SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2002 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 specified in its charter)

Maryland

(State or other jurisdiction of
incorporation or organization)

35-2085640

(I.R.S. Employer
Identification Number)

110 East Charles Street
Muncie, Indiana 47305
(765) 747-2800

(Registrant's telephone number, including area code)

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 report), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ]

The number of shares of the Registrant's common stock, without par value, outstanding as of June 30, 2002 was 6,040,141.

Next Page

FORM 10 - Q
MutualFirst Financial, Inc.

INDEX

			Page Number
PART I - FINANCIAL INFORMATION


Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets at
		June 30, 2002 and December 31, 2001	1
	Consolidated Condensed Statements of Income for the
		three and six months ended June 30, 2002 and
		June 30, 2001	2
	Consolidated Condensed Statement of Stockholders' Equity
		for the six months ended June 30, 2002	3
	Consolidated Condensed Statements of Cash Flows for the
		six months ended June 30, 2002 and June 30, 2001	4
	Notes to Unaudited Consolidated Condensed Financial Statements
			5
Item 2.	Management's Discussion and Analysis of Financial Condition
		and Results of Operations	7

Item 3.	Quantitative and Qualitative Disclosures about Market Risk
			12
PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		13

Item 2.	Changes in Securities and Use of Proceeds		13

Item 3.	Defaults Upon Senior Securities		13

Item 4.	Submission of Matters to a Vote of Security Holders		13

Item 5.	Other Information		13

Item 6.	Exhibits and Reports on Form 8-K		13

Signature Page			14

i Next Page

PART 1 FINANCIAL INFORMATION
ITEM 1. Financial Statements

MUTUALFIRST FINANCIAL, INC. AND SUBSIDIARY
Consolidated Condensed Balance Sheets

				June 30, 2002 (Unaudited)	December 31, 2001
Assets
Cash				$19,516,482	$24,140,688
Interest-bearing deposits				1,221,139	6,416,985
	Cash and cash equivalents			20,737,621	30,557,673
Investment securities available for sale				30,026,798	31,580,095
Loans held for sale				18,481,139	11,559,158
Loans				653,916,156	642,084,418
	Allowance for loan losses			(5,940,094)	(5,449,292)
Net loans				647,976,062	636,635,126
Premises and equipment				8,530,779	8,674,152
Federal Home Loan Bank of Indianapolis stock, at cost				6,993,400	6,993,400
Investment in limited partnerships				5,495,972	5,677,060
Cash surrender value of life insurance				24,839,091	24,231,091
Foreclosed real estate				620,217	1,045,765
Interest receivable				3,755,944	3,696,560
Core deposit intangibles and goodwill				964,819	1,052,491
Deferred income tax benefit				4,515,961	4,553,975
Other assets				3,727,104	3,071,327

		Total assets		$776,664,907	$769,327,873

Liabilities
Deposits
	Non-interest-bearing			$27,047,158	$23,433,570
	Interest bearing			520,825,134	515,444,601
		Total deposits		547,872,292	538,878,171
Federal Home Loan Bank advances				113,751,298	107,484,586
Other borrowings				3,259,210	3,258,677
Advances by borrowers for taxes and insurance				1,378,539	1,463,384
Interest payable				1,230,804	1,359,940
Other liabilities				7,123,139	7,138,937
		Total liabilities		674,615,282	659,583,695

Commitments and Contingent Liabilities
Stockholders' Equity
	Preferred stock, $.01 par value
		Authorized and unissued --- 5,000,000 shares
	Common stock, $.01 par value
		Authorized --- 20,000,000 shares
		Issued and outstanding --- 6,040,141 and 6,693,841 shares		60,401	66,938
	Additional paid-in capital			48,477,109	59,575,884
	Retained earnings			57,999,512	55,195,694
		Accumulated other comprehensive income		413,030	356,009
		Unearned employee stock ownership plan (ESOP) shares		(3,655,026)	(3,813,946)
		Unearned recognition and retention plan (RRP) shares		(1,245,401)	(1,636,401)
			Total stockholders' equity	102,049,625	109,744,178

			Total liabilities and stockholders' equity	$776,664,907	$769,327,873

See notes to consolidated condensed financial statements.

1 Next Page

MUTUALFIRST FINANCIAL, INC. AND SUBSIDIARY
Consolidated Condensed Statements of Income
(Unaudited)

					Three Months Ended June 30		Six Months Ended June 30
					2002	2001	2002	2001
Interest Income
	Loans receivable, including fees				$12,229,245	$13,341,093	$24,444,131	$26,554,790
		Investment securities:
			Mortgage-backed securities		140,203	200,309	294,319	413,181
			Federal Home Loan Bank stock		108,973	135,126	212,437	273,078
			Other investments		206,815	393,922	423,405	860,192
	Deposits with financial institutions				30,889	41,767	96,784	68,116
				Total interest income	12,716,125	14,112,217	25,471,076	28,169,357

Interest Expense
	Passbook savings				157,355	241,724	316,906	480,322
	Certificates of deposit				4,017,827	5,376,610	8,244,816	10,823,940
	Daily Money Market accounts				193,166	340,401	402,877	722,087
	Demand and NOW accounts				119,897	191,957	239,834	420,157
	Federal Home Loan Bank advances				1,384,395	1,347,292	2,768,659	2,785,382
	Other interest expense				15,606	15,769	40,316	15,769
				Total interest expense	5,888,246	7,513,753	12,013,408	15,247,657

Net Interest Income					6,827,879	6,598,464	13,457,668	12,921,700
	Provision for losses on loans				375,000	296,250	962,483	485,500
Net Interest Income After Provision for Loan Losses					6,452,879	6,302,214	12,495,185	12,436,200

Other Income
	Service fee income				688,189	674,846	1,294,862	1,247,741
	Equity in losses of limited partnerships				(101,552)	(116,534)	(138,943)	(161,925)
	Commissions				189,417	181,191	378,541	363,713
	Net gains on loan sales				202,355	187,277	202,355	310,437
	Increase in cash surrender value of life insurance				308,000	286,500	608,000	573,000
	Other income				105,691	77,972	218,990	192,302
				Total other income	1,392,100	1,291,252	2,563,805	2,525,268

Other Expenses
	Salaries and employee benefits				3,160,964	2,797,765	6,169,899	5,993,998
	Net occupancy expenses				288,827	222,879	530,813	453,618
	Equipment expenses				226,625	208,221	424,371	440,436
	Data processing fees				199,742	192,925	393,490	397,139
	Automated teller machine				131,337	148,093	216,793	266,228
	Deposit insurance expense				23,443	25,002	47,611	51,093
	Advertising and promotion				114,616	124,167	208,108	283,658
	Goodwill amortization				42,532	50,353	87,672	102,128
	Other expenses				896,072	803,436	1,665,683	1,692,497
				Total other expenses	5,084,158	4,572,841	9,744,440	9,680,795

Income Before Income Tax					2,760,821	3,020,625	5,314,550	5,280,673
	Income tax expense				747,950	856,900	1,417,550	1,377,900

Net Income					$2,012,871	$2,163,725	$3,897,000	$3,902,773

	Basic earnings per share				$0.35	$0.30	$0.67	$0.53

	Diluted earnings per share				$0.34	$0.30	$0.66	$0.53

	Dividends per share				$0.09	$0.08	$0.18	$0.16

See notes to consolidated condensed financial statements.

2 Next Page

MUTUALFIRST FINANCIAL, INC. AND SUBSIDIARY
Consolidated Condensed Statement of Stockholders' Equity
For the Six Months Ended June 30, 2002
(Unaudited)

			Common Stock		Additional paid-in capital	Comprehensive Income	Retained Earnings	Accumulated Other Comprehensive Income	Unearned ESOP shares	Unearned RRP shares	Total
			Shares Outstanding	Amount	Additional paid-in capital	Comprehensive Income	Retained Earnings	Accumulated Other Comprehensive Income	Unearned ESOP shares	Unearned RRP shares	Total

Balances, December 31, 2001			6,693,841	$66,938	$59,575,884		$55,195,694	$356,009	($3,813,946)	($1,636,401)	$109,744,178

Comprehensive income

	Net income for the period					$3,897,000	$3,897,000				$3,897,000

	Other comprehensive income, net of tax

		Unrealized gains on securities				57,021		57,021			57,021

Comprehensive income						$3,954,021

ESOP shares earned					122,479				158,920		281,399

Cash dividends ($.09 per share)							(1,093,182)				(1,093,182)

RRP shares earned										391,000	391,000

Stock repurchased			(654,631)	(6,546)	(11,226,245)						(11,232,791)

Stock options exercised			931	9	4,991						5,000

Balances, June 30, 2002			6,040,141	$60,401	$48,477,109		$57,999,512	$413,030	($3,655,026)	($1,245,401)	$102,049,625

See notes to consolidated condensed financial statements.

3 Next Page

MUTUALFIRST FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows

					Six Months Ended June 30,
					2002	2001
Operating Activities
	Net income				$3,897,000	$3,902,773
	Adjustments to reconcile net income to net cash provided by operating activities
		Provision for loan losses			962,483	485,500
		Net loss on disposal of premises and equipment			1,986
		Net loss on sale of real estate owned			123,288	119,162
		Securities amortization (accretion), net			18,787	(22,069)
		ESOP shares earned			281,399	227,954
		RRP shares earned			391,000	983,303
		Equity in losses of limited partnerships			138,943	161,925
		Amortization of net loan origination costs			899,777	1,088,484
		Amortization of core deposit intangibles and goodwill			87,672	133,666
		Depreciation and amortization			430,986	538,869
		Loans originated for sale			(13,446,838)	(29,172,270)
		Proceeds from sales on loans held for sale			10,259,120	22,297,766
		Gains on sales of loans held for sale			(202,355)	(90,467)
		Change in
			Interest receivable		(59,384)	445,185
			Other assets		(642,865)	212,831
			Interest payable		(129,136)	(37,923)
			Other liabilities		49,209	(871,917)
			Increase in cash surrender value of life insurance		(608,000)	(573,000)
				Net cash provided (used) by operating activities	2,453,072	(170,228)

Investing Activities
	Purchases of securities available for sale				(6,520,220)	(3,478,555)
	Proceeds from maturities and paydowns of securities available for sale				8,149,763	6,925,715
	Proceeds from maturities and paydowns of securities held to maturity					5,537,069
	Net change in loans				(17,270,585)	(8,165,716)
	Purchases of premises and equipment				(289,599)	(174,357)
	Proceeds from real estate owned sales				932,831	6,682
	Distribution from limited partnership				29,232	14,516
	Other investing activities				(95,086)	(45,111)
				Net cash provided (used) by investing activities	(15,063,664)	620,243

Financing Activities
	Net change in
		Noninterest-bearing, interest bearing demand and savings deposits			1,847,145	5,618,718
		Certificates of deposits			7,146,976	7,986,332
	Repayment of note payable				(30,679)	(30,679)
	Proceeds from FHLB advances				29,280,000	158,035,334
	Repayment of FHLB advances				(23,047,084)	(153,743,596)
	Net change in advances by borrowers for taxes and insurance				(84,845)	99,382
	Stock repurchased				(11,232,791)	(14,110,229)
	Proceeds from exercise of stock options				5,000	53,950
	Dividends paid				(1,093,182)	(1,172,205)
				Net cash provided by financing activities	2,790,540	2,737,007

Net Change in Cash and Cash Equivalents					(9,820,052)	3,187,022

Cash and Cash Equivalents, Beginning of Year					30,557,673	21,046,057

Cash and Cash Equivalents, End of Period					$20,737,621	$24,233,079

Additional Cash Flows Information
	Interest paid	$12,142,544	$15,285,580
	Income tax paid	1,700,000	375,000
	Transfers from loans to foreclosed real estate	535,485	255,648
	Loans transferred to loans held for sale, net	3,900,029
	Mortgage servicing rights capitalized	100,568	219,969

See notes to consolidated condensed financial statements.

4 Next Page

MutualFirst Financial, Inc. and Subsidiaries
NOTES TO UNAUDITED CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS

NOTE 1: Basis of Presentation

The consolidated financial statements include the accounts of MutualFirst Financial, Inc. (the "Company"), its wholly owned subsidiary, Mutual Federal Savings Bank, a federally chartered savings bank ("Mutual Federal"), and Mutual Federal's two wholly owned subsidiaries, First MFSB Corporation and Third MFSB Corporation. All significant inter-company accounts and transactions have been eliminated in consolidation.

Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K annual report for 2001 filed with the Securities and Exchange Commission.

The interim consolidated financial statements have been prepared in accordance with instructions to Form 10-Q, and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

The interim consolidated financial statements at June 30, 2002, and for the three and six month periods ended June 30, 2002 have not been audited by independent accountants, but in the opinion of management, reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for such periods. The results of operations for the period are not necessarily indicative of the results to be expected for the full year.

The Consolidated Condensed Balance Sheet of the Company as of December 31, 2001 has been derived from the Audited Consolidated Balance Sheet of the Company as of that date.

NOTE 2: Benefit Plans

On December 1, 2000, the stockholders of the Company approved a Stock Option Plan and a Recognition and Retention Plan (RRP). These plans allow for the purchase in the open market or through the issuance of authorized and unissued shares of up to 581,961 shares of common stock for the Stock Option Plan and 232,784 shares of common stock for the RRP. Under the Stock Option Plan, stock option rights covering 581,961 shares of stock may be granted to officers, key employees and directors of the Company and its subsidiaries. Options for 507,000 of such shares were granted effective January 12, 2001. The options have an exercise price per share equal to the market value at the date of grant. Of the options granted, 247,248 have a 15-year term and 259,752 have a 10-year term. 212,000 of these options become exercisable at the rate of 33.3% per year and 295,000 become exercisable at a rate of 20% per year. Under the RRP plan, stock awards covering 232,784 shares of common may be awarded to the directors and key employees of the Company and its subsidiaries. Grants of 209,000 of such shares have been awarded effective January 12, 2001. Beginning March 20, 2001, 122,000 of these shares vest at a rate of 20% per year and 77,500 vest at a rate of 33.3% per year, and 9,500 shares were fully vested as of March 20, 2002. Expense under the RRP plan was $188,000 and $391,000 for the three- and six-month periods ended June 30, 2002, respectively.

5 Next Page

NOTE 3: Earnings per share

Earnings per share were computed as follows:

		Three Months Ended June 30,
		2002			2001
		Income	Weighted- Average Shares	Per-Share Amount	Income	Weighted- Average Shares	Per-Share Amount
		(000's)			(000's)

Basic Earnings Per Share
	Income available to common shareholders	$2,013	5,739,746	$0.35	$2,164	7,109,629	$0.30
Effect of Dilutive Securities
	Stock options and RRP grants		130,513			7,654
Diluted Earnings Per Share

Income available to common stockholders
	and assumed conversions	$2,013	5,870,259	$0.34	$2,164	7,117,283	$0.30

		Six Months Ended June 30,
		2002			2001
		Income	Weighted- Average Shares	Per-Share Amount	Income	Weighted- Average Shares	Per-Share Amount
		(000's)			(000's)

Basic Earnings Per Share
	Income available to common shareholders	$3,897	5,793,963	$0.67	$3,903	7,413,930	$0.53
Effect of Dilutive Securities
	Stock options and RRP grants		98,618			9,747
Diluted Earnings Per Share

Income available to common stockholders
	and assumed conversions	$3,897	5,892,581	$0.66	$3,903	7,423,677	$0.53

6 Next Page

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations.

General

MutualFirst Financial, Inc., a Maryland corporation (the "Company"), was organized in September 1999. On December 29, 1999, it acquired the common stock of Mutual Federal Savings Bank ("Mutual Federal") upon the conversion of Mutual Federal from a federal mutual savings bank to a federal stock savings bank.

Mutual Federal was originally organized in 1889 and currently conducts its business from seventeen full service offices located in Delaware, Randolph, Grant, and Kosciusko counties, Indiana, with its main office located in Muncie. Mutual Federal's principal business consists of attracting deposits from the general public and originating fixed rate and adjustable rate loans secured primarily by first mortgage liens on one-to-four family residential real estate as well as commercial real estate and loans on consumer goods. Mutual Federal's deposit accounts are insured up to applicable limits by the Savings Association Insurance Fund (SAIF) of the FDIC.

Mutual Federal currently owns two subsidiaries, First MFSB Corporation and Third MFSB Corporation. The assets of First MFSB Corporation consist of an investment in Family Financial Life Insurance Company. Family Financial is an Indiana stock insurance company that primarily engages in retail sales of mortgage and credit life insurance products in connection with loans originated by it's shareholder financial institutions. Third MFSB, which does business as Mutual Financial Services, offers tax deferred annuities and 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.

The Company's results of operations depend primarily on the level of net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and investments, and costs incurred with respect to interest-bearing liabilities, primarily deposits and borrowings. Results of operations also depend upon the level of the Company's non-interest income, including fee income and service charges, and the level of its non-interest expense, including general and administrative expenses.

7 Next Page

Critical Accounting Policies

The notes to the consolidated financial statements contain a summary of the Company's significant accounting policies presented on pages 22 and 23 of the Annual Report to Shareholders for the year ended December 31, 2001. Certain of these policies are important to the portrayal of the Company's financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Management believes that its critical accounting policies include determining the allowance for loan losses, the valuation of foreclosed assets and the valuation of intangible assets.

Allowance for Loan Losses

The allowance for loan losses is a significant estimate that can and does change based on management's assumptions about specific borrowers and current general economic and business conditions, among other factors. Management reviews the adequacy of the allowance for loan losses on at least a quarterly basis. The evaluation by management includes consideration of past loan loss experience, changes in the composition of the loan portfolio, the current condition and amount of loans outstanding, identified problem loans and the probability of collecting all amounts due.

The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. A worsening or protracted economic decline would increase the likelihood of additional losses due to credit and market risk and could create the need for additional loss reserves.

Foreclosed Assets

Foreclosed assets are carried at the lower of cost or fair value less estimated selling costs. Management estimates the fair value of the properties based on current appraisal information. Fair value estimates are particularly susceptible to significant changes in the economic environment, market conditions, and the real estate market. A worsening or protracted economic decline would increase the likelihood of a decline in property values and could create the need to write down the properties through current operations.

Intangible Assets

The Company periodically assesses the impairment of its goodwill and the recoverability of its core deposit intangible. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If actual external conditions and future operating results differ from the Company's judgments, impairment and/or increased amortization charges may be necessary to reduce the carrying value of these assets to the appropriate value.

8 Next Page

Forward Looking Statements

This quarterly report on Form 10-Q ("Form 10-Q") contains statements which constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may appear in a number of places in this Form 10-Q and include statements regarding the intent, belief, outlook, estimate or expectations of the company, its directors or its officers primarily with respect to future events and the future financial performance of the company. Readers of this Form 10-Q are cautioned that any such forward looking statements are not guarantees of future events or performance and involve risk and uncertainties, and that actual results may differ materially from those in the forward looking statements as a result of various factors. The accompanying information contained in this Form 10-Q identifies important factors that could cause such differences. These factors include changes in interest rate; the loss of deposits and loan demand to other financial institutions; substantial changes in financial markets; changes in real estate values and the real estate market; or regulatory changes.

Financial Condition

Assets totaled $776.7 million at June 30, 2002, an increase of $7.3 million from $769.3 million at December 31, 2001. The primary reason for the increase was due to an $18.8 million increase in loans, including loans held for sale, from $653.6 million at December 31, 2001 to $672.4 million at June 30, 2002. This was partially offset by the use of cash and cash equivalents and proceeds from the maturity of investment securities available for sale for stock repurchases of $11.2 million and loan growth during the period. Excluding loans held for sale, the real estate mortgage loan portfolio decreased $5.1 million during the period. Consumer loans increased $11.6 million and commercial business loans increased $5.3 million.

Allowance for loan losses increased $491,000 from $5.4 million at December 31, 2001 to $5.9 million at June 30, 2002. The company determined to increase its allowance primarily due to an increase in classified commercial and one- to four- family real estate loans. Net charge offs for the first half of 2002 were $472,000 or .14% of average loans on an annualized basis, compared to $1.7 million, or .52% for the first half of 2001 which included a large commercial loan chargeoff.

Total deposits were $547.9 million at June 30, 2002 an increase of $9.0 million or 1.7% from $538.9 million at December 31, 2001. Of this growth, $3.6 million was in non-interest bearing deposits. Total borrowings increased $6.3 million to $117.0 million at June 30, 2002 from $110.7 million at December 31, 2001 to fund loan growth and share repurchases.

Stockholders' equity decreased $7.7 million to $102.0 million at June 30, 2002 from $109.7 million at December 31, 2001. The decrease was due primarily to the repurchase of 654,631 shares of common stock for $11.2 million and dividend payments of $1.1 million. These decreases were partially offset by net income of $3.9 million, Employee Stock Ownership Plan (ESOP) shares earned of $281,000, and RRP shares earned of $391,000. Also, unrealized gain on securities available for sale increased $57,000.

9 Next Page

Comparison of the Operating Results for the Three Months Ended June 30, 2002 and 2001

Net income for the quarter ended June 30, 2002 was $2.0 million, or $.35 for basic and $.34 for diluted earnings per share. This compared to net income for the comparable period in 2001 of $2.2 million, or $.30 for both basic and diluted earnings per share. Annualized return on average assets was 1.04% and return on average equity was 7.71% for the second quarter of 2002, compared to 1.12% and 7.09%, respectively, for the same period last year.

Interest income decreased $1.4 million, or 9.9%, from $14.1 million for the three months ended June 30, 2001 to $12.7 million for the three months ended June 30, 2002. Interest expense decreased $1.6 million, or 21.6%, from $7.5 million for the three months ended June 30, 2001, to $5.9 million for the three months ended June 30, 2002. As a result, net interest income for the three-month period ended June 30, 2002, increased $229,000, or 3.5%, compared to the same period in 2001. The average interest rate spread increased from 3.26% for the three-month period ended June 30, 2001, to 3.59% for the comparable period in 2002 as yields on interest earning-assets continued to decrease at a slower rate than the decrease in the cost of interest-bearing liabilities.

The provision for loan losses for the second quarter of 2002 was $375,000 compared to $296,000 for the same period in 2001. Non-performing loans to total loans at June 30, 2002, were .88% compared to .64% at June 30, 2001. Non-performing assets to total assets were .87% at June 30, 2002, compared to .71% at June 30, 2001. The increase was due to higher non-performing one- to four- family and commercial mortgage loan balances brought about by the continued slow economy. The non-performing commercial properties are comprised primarily of two nursing home loans totaling $1.8 million and four other loans totaling $536,000. Specific reserves of $150,000 have been established on these loans. Negotiations are in progress with the owners and possible buyers to satisfy these obligations.

Non-interest income, excluding net gain on loan sales, increased $86,000, or 7.8%, to $1.2 million for the three-months ended June 30, 2002 compared to $1.1 million for the same period in 2001. During the second quarter of 2001, there was a gain of $187,000 on the sale of fixed rate residential mortgage loans, compared to $202,000 for the same period in 2002.

Non-interest expense increased $511,000 or 11.2% to $5.1 million for the three months ended June 30, 2002 compared to $4.6 million for the same period in 2001. Salaries and employee benefits were $3.2 million for the three months ended June 30, 2002 compared to $2.8 million for the 2001 period, an increase of $363,000 or 13.0%. The increase in salaries and benefits included a $158,000 increase in health insurance premium costs, increased ESOP expense due to the increase in the company's stock price, and annual pay increases. All other expenses increased $149,000 or 8.4% for the three-month period ended June 30, 2002 compared to the same period in 2001. Much of this increase is attributed to a $99,000 increase in real estate owned expense.

10 Next Page

ITEM 3 - Quantitative and Quantitative Disclosures about Market Risk

Presented below as of June 30, 2002 and 2001 is an analysis of Mutual Federal's interest rate risk as measured by changes in Mutual Federal's net portfolio value ("NPV") assuming an instantaneous and sustained parallel shift in the yield curve, in 100 basis point increments, up and down 300 basis points.

June 30, 2002 Net Portfolio Value
Changes In Rates	$ Amount	$ Change	% Change	NPV as % of PV of Assets
Changes In Rates	$ Amount	$ Change	% Change	NPV Ratio	Change

+300 bp	67,547	(36,117)	(35)%	9.39%	(385)bp
+200 bp	80,727	(22,937)	(22)%	10.90%	(234)bp
+100 bp	93,462	(10,202)	(10)%	12.27%	(97)bp
0 bp	103,664			13.24%
-100 bp	106,885	3,221	3%	13.38%	+14 bp
-200 bp	109,419	5,755	6%	13.43%	+19 bp
-300 bp	113,268	9,604	9%	13.68%	+44 bp

June 30, 2001 Net Portfolio Value
Changes In Rates	$ Amount	$ Change	% Change	NPV as % of PV of Assets
Changes In Rates	$ Amount	$ Change	% Change	NPV Ratio	Change

+300 bp	71,919	(31,086)	(30)%	9.98%	(335)bp
+200 bp	83,527	(20,478)	(20)%	11.18%	(215)bp
+100 bp	94,450	(9,555)	(9)%	12.37%	(96)bp
0 bp	105,005			13.33%
-100 bp	110,517	6,512	5%	13.92%	+59 bp
-200 bp	112,797	8,792	8%	14.02%	+69 bp
-300 bp	117,958	13,952	13%	14.40%	+107 bp

The analysis at June 30, 2002 indicates that there have been no material changes in market interest rates for Mutual Federal's interest rate sensitivity instruments which would cause a material change in the market risk exposures that effect the quantitative and qualitative risk disclosures as presented in item 7A of the Company's annual report on Form 10-K for the period ended December 31, 2001.

12 Next Page

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings

	None.

Item 2.	Changes in Securities and use of Proceeds

	None.

Item 3.	Defaults Upon Senior Securities.

	None.

Item 4.	Submission of Matters to Vote of Security Holders.
	The following is a record of the votes cast at the Company's Annual Meeting of Stockholders in the election of directors of the Company:
			FOR	VOTE WITHHELD

	Linn A. Crull		5,154,217	18,773
	Wilbur R. Davis		5,165,020	7,970
	Steven L. Banks		5,108,058	64,932
	Jon R. Marler		5,151,417	21,573

	Accordingly, the individuals named above were declared to be duly elected directors of the Company for a three-year term to expire in 2005.

	The following is a record of the votes cast for the proposal to ratify the appointment of BKD,LLP as the Company's independent auditors for the fiscal year ending December 31, 2002.

			NUMBER OF VOTES
	FOR		5,124,539
	AGAINST		28,150
	ABSTAIN		20,301

	Accordingly, the proposal described above was declared to be duly adopted by the stockholders of the Corporation.

Item 5.	Other Information.

	None.

Item 6.	Exhibits and Reports on Form 8-K.

	(a)	No reports on Form 8-K were filed during the quarter ended June 30, 2002.

13 Next Page

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			MutualFirst Financial, Inc.


Date:	August 12, 2002	By:	/s/ R. Donn Roberts R. Donn Roberts President and Chief Executive Officer


Date:	August 12, 2002	By:	/s/ Timothy J. McArdle Timothy J. McArdle Senior Vice President and Treasurer

14 Next Page

CERTIFICATION

Each of the undersigned hereby certifies in his capacity as an officer of MutualFirst Financial, Inc. (the "Company") that the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2002 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

Dated:	August 12, 2002	/s/ R. Donn Roberts R. Donn Roberts Chief Executive Officer

Dated:	August 12, 2002	/s/ Timothy J. McArdle Senior Vice President, Treasurer and Chief Financial Officer

15 End.