MFB CORP
8-K, 2000-10-20
SAVINGS INSTITUTION, FEDERALLY CHARTERED
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                               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 18, 2000



                                   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 18, 2000 concerning the Annual 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 18, 2000.




                                  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:  October 20, 2000







<PAGE>






October 18, 2000                        Point of Contact: Charles J. Viater



                     MFB CORP. ANNOUNCES ANNUAL EARNINGS
                            AND QUARTERLY DIVIDEND

     Mishawaka, Indiana - MFB Corp. (NASDAQ/MFBC),(the "Corporation"),
parent company of MFB Financial (the "Bank"), today reported consolidated net
income on an unaudited basis of $2.8 million or $1.98 diluted earnings per
share for the  fiscal  year  ended  September 30, 2000 compared to
$2.2 million of $1.51 diluted earnings per share for  the  year ended September
30,  1999, representing a 31.1% year to date earnings per share  increase.  Net
income  for  the  three  months  ended September 30, 2000 was $558,000 or $ .40
diluted earnings per common share compared to $582,000 or $ .41 diluted
earnings per common  share  for  the  comparable  period  ended
September 30, 1999.

     Net  interest income after provision for loan losses for the
most recent three and twelve  month  periods  totaled  $2.4  million  and $10.9
million compared to $2.6 million and $9.6 million for the same periods one year
ago.   During  the  three months ended September 30, 2000 total interest income
increased by $1.4 million  compared  to  the  same  period  one  year ago. This
increase  was  due to both  increased volumes of loans receivable, particularly
commercial and consumer  loans,  and higher yields generated on the entire loan
portfolio. Commercial and consumer  loan receivables, including home equity and
second mortgage loans, increased $53.7  million  from  September  30,  1999  to
September  30, 2000. Total interest expense increased $912,000 during the three
months ended  September  30,  2000,  as compared to the same period a year ago,
reflecting the growth in deposits and  borrowed  funds.  For  the twelve months
ended  September  30,  2000 total interest income increased $4.3 million  while
total interest expense increased $2.0 million.

   The provision for loan and lease losses is determined in conjunction with
management's review and evaluation of current economic conditions,changes in
the character and size of the loan and lease portfolio, delinquencies  (current
status  as  well  as  past  and  anticipated trends) and adequacy of collateral
securing delinquencies, historical  and  estimated  net  charge-offs  and other
pertinent information. During the fiscal year ended September 30, 2000 the Bank
experienced   significant  growth  in  the  commercial  loan  portfolio.  Total
commercial loans  at  September  30,  2000 were $91.1 million compared to $47.4
million  at  September  30,  1999, a 92.2%  increase.  In  addition,  the  Bank
continued to improve its loan  review  and risk assessment procedures. Based on
these factors, management concluded that  an increase in the provision for loan
and lease losses was appropriate and a one-time  $600,000  addition was made to
the  allowance for loan losses reserve during the quarter ended  September  30,
2000.

    Noninterest income increased from $372,000 and $1.2 million for
the three  and  twelve  months  ended  September  30, 1999 to $623,000 and $1.8
million for the most recent three and twelve month periods. These increases are
primarily  due to fees generated from the increasing  number  of  core  deposit
account relationships,  income  generated from the Bank's trust department, net
gains from loan sales and the servicing  fees  retained  on  these  sold loans.
Noninterest expenses increased from $1.9 million during the three months  ended
September 30, 1999 to $2.1 million during the three months ended September  30,
2000,  and  from  $7.0  million to $8.3 million for the comparable twelve month
periods.  The noninterest  expense  increases  are  primarily  attributable  to
staffing  increases,   renovated  facilities  to  support  lending  operations,
expenses associated with  the  opening  of a new full service office during the
first quarter of 2000, and expenses incurred  in  the  offering  of  additional
services to the Bank's customers.



    The  Corporation  has  increased  total  assets  from $346.5 million as
of September 30, 1999 to $396.0 million as of September 30, 2000, an
increase  of  $49.5  million (or 14.3%). Total net loans increased from  $277.5
million to $322.0 million  during this same twelve month period, an increase of
$44.5 million (or 16.0%).  The  loan  growth  has  been funded primarily by the
growth in deposits and additional borrowings through  Federal  Home  Loan  Bank
advances.

