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 DECEMBER 31, 1997
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 December 31, 1997 was 1,626,767.
<PAGE>
MFB CORP. AND SUBSIDIARY
FORM 10-Q
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Consolidated Balance Sheets, (Unaudited)
December 31, 1997 and September 30, 1997 3
Consolidated Statements of Income, (Unaudited)
Three months ended December 31, 1997 and 1996 4
Consolidated Statements of Changes in Shareholders' Equity,
(Unaudited) Three months ended December 31, 1997 and 1996 5
Consolidated Statements of Cash Flows, (Unaudited)
Three months ended December 31, 1997 and 1996 6
Notes to Unaudited Consolidated Financial Statements
December 31, 1997 8
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
2
<PAGE>
MFB CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, 1997 and September 30, 1997
(In thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1997 1997
ASSETS
<S> <C> <C>
Cash and due from financial institutions $ 2,339 $ 2,906
Interest-bearing deposits in other financial
institutions - short-term 12,929 6,576
Cash and cash equivalents $ 15,268 $ 9,482
Interest- bearing time deposits in other financial
institutions - -
Securities available for sale 34,476 39,628
Federal Home Loan Bank (FHLB) stock, at cost 2,675 2,400
Loans held for sale, net of unrealized losses
of $-0- 5,850 12,671
Loans receivable, net of allowance for loan losses 202,351 188,264
Accrued interest receivable 600 719
Premises and equipment, net 2,762 2,613
Other assets 115 144
Total assets $ 264,097 $ 255,921
LIABIILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Noninterest-bearing demand deposits $ 2,356 $ 2,047
Savings, NOW and MMDA deposits 39,631 38,130
Other time deposits 131,444 131,710
Total deposits 173,431 171,887
Securities sold under agreements to repurchase 1,695 389
FHLB advances 53,500 47,500
Advances from borrowers for taxes and insurance 905 1,854
Accrued expenses and other liabilities 1,031 741
Total liabilities 230,562 222,371
Shareholders' equity
Common stock $ 13,174 $ 13,108
Treasury Stock (1,433) ( 889)
Retained earnings - substantially restricted 22,409 22,038
Net unrealized appreciation (depreciation) on
securities available for sale, net of tax 91 73
Unearned Employee Stock Ownership Plan (ESOP) Shares (610) (665)
Unearned Recognition and Retention Plan (RRP) Shares (96) (115)
Total shareholders' equity 33,535 33,550
Total liabilities and shareholders' equity $ 264,097 $ 255,921
</TABLE>
See accompanying notes to (unaudited) consolidated financial statements.
3
<PAGE>
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three months ended December 31, 1997 and 1996
(In thousands)
<TABLE> Three Months Ended
December 31,
1997 1996
INTEREST INCOME
Loans receivable
<S> <C> <C>
First mortgage loans $ 3,581 $ 2,957
Consumer and other loans 192 104
Financing leases and commercial loans 269 61
Securities - taxable 651 949
Other interest-earning assets 126 36
4,819 4,107
INTEREST EXPENSE
Deposits 2,124 2,008
Securities sold under agreements to repurchase 6 -
FHLB advances 689 331
2,819 2,339
NET INTEREST INCOME 2,000 1,768
PROVISION FOR LOAN LOSSES 15 7
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,985 1,761
Noninterest income
Insurance commissions 39 37
Brokerage commissions 5 -
Net realized gains from sales of securities
available for sale 8 4
Net realized gains from sales of loans 17 -
Other 96 72
Total noninterest income 165 113
Noninterest expense
Salaries and employee benefits 770 606
Occupancy and equipment expense 161 125
SAIF deposit insurance premium 26 89
Other expense 321 264
Total noninterest expense 1,278 1,084
INCOME BEFORE INCOME TAXES 872 790
Income tax expense 370 314
NET INCOME $ 502 $ 476
Basic Earnings per common share $ 0.32 $ 0.28
Diluted Earnings per common share $ 0.30 $ 0.27
</TABLE>
See accompanying notes to (unaudited) consolidated financial statements.
4
<PAGE>
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
Three months ended December 31, 1997 and 1996
(In thousands)
<TABLE> Net Unrealized
<CAPTION> Depreciation
Unearned Unearned on Securities Total
Common Retained ESOP RRP Available- Treasury Shareholders'
STOCK EARNINGS SHARES SHARES FOR-SALE STOCK EQUITY
THREE MONTHS ENDED DECEMBER 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C>
Balance-October 1, 1996 $ 18,316 $ 20,589 $( 894) $( 192) $( 220) $ - $ 37,599
Effect of contribution to fund ESOP - - 50 - - - 50
Market adjustment of ESOP shares committed
to be released 37 - - - - - 37
Amortization of RRP contribution - - - 19 - - 19
Issuance of 2500 shares of common stock -
exercise of stock option 25 - - - - - 25
Purchase and retirement of 199,963 shares
of common stock (3,734) - - - - - (3,734)
Cash dividends declared -$.08/share - (143) - - - - (143)
Net change in unrealized appreciation on
securities available-for-sale, net of tax - - - - 143 - 143
Net income for the three months ended
December 31, 1996 - 476 - - - - 476
Balance at December 31, 1996 $ 14,644 $ 20,922 $ (844) $ (173) $ ( 77) $ - $ 34,472
THREE MONTHS ENDED DECEMBER 31, 1997
Balance-October 1, 1997 $ 13,108 $ 22,038 $( 665) $( 115) $ 73 $ (889) $ 33,550
Effect of contribution to fund ESOP - - 55 - - - 55
Market adjustment of 19,513 ESOP shares
committed to be released 66 - - - - - 66
Amortization of RRP contribution - - - 19 - - 19
Purchase of 23,800 shares of treasury stock - - - - - (544) (544)
Cash dividends declared -$.08/share - (130) - - - - (130)
Net change in unrealized appreciation
(depreciation) on securities available-for-sale
net of tax - - - - 17 - 17
Net income for the three months ended
December 31, 1997 - 502 - - - - 502
Balance at December 31, 1997 $ 13,174 $ 22,410 $ (610) $ (96) $ 90 $ (1,433) $ 33,535
</TABLE>
See accompanying notes to (unaudited ) consolidated financial statements.
5
<PAGE>
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended December 31, 1997 and 1996
(In thousands)
<TABLE> Three Months Ended
December 31
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 502 $ 476
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization, net of accretion 60 191
Amortization of RRP contribution 19 19
Provision for loan losses 15 7
Market adjustment of ESOP shares 65 37
ESOP expense 55 50
Net realized gains from sales of securities available for sale ( 8) (4)
Proceeds from sale of loans held for sale 6,426 -
Net realized gains from sale of loans held for sale (17) -
Net change in:
Accrued interest receivable 118 146
Other assets 29 369
Accrued expenses and other liabilities 279 (865)
Total adjustments 7,041 (50)
Net cash from operating activities 7,543 426
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans receivable (13,690) (13,744)
Purchase of:
Securities available-for-sale (9,410) (7,461)
FHLB stock (275) -
Premises and equipment, net (225) (301)
Proceeds from:
Maturities of securities available for sale 9,912 10,300
Principal payments of mortgage-backed and related
securities 1,777 433
Sales of securities available for sale 2,926 12,119
Net change in interest-bearing time deposits in
other financial institutions - 297
Net cash from investing activities (8,985) 1,643
(CONTINUED)
6
MFB CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended December 31, 1997 and 1996
(In thousands)
Three Months Ended
December 31,
1997 1996
CASH FLOWS FROM FINANCING ACTIVITIES
<S> <C> <C>
Net change in deposits 1,544 2,612
Net change in securities sold under
agreements to repurchase 1,306 -
Net change in advances from borrowers for
taxes and insurance (949) (983)
Proceeds from stock option exercise - 25
Purchase of MFB Corp. common stock (544) (3,734)
Net proceeds from Federal Home Loan Bank advances 6,000 500
Cash dividends paid (130) (143)
Net cash from financing activities 7,227 (1,723)
Net change in cash and cash equivalents 5,785 346
Cash and cash equivalents at beginning of period 9,483 1,734
Cash and cash equivalents at end of period $ 15,268 $ 2,080
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for
Interest on deposits $ 2,781 $ 2,327
Income taxes 57 44
</TABLE>
See accompanying notes to (unaudited) consolidated financial statements
7
<PAGE>
MFB CORP. AND SUBSIDIARY
NOTES TO (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
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. On November 1,
1996, the Bank officially changed its name to MFB Financial. 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 five branch locations in St. Joseph and Elkhart Counties of
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 MFB Financial as of December 31, 1997 and September
30, 1997, and the consolidated statements of income for the three months ended
December 31, 1997 and 1996, and the consolidated statements of changes in
shareholders' equity and the consolidated statements of cash flows for the
three months ended December 31, 1997 and 1996. All significant intercompany
transactions and balances are eliminated in consolidation. The income
reported for the three months ended December 31, 1997 is not necessarily
indicative of the results that may be expected for the full year.
NOTE 2 - EARNINGS PER COMMON SHARE
Earnings per common share is computed under the provisions of Statement of
Financial Accounting Standards No. 128, "Earnings Per Share," which was adopted
retroactively by the Company on October 1,1997. At December 31, 1997 and 1996,
the Company had 61,032 and 90,767 unallocated ESOP shares, and 15,400 and 23,100
nonvested RRP shares, which are excluded from the weighted average number of
shares outstanding. Basic earnings per common share is based on net income
divided by the weighted average number of shares outstanding during the period.
Diluted earnings per common share further assumes issues of any dilutive common
shares.
8
<PAGE>
The computations for Basic Earnings per common share and Diluted Earnings per
common share for the periods ended December 31, 1997 and 1996 are presented
below.
<TABLE>
PERIOD ENDED
DECEMBER 31,
1997 1996
BASIC EARNINGS PER COMMON SHARE
<S> <C> <C>
Net income available to common shareholders $ 502,420 $ 475,774
Weighted average common shares outstanding 1,558,520 1,718,236
Earnings Per Common Share $ .32 $ .28
EARNINGS PER COMMON SHARE ASSUMING DILUTION
Net income available to common shareholders $502,420 $475,774
Weighted average common shares outstanding 1,558,520 1,718,236
Add: dilutive effects of assumed exercises:
Incentive stock options 69,521 46,665
Non-qualified stock options 20,589 14,921
Recognition and Retention plan shares 9,154 8,094
Weighted average common and dilutive
potential common shares outstanding 1,657,784 1,787,916
EARNINGS PER COMMON SHARE
ASSUMING DILUTION $ .30 $ .27
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The principal business of MFB Financial (the "Bank") has historically consisted
of attracting deposits from the general public and making loans secured by
residential and other real estate. The Bank 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,
fee structures, and level of personal income and savings. 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, borrowings, payments on loans
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.
9
Interest income is a function of the balances of loans and investments
outstanding during a given period and the yield earned on such loans and
investments. 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 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, deposits with other financial
institutions, overnight interest-bearing deposits in other financial
institutions and securities, excluding FHLB stock. These assets are commonly
referred to as liquid assets. Liquid assets were $49.7 million as of December
31, 1997 compared to $49.1 million as of September 30, 1997. This $632,000
increase was primarily due to a $5.8 million increase in cash and interest-
bearing deposits in other financial institutions, offset by a $5.2 million
decrease in securities available for sale. Management believes the liquidity
level of $49.7 million as of December 31, 1997 is sufficient to meet
anticipated liquidity needs.
A standard measure of liquidity for savings associations is the ratio of cash
and eligible investments to a certain percentage of net withdrawable savings
and borrowings due within one year. The minimum required ratio is currently set
by Office of Thrift Supervision regulation at 4%, and, at December 31, 1997,
the Bank's liquidity ratio was 16.71%. Therefore, the Bank's liquidity is well
above the minimum regulatory requirements.
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 December 31, 1997, the Company had commitments to fund
loan originations with borrowers totaling $27.5 million (including $14.2
million in available consumer and commercial 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 maintain
an adequate level of liquidity. A discussion of the changes in the cash flow
statements for the three months ended December 31, 1997 and 1996 follows.
During the three months ended December 31, 1997, net cash increased $5.8
million from $9.5 million at September 30, 1997 to $15.3 million at December
31, 1997.
