m-tarps3.htm
As filed
with the Securities and Exchange Commission on January 22, 2009
Registration
No. 333-________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
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MUTUALFIRST
FINANCIAL, INC.
(Exact
name of registrant as specified in its
charter)
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Maryland
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35-2085640
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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110
E. Charles Street
Muncie,
Indiana 47305-2419
(765)
747-2800
(Address,
including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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David
W. Heeter
President
and Chief Executive Officer
MutualFirst Financial,
Inc.
110
E. Charles Street
Muncie,
Indiana 47305-2419
(573)
747-2800
(Name,
address, including zip code, and telephone number, including area code, of
agent for service)
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Copy
of communications to:
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Martin
L. Meyrowitz, P.C.
Craig
M. Scheer, P.C.
Silver,
Freedman & Taff, L.L.P.
3299
K Street, N.W., Suite 100
Washington,
D.C. 20007
(202)
295-4500
(202)
337-5502 (fax)
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Approximate date of commencement of
proposed sale to the public: From time to time after this Registration
Statement becomes effective.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
[__]
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[__]
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [__]
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [__]
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. [__]
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ
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(Do not check if a smaller reporting company)
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CALCULATION
OF REGISTRATION FEE
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TITLE
OF EACH CLASS OF
SECURITIES
TO BE REGISTERED
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AMOUNT
TO
BE
REGISTERED
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PROPOSED
MAXIMUM
OFFERING
PRICE
PER
UNIT
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PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE
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AMOUNT
OF
REGISTRATION
FEE
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Common
Stock (1)
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625,135
shares
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$6.53(2)
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$4,082,132
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$161
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Warrant
(1)
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---
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---
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Total
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$4,082,132
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$161
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(1)
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The
shares of common stock being registered are purchasable upon exercise of
the warrant being registered, which we issued to the United States
Department of the Treasury (“Treasury”) pursuant to Treasury’s Troubled
Asset Relief Program Capital Purchase Program. In addition to
the number of shares of common stock stated in the table above, there is
registered, pursuant to Rule 416, such number of additional shares of
common stock, of a currently undeterminable amount, as may from time to
time become issuable by reason of stock splits, stock dividends and
certain other anti-dilution provisions set forth in the
warrant. Pursuant to Rule 457(g), no additional fee is payable
for the warrant.
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(2)
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Estimated
in accordance with Rule 457(c), calculated on the basis of $6.53 per
share, which was the average of the high and low sales prices per share of
the common stock on the NASDAQ Stock Market on January 20,
2009.
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_____________________
The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information in this prospectus is not complete and may be changed. The selling
securityholders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state or jurisdiction where the offer or
sale is not permitted.
Subject
to Completion
Preliminary
Prospectus dated January 22, 2009
PROSPECTUS
MutualFirst Financial,
Inc.
625,135
Shares of Common Stock and a Warrant to Purchase Such
Shares
This prospectus relates to (i) a
warrant, or portions thereof, which expires on December 23, 2018, to purchase
625,135 shares of our common stock at an exercise price of $7.77 per share,
subject to adjustment as described in this prospectus, and (ii) the shares of
our common stock that may be purchased upon exercise of the
warrant. The warrant, along with 32,382 shares of our Fixed Rate
Cumulative Perpetual Preferred Stock, Series A (liquidation preference amount
$1,000 per share), was issued by us on December 23, 2008 to the United States
Department of the Treasury as part of Treasury’s Troubled Asset Relief Program
Capital Purchase Program in a private placement exempt from the registration
requirements of the Securities Act of 1933.
The selling securityholders who may sell
or otherwise dispose of the securities offered by this prospectus include
Treasury and any other holders of the securities covered by this prospectus to
whom Treasury has transferred its registration rights in accordance with the
terms of the securities purchase agreement between us and
Treasury. The selling securityholders may offer the securities from
time to time directly or through underwriters, broker-dealers or agents and in
one or more public or private transactions and at fixed prices, at prevailing
market prices, at prices related to prevailing market prices or at negotiated
prices. If these securities are sold through underwriters,
broker-dealers or agents, the selling securityholders will be responsible for
underwriting discounts or commissions or agents’ commissions, if
any. We
will not receive any proceeds from the sale of securities by the selling
securityholders.
Our common stock is listed on the
NASDAQ Global
Market under the symbol
“MFSF.” On January 21, 2009, the closing sale price of our common
stock on the NASDAQ Global
Market was $6.49 per share. The warrant is not currently
listed on any established securities exchange or quotation system and we do not
intend to seek such a listing for the warrant unless we are requested to do so
by Treasury.
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The
securities offered by this prospectus are not savings accounts, deposits or
other obligations of any bank and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
_______________
Investing
in the securities offered by this prospectus involves risks. See
“Risk Factors” beginning on page 2 of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission nor
any other regulatory body has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
The date of this prospectus is _______
, 2009.
TABLE OF CONTENTS
Page
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ABOUT
THIS PROSPECTUS
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iii
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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iii
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WHERE
YOU CAN FIND MORE INFORMATION
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iv
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PROSPECTUS
SUMMARