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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

__________________________


FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
            For the fiscal year ended December 31, 2000

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 000-27905


MutualFirst Financial, Inc.
(Exact Name of Registrant as Specified in its Charter)


Maryland
(State or other jurisdiction of incorporation or organization)

35-2085640
(I.R.S. Employer Identification No.)

110 E. Charles Street, Muncie, Indiana
(Address of principal executive offices)
47305-2419
(Zip Code)
Registrant's telephone number, including area code: (765) 747-2800


Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, par value $.01 per share
(Title of Class)


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. YES [X] NO [ ]

             Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X ]

             The aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the last sale price of such stock on the Nasdaq National Market on March 1, 2001, was approximately $113.3 million. (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant.)

            As of March 1, 2001, there were issued and outstanding 8,376,623 shares of the registrant's common stock.

DOCUMENTS INCORPORATED BY REFERENCE

PART II of Form 10-K--Portions of registrant's Annual Report to Stockholders for the fiscal year ended December 31, 2000.
PART III of Form 10-K--Portions of registrant's Proxy Statement for its 2001 Annual Meeting of Stockholders.


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Item 1. Business

General

            MutualFirst Financial, Inc., a Maryland corporation, is a savings and loan holding company which has as its wholly-owned subsidiary Mutual Federal Savings Bank. MFS Financial was formed in September 1999 to become the holding company of Mutual Federal in connection with Mutual Federal's conversion from the mutual to stock form of organization on December 29, 1999. In April 2000, MFS Financial formally changed its corporate name to MutualFirst Financial, Inc. ("MutualFirst"). The words "we," "our" and "us" refer to MutualFirst and Mutual Federal on a consolidated basis, except that references to us prior to December 29, 1999 refer only to Mutual Federal.

            At December 31, 2000, we had total assets of $770 million, deposits of $515 million and stockholders' equity of $130 million. Our executive offices are located at 110 E. Charles Street, Muncie, Indiana 47305-2400.

            Our principal business consists of attracting retail deposits from the general public and investing those funds primarily in permanent loans secured by first mortgages on owner-occupied, one- to four-family residences and a variety of consumer loans. We also originate loans secured by commercial and multi-family real estate, commercial business loans and construction loans secured primarily by residential real estate.

            Our revenues are derived principally from interest on loans and interest on investments and mortgage-backed securities.

            We offer deposit accounts having a wide range of interest rates and terms, which generally include passbook and statement savings accounts, money market deposit accounts, NOW and non-interest bearing checking accounts and certificates of deposit with terms ranging from seven days to 71 months. We solicit deposits in our market areas and we have not accepted brokered deposits.

            On December 8, 2000, MutualFirst Financial, Inc. completed a strategic alliance with Marion Capital Holdings, Inc. ("Marion Capital") in Marion, Indiana. Marion Capital had assets totaling $198.3 million and equity of $30.3 million held primarily through its wholly owned subsidiary, First Federal Saving Bank of Marion. MutualFirst issued approximately 2.5 million MutualFirst shares to Marion Capital shareholders in exchange for their Marion Capital shares. The combination was accounted for using the purchase accounting method and created no goodwill.

Forward-Looking Statements

            This Form 10-K contains various forward-looking statements which are based on assumptions and describe our future plans and strategies and our expectations. These forward-looking statements are generally identified by words such as "believe," "expect," "intend," "anticipate," "estimate," "project," or similar words. Our ability to predict results or the actual


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effect of future plans or strategies is uncertain. Factors which could cause actual results to differ materially from those estimated include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality and composition of our loan and investment portfolios, demand for our loan products, deposit flows, our operating expenses, competition, demand for financial services in our market areas and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and you should not rely too much on these statements.

Market Areas

            We are a community-oriented financial institution offering a variety of financial services to meet the needs of the communities we serve. We are headquartered in Muncie, Indiana and with our recent merger with Marion Capitol Holdings, Inc., we offer our financial services through 17 retail offices primarily serving Delaware, Randolph, Kosciusko and Grant counties in Indiana. We also originate mortgage loans in contiguous counties and we originate indirect consumer loans throughout Indiana and western Ohio. See "Lending Activities -- Consumer and Other Lending."

Lending Activities

            General. Our mortgage loans carry either a fixed or an adjustable rate of interest. Mortgage loans are generally long-term and amortize on a monthly basis with principal and interest due each month. At December 31, 2000, our net loan portfolio totaled $643 million, which constituted 83.5% of our total assets.

            Loans up to $550,000 may be approved by individual loan officers. Loans in excess of $550,000, but not in excess of $1.0 million, require the signatures of the recommending officer and any two signatures from the Executive Loan Committee. Loans in amounts greater than $1.0 million, but not to exceed $1.5 million, require the signatures of the recommending officer and any three Executive Loan Committee members. All loans in excess of $1.5 million and loans of any amount to a borrower whose aggregate debt will exceed $3.0 million must be approved by the Board of Directors.

            At December 31, 2000, the maximum amount which we could lend to any one borrower and the borrower's related entities was approximately $15.6 million. At December 31, 2000, our largest lending relationship to a single borrower or a group of related borrowers consisted of ten loans to a local developer/entrepreneur and related entities totaling $3.6 million. Although the relationship dates back to 1980, 88.2% of the outstanding debt has been originated since June 30, 1998, and consists of refinancing existing debt. The loans are diverse and are secured by apartment complexes, medical facilities and a bank branch, each with independent income streams to support debt service requirements. Each of the loans to this group of borrowers was current and performing in accordance with its terms at December 31, 2000.


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            The following table presents information concerning the composition of our loan portfolio in dollar amounts and in percentages as of the dates indicated.

December 31,
2000
 1999
1998
1997
1996
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in Thousands)
Real Estate Loans:
   One- to four-family(1) $392,832 60.19% $286,578 63.70% $264,461 65.42% $266,971 65.77% $244,518 63.17%
    Multi-family 9,787 1.50    5,544 1.23    6,282 1.56    7,694 1.90    9,598 2.48   
   Commercial 53,197 8.15    14,559 3.24    10,293 2.54    8,131 2.00    7,878 2.03   
   Construction and development 13,591
 2.08   
 12,470
 2.77   
 11,805
 2.92   
 10,385
 2.56   
 22,040
 5.69   
      Total real estate loans 469,407
 71.92   
 319,151
 70.94   
 292,841
 72.44   
 293,181
 72.23   
 284,034
 73.37   
Other Loans:
   Consumer Loans:
   Automobile 28,909 4.43    19,887 4.42    17,820 4.41    19,977 4.92    20,164 5.21   
   Home equity 17,428 2.67    10,585 2.36    10,253 2.54    11,366 2.80    10,885 2.81   
   Home improvement 23,304 3.57    14,588 3.24    12,108 2.99    14,485 3.57    12,066 3.12   
   Manufactured housing 9,865 1.51    12,305 2.74    15,466 3.83    20,017 4.93    24,933 6.44   
   R.V. 34,744 5.32    25,629 5.70    19,100 4.72    14,564 3.59    11,503 2.97   
   Boat 35,180 5.39    32,374 7.20    23,608 5.84    21,553 5.31    17,244 4.45   
   Other 7,508
 1.15   
 4,554
 1.01   
 5,753
 1.42   
 5,585
 1.38   
 5,676
 1.47   
      Total consumer loans 156,938 24.04    119,922 26.67    104,108 25.75    107,547 26.50    102,471 26.47   
   Commercial business loans 26,375
 4.04   
 10,764
 2.39   
 7,285
 1.81   
 5,211
 1.27   
 596
 0.16   
      Total other loans 183,313
 28.08   
 130,686
 29.06   
 111,393
 27.56    112,758
 27.77   
 103,067
 26.63   
   Total loans receivable, gross(1) 652,720 100.00%
 449,837 100.00%
 404,234 100.00%
 405,939 100.00%
 387,101 100.00%
Less:
   Undisbursed portion of loans 5,247 4,844 3,353 3,998 6,073
   Deferred loan fees and costs (2,274) (1,446) (689) (440) (252)
   Allowance for losses 6,472
 3,652
 3,424
 3,091
 2,990
   Total loans receivable, net $643,275
 $442,787
 $398,146
 $399,290
 $378,290
_______________
(1) Includes loans held for sale.





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            The following table shows the composition of our loan portfolio by fixed- and adjustable-rate at the dates indicated.

December 31,
2000
 1999
1998
1997
1996
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in Thousands)
Fixed-Rate Loans:
Real estate:
   One- to four-family(1) $179,656 27.52% $178,033 39.58% $163,262 40.39% $141,024 34.74% $132,095 34.12%
   Multi-family 3,248 0.50    2,270 .50    2,656 0.66    2,485 0.61    3,161 0.82   
   Commercial 10,197 1.56    6,220 1.38    2,398 0.59    1,447 0.36    1,280 0.33   
   Construction and development 6,713
 1.03   
 5,043
 1.12   
 8,076
 2.00   
 4,108
 1.01   
 11,271
 2.91   
      Total real estate loans 199,814 30.61    191,566 42.58    176,392 43.64    149,064 36.72    147,807 38.18   
   Consumer 137,003 20.99    106,563 23.69    93,855 23.22    96,181 23.70    91,586 23.66   
   Commercial business 11,607
 1.78   
 3,320
 .74   
 1,972
 0.49   
 4,454
 1.09   
 596
 0.16   
      Total fixed-rate loans 348,424
 53.38   
 301,449
 67.01   
 272,219
 67.35   
 249,699
 61.51   
 239,989
 62.00   
Adjustable-Rate Loans:
Real estate:
   One- to four-family 213,176 32.66    108,545 24.13    101,199 25.03    125,947 31.03    112,423 29.05   
   Multi-family 6,539 1.00    3,274 .73    3,626 0.90    5,209 1.29    6,437 1.66   
   Commercial 43,000 6.59    8,339 1.85    7,895 1.95    6,684 1.64    6,598 1.70   
   Construction and development 6,878
 1.05   
 7,427
 1.65   
 3,729
 0.92   
 6,277
 1.55   
 10,769
 2.78   
      Total real estate loans 269,593 41.30    127,585 28.36    116,449 28.80    144,117 35.51    136,227 35.19   
   Consumer 19,935 3.06    13,359 2.97    10,253 2.53    11,366 2.80    10,885 2.81   
   Commercial business 14,768
 2.26   
 7,444
 1.66   
 5,313
 1.32   
 757
 0.18   
 ---
 --- 
      Total adjustable-rate loans 304,296
 46.62 
 148,388
 32.99   
 132,015
 32.65   
 156,240
 38.49   
 147,112
 38.00   
      Total loans(1) 652,720 100.00%
 449,837 100.00%
 404,234 100.00%
 405,939 100.00%
 387,101 100.00%
Less:
   Undisbursed portion of loans 5,247 4,844 3,353 3,998 6,073
   Deferred loan fees and costs (2,274) (1,446) (689) (440) (252)
   Allowance for loan losses 6,472
 3,652
 3,424
 3,091
 2,990
      Total loans receivable, net $643,275
 $442,787
 $398,146
 $399,290
 $378,290
________________
(1) Includes loans held for sale.



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            The following schedule illustrates the contractual maturity of our loan portfolio at December 31, 2000. Mortgages which have adjustable or renegotiable interest rates are shown as maturing in the period during which the contract is due. The schedule does not reflect the effects of possible prepayments or enforcement of due-on-sale clauses.

Real Estate
One- to Four-Family(3)
 Multi-family and
Commercial
 Construction
and Development(1)
 Consumer
 Commercial
Business
 Total
Amount
 Weighted
Average
Rate
 Amount
 Weighted
Average
Rate
 Amount
 Weighted
Average
Rate
 Amount
 Weighted
Average
Rate
 Amount
 Weighted
Average
Rate
 Amount
 Weighted
Average
Rate
(Dollars in Thousands)
Due During
Years Ending December 31,
2001(2) $ 851 8.011% $ 659 10.121% $ 792 9.024% $ 7,271 10.219% $ 9,441 9.961% $ 19,014 9.939%
2002 600 8.609    276 8.479    129 10.081    5,205 9.386    2,078 9.655    8,288 9.378   
2003 2,400 7.669    1,655 8.778    --- ---    8,895 9.135    1,403 9.965    14,353 8.930   
2004 and 2005 5,325 8.532    5,330 8.933    748 9.707    30,634 9.081    6,715 9.538    48,752 9.076   
2006 to 2007 10,514 8.057    4,950 8.556    353 9.095    14,592 9.426    2,520 9.628    32,929 8.870   
2008 to 2022 182,330 7.733    49,487 8.842    4,466 8.646    90,085 9.413    4,218 7.697    330,586 8.369   
2023 and following 186,899
 7.514    627
 9.290    7,103
 8.252    256
 11.191    ---
 0.000    194,885
 7.551   
Total $388,919
 $62,984
 $13,591
 $156,938
 $26,375
 $648,807
_______________
(1) Once the construction phase has been completed, these loans will automatically convert to permanent financing.
(2) Includes demand loans, loans having no stated maturity and overdraft loans.
(3) Does not include mortgage loans held for sale.


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            The total amount of loans due after December 31, 2001 which have predetermined interest rates is $336 million, while the total amount of loans due after such date which have floating or adjustable interest rates is $294 million.

            One- to Four-Family Residential Real Estate Lending. We focus our lending efforts primarily on the origination of loans secured by first mortgages on owner-occupied, one- to four-family residences in our market areas. At December 31, 2000, one- to four-family residential mortgage loans totaled $392.8 million, or 60.2% of our gross loan portfolio.

            We generally underwrite our one- to four-family loans based on the applicant's employment and credit history and the appraised value of the subject property. Presently, we lend up to 100% of the lesser of the appraised value or purchase price for one- to four-family residential loans. For loans with a loan-to-value ratio in excess of 80%, we generally require private mortgage insurance in order to reduce our exposure to below 80%. Properties securing our one- to four-family loans are appraised by independent state licensed fee appraisers approved by Mutual Federal's board of directors. We require borrowers to obtain title and hazard insurance, and flood insurance, if necessary, in an amount not less than the value of the property improvements.

            We originate one- to four-family mortgage loans on either a fixed- or adjustable-rate basis, as consumer demand dictates. Our pricing strategy for mortgage loans includes setting interest rates that are competitive with Freddie Mac and other local financial institutions, and consistent with our internal needs. Adjustable-rate mortgage, or ARM, loans are offered with a six-month, one-year, three-year, five-year or seven-year term to the initial repricing date. After the initial period, the interest rate for each ARM loan adjusts consistently with the initial term for the six-month, one-year and three-year terms, respectively, and annually for the five-year and seven-year terms, for the remainder of the term of the loan. We use the weekly average of the appropriate term Treasury Bill Constant Maturity Index to reprice our ARM loans. During fiscal 2000, we originated $18.6 million of one- to four-family ARM loans and $32.7 million of one- to four-family fixed rate mortgage loans. By way of comparison, during fiscal 1999, we originated $23.0 million of one- to four-family ARM loans, and $48.3 million of one- to four-family fixed-rate mortgage loans.

            Fixed-rate loans secured by one- to four-family residences have contractual maturities of up to 30 years, and are generally fully amortizing, with payments due monthly. These loans normally remain outstanding, however, for a substantially shorter period of time because of refinancing and other prepayments. A significant change in interest rates could alter considerably the average life of a residential loan in our portfolio. Our one- to four-family loans are generally not assumable, do not contain prepayment penalties and do not permit negative amortization of principal. Most are written using underwriting guidelines which make them saleable in the secondary market. Our real estate loans generally contain a "due on sale" clause allowing us to declare the unpaid principal balance due and payable upon the sale of the security property.

            Our one- to four-family residential ARM loans are fully amortizing loans with contractual maturities of up to 30 years, with payments due monthly. Our ARM loans generally provide for specified minimum and maximum interest rates, with a lifetime cap and floor, and a periodic


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adjustment on the interest rate over the rate in effect on the date of origination. As a consequence of using caps, the interest rates on these loans may not be as rate sensitive as is our cost of funds. We offer a one-year ARM loan that is convertible into a fixed-rate loan. When these loans convert, they are usually sold in the secondary market.

            In order to remain competitive in our market areas, we originate ARM loans at initial rates below the fully indexed rate. ARM loans generally pose different credit risks than fixed-rate loans, primarily because as interest rates rise, the borrower's payment rises, increasing the potential for default. We have not experienced difficulty with the payment history for these loans. See "Asset Quality -- Non-performing Assets" and "-- Classified Assets." At December 31, 2000, our one- to four-family ARM loan portfolio totaled $213.2 million, or 32.7% of our gross loan portfolio. At that date, the fixed-rate one- to four-family mortgage loan portfolio totaled $179.7 million, or 27.5% of our gross loan portfolio.

            Multi-family and Commercial Real Estate Lending. We offer a variety of multi-family and commercial real estate loans for acquisition, renovation or construction. These loans are secured by the real estate and improvements financed. The collateral securing these loans ranges from industrial commercial buildings, churches, office buildings and multi-family housing complexes. At December 31, 2000, multi-family and commercial real estate loans totaled $63 million, or 9.7% of our gross loan portfolio.

            Our loans secured by multi-family and commercial real estate are originated with either a fixed or adjustable interest rate. The interest rate on adjustable-rate loans is based on a variety of indices, generally determined through negotiation with the borrower. Loan-to-value ratios on our multi-family and commercial real estate loans typically do not exceed 80% of the appraised value of the property securing the loan. These loans typically require monthly payments, may not be fully amortizing and have maximum maturities of 20 years.

            Loans secured by multi-family and commercial real estate are underwritten based on the income producing potential of the property and the financial strength of the borrower. The net operating income, which is the income derived from the operation of the property less all operating expenses, must be sufficient to cover the payments related to the outstanding debt. We generally require personal guarantees of the borrowers in addition to the security property as collateral for such loans. We also generally require an assignment of rents or leases in order to be assured that the cash flow from the project will be used to repay the debt. Appraisals on properties securing multi-family and commercial real estate loans are performed by independent state licensed fee appraisers approved by Mutual Federal's board of directors. See "Loan Originations, Purchases, Sales and Repayments."

            We generally do not maintain a tax or insurance escrow account for loans secured by multi-family and commercial real estate. In order to monitor the adequacy of cash flows on income-producing properties, the borrower is requested or required to provide periodic financial information.

            Loans secured by multi-family and commercial real estate are generally larger and involve a greater degree of credit risk than one- to four-family residential mortgage loans. Multi-family


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and commercial real estate loans typically involve large balances to single borrowers or groups of related borrowers. Because payments on loans secured by multi-family and commercial real estate are often dependent on the successful operation or management of the properties, repayment of such loans may be subject to adverse conditions in the real estate market or the economy. If the cash flow from the project is reduced, or if leases are not obtained or renewed, the borrower's ability to repay the loan may be impaired. See "Asset Quality -- Non-performing Assets."

            Construction and Development Lending. We originate construction loans primarily secured by existing residential building lots. We make construction loans to builders and to individuals for the construction of their residences. Substantially all of these loans are secured by properties located within our market areas. At December 31, 2000, we had $13.6 million in construction and development loans outstanding, representing 2.1% of our gross loan portfolio.

            Construction and development loans are obtained through continued business with builders who have previously borrowed from us, from walk-in customers and through referrals from realtors and architects. The application process includes submission of accurate plans, specifications and costs of the project to be constructed. These items are used to determine the appraised value of the subject property. Loans are based on the lesser of the current appraised value and/or the cost of construction, including the land and the building. We generally conduct regular inspections of the construction project being financed.

            Construction loans for one- to four-family homes are generally granted with a construction period of up to one year. During the construction phase, the borrower generally pays interest only on a monthly basis. Loans to individuals for the construction of their residences may be either short term construction financing or a construction/permanent loan which automatically converts to a long term mortgage consistent with our one- to four-family residential loan products. Loan-to-value ratios on our construction and development loans typically do not exceed 80% of the appraised value of the project on an as completed basis. Single family construction loans with loan-to-value ratios over 80% require private mortgage insurance.

            Because of the uncertainties inherent in estimating construction and development costs and the market for the project upon completion, it is difficult to evaluate accurately the total loan funds required to complete a project, the related loan-to-value ratios and the likelihood of ultimate success of the project. These loans also involve many of the same risks discussed above regarding multi-family and commercial real estate loans and tend to be more sensitive to general economic conditions than many other types of loans. In addition, payment of interest from loan proceeds can make it difficult to monitor the progress of a project.

            Consumer and Other Lending. Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates, and carry higher rates of interest than one- to four-family residential mortgage loans. In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our customer base by increasing the number of customer relationships and providing cross-marketing opportunities. At December 31, 2000, our consumer loan portfolio totaled $156.9 million, or


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24% of our gross loan portfolio. We offer a variety of secured consumer loans, including home equity and lines of credit, home improvement, auto, boat and recreational vehicle, manufactured housing and loans secured by savings deposits. We also offer a limited amount of unsecured loans. We originate our consumer loans both in our market areas and throughout Indiana and western Ohio.

            At December 31, 2000, our home equity loans, including lines of credit, and home improvement loans totaled $40.7 million, or 6.2% of our gross loan portfolio. These loans may be originated in amounts, together with the amount of the existing first mortgage, of up to 100% of the value of the property securing the loan. The term to maturity on our home equity and home improvement loans may be up to 15 years. Home equity lines of credit have a maximum term to maturity of 20 years and require a minimum monthly payment based on the outstanding loan balance per month, which amount may be reborrowed at any time. Other consumer loan terms vary according to the type of collateral, length of contract and creditworthiness of the borrower.

            We directly and indirectly originate auto loans, boat and recreational vehicle loans and manufactured housing loans. We generally buy indirect auto loans on a rate basis, paying the dealer a cash payment for loans with an interest rate in excess of the rate we require. This premium is amortized over the remaining life of the loan. Any prepayments or delinquencies are charged to future amounts owed to that dealer, with no dealer reserve or other guarantee of payment if the dealer stops doing business with us.

            We underwrite indirect auto loans using the Fair-Isaacs credit scoring system. We also directly originate auto loans through bank personnel. These loans are underwritten more traditionally, with a review of the borrower's employment and credit history and an assessment of the borrower's ability to repay the loan.

            At December 31, 2000, auto loans totaled $28.9 million, or 4.4% of our gross loan portfolio. Auto loans may be written for up to six years and usually have fixed rates of interest. Loan to value ratios are up to 100% of the sale price for new autos and 110% of value on used cars, based on valuation from official used car guides.

            Our boat and recreational vehicle loans are generally originated on an indirect basis. We utilize an independent company to market our loan products and help service and collect our boat and RV loans, keeping down our marketing, collection and related personnel costs. We pay a fee based on a percentage of the loan amounts originated through this company as well as monthly service fees, for these services. We pay dealers a premium for each loan based on the interest rate charged on each loan. We amortize this premium, which is usually significantly smaller than the premium we pay dealers for our indirect auto loans, over the estimated life of each loan.

            For a few of our largest boat and RV dealers, we also offer a program where we pay for each loan on a rate basis, just as with our indirect auto loans. Under this program, however, we pay only a portion of the cash payment due, holding back a reserve in a Mutual Federal savings account. This dealer holdback is released to the dealer pro-rata over the life of the loan.



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            We underwrite indirect boat and RV loans using the Fair-Isaacs credit scoring system and, as with our indirect auto loans, tend to accept only the more qualified buyers based on our scoring.

            Loans for boats and recreational vehicles totaled $69.9 million at December 31, 2000, or 10.7% of our gross loan portfolio. This has been the fastest growing portion of our consumer loan portfolio over the past five years. We will finance up to 100% of the purchase price for a new recreational vehicle and 95% for a new boat. The maximum loan to value ratio is 100% for used recreational vehicles and 95% for boats. Values are based on the applicable official used vehicle guides. The term to maturity for these types of loans is up to 10 years for used boats and recreational vehicles and up to 15 years for new boats and recreational vehicles. These loans are generally written with fixed rates of interest.