The Company experienced a $7.5 million net increase in cash from operating
activities for the period ended December 31, 1997, compared to a $426,000 net
increase for the period ended December 31, 1996. The increase in the most
recent period was primarily attributable to $6.4 million in proceeds from the
sale of mortgage loans, $502,000 in net income during the period and a $279,000
increase in accrued expenses and other liabilities due to adjusting the federal
and Indiana current and deferred tax payable accounts to the actual tax
accruals. The Company experienced a net increase in cash from operating
activities of $426,000 during the three months ended December 31, 1996. This
increase was primarily due to $476,000 in net income for the period and
increases in other assets offsetting the $865,000 decrease in accrued expenses
resulting from the payment during the quarter of the one time Savings
Association Insurance Fund assessment of $955,000.
The $9.0 million net decrease in cash from investing activities during the
three months ended December 31, 1997 is primarily related to the $13.7 million
increase in loan originations exceeding principal payments and the $9.7 million
purchase of securities and FHLB stock, offset by sales and maturities of
securities totaling $12.9 million and $1.8 million of mortgage-backed
securities principal payments. During the three months ended December 31, 1996,
net cash provided by investing activities was $1.6 million, resulting primarily
form the $2.8 generated from normal maturities of securities exceeding
reinvestments and the $12.1 million in proceeds from the sale of securities,
partially offset by the net increase in loan receivables of $13.8 million.
10
Financing activities generated net cash of $7.2 million for the period ending
December 31, 1997. The net cash was provided primarily from $6.0 million in
net new FHLB advances, net deposit increases of $1.5 million, and net
increases of securities sold under agreements of $1.3 million, offset by net
changes of $949,000 in funds held for borrower's due to payments of taxes,
$544,000 to repurchase the Company's stock and cash dividend payments of
$130,000 during the quarter. Net cash used in financing activities was $1.7
million for the three months ended December 31, 1996 as $3.7 million in MFB
Corp. common stock was repurchased, $1.0 million in escrow payments for
borrower's taxes and insurance were disbursed and $143,000 in cash dividends
were paid during the quarter. $2.6 million in net deposits and $500,000 in
additional FHLB advances were used to fund the investing activities discussed
above.
CAPITAL RESOURCES
Total shareholders' equity decreased from $33.6 million as of September 30,
1997 to $33.5 million as of December 31, 1997 mainly as a result of the
Company's repurchase of 23,800 shares of outstanding common stock at a cost of
$544,000 and the payment of cash dividends of $130,000 during this period,
partially offset by $502,000 in net income for the same period.
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 December 31, 1997, the Bank meets the regulatory
tangible capital, core capital and risk-based capital requirements. Tangible
capital was $32.5 million or 12.3% of total bank assets, core capital was $32.5
million or 12.3% of total bank assets and risk-based capital was $32.9 million
or 24.7% of risk-based bank assets.
As of December 31, 1997, 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
DECEMBER 31, 1997 COMPARED TO SEPTEMBER 30, 1997
Total assets increased $8.2 million from $255.9 million as of September 30,
1997 to $264.1 million as of December 31, 1997.
Net loans increased by $7.3 million from $200.9 million at September 30, 1997
to $208.2 million at December 31, 1997 due to loan originations exceeding
principal payments by approximately $13.7 million, offset by the proceeds
received from first mortgage loan sales of $6.4 million. The loans sold were
fixed rate loans with remaining maturities greater than fifteen years. Loan
sales are conducted from time to time in an effort to manage interest rate risk
and to generate servicing fee income. Securities available for sale decreased
during this same period from $39.6 million at September 30, 1997 to $34.5
million at December 31, 1997 due primarily to maturities, sales and
principal payments exceeding purchases by $5.2 million during the period. As
indicated above, the net loan growth has been funded in part by the decrease
in securities available for sale, along with additional borrowings through
the Federal Home Bank advances.
Total liabilities increased from $222.4 million at September 30 , 1997 to
$230.6 million at December 31, 1997. Significant liability changes included the
addition of $1.8 million in savings , NOW and MMDA deposits, increased
securities sold under agreements to repurchase of $1.3 million, and net new
FHLB advances of $6.0 million. Enhancement of our deposit based product
offerings and emphasis on core relationships and quality
11
service has contributed to the deposit and repurchase increases. Advances from
borrowers for taxes and insurance decreased $949,000 due to the payment of
borrower's taxes in November.