    Total shareholders' equity increased from $31.2 million as  of
September  30,  1999  to $32.5 million as of September 30, 2000 mainly from net
income of $2.8 million offset by the repurchase of 61,600 shares of outstanding
common stock during this  period  at  a  cost of $1.1 million and cash dividend
payments of $553,000.

  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, 2000 was .02% compared to .06% as of September 30, 1999.

                    In addition, MFB Corp. announced today that the Corporation
has  declared a cash dividend of  $ .095 per share  of  Common  Stock  for  the
quarter  ended September 30, 2000. The dividend is payable on November 14, 2000
to holders of record on October 31, 2000.

                     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  six  banking centers located in St.
Joseph and Elkhart counties.

<PAGE>
                            MFB CORP. AND SUBSIDIARY
                      CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                    September 30, 2000 and September 30, 1999
                                (in thousands)

<TABLE>
<CAPTION>
<S>                                             September 30,    September 30,
                                                   2000                  1999
                                                   <C>                 <C>

ASSETS
Cash and due from financial institutions      $    9,693           $    6,316
Interest-bearing deposits in other financial
   institutions - short term                       4,851                5,746
Total cash and cash equivalents                   14,544               12,062
Interest-bearing time deposits in other
   financial institutions                              -                1,000
Securities available-for-sale                     40,663               38,170
Securities held to maturity                        1,000                3,984
Federal Home Loan Bank (FHLB) stock, at cost       6,308                5,511
Loans held for sale, net                           6,626                8,062
Loans receivable, net                            315,374              269,464
Accrued interest receivable                        1,895                1,363
Premises and equipment, net                        4,688                4,413
Mortgage servicing rights, net                       611                  412
Investment in limited partnership                  2,948                1,213
Other assets                                       1,371                  798

   TOTAL ASSETS                                 $396,028             $346,454



LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
   Deposits
      Noninterest-bearing demand deposits    $    11,802           $    7,358
      Savings, NOW and MMDA deposits              56,569               52,409
      Other time deposits                        171,023              141,640
        Total deposits                           239,394              201,407
   Securities sold under agreements to
     repurchase                                    9,143                6,566
   Other borrowings                              112,152              104,226
   Advances from borrowers for taxes and
     insurance                                     2,116                2,111
   Accrued expenses and other liabilities            684                  962
        Total Liabilities                        363,489              315,272

Shareholders' Equity
   Common Stock, 5,000,000 shares authorized;
   shares issued: 1,689,417 - 9/30/00 and 9/30/99
   shares outstanding: 1,358,449 - 9/30/00,
   1,420,049 - 9/30/99                            13,136               13,016
   Retained earnings-substantially restricted     27,711               25,420
   Accumulated other comprehensive income (loss),
   net of tax                                       (892)                (718)
   Unearned Employee Stock Ownership Plan
   (ESOP) shares                                       -                 (223)
   Treasury Stock, 330,968 common shares-9/30/00
   269,368 common shares - 9/30/99                (7,416)              (6,313)
         Total shareholders' equity               32,539               31,182

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITIES    $396,028             $346,454

</TABLE>







                            MFB CORP. AND SUBSIDIARY
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
        THREE MONTHS AND TWELVE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                  (in thousands)

<TABLE>
<CAPTION>
<S>
                                Three Months Ended         Twelve Months Ended
                                   September 30,                September 30,
                                   2000      1999            2000        1999
                                    <C>      <C>              <C>        <C>
Total interest income            $7,696    $6,262         $28,514     $24,254

Total interest expense            4,538     3,625          16,473      14,448

Net interest income               3,158     2,637          12,041       9,806

Provision for loan losses           761        75           1,106         230

Net interest income after
provision for loan losses         2,397     2,562          10,935       9,576

Total non-interest income           623       372           1,845       1,220

Total non-interest expense        2,123     1,923           8,272       7,006

Income before income taxes          897     1,011           4,508       3,790

Income tax expense                  339       429           1,693       1,586

  NET INCOME                       $558      $582          $2,815      $2,204



Basic Earnings per common share   $  .41    $  .42        $   2.03     $  1.56

Diluted Earnings per common share $  .40    $  .41         $  1.98     $  1.51



</TABLE>





















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