            At December 31, 2000, manufactured housing loans totaled $9.9 million, or 1.5% of our gross loan portfolio. This amount has decreased significantly over the last five years, due to increased competition. Manufactured housing loans are offered at fixed or adjustable rates of interest for terms up to 25 years, and at a maximum loan to value ratio of 95%.

            Consumer loans may entail greater risk than one- to four-family residential mortgage loans, especially consumer loans secured by rapidly depreciable assets, such as automobiles, boats and recreational vehicles. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. As a result, consumer loan collections are dependent on the borrower's continuing financial stability and, thus, are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.

            Commercial Business Lending. At December 31, 2000, commercial business loans totaled $26.4 million, or 4% of our gross loan portfolio. Most of our commercial business loans have been extended to finance local businesses and include short term loans to finance machinery and equipment purchases, inventory and accounts receivable. Commercial business loans also involve the extension of revolving credit for a combination of equipment acquisitions and working capital needs and agricultural purposes such as seed, farm equipment and livestock.

            The terms of loans extended on the security of machinery and equipment are based on the projected useful life of the machinery and equipment, generally not to exceed seven years. Lines of credit generally are available to borrowers for up to 13 months, and may be renewed by us.

            We issue a few financial-based standby letters of credit which are offered at competitive rates and terms and are generally on a secured basis. We are attempting to expand our volume of commercial business loans.

            Our commercial business lending policy includes credit file documentation and analysis of the borrower's background, capacity to repay the loan, the adequacy of the borrower's capital and collateral as well as an evaluation of other conditions affecting the borrower. Analysis of the borrower's past, present and future cash flows also is an important aspect of our credit analysis. We generally obtain personal guarantees on our commercial business loans. Nonetheless, these loans are believed to carry higher credit risk than traditional single family loans.


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            Unlike residential mortgage loans, commercial business loans are typically made on the basis of the borrower's ability to make repayment from the cash flow of the borrower's business. As a result, the availability of funds for the repayment of commercial business loans may substantially depend on the success of the business itself (which, in turn, often depends in part upon general economic conditions). Our commercial business loans are usually secured by business assets. However, the collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

Loan Originations, Purchases, Sales and Repayments

            We originate loans through referrals from real estate brokers and builders, our marketing efforts, and our existing and walk-in customers. We also originate many of our consumer loans through relationships with dealerships. While we originate both adjustable-rate and fixed-rate loans, our ability to originate loans depends upon customer demand for loans in our market areas. Demand is affected by local competition and the interest rate environment. During the last several years, due to low market interest rates, our dollar volume of fixed-rate, one- to four-family loans has exceeded the dollar volume of the same type of adjustable-rate loans. From time to time, we sell fixed rate, one- to four-family residential loans. We have also, on a very limited basis, purchased one- to four-family residential and commercial real estate loans. Furthermore, during the past few years, we, like many other financial institutions, have experienced significant prepayments on loans due to the low interest rate environment prevailing in the United States.

            In periods of economic uncertainty, the ability of financial institutions, including us, to originate or purchase large dollar volumes of real estate loans may be substantially reduced or restricted, with a resultant decrease in interest income.


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            The following table shows our loan origination, purchase, sale and repayment activities for the years indicated.


Year Ended December 31,
2000
 1999
1998
(In Thousands)
Originations by type:
   Adjustable rate:
      Real estate - one- to four-family $18,565 $23,002 $ 19,835
                          - multi-family 1,356 37 1,051
                          - commercial 8,626 3,008 2,701
                          - construction or development 8,285 8,710 4,160
      Non-real estate - consumer --- --- ---
                                  - commercial business 5,417
 611
 3,003
                  Total adjustable-rate 42,249
 35,368
 30,750
   Fixed rate:
      Real estate - one- to four-family 32,716 48,307 96,672
                          - multi-family --- --- 514
                          - commercial 709 4,032 1,240
                          - construction or development 6,141 8,486 7,297
      Non-real estate - consumer 53,130 47,925 32,492
                                   - - commercial business 4,969
 491
 810
            Total fixed-rate 97,665
 109,241
 139,025
            Total loans originated 139,914
 144,609
 169,775
Purchases(1):
   Real estate - one- to four-family 113,064 3,324 ---
                       - multi-family 49,035 --- ---
                       - commercial 2,036 --- 325
                        - construction or development 2,229 --- ---
      Non-real estate - consumer 4,168 --- ---
                                  - commercial business 9,819
 ---
 ---
            Total loans purchased 180,351
 3,324
 325
Sales and Repayments:
Sales:
      Real estate - one- to four-family 7,866 --- 35,123
                           - multi-family --- --- ---
                           - commercial --- --- ---
                           - construction or development --- --- ---
      Non-real estate - consumer --- --- ---
                                   - - commercial business ---
---
 ---
             Total loans sold 7,866 --- 35,123
Principal repayments 112,549
100,480
 135,909
             Total reductions 120,415 100,480 171,032
Increase (decrease) in other items, net 3,033
(1,850)
 (773)
             Net increase (decrease) $202,883
 $ 45,603
 $ (1,705)
_____________
(1) Includes loans acquired in the merger with Marion Capital Holdings, Inc.


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Asset Quality

            When a borrower fails to make a payment on a mortgage loan on or before the default date, a late charge notice is mailed 16 days after the due date. When the loan is 31 days past due (16 days for an ARM), we mail a delinquency notice to the borrower. All delinquent accounts are reviewed by a collector, who attempts to cure the delinquency by contacting the borrower once the loan is 30 days past due. If the loan becomes 60 days delinquent, the collector will generally contact the borrower by phone or send a letter to the borrower in order to identify the reason for the delinquency. Once the loan becomes 90 days delinquent, the borrower is asked to pay the delinquent amount in full, or establish an acceptable repayment plan to bring the loan current. Between 100 and 120 days delinquent a drive-by inspection is made. If the account becomes 120 days delinquent, and an acceptable repayment plan has not been agreed upon, a collection officer will generally refer the account to legal counsel, with instructions to prepare a notice of intent to foreclose. The notice of intent to foreclose allows the borrower up to 30 days to bring the account current. During this 30 day period, the collector may accept a written repayment plan from the borrower which would bring the account current within the next 90 days. If the loan becomes 150 days delinquent and an acceptable repayment plan has not been agreed upon, the collection officer will turn over the account to our legal counsel with instructions to initiate foreclosure.

            For consumer loans, a similar process is followed, with the initial written contact being made once the loan is 30 days past due.

            Delinquent Loans. The following table sets forth, as of December 31, 2000, our loans delinquent 60 - 89 days by type, number, amount and percentage of type.

Loans Delinquent For:
60-89 Days
Number
 Amount
 Percent
of Loan
Category
(Dollars in Thousands)
Real Estate:
   One- to four-family 45 $1,827 .465%
   Multi-family 0 0 0   
   Commercial 0 0 0   
   Construction and
       development 		0 0 0   
Consumer 111 1,017 .648   
Commercial business 0
 0
 0   
      Total 156
 $2,844
 .436%

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            Non-performing Assets. The table below sets forth the amounts and categories of non-performing assets in our loan portfolio at the dates indicated. Loans are placed on non-accrual status when the loan becomes more than 90 days delinquent. At all dates presented, we had no troubled debt restructurings which involve forgiving a portion of interest or principal on any loans or making loans at a rate materially less than that of market rates. Foreclosed assets owned include assets acquired in settlement of loans.

December 31,
2000
 1999
 1998
 1997
 1996
(Dollars in Thousands)
Non-accruing loans:
   One- to four-family $ 710 $ 385 $ 500 $ 243 $ 558
   Multi-family --- --- --- --- ---
   Commercial real estate 1,548 --- 31 108 471
   Construction and development --- --- --- --- ---
   Consumer 761 368 485 331 ---
   Commercial business ---
 ---
 ---
 ---
 ---
      Total 3,022
 753
 1,016
 682
 1,029
Accruing loans delinquent 90 days or more:
   One- to four-family 232 16 88 27 8
   Multi-family --- --- --- --- ---
   Commercial real estate 137 12 --- --- ---
   Construction and development --- --- --- --- ---
   Consumer 31 --- 10 51 507
   Commercial business ---
 ---
 ---
 ---
 ---
      Total 400
 28
 98
 78
 515
      Total nonperfoming loans 3,422
 781
 1,114
 760
 1,544
Foreclosed assets:
   One- to four-family 80 304 46 83 20
   Multi-family --- --- --- --- ---
   Commercial real estate 764 425 --- 1,498 ---
   Construction and development --- --- --- --- ---
   Consumer 90 122 223 486 561
   Commercial business ---
 ---
 ---
 ---
 ---
      Total 934
 851
 269
 2,067
 581
Total non-performing assets $4,356
 $1,632
 $1,383
 $2,827
 $2,125
Total as a percentage of total assets 0.56%
0.30%
0.29%
 0.62%
0.49%

            For the year ended December 31, 2000, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $126,900. The amount included in interest income on these loans for the year ended December 31, 2000 was $81,300.
            At December 31, 1997, foreclosed commercial real estate consisted of two properties acquired during 1997 from a troubled debtor. The properties, comprised of a 50 unit apartment building and a food pantry, were sold in 1998.


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            At December 31, 2000, foreclosed commercial real estate consisted of an office building in Muncie, which is currently being offered for sale and the remaining condominium units in a project acquired from a troubled debtor. Based on the sales of other units in this project, the condominiums are expected to generate sufficient funds to result in 100% recovery of the outstanding principal. In addition, one residential property was acquired in 2000 with a book value of $62,000. This property is also being offered for sale.

            Other Loans of Concern. In addition to the non-performing assets set forth in the table above, as of December 31, 2000, there was an aggregate of $3.4 million in loans with respect to which known information about the possible credit problems of the borrowers have caused management to have doubts as to the abilities of the borrowers to comply with present loan repayment terms and which may result in the future inclusion of such items in the non-performing asset categories. These loans have been considered in management's determination of the adequacy of our allowance for loan losses.

            Included in the $3.4 million above are one multi-family loan totaling $419,000, two commercial business loans totaling $96,000 and four nursing home loans totaling $2.9 million. All of these loans, according to financial statements submitted by the borrowers, indicate insufficient cash flow to meet all expenses. All of the above loans were current as of December 31, 2000.

            Classified Assets. Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered by the Office of Thrift Supervision to be of lesser quality, as "substandard," "doubtful" or "loss." An asset is considered "substandard" if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. "Substandard" assets include those characterized by the "distinct possibility" that the insured institution will sustain "some loss" if the deficiencies are not corrected. Assets classified as "doubtful" have all of the weaknesses inherent in those classified "substandard," with the added characteristic that the weaknesses present make "collection or liquidation in full," on the basis of currently existing facts, conditions, and values, "highly questionable and improbable." Assets classified as "loss" are those considered "uncollectible" and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

            When an insured institution classifies problem assets as either substandard or doubtful, it may establish general allowances for loan losses in an amount deemed prudent by management and approved by the board of directors. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. When an insured institution classifies problem assets as "loss," it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge off such amount. An institution's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the Office of Thrift Supervision and the FDIC, which may order the establishment of additional general or specific loss allowances.



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            In connection with the filing of Mutual Federal's periodic reports with the Office of Thrift Supervision and in accordance with our classification of assets policy, we regularly review the problem assets in our portfolio to determine whether any assets require classification in accordance with applicable regulations. On the basis of management's review, at December 31, 2000, we had classified $4.1 million of Mutual Federal's assets as substandard and $883,000 as loss. We did not classify any assets as doubtful. The total amount classified represented 4.8% of our stockholders' equity and 0.65% of our assets at December 31, 2000.

            Provision for Loan Losses. We recorded a provision for loan losses during the year ended December 31, 2000 of $685,000, compared to $760,000 million for the year ended December 31, 1999 and $1.3 million for the year ended December 31, 1998. The provision for loan losses is charged to income to bring our allowance for loan losses to a level deemed appropriate by management based on the factors discussed below under "-- Allowance for Loan Losses." The provision for loan losses during the year ended December 31, 2000 was based on management's review of such factors which indicated that the allowance for loan losses was adequate to cover losses inherent in the loan portfolio as of December 31, 2000.

            Allowance for Loan Losses. We maintain an allowance for loan losses to absorb losses inherent in the loan portfolio. The allowance is based on ongoing, quarterly assessments of the estimated losses inherent in the loan portfolio. Our methodology for assessing the appropriateness of the allowance consists of several key elements, which include the formula allowance, specific allowances for identified problem loans and portfolio segments and the unallocated allowance. In addition, the allowance incorporates the results of measuring impaired loans as provided in SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" and SFAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosures." These accounting standards prescribe the measurement methods, income recognition and disclosures related to impaired loans.

            The formula allowance is calculated by applying loss factors to outstanding loans based on the internal risk evaluation of such loans or pools of loans. Changes in risk evaluations of both performing and nonperforming loans affect the amount of the formula allowance. Loss factors are based on our historical loss experience as well as on significant factors that, in management's judgment, affect the collectibility of the portfolio as of the evaluation date.

            The appropriateness of the allowance is reviewed by management based upon its evaluation of then-existing economic and business conditions affecting our key lending areas and other conditions, such as credit quality trends (including trends in nonperforming loans expected to result from existing conditions), collateral values, loan volumes and concentrations, specific industry conditions within portfolio segments and recent loss experience in particular segments of the portfolio that existed as of the balance sheet date and the impact that such conditions were believed to have had on the collectibility of the loan. Senior management reviews these conditions quarterly in discussions with our senior credit officers. To the extent that any of these conditions is evidenced by a specifically identifiable problem credit or portfolio segment as of the evaluation date, management's estimate of the effect of such condition may be reflected as a specific allowance applicable to such credit or portfolio segment. Where any of these conditions is not evidenced by a specifically identifiable problem credit or portfolio segment as of the



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evaluation date, management's evaluation of the loss related to this condition is reflected in the unallocated allowance. The evaluation of the inherent loss with respect to these conditions is subject to a higher degree of uncertainty because they are not identified with specific problem credits or portfolio segments.

            The allowance for loan losses is based on estimates of losses inherent in the loan portfolio. Actual losses can vary significantly from the estimated amounts. Our methodology as described permits adjustments to any loss factor used in the computation of the formula allowance in the event that, in management's judgment, significant factors which affect the collectibility of the portfolio as of the evaluation date are not reflected in the loss factors. By assessing the estimated losses inherent in the loan portfolio on a quarterly basis, we are able to adjust specific and inherent loss estimates based upon any more recent information that has become available. Due to the loss of numerous manufacturing jobs in the local community during recent years and the increase in higher risk loans, like consumer and commercial loans, as a percentage of total loans, management has concluded that our allowance for loan losses should be greater than historical loss experience would otherwise indicate.

            At December 31, 2000, our allowance for loan losses was $6.5 million, or 1.01% of the total loan portfolio, and approximately 189% of total non-performing loans. Assessing the adequacy of the allowance for loan losses is inherently subjective as it requires making material estimates, including the amount and timing of future cash flows expected to be received on impaired loans, that are susceptible to significant change. In the opinion of management, the allowance, when taken as a whole, is adequate to absorb reasonable estimated loan losses inherent in our loan portfolio.






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            The following table sets forth an analysis of our allowance for loan losses.

Year Ended December 31,
2000
 1999
 1998
 1997
 1996
(Dollars in Thousands)
Balance at beginning of period $3,652
 $3,424
 $3,091
 $2,990
 $2,754
Charge-offs:
   One- to four-family 504 63 446 3 30
   Multi-family 75 --- 38 --- ---
   Commercial real estate 50 167 43 237 ---
   Construction and development --- --- --- --- ---
   Consumer 453 421 511 450 353
   Commercial business 12
 ---
 ---
---
---
1,094
 651
 1,038
 690
 383
Recoveries:
   One- to four-family 23 81 40 47 6
   Multi-family --- --- --- --- ---
   Commercial real estate --- 7 --- --- ---
   Construction and development --- --- --- --- ---
   Consumer 34 31 66 44 43
   Commercial business ---
 ---
 ---
 ---
 ---
57
 119
 106
 91
 49
Net charge-offs 1,037 532 932 599 334
Amount acquired with Marion purchase 3,172 --- --- --- ---
Provisions charged to operations 685
 760
 1,265
 700
 570
Balance at end of period $6,472
 $3,652
 $3,424
 $3,091
 $2,990
Ratio of net charge-offs during the period
   to average loans outstanding during the
   period

0.22%

0.13%

0.23%

0.15%

0.09%
Allowance as a percentage of
    non-performing loans
189.13%
467.61%
307.36%
406.71%
193.65%
Allowance as a percentage of total loans
   (end of period)
1.01%
0.82%
0.85%
0.77%
0.78%



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            The distribution of our allowance for loan losses at the dates indicated is summarized as follows:

December 31,
2000
 1999
 1998
 1997
 1996
Amount of
Loan Loss
Allowance
 Loan
Amounts
by
Category
 Percent
of Loans
in Each
Category
to Total
Loans
 Amount of
Loan Loss
Allowance
 Loan
Amounts
by
Category
 Percent
of Loans
in Each
Category
to Total
Loans
 Amount of
Loan Loss
Allowance
 Loan
Amounts
by
Category
 Percent
of Loans
in Each
Category
to Total
Loans
 Amount of
Loan Loss
Allowance
 Loan
Amounts
by
Category
 Percent
of Loans
in Each
Category
to Total
Loans
 Amount of
Loan Loss
Allowance
 Loan
Amounts
by
Category
 Percent
of Loans
in Each
Category
to Total
Loans
(Dollars in Thousands)
One- to four-family $1,106 $392,832 60.19% $1,038 $286,578 63.70% $1,181 $264,461 65.42% $ 583 $266,971 65.77% $ 683 $244,518 63.17%
Multi-family 610 9,787 1.50    55 5,544 1.23    57 6,282 1.56    275 7,694 1.90    363 9,598 2.48   
Commercial real estate 1,550 53,197 8.15    300 14,559 3.24    174 10,293 2.54    234 8,131 2.00    282 7,878 2.03   
Construction or
   development 		68 13,591 2.08    62 12,470 2.77    59 11,805 2.92    52 10,385 2.56    110 22,040 5.69   
Consumer 2,505 156,938 24.04    1,647 119,922 26.67    1,535 104,108 25.75    1,480 107,547 26.50    1,367 102,471 26.47   
Commercial business 455 26,375 4.04    215 10,764 2.39    146 7,285 1.81    104 5,211 1.27    12 596 0.16   
Unallocated 178
 ---
 ---   
 335
 ---
 ---   
 272
 ---
 ---   
 363
 ---
 ---   
 173
 ---
---   
      Total $6,472
 $652,720
 100.00%
 $3,652
 $449,837
 100.00%
 $3,424
 $404,234
 100.00%
 $3,091
 $405,939
 100.00%
 $2,990
 $387,101
 100.00%



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Investment Activities

            Federally chartered savings institutions may invest in various types of liquid assets, including United States Treasury obligations, securities of various federal agencies, including callable agency securities, certain certificates of deposit of insured banks and savings institutions, certain bankers' acceptances, repurchase agreements and federal funds. Subject to various restrictions, federally chartered savings institutions also may invest in investment grade commercial paper and corporate debt securities and mutual funds the assets of which conform to the investments that a federally chartered savings institution is otherwise authorized to make directly. See "How We Are Regulated - Mutual Federal" and "- Qualified Thrift Lender Test" for a discussion of additional restrictions on our investment activities.

            The Chief Financial Officer has the basic responsibility for the management of our investment portfolio, subject to the direction and guidance of the asset and liability management committee. The Chief Financial Officer considers various factors when making decisions, including the marketability, maturity and tax consequences of the proposed investment. The maturity structure of investments will be affected by various market conditions, including the current and anticipated slope of the yield curve, the level of interest rates, the trend of new deposit inflows, and the anticipated demand for funds via deposit withdrawals and loan originations and purchases.

            The general objectives of our investment portfolio are to provide liquidity when loan demand is high, to assist in maintaining earnings when loan demand is low and to maximize earnings while satisfactorily managing risk, including credit risk, reinvestment risk, liquidity risk and interest rate risk. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Asset and Liability Management and Market Risk" contained in our Annual Report to Stockholders, filed as Exhibit 13 to this Form 10-K.

            Our investment securities currently consist of U.S. Agency securities, mortgage-backed securities, marketable equity securities (which consist of shares in mutual funds that invest in government obligations, corporate obligations and mortgage-backed securities) and corporate obligations. See Note 5 of the Notes to Consolidated Financial Statements contained in our Annual Report to Stockholders, filed as Exhibit 13 to this Form 10-K. Our mortgage-backed securities portfolio currently consists of securities issued under government-sponsored agency programs.

            While mortgage-backed securities carry a reduced credit risk as compared to whole loans, these securities remain subject to the risk that a fluctuating interest rate environment, along with other factors like the geographic distribution of the underlying mortgage loans, may alter the prepayment rate of the mortgage loans and affect both the prepayment speed and value of the securities.

            At times over the past several years, we also have maintained a trading portfolio of U.S. Government securities. At December 31, 2000, we did not maintain a trading portfolio. However, we are permitted by the board of directors to have a portfolio of up to $5.0 million, and to trade up to $2.0 million in these securities at any one time. See Note 5 of the Notes to



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Consolidated Financial Statements contained in our Annual Report to Stockholders, filed as Exhibit 13 to this Form 10-K.

            Mutual Federal has investments in six separate Indiana limited partnerships that were organized to construct, own and operate four multi-unit apartment complexes in the Indianapolis area, one in Findley, Ohio and one in Niles, Michigan (the Pedcor Projects). The general partner in each of these Pedcor Projects is Pedcor Investments. We have no financial or other relationships with Pedcor Investments. The four Indianapolis area Pedcor Projects and the Pedcor project located in Niles, Michigan, are operated as multi-family, low and moderate-income housing projects, and have been performing as planned for several years. The Findley, Ohio Pedcor Project, which also is operated as a multi-family, low and moderate-income housing project, was completed in 2000. At the inception of the Findley, Ohio Pedcor Project in February 1998, we invested $2.1 million and committed to invest an additional $1.9 million. As of December 31, 2000, $1.7 million of this commitment remained payable over the next nine years. At the inception of the Niles, Michigan Project in August 1997, we committed to invest $3.6 million over ten years. As of December 31, 2000, $2.4 million remained payable over the next seven years.

            A low and moderate-income housing project qualifies for certain federal income tax credits if (1) it is a residential rental property, (2) the units are used on a non-transient basis, and (3) at least 20% of the units in the project are occupied by tenants whose incomes are 50% or less of the area median gross income, adjusted for family size, or alternatively, at least 40% of the units in the project are occupied by tenants whose incomes are 60% or less of the area median gross income. Qualified low-income housing projects generally must comply with these and other rules for 15 years, beginning with the first year the project qualified for the tax credit, or some or all of the tax credit together with interest may be recaptured. The tax credit is subject to the limitation as the use of general business credit, but no basis reduction is required for any portion of the tax credit claimed. As of December 31, 2000, at least 90% of the units in the Indianapolis area Pedcor Projects were occupied, and all of the tenants met the income test required for the tax credits.

            We received tax credits of $158,000 for the year ended December 31, 2000, and $262,000 for each of the years ended December 31, 1999 and 1998 from the Indianapolis Pedcor Projects. We also received a tax credit of $151,000 from the Findley, Ohio project , and $30,000 from the Niles, Michigan project. Additionally, the Pedcor Projects have incurred operating losses in the early years of their operations primarily due to accelerated depreciation of assets. We have accounted for our investment in five of the six Pedcor Projects on the equity method. Accordingly, we have recorded our share of these losses as reductions to Mutual Federal's investment in the Pedcor Projects. Mutual Federal has less than a 20% ownership interest in the remaining Pedcor Project, and we have recorded its investment in this project at amortized cost.



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            The following summarizes Mutual Federal's equity in the Pedcor Projects' losses and tax credits recognized in our consolidated financial statements.

For the Year Ended December 31,
2000
 1999
 1998
(In Thousands)
Investments in Pedcor low
    income housing projects
$6,437
$5,275
$5,266
Equity in losses, net of income
   tax effect 		$ (127) $    (7) $    (9)
Tax credit 339
 262
 262
Increase in after tax income
   from Pedcor Investments 		$ 212
 $ 255
 $ 253



            See Note 8 of the Notes to Consolidated Financial Statements contained in our Annual Report to Stockholders filed as Exhibit 13 to this Form 10-K for additional information regarding our limited partnership investments.









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            The following table sets forth the composition of our investment and mortgage-related securities portfolio and other investments at the dates indicated. As of December 31, 2000, our investment securities portfolio did not contain securities of any issuer with an aggregate book value in excess of 10% of our equity capital, excluding those issued by the United States Government or its agencies.

December 31,
2000
 1999
 1998
Amortized
Cost
 Fair
Value
 Amortized
Cost
 Fair
Value
 Amortized
Cost
 Fair
Value
(In Thousands)
Investment securities held-to-maturity:
   Federal agency obligations $ 9,400 $ 9,274 $10,200 $ 9,787 $ 6,220 $ 6,220
    Corporate obligations 989 989 2,099 2,079 4,634 4,651
    Municipal obligations 150
 150
 150
 150
 150
 150
      Total investment securities held to maturity 10,539
 10,413
 12,449
 12,016
 11,004
 11,021
Investment securities available-for-sale:
    Mutual funds 7,925 7,754 5,781 5,587 7,761 7,625
    Federal agency obligations 4,364 4,420 2,416 2,382 1,244 1,286
    Mortgage-backed securities 7,934 7,979 9,517 9,387 5,129 5,297
    Collateralized mortgage obligations 4,529 4,584 4,584 4,536 --- ---
    Corporate obligations 10,300
 10,405
 7,781
 7,707
 ---
 ---
      Total investment securities held for sale 35,052
 35,142
 30,079
 29,599
 14,134
 14,208
Trading account securities:
   U.S. Treasury obligations ---
 ---
 1,447
 1,235
 ---
 ---
       Total trading account securities ---
 ---
 1,447
 1,235
 ---
 ---
Total investment securities 45,591 45,555 43,975 42,850 25,138 25,229
Investment in limited partnerships 6,437 N/A 5,275 N/A 5,266 N/A
Investment in insurance company 590 N/A 590 N/A 590 N/A
Federal Home Loan Bank stock 6,993
 N/A 5,339
 N/A 3,612
 N/A
Total investments $ 59,611
 $55,179
 $34,606




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            The following table indicates, as of December 31, 2000, the composition and maturities of our investment securities and mortgage-backed securities portfolio, excluding Federal Home Loan Bank stock and our trading securities.

Due in
Less Than
1 Year
 1 to 5
Years
 5 to 10
Years
 Over
10 Years
 Total
Investment Securities
Amortized
Cost
 Amortized
Cost
 Amortized
Cost
 Amortized
Cost
 Amortized
Cost
 Fair
Value
(Dollars in Thousands)
Corporate obligations $ 1,497 $ 9,319 $ 473 $   --- $ 11,289 $ 11,394
Federal agency obligations 1,500 8,888 1,988 1,388 13,764 13,694
Municipal obligations --- --- --- 150 150 150
Mutual funds 7,925 --- --- --- 7,925 7,754
Mortgage-backed securities:
   Freddie Mac --- 345 --- 1,291 1,636 1,646
   Fannie Mae --- 583 485 4,889 5,957 5,992
   Ginnie Mae --- --- --- 1,221 1,221 1,232
   Other ---
 ---
 ---
 3,649
 3,649
 3,693
$10,922
 $ 19,135
 $2,946
 $12,588
 $45,591
 $45,555
Weighted average yield 6.28% 6.35% 6.70% 6.94% 6.52%



Sources of Funds

            General. Our sources of funds are deposits, borrowings, payment of principal and interest on loans, interest earned on or maturation of other investment securities and funds provided from operations.

            Deposits. We offer deposit accounts to consumers and businesses having a wide range of interest rates and terms. Our deposits consist of passbook accounts, money market deposit accounts, NOW and demand accounts and certificates of deposit. We solicit deposits in our market areas and have not accepted brokered deposits. We primarily rely on competitive pricing policies, marketing and customer service to attract and retain these deposits.

            The flow of deposits is influenced significantly by general economic conditions, changes in money market and prevailing interest rates, and competition. The variety of our deposit accounts has allowed us to be competitive in obtaining funds and to respond to changes in consumer demand. We have become more susceptible to short-term fluctuations in deposit flows, as customers have become more interest rate conscious. We try to manage the pricing of our deposits in keeping with our asset/liability management, liquidity and profitability objectives, subject to competitive factors. Based on our experience, we believe that our deposits are relatively stable sources of funds. Our ability to attract and maintain these deposits, however, and the rates paid on them, has been and will continue to be affected significantly by market conditions.



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            The following table sets forth the dollar amount of savings deposits in the various types of deposit programs we offered at the dates indicated.

December 31,
2000
 1999
1998
Amount
Percent of Total
Amount
Percent of Total
Amount
Percent of Total
(Dollars in Thousands)
Transactions and Savings Deposits:
Passbook accounts $ 48,189 9.36% $ 39,792 10.91% $ 42,242 11.54%
NOW and demand accounts 76,982 14.96    52,560 14.42    57,239 15.64   
Money market accounts 43,898
 8.53   
 42,091
 11.54   
 33,686
 9.20   
Total non-certificates 169,069
 32.85   
 134,443
 36.87   
 133,167
 36.38   
Certificates:
0.00 - 1.99% --- ---    --- ---     --- ---   
2.00 - 3.99% 35 .01    5,494 1.51    8,691 2.38   
4.00 - 5.99% 134,795 26.19    185,993 51.01    171,455 46.85   
6.00 - 7.99% 209,151 40.63    36,957 10.14    50,928 13.91   
8.00 - 9.99% 1,660 .32    1,717 .47    1,758 0.48   
10.00% and over ---
 ----   
 ---
 ---   
 ---
 ---   
Total certificates 345,641
 67.15   
 230,161
 63.13   
 232,832
 63.62   
Total deposits $514,710
 100.00%
 $364,604
 100.00%
 $365,999
 100.00%



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            The following table shows rate and maturity information for our certificates of deposit as of December 31, 2000.

2.00-
3.99%
 4.00-
5.99%
 6.00-
7.99%
 8.00-
9.99%
 Total
 Percent
of Total
(Dollars in Thousands)
Certificate accounts maturing
in quarter ending:
March 31, 2001

$ 29

$50,295 $ 22,104 $ --- $ 72,428 20.95%
June 30, 2001 --- 32,788 39,185 --- 71,973 20.82   
September 30, 2001 --- 11,407 34,812 --- 46,219 13.37   
December 31, 2001 --- 8,301 19,110 --- 27,411 7.93   
March 31, 2002 --- 3,852 10,472 --- 14,324 4.14   
June 30, 2002 6 2,912 20,042 40 23,000 6.65   
September 30, 2002 --- 4,274 11,891 651 16,816 4.87   
December 31, 2002 --- 2,769 3,036 459 6,264 1.81   
March 31, 2003 --- 2,011 1,314 279 3,604 1.04   
June 30, 2003 --- 1,895 707 139 2,741 0.79   
September 30, 2003 --- 1,934 388 89 2,411 0.70   
December 31, 2003 --- 1,052 246 3 1,301 0.38   
Thereafter ---
11,305
 45,844
---
57,149
 16.55   
      Total $ 35
 $134,795
 $209,151
 $ 1,660
 $ 345,641
 100.00%
      Percent of total 0.01%
 39.00%
 60.51%
 .48%
 100.00%



            The following table indicates, as of December 31, 2000, the amount of our certificates of deposit and other deposits by time remaining until maturity.

Maturity
3 Months
or Less
 Over
3 to 6
Months
 Over
6 to 12
Months
 Over
12 months
 Total
(In Thousands)
Certificates of deposit less than $100,000 $49,039 $59,196 $61,758 $100,332 $270,325
Certificates of deposit of $100,000 or more 7,639 11,002 11,872 27,278 57,791
Public funds (1) 15,750
 1,775
 ---
 ---
 17,525
Total certificates of deposit $72,428
 $71,973
 $73,630
 $127,610
 $345,641
_______________

(1) Deposits from governmental and other public entities.

            Borrowings. Although deposits are our primary source of funds, we may utilize borrowings when they are a less costly source of funds and can be invested at a positive interest rate spread, when we desire additional capacity to fund loan demand or when they meet our asset/liability management goals. Our borrowings historically have consisted of advances from



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the Federal Home Loan Bank of Indianapolis and securities sold under agreement to repurchase. See Notes 10 and 11 of the Notes to Consolidated Financial Statements contained in our Annual Report to Stockholders, filed as Exhibit 13 to this Form 10-K.

            We may obtain advances from the Federal Home Loan Bank of Indianapolis upon the security of certain of our mortgage loans and mortgage-backed securities. These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features. At December 31, 2000, we had $112.5 million in Federal Home Loan Bank advances outstanding.

            The following table sets forth, for the years indicated, the maximum month-end balance and average balance of Federal Home Loan Bank advances, securities sold under agreement to repurchase and other borrowings.



Year Ended December 31,
2000
 1999
 1998
(In Thousands)
Maximum Balance:
   FHLB advances $112,807 $99,039 $63,754
   Securities sold under agreements to repurchase 830 895 ---
   Other borrowings 3,640 1,799 1,830
Average Balance:
   FHLB advances $65,600 $60,220 $55,232
   Securities sold under agreements to repurchase 128 400 ---
   Other borrowings 1,889 1,784 1,685



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            The following table sets forth certain information as to our borrowings at the dates indicated.

December 31,
2000
1999
1998
(Dollars in Thousands)
FHLB advances $112,542 $72,289 $50,632
Securities sold under agreements to repurchase --- 840 ---
Other borrowings 3,640
 1,768
 1,830
Total borrowings $116,182 $74,897 $52,462
Weighted average interest rate of FHLB
   advances 		6.16%
 5.69%
 5.50%
Weighted average interest rate of securities
   sold under agreements to repurchase
---%
5.50%
---%
Weighted average interest rate of other
   borrowings 		---%
 ---%
 ---%



Subsidiary and Other Activities

            As a federally chartered savings bank, Mutual Federal is permitted by Office of Thrift Supervision regulations to invest up to 2% of its assets, or $15.3 million at December 31, 2000, in the stock of, or unsecured loans to, service corporation subsidiaries. Mutual Federal may invest an additional 1% of its assets in service corporations where such additional funds are used for inner-city or community development purposes.

            At December 31, 2000, Mutual Federal had three active subsidiaries, First M.F.S.B. Corporation, Third M.F.S.B. Corporation and First Marion Service Corporation. First M.F.S.B. owns stock in Family Financial Life Insurance Company, a life and accident and health insurance company chartered in Indiana. Family Financial Life primarily sells mortgage and credit life insurance, as well as accident and disability insurance. It also issues and services annuity contracts. As of December 31, 2000, Mutual Federal's total investment in this subsidiary was $780,000. For the year ended December 31, 2000, First M.F.S.B. reported net income of $61,800, which consisted of dividends from Family Financial Life.

            Third M.F.S.B., which does business as Mutual Financial Services, offers tax-deferred annuities, long-term health and life insurance products. All securities related products and services made available through Mutual Financial Services are offered by a third party independent broker-dealer. As of December 31, 2000, Mutual Federal's total investment in this subsidiary was $76,200. For the year ended December 31, 2000, Third M.F.S.B. reported net income of $157,500, which consisted of commissions less expenses.

            First Marion Service Corporation ("First Marion") is engaged in the sale of tax deferred annuities and mutual funds pursuant to an arrangement with several independent brokers. In



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addition, First Marion provides 100% financing to borrowers of the Bank by providing 20% second mortgages behind the Bank's 80% mortgage. Such loans amounted to $2.6 million at December 31, 2000. This service corporation will be dissolved in the first quarter of 2001 and the assets and liabilities will be merged into the Bank.

Competition

            We face strong competition in originating real estate and other loans and in attracting deposits. Competition in originating real estate loans comes primarily from other savings institutions, commercial banks, credit unions and mortgage bankers. Other savings institutions, commercial banks, credit unions and finance companies provide vigorous competition in consumer lending.

            We attract our deposits through our branch office system. Competition for deposits comes principally from other savings institutions, commercial banks and credit unions located in the same community, as well as mutual funds and other alternative investments. We compete for deposits by offering superior service and a variety of account types at competitive rates.

Employees

            At December 31, 2000, we had a total of 188 full-time and 61 part-time employees. Our employees are not represented by any collective bargaining group. Management considers its employee relations to be good.

HOW WE ARE REGULATED


            Set forth below is a brief description of certain laws and regulations which apply to us. This description, as well as other descriptions of laws and regulations contained in this Form 10-K, is not complete and is qualified in its entirety by reference to the applicable laws and regulations.

            Legislation is introduced from time to time in the United States Congress that may affect our operations. In addition, the regulations by which we are governed may be amended from time to time. Any such legislation or regulatory changes could adversely affect us. We cannot assure you as to whether or in what form any such changes will occur.

General

            Mutual Federal, as a federally chartered savings institution, is subject to federal regulation and oversight by the Office of Thrift Supervision extending to all aspects of Mutual Federal's operations. Mutual Federal also is subject to regulation and examination by the FDIC, which insures the deposits of Mutual Federal to the maximum extent permitted by law, and to requirements of the Federal Reserve Board. Federally chartered savings institutions are required to file periodic reports with the Office of Thrift Supervision and are subject to periodic examinations by the Office of Thrift Supervision and the FDIC. The investment and lending authority of savings institutions are prescribed by federal laws and regulations, and savings



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institutions are prohibited from engaging in any activities not permitted by such laws and regulations. This regulation and supervision primarily is intended for the protection of depositors and not for the purpose of protecting stockholders.

            The Office of Thrift Supervision regularly examines Mutual Federal and prepares reports for the consideration of Mutual Federal's board of directors on any deficiencies that it may find in Mutual Federal's operations. The FDIC also has the authority to examine Mutual Federal in its role as the administrator of the Savings Association Insurance Fund. Mutual Federal's relationship with its depositors and borrowers also is regulated to a great extent by both Federal and state laws, especially in such matters as the ownership of savings accounts and the form and content of Mutual Federal's mortgage requirements. Any change in these laws and regulations, whether by the FDIC, the Office of Thrift Supervision or Congress, could have a material adverse impact on our operations.

MutualFirst Financial, Inc.

            Pursuant to regulations of the Office of Thrift Supervision and the terms of MutualFirst's Maryland articles of incorporation, the purpose and powers of MutualFirst are to pursue any or all of the lawful objectives of a thrift holding company and to exercise any of the powers accorded to a thrift holding company.

            If Mutual Federal fails the qualified thrift lender test, MutualFirst must obtain the approval of the Office of Thrift Supervision prior to continuing, directly or through other subsidiaries, any business activity other than those approved for multiple thrift companies or their subsidiaries. In addition, within one year of such failure MutualFirst must register as, and will become subject to, the restrictions applicable to bank holding companies. The activities authorized for a bank holding company are more limited than the activities authorized for a unitary or multiple thrift holding company. See "- Qualified Thrift Lender Test."

Mutual Federal

            The Office of Thrift Supervision has extensive authority over the operations of savings institutions. Mutual Federal is required to file periodic reports with the Office of Thrift Supervision and is subject to periodic examinations by the Office of Thrift Supervision and the FDIC. The last regular Office of Thrift Supervision examination of Mutual Federal was as of September 30, 2000. When these examinations are conducted by the Office of Thrift Supervision and the FDIC, the examiners may require Mutual Federal to provide for higher general or specific loan loss reserves. All savings institutions are subject to a semi-annual assessment, based upon the savings institution's total assets, to fund the operations of the Office of Thrift Supervision. Mutual Federal's Office of Thrift Supervision assessment for the year ended December 31, 2000 was $105,159.

            The Office of Thrift Supervision also has extensive enforcement authority over all savings institutions and their holding companies, including Mutual Federal and MutualFirst. This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease-and-desist or removal orders and to initiate injunctive actions. In


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general, these enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. Other actions or inactions may provide the basis for enforcement action, including misleading or untimely reports filed with the Office of Thrift Supervision. Except under certain circumstances, final enforcement actions by the Office of Thrift Supervision must be publicly disclosed.

            In addition, the investment, lending and branching authority of Mutual Federal is prescribed by federal laws and it is prohibited from engaging in any activities not permitted by such laws. For instance, no savings institution may invest in non-investment grade corporate debt securities. In addition, the permissible level of investment by federal institutions in loans secured by non-residential real property may not exceed 400% of total capital, except with approval of the Office of Thrift Supervision. Federal savings institutions are also generally authorized to branch nationwide. Mutual Federal is in compliance with the noted restrictions.

            Mutual Federal's general permissible lending limit for loans-to-one-borrower is equal to the greater of $500,000 or 15% of unimpaired capital and surplus (except for loans fully secured by certain readily marketable collateral, in which case this limit is increased to 25% of unimpaired capital and surplus). At December 31, 2000, Mutual Federal's lending limit under this restriction was $15.6 million. Mutual Federal is in compliance with the loans-to-one-borrower limitation.

            The Office of Thrift Supervision, as well as the other federal banking agencies, has adopted guidelines establishing safety and soundness standards on such matters as loan underwriting and documentation, asset quality, earnings standards, internal controls and audit systems, interest rate risk exposure and compensation and other employee benefits. Any institution which fails to comply with these standards must submit a compliance plan.

Insurance of Accounts and Regulation by the FDIC

            Mutual Federal is a member of the Savings Association Insurance Fund, which is administered by the FDIC. Deposits are insured up to the applicable limits by the FDIC and such insurance is backed by the full faith and credit of the United States Government. As insurer, the FDIC imposes deposit insurance premiums and is authorized to conduct examinations of and to require reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious risk to the Savings Association Insurance Fund or the Bank Insurance Fund. The FDIC also has the authority to initiate enforcement actions against savings institutions, after giving the Office of Thrift Supervision an opportunity to take such action, and may terminate an institution's deposit insurance if it determines that the institution has engaged in unsafe or unsound practices or is in an unsafe or unsound condition.

            The FDIC's deposit insurance premiums are assessed through a risk-based system under which all insured depository institutions are placed into one of nine categories and assessed insurance premiums based upon their level of capital and supervisory evaluation. Under the system, institutions classified as well capitalized (i.e., a core capital ratio of at least 5%, a ratio of Tier 1 or core capital to risk-weighted assets ("Tier 1 risk-based capital") of at least 6% and a


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risk-based capital ratio of at least 10%) and considered healthy pay the lowest premium while institutions that are less than adequately capitalized (i.e., core or Tier 1 risk-based capital ratios of less than 4% or a risk-based capital ratio of less than 8%) and considered of substantial supervisory concern pay the highest premium. Risk classification of all insured institutions is made by the FDIC for each semi-annual assessment period.

            The FDIC is authorized to increase assessment rates, on a semi-annual basis, if it determines that the reserve ratio of the Savings Association Insurance Fund will be less than the designated reserve ratio of 1.25% of Savings Association Insurance Fund insured deposits. In setting these increased assessments, the FDIC must seek to restore the reserve ratio to that designated reserve level, or such higher reserve ratio as established by the FDIC. The FDIC also may impose special assessments on Savings Association Insurance Fund members to repay amounts borrowed from the United States Treasury or for any other reason deemed necessary by the FDIC.

            Since January 1, 1997, the premium schedule for Bank Insurance Fund and Savings Association Insurance Fund insured institutions has ranged from 0 to 27 basis points. However, insured institutions are required to pay a Financing Corporation assessment, in order to fund the interest on bonds issued to resolve thrift failures in the 1980s. For both Savings Association Insurance Fund insured institutions, and Bank Insurance Fund insured institutions this assessment is 2.02 basis points for each $100 in domestic deposits. The assessment, which may be revised further based upon the level of Bank Insurance Fund and Savings Association Insurance Fund deposits, will continue until the bonds mature in the year 2017.

Regulatory Capital Requirements

            Federally insured savings institutions, such as Mutual Federal, are required to maintain a minimum level of regulatory capital. The Office of Thrift Supervision has established capital standards, including a tangible capital requirement, a leverage ratio or core capital requirement and a risk-based capital requirement applicable to such savings institutions. These capital requirements must be generally as stringent as the comparable capital requirements for national banks. The Office of Thrift Supervision also may impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.

            The capital regulations require tangible capital of at least 1.5% of adjusted total assets, as defined by regulation. Tangible capital generally includes common stockholders' equity and retained income, and certain noncumulative perpetual preferred stock and related income. In addition, all intangible assets, other than a limited amount of purchased mortgage servicing rights, must be deducted from tangible capital for calculating compliance with the requirement. At December 31, 2000, Mutual Federal had $1.3 million of intangible assets.

            At December 31, 2000, Mutual Federal had tangible capital of $103.9 million, or 13.6% of adjusted total assets, which is approximately $92.4 million above the minimum requirement of 1.5% of adjusted total assets in effect on that date.


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            The capital standards also require core capital equal to at least 3.0% of adjusted total assets. Core capital generally consists of tangible capital plus certain intangible assets, including a limited amount of purchased credit card relationships. As a result of the prompt corrective action provisions discussed below, however, a savings institution must maintain a core capital ratio of at least 4.0% to be considered adequately capitalized unless its supervisory condition is such to allow it to maintain a 3.0% ratio. At December 31, 2000, Mutual Federal had $1.3 million of intangible assets which were subject to these tests.

            At December 31, 2000, Mutual Federal had core capital equal to $103.9 million, or 13.6% of adjusted total assets, which is $81 million above the minimum requirement of 3.0% in effect on that date.

            The Office of Thrift Supervision also requires savings institutions to have total capital of at least 8.0% of risk-weighted assets. Total capital consists of core capital, as defined above, and supplementary capital. Supplementary capital consists of certain permanent and maturing capital instruments that do not qualify as core capital and general valuation loan and lease loss allowances up to a maximum of 1.25% of risk-weighted assets. Supplementary capital may be used to satisfy the risk-based requirement only to the extent of core capital. The Office of Thrift Supervision is also authorized to require a savings institution to maintain an additional amount of total capital to account for concentration of credit risk and the risk of non-traditional activities. At December 31, 2000, Mutual Federal had $ 5.7 million of general loan loss reserves, which was less than 1.25% of risk-weighted assets.

            In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet items, will be multiplied by a risk weight, ranging from 0% to 100%, based on the risk inherent in the type of asset. For example, the Office of Thrift Supervision has assigned a risk weight of 50% for prudently underwritten permanent one- to four-family first lien mortgage loans not more than 90 days delinquent and having a loan-to-value ratio of not more than 80% at origination unless insured to such ratio by an insurer approved by Fannie Mae or Freddie Mac.

            As of December 31, 2000, Mutual Federal had total risk-based capital of $109.6 million and risk-weighted assets of $528.5 million; or total capital of 20.7% of risk-weighted assets. This amount was $67.3 million above the 8.0% requirement in effect on that date.

            The Office of Thrift Supervision and the FDIC are authorized and, under certain circumstances, required to take actions against savings institutions that fail to meet their capital requirements. The Office of Thrift Supervision is generally required to restrict the activities of an "undercapitalized institution," which is an institution with less than either a 4% core capital ratio, a 4% Tier 1 risked-based capital ratio or an 8.0% risk-based capital ratio. Any such institution must submit a capital restoration plan and, until such plan is approved by the Office of Thrift Supervision, may not increase its assets, acquire another institution, establish a branch or engage in any new activities, and generally may not make capital distributions. The Office of Thrift Supervision is authorized to impose the additional restrictions that are applicable to significantly undercapitalized institutions.


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            As a condition to the approval of the capital restoration plan, any company controlling an undercapitalized institution must agree that it will enter into a limited capital maintenance guarantee with respect to the institution's achievement of its capital requirements.

            Any savings institution that fails to comply with its capital plan or has Tier 1 risk-based or core capital ratio of less than 3.0% or a risk-based capital ratio of less than 6.0% and is considered "significantly undercapitalized" must be made subject to one or more additional specified actions and operating restrictions which may cover all aspects of its operations and may include a forced merger or acquisition of the institution. An institution that becomes "critically undercapitalized" because it has a tangible capital ratio of 2.0% or less is subject to further restrictions on its activities in addition to those applicable to significantly undercapitalized institutions. In addition, the Office of Thrift Supervision must appoint a receiver, or conservator with the concurrence of the FDIC, for a savings institution, with certain limited exceptions, within 90 days after it becomes critically undercapitalized. Any undercapitalized institution is also subject to the general enforcement authority of the Office of Thrift Supervision and the FDIC, including the appointment of a conservator or a receiver.

            The Office of Thrift Supervision is also generally authorized to reclassify an institution into a lower capital category and impose the restrictions applicable to such category if the institution is engaged in unsafe or unsound practices or is in an unsafe or unsound condition.

            The imposition by the Office of Thrift Supervision or the FDIC of any of these measures on Mutual Federal may have a substantial adverse effect on our operations and profitability.

Limitations on Dividends and Other Capital Distributions

            Office of Thrift Supervision regulations impose various restrictions on distributions of capital, which include dividends, stock redemptions or repurchases, cash-out mergers and other transactions charged to the capital account.

            Generally, savings institutions, such as Mutual Federal, that before and after the proposed distribution remain well-capitalized, may make capital distributions during any calendar year equal to the greater of 100% of net income for the year-to-date plus retained net income for the two preceding years. However, an institution deemed to be in need of more than normal supervision by the Office of Thrift Supervision may have its dividend authority restricted by the Office of Thrift Supervision. Mutual Federal may pay dividends in accordance with this general authority.

            Savings institutions proposing to make any capital distribution need not submit written notice to the Office of Thrift Supervision prior to such distribution unless they are a subsidiary of a holding company or would not remain well-capitalized following the distribution. Savings institutions that do not, or would not meet their current minimum capital requirements following a proposed capital distribution or propose to exceed these net income limitations must obtain Office of Thrift Supervision approval prior to making such distribution. The Office of Thrift Supervision may object to the distribution during that 30-day period based on safety and soundness concerns. See "- Regulatory Capital Requirements."


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Qualified Thrift Lender Test

            All savings institutions, including Mutual Federal, are required to meet a qualified thrift lender test to avoid certain restrictions on their operations. This test requires a savings institution to have at least 65% of its portfolio assets, as defined by regulation, in qualified thrift investments on a monthly average for nine out of every 12 months on a rolling basis. As an alternative, the savings institution may maintain 60% of its assets in the assets specified in Section 7701(a)(19) of the Internal Revenue Code. Under either test, such assets primarily consist of residential housing related loans and investments. At December 31, 2000, Mutual Federal met the test and has always met the test since its effectiveness.

            Any savings institution that fails to meet the qualified thrift lender test must convert to a national bank charter, unless it requalifies as a qualified thrift lender and thereafter remains a qualified thrift lender. If an institution does not requalify and converts to a national bank charter, it must remain Savings Association Insurance Fund-insured until the FDIC permits it to transfer to the Bank Insurance Fund. If such an institution has not yet requalified or converted to a national bank, its new investments and activities are limited to those permissible for both a savings institution and a national bank, and it is limited to national bank branching rights in its home state. In addition, the institution is immediately ineligible to receive any new Federal Home Loan Bank borrowings and is subject to national bank limits for payment of dividends. If such an institution has not requalified or converted to a national bank within three years after the failure, it must divest of all investments and cease all activities not permissible for a national bank. In addition, it must repay promptly any outstanding Federal Home Loan Bank borrowings, which may result in prepayment penalties. If any institution that fails the qualified thrift lender test is controlled by a holding company, then within one year after the failure, the holding company must register as a bank holding company and become subject to all restrictions on bank holding companies.

Community Reinvestment Act

            Under the Community Reinvestment Act, every FDIC-insured institution is obligated, consistent with safe and sound banking practices, to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The Community Reinvestment Act does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the Community Reinvestment Act. The Community Reinvestment Act requires the Office of Thrift Supervision, in connection with the examination of Mutual Federal, to assess the institution's record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications, such as a merger or the establishment of a branch. An unsatisfactory rating may be used as the basis for the denial of an application. Due to the heightened attention being given to the Community Reinvestment Act in the past few years, Mutual Federal may be required to devote additional funds for investment and lending in its local community. Mutual Federal was examined for Community Reinvestment Act compliance in January 2000, and received a rating of satisfactory.


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Transactions with Affiliates

            Generally, transactions between a savings institution or its subsidiaries and its affiliates are required to be on terms as favorable to the institution as transactions with non-affiliates. In addition, certain of these transactions, such as loans to an affiliate, are restricted to a percentage of the institution's capital. Affiliates of Mutual Federal include MutualFirst and any company which is under common control with Mutual Federal. In addition, a savings institution may not lend to any affiliate engaged in activities not permissible for a bank holding company or acquire the securities of most affiliates. The Office of Thrift Supervision has the discretion to treat subsidiaries of savings institutions as affiliates on a case by case basis.

            Certain transactions with directors, officers or controlling persons are also subject to conflict of interest regulations enforced by the Office of Thrift Supervision. These conflict of interest regulations and other statutes also impose restrictions on loans to such persons and their related interests. Among other things, such loans must generally be made on terms substantially the same as loans to unaffiliated individuals.

Federal Securities Law

            The common stock of MutualFirst is registered with the SEC under the Securities Exchange Act of 1934. MutualFirst is subject to the information, proxy solicitation, insider trading restrictions and other requirements of the SEC under the Securities Exchange Act of 1934.

            MutualFirst stock held by persons who are affiliates of MutualFirst may not be resold without registration under the Securities Act of 1933 unless sold in accordance with certain resale restrictions. Affiliates are generally considered to be officers, directors and principal stockholders. If MutualFirst meets specified current public information requirements, each affiliate of MFS Financial is permitted to sell in the public market, without registration, a limited number of shares in any three-month period.

Federal Reserve System

            The Federal Reserve Board requires all depository institutions to maintain non-interest bearing reserves at specified levels against their transaction accounts, primarily checking, NOW and Super NOW checking accounts. At December 31, 2000, Mutual Federal was in compliance with these reserve requirements. The balances maintained to meet the reserve requirements imposed by the Federal Reserve Board may be used to satisfy liquidity requirements that may be imposed by the Office of Thrift Supervision.

            Savings institutions are authorized to borrow from the Federal Reserve Bank "discount window," but Federal Reserve Board regulations require institutions to exhaust other reasonable alternative sources of funds, including Federal Home Loan Bank borrowings, before borrowing from the Federal Reserve Bank.


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Federal Home Loan Bank System

            Mutual Federal is a member of the Federal Home Loan Bank of Indianapolis, which is one of 12 regional Federal Home Loan Banks that administers the home financing credit function of savings institutions. Each Federal Home Loan Bank serves as a reserve or central bank for its members within its assigned region. It is funded primarily from proceeds derived from the sale of consolidated obligations of the Federal Home Loan Bank System. It makes loans or advances to members in accordance with policies and procedures established by the board of directors of the Federal Home Loan Bank, which are subject to the oversight of the Federal Housing Finance Board. All advances from the Federal Home Loan Bank are required to be fully secured by collateral deemed sufficient by the Federal Home Loan Bank. In addition, all long-term advances must be used for residential home financing.

            As a member, Mutual Federal is required to purchase and hold stock in the Federal Home Loan Bank of Indianapolis. At December 31, 2000, Mutual Federal had $7.0 million in Federal Home Loan Bank stock, which was in compliance with this requirement. In past years, Mutual Federal has received substantial dividends on its Federal Home Loan Bank stock. Over the past five fiscal years, these dividends have averaged 8.09% and were 8.25% for 2000.

            Under federal law, the Federal Home Loan Banks must provide funds for the resolution of troubled savings institutions and contribute to low- and moderately priced housing programs through direct loans or interest subsidies on advances targeted for community investment and low- and moderate-income housing projects. These contributions have affected adversely the level of Federal Home Loan Bank dividends paid and could continue to do so in the future. These contributions also could affect adversely the future value of Federal Home Loan Bank stock. A reduction in value of Mutual Federal's Federal Home Loan Bank stock may result in a corresponding reduction in Mutual Federal's capital.

            For the year ended December 31, 2000, dividends paid to Mutual Federal by the Federal Home Loan Bank of Indianapolis totaled $457,000, as compared to $318,000 for the year ended December 31, 1999.

Federal Taxation

             General. We are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to us. Mutual Federal's federal income tax returns have been closed without audit by the IRS through its year ended December 31, 1995. MutualFirst and Mutual Federal will file a consolidated federal income tax return for fiscal year 2000, the first taxable year after completion of the conversion.

            Bad Debt Reserves. Prior to the Small Business Job Protection Act, Mutual Federal was permitted to establish a reserve for bad debts under the percentage of taxable income method and to make annual additions to the reserve utilizing that method. These additions could, within specified formula limits, be deducted in arriving at taxable income. As a result of the Small


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Business Job Protection Act, savings associations of Mutual Federal's size may now use the experience method in computing bad debt deductions beginning with their 1996 federal tax return. In addition, federal legislation requires Mutual Federal to recapture, over a six year period, the excess of tax bad debt reserves at December 31, 1997 over those established as of the base year reserve balance as of December 31, 1987. As of December 31, 2000 the amount of Mutual Federal's reserves subject to recapture were approximately $269,000.

             Taxable Distributions and Recapture. Prior to the Small Business Job Protection Act, bad debt reserves created prior to the year ended December 31, 1997 were subject to recapture into taxable income if Mutual Federal failed to meet certain thrift asset and definitional tests. Recent federal legislation eliminated these thrift related recapture rules. However, under current law, pre-1988 reserves remain subject to recapture should Mutual Federal make certain non-dividend distributions or cease to maintain a thrift/bank charter.

            Minimum Tax. The Internal Revenue Code imposes an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences, called alternative minimum taxable income. The alternative minimum tax is payable to the extent such alternative minimum taxable income is in excess of an exemption amount. Net operating losses can offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. Mutual Federal has not been subject to the alternative minimum tax, and does not have any such amounts available as credits for carryover.

             Net Operating Loss Carryovers. A financial institution may carryback net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. This provision applies to losses incurred in taxable years beginning after August 6, 1997. For losses incurred in the taxable years prior to August 6, 1997, the carryback period was three years and the carryforward period was 15 years. At December 31, 2000, we had no net operating loss carryforwards for federal income tax purposes.

            Corporate Dividends-Received Deduction. MutualFirst may eliminate from its income dividends received from Mutual Federal as a wholly owned subsidiary of MFS Financial if it elects to file a consolidated return with Mutual Federal. The corporate dividends-received deduction is 100% or 80%, in the case of dividends received from corporations with which a corporate recipient does not file a consolidated tax return, depending on the level of stock ownership of the payor of the dividend. Corporations which own less than 20% of the stock of a corporation distributing a dividend may deduct 70% of dividends received or accrued on their behalf.

State Taxation

            Mutual Federal is subject to Indiana's financial institutions tax, which is imposed at a flat rate of 8.5% on "adjusted gross income." "Adjusted gross income," for purposes of the financial institutions tax, begins with taxable income as defined by Section 63 of the Internal Revenue Code and incorporates federal tax law to the extent that it affects the computation of taxable income. Federal taxable income is then adjusted by several Indiana modifications.


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            Other applicable state taxes include generally applicable sales and use taxes plus real and personal property taxes.

Executive Officers Who Are Not Directors

            The business experience for at least the past five years for each of our executive officers who do not serve as directors is set forth below.

            Steven R. Campbell. Age 57 years. Mr. Campbell is Senior Vice President of Mutual Federal's Retail Banking Division, a position he has held since 1991. He has been employed by Mutual Federal since 1984.

            David W. Heeter. Age 39 years. Mr. Heeter is Mutual Federal's Vice President of Human Resources, Marketing and Administration. He has served in these positions since 1993, and started with Mutual Federal in 1986.

            Timothy J. McArdle. Age 50 years. Mr. McArdle, a certified public accountant, has served as Senior Vice President of Mutual Federal since 1995, and Treasurer and Controller of Mutual Federal since 1986. He also serves as Senior Vice President, Treasurer and Controller of MutualFirst Financial. He has been employed by Mutual Federal since 1981.

            Stephen C. Selby. Age 55 years. Since 1995, Mr. Selby has served as Senior Vice President of the Operations Division at Mutual Federal. Prior to 1995, he served as Vice President of the Operations Division for nine years. Mr. Selby has served in various other capacities at Mutual Federal since 1964.

Item 2. Description of Property

            At December 31, 2000, we had 17 full service offices. We own the office building in which our home office and executive offices are located. At December 31, 2000, we owned all but two of our other branch offices. The net book value of our investment in premises, equipment and leaseholds, excluding computer equipment, was approximately $7.7 million at December 31, 2000.

            We believe that our current facilities are adequate to meet our present and immediately foreseeable needs.

            We utilize a third party service provider to maintain our database of depositor and borrower customer information. At December 31, 2000, the net book value of the data processing and computer equipment utilized by us was $1.3 million.

Item 3. Legal Proceedings

            From time to time we are involved as plaintiff or defendant in various legal actions arising in the normal course of business. We do not anticipate incurring any material liability as a result of such litigation.


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Item 4. Submission of Matters to a Vote of Security Holders

            A special meeting of stockholders of MutualFirst was held on December 1, 2000 at our corporate offices. At the meeting stockholders voted upon three proposals: (1) The approval of an Agreement and Plan of Merger dated June 7, 2000 by and between MutualFirst Financial, Inc. and Marion Capital Holdings, Inc., and the approval of the issuance of shares of MutualFirst common stock in the merger; (2) the ratification of the adoption of the 2000 Stock Option and Incentive Plan; (3) the ratification of the adoption of the 2000 Recognition and Retention Plan. The voting on such matters was as follows:


Votes For
Votes Against
Abstentions
Broker
Non-Votes
Proposal 1 4,051,825 402,493 9,677 0
Proposal 2 3,863,868 542,251 57,876 0
Proposal 3 3,524,136 877,059 62,800 0

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

            The information under the caption "Shareholder Information" in the Company's Annual Report to Stockholders for the year ended December 31, 2000, portions of which are included as Exhibit 13 to this Form 10-K, is incorporated herein by reference.

Item 6. Selected Financial Data

            The information under the heading "Selected Financial and Other Data" in the Company's Annual Report to Stockholders for the year ended December 31, 2000, portions of which are included as Exhibit 13 to this Form 10-K, is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation

The information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report to Stockholders for the year ended December 31, 2000, portions of which are included as Exhibit 13 to this Form 10-K, is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

            The information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Asset and Liability Management and Market Risk" in the Company's Annual Report to Stockholders for the year ended December 31, 2000, portions of which are included as Exhibit 13 to this Form 10-K, is incorporated herein by reference.


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Item 8. Financial Statements and Supplementary Data

            The consolidated financial statements and notes thereto and supplementary data (selected quarterly financial information) contained in the Company's Annual Report to Stockholders for the year ended December 31, 2000, portions of which are included as Exhibit 13 to this Form 10-K, are incorporated herein by reference.


Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

            No disclosure under this item is required.


PART III


Item 10. Directors and Executive Officers of the Registrant

Directors

            Information concerning the Company's directors is incorporated herein by reference from the Company's definitive proxy statement for its Annual Meeting of Stockholders to be held in April 2001, except for information contained under the headings "Compensation Committee Report on Executive Compensation", "Shareholder Return Performance Presentation"and "Report of the Audit Committee", a copy of which will be filed not later than 120 days after the close of the fiscal year.

Executive Officers

Information concerning the executive officers of the Company who are not directors is incorporated herein by reference from Part I of this Form 10-K under the caption "Executive Officers of the Registrant Who Are Not Directors."

Section 16(a) Beneficial Ownership Reporting Compliance

No Disclosure under this item is required.

Item 11. Executive Compensation

            Information concerning executive compensation is incorporated herein by reference from the Company's definitive proxy statement for its Annual Meeting of Stockholders to be held in April 2001, except for information contained under the headings "Compensation Committee Report on Executive Compensation", "Shareholder Return Performance Presentation" and "Report of the Audit Committee", a copy of which will be filed not later than 120 days after the close of the fiscal year.


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Item 12. Security Ownership of Certain Beneficial Owners and Management

            Information concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the Company's definitive proxy statement for its Annual Meeting of Stockholders to be held April 2001, except for information contained under the headings "Compensation Committee Report on Executive Compensation", "Shareholder Return Performance Presentation" and "Report of the Audit Committee", a copy of which will be filed not later than 120 days after the close of the fiscal year.

Item 13. Certain Relationships and Related Transactions

            Information concerning certain relationships and related transactions is incorporated herein by reference from the Company's definitive proxy statement for its Annual Meeting of Stockholders to be held in April 2001, except for information contained under the headings "Compensation Committee Report on Executive Compensation", "Shareholder Return Performance Presentation" and "Report of the Audit Committee", a copy of which will be filed not later than 120 days after the close of the fiscal year.


PART IV



Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

            (a)(1) Financial Statements

            The following are contained in the portions of the Company's Annual Report to Stockholders filed as Exhibit 13 to this Form 10-K and are incorporated by reference into Item 8 of this Form 10-K:

Annual Report Section
Page in

Annual Report
Independent Auditor's Report 17
Consolidated Balance Sheet at December 31, 2000 and 1999 18
Consolidated Statement of Income for the Years Ended December 31, 2000, 1999 and 1998
19
Consolidated Statement of Stockholders' Equity for the Years Ended December 31, 2000, 1999 and 1998 20
Consolidated Statement of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 21
Notes to Consolidated Financial Statements 23-46


            (a)(2) Financial Statement Schedules:
            All financial statement schedules have been omitted as the information is not required under the related instructions or is not applicable.



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            (a)(3) Exhibits:

Regulation
S-K
Exhibit
Number
 Document
Reference to
Prior Filing or
Exhibit Number
Attached Hereto
2 Plan of acquisition, reorganization, arrangement, liquidation or succession None
3(i) Articles of Incorporation *
3(ii) Amended Bylaws 3(ii)
4 Instruments defining the rights of security holders, including indentures:
Form of MutualFirst Financial, Inc. Common Stock Certificate *
9 Voting Trust Agreement None
10 Material contracts:
Employment Agreement with R. Donn Roberts
Employment Agreement with Timothy J. McArdle
Employment Agreement with Steven L. Banks

** **
10.1
Form of Supplemental Retirement Plan Income Agreements for R. Donn
Roberts, Steven Campbell, David W. Heeter, Timothy J. McArdle and
Stephen C. Selby		 **
Form of Director Shareholder Benefit Program, as amended, for Steven L. Banks
Form of Executive Shareholder Benefit Program Agreement, as amended, for Steven L. Banks
Form of Director Shareholder Benefit Program Agreement, as amended, for Jerry D. McVicker		 10.2
10.3
10.4
Form of Agreements for Executive Deferred Compensation Plan for
R. Donn Roberts, Steven Campbell, David W. Heeter,
Timothy J. McArdle and Stephen C. Selby		 **
Registrant's 2000 Stock Option and Incentive Plan ***
Registrant's 2000 Recognition and Retention Plan ***
11 Statement re computation of per share earnings None
12 Statements re computation of ratios None
13 Annual Report to Security Holders 13
16 Letter re change in certifying accountant None
18 Letter re change in accounting principles None
21 Subsidiaries of the registrant 21
22 Published report regarding matters submitted to vote of security holders None
23 Consents of Experts and Counsel 23
24 Power of Attorney None
99 Additional Exhibits None
____________
* Filed as an exhibit to the Company's Form S-1 registration statement filed on September 16, 1999 (File No. 333-87239) pursuant to Section 5 of the Securities Act of 1933. Such previously filed document is incorporated herein by reference in accordance with Item 601 of Regulation S-K.

** Filed as an exhibit to the Company's Annual Report on Form 10-K filed on March 30, 2000 (File No. 000-27905). Such previously filed document is incorporated herein by reference in accordance with Item 601 of Regulation S-K.

*** Filed as an Appendix to the Company's Form S-4/A Registration Statement filed on October 19, 2000 (File No. 333-46510). Such previously filed document is incorporated herein by reference in accordance with Item 601 of Regulation S-K.


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            (b) Reports on Form 8-K

            On December 20, 2000, MutualFirst filed a Current Report on Form 8-K disclosing a press release issued on December 8, 2000 announcing the consummation of the merger with Marion Capital Holdings and the appointment of Steven L. Banks, John M. Dalton, Jon R. Marler and Jerry D. McVicker to MutualFirst's Board of Directors.















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SIGNATURES


             Pursuant to the requirements of Section 13 or 15(d) 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.


MutualFirst Financial, Inc.
By: /s/ R. DONN ROBERTS
R. Donn Roberts, President, Chief Executive Officer
and Director (Duly Authorized Representative)


             Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


/s/ R. DONN ROBERTS
R. Donn Roberts, President, Chief Executive
Officer and Director (Principal Executive Officer)		 /s/ WILBUR R. DAVIS
Wilbur R. Davis, Chairman of the Board
Date: April 2, 2001 Date: April 2, 2001
/s/ LINN A. CRULL
Linn A. Crull, Director		 /s/ EDWARD J. DOBROW
Edward J. Dobrow, Director
Date: April 2, 2001 Date: April 2, 2001
/s/ WILLIAM V. HUGHES
William V. Hughes, Director		 /s/ JAMES D. ROSEMA
James D. Rosema, Director
Date: April 2, 2001 Date: April 2, 2001
/s/ JULIE A. SKINNER
Julie A. Skinner, Director		 /s/ JERRY D. MCVICKER
Jerry D. McVicker
Date: April 2, 2001
Date: April 2, 2001
/s/ STEVEN L. BANKS
Steven L. Banks, Director		 /s/ JOHN M. DALTON
John M. Dalton, Director
Date: April 2, 2001 Date: April 2, 2001
/s/ JON R. MARLER
Jon R. Marler, Director		 /s/ TIMOTHY J. MCARDLE
Timothy J. McArdle, Senior Vice President,
Treasurer and Controller (Principal Financial and
Accounting Officer)
Date: April 2, 2001 Date: April 2, 2001




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INDEX TO EXHIBITS



Number
Description
3(ii)Amended Bylaws
10.1 Employment Agreement with Steven L. Banks
10.2 Form of Director Shareholder Benefit Program, as amended, for Steven L. Banks
10.3 Form of Executive Shareholder Benefit Program, as amended, for Steven L. Banks
10.4 Form of Director Shareholder Benefit Program, as amended, for Jerry D. McVicker
13 Portions of Annual Report to Security Holders
21 Subsidiaries of the Registrant
23 Consent of Accountants








End.