The $53.5 million of Federal Home Loan Bank advances have a weighted average
interest rate of 5.66% and mature in five years or less. The one-day retail
repurchase agreements totaled $1.7 million at December 31, 1997 and had a
weighted average interest rate of 4.25%.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 1996
The Company's consolidated net income for the three months ended December 31,
1997 was $502,000 compared with $476,000 for the three months ended December
31, 1996, an increase of 5.5%
Net interest income after provision for loan losses for the most recent three
month period totaled $2.0 million compared to $1.8 million for the same period
one year ago. During the three months ended December 31, 1997 total interest
income increased by $712,000 compared to the same period one year ago,
primarily as a result of a $28.9 million increase in first mortgage loan
receivables and a $13.6 million increase in commercial and consumer loan
receivables. This continued the Bank's efforts to redeploy assets from
relatively lower earning investments into the Bank's loan portfolio. Total
interest expense increased $480,000 reflecting the growth in both savings
account deposits and borrowed funds.
Noninterest income increased from $113,000 for the three months ended December
31, 1996 to $165,000 for the most recent three month period, while noninterest
expense increased from $1.1 million to $1.3 million for the comparable periods.
The $52,000 noninterest income increase is primarily related to gains realized
on the sale of mortgage loans during the period, servicing income retained on
those sold loans, and fees generated through increased deposit account
relationships and additional services offered to the bank's customers. The
noninterest expense increases are primarily attributable to increased
compensation and building expenses during the quarter ended December 31, 1997.
SUPPLEMENTAL INFORMATION
The Company continues to maintain asset quality that compares favorably to its
industry peer group. The ratio of nonperforming assets to total assets as of
December 31, 1997 was .09% compared to .02% as of December 31, 1996.
12
<PAGE>
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 20, 1998.
(b) Each of the persons named in the proxy statement as a
nominee for director was elected.
(c) The following are the voting results on each of the matters which
were submitted to the shareholders:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTE
<S> <C> <C> <C> <C>
Election of Directors:
Reginald Wagle 1,395,005 12,400
Marian K. Torian 1,396,380 13,775
Appointment of Crowe Chizek
& Co. as auditors for 1997. 1,401,970 3,750 3,060
Approval of the MFB 1997
Stock Option Plan 958,590 201,605 7,570 241,015
</TABLE>
The text of the matters referred to under this Item 4 is set forth in the proxy
statement dated December 15, 1997 previously filed with the Securities and
Exchange Commission, and is incorporated herein by reference.
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
(a) MFB Corp. filed one Form 8-K reports during the quarter ended
December 31, 1997.
Date of report: October 22, 1997
Items reported: News release dated October 20, 1997 regarding
the announcement of fourth quarter earnings
News release dated October 22, 1997 regarding
the declaration of a $ .08 per share cash
dividend payable on November 18, 1997 to
holders of record on November 4, 1997.
13
<PAGE>
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> DEC-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 15,268,000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 2,675,000
<INVESTMENTS-MARKET> 34,476,000
<LOANS> 208,586,000
<ALLOWANCE> 385,000
<TOTAL-ASSETS> 264,097,000
<DEPOSITS> 173,431,000
<SHORT-TERM> 1,695,000
<LIABILITIES-OTHER> 1,936,000
<LONG-TERM> 53,500,000
0
0
<COMMON> 13,174,000
<OTHER-SE> 20,361,000
<TOTAL-LIABILITIES-AND-EQUITY> 264,097,000
<INTEREST-LOAN> 4,042,000
<INTEREST-INVEST> 651,000
<INTEREST-OTHER> 126,000
<INTEREST-TOTAL> 4,819,000
<INTEREST-DEPOSIT> 2,124,000
<INTEREST-EXPENSE> 2,819,000
<INTEREST-INCOME-NET> 2,000,000
<LOAN-LOSSES> 15,000
<SECURITIES-GAINS> 25,000
<EXPENSE-OTHER> 1,278,000
<INCOME-PRETAX> 872,000
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 502,000
<EPS-PRIMARY> .320
<EPS-DILUTED> .300
<YIELD-ACTUAL> 4.910
<LOANS-NON> 0
<LOANS-PAST> 237,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 370,000
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 385,000
<ALLOWANCE-DOMESTIC> 341,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 44,000
</TABLE>
