000 compared to the same periods one year
11
ago primarily as a result of the increase in earning assets.
Total interest expense increased $307,000 and $847,000 for the
three and nine month comparative periods reflecting the growth
in savings accounts deposits as well as the cost of borrowed
funds.
Noninterest income increased from $80,000 for the three months
ended June 30, 1995 to $91,000 for the most recent three month
period. Noninterest expense increased from $935,000 during the
three months ended June 30, 1995 to $963,000 during the three
months ended June 30, 1996. This expense increase is primarily
related to increased advertising expense. For the nine month
period ended June 30, 1996, noninterest expense decreased to
$2.76 million from $2.83 million for the same period one year
ago. The main reason for this change was compensation and
employee benefit expense decreasing by $206,000 partially offset
by an $80,000 increase in advertising expense and a $31,000
increase in occupancy and equipment expense. The decrease in
compensation and employee benefits occurred primarily as a
result of lower pension fund expenses over the comparative nine
month periods as a result of an overfunding status in the
defined benefit plan that was identified by the plan
administrator in the most recent nine month period.
SUPPLEMENTAL INFORMATION
There were no material increases or decreases in regard to
nonperforming assets as of June 30, 1996 compared to September
30, 1995.
A cash dividend of $ .06 on each share of common stock for the
quarter ending June 30, 1996 was announced on July 17, 1996.
The dividend is payable on August 20, 1996 to holders of record
on August 6, 1996.
IMPACT OF NEW ACCOUNTING STANDARDS
Several new accounting standards have been issued by the
Financial Accounting Standards Board that will apply in 1996.
Statement of Financial Accounting Standards No. 121,
"Accounting for the impairment of long-lived assets ", requires
a review of long-term assets for impairment of recorded value
and resulting write-downs if value is impaired. Statement of
Financial Accounting Standards No. 122, "Accounting for
mortgage servicing rights", requires recognition of an asset
when servicing rights are retained on in-house originated loans
that are sold. Statement of Financial Accounting Standards
No. 123. "Accounting for stock-based compensation", requires
pro-forma disclosure of the effect on net income of valuing
future option grants at estimated fair value of the option
granted. These statements are not expected to have a material
effect on the Company's consolidated financial position or
consolidated results of operation.
12
MFB CORP. AND SUBSIDIARY
FORM 10-Q
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Annual Meeting of Shareholders was held on January 16,
1996.
(b) Each of the persons named in the proxy statement as a
nominee for director was elected.
(c) The voting results on each of the matters which were
submitted to the shareholders can be found in the Form
10-Q filed for the quarter ended December 31, 1995.
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
None
13
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 thereunto duly authorized.
MFB CORP.
Date By
Charles J. Viater
President
Date By
Timothy C. Boenne
Vice President
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 579,000
<INT-BEARING-DEPOSITS> 1,637,000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 65,047,000
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 139,095,000
<ALLOWANCE> 333,000
<TOTAL-ASSETS> 210,559,000
<DEPOSITS> 153,962,000
<SHORT-TERM> 17,500,000
<LIABILITIES-OTHER> 277,000
<LONG-TERM> 0
0
0
<COMMON> 18,284,000
<OTHER-SE> 19,407,000
<TOTAL-LIABILITIES-AND-EQUITY> 210,559,000
<INTEREST-LOAN> 2,609,000
<INTEREST-INVEST> 925,000
<INTEREST-OTHER> 99,000
<INTEREST-TOTAL> 3,633,000
<INTEREST-DEPOSIT> 1,886,000
<INTEREST-EXPENSE> 2,050,000
<INTEREST-INCOME-NET> 1,583,000
<LOAN-LOSSES> 8,000
<SECURITIES-GAINS> (12,000)
<EXPENSE-OTHER> 948,000
<INCOME-PRETAX> 703,000
<INCOME-PRE-EXTRAORDINARY> 703,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 424,000
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
<YIELD-ACTUAL> 3.17
<LOANS-NON> 29,000
<LOANS-PAST> 100,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 325,500
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 333,000
<ALLOWANCE-DOMESTIC> 333,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 316,000
</TABLE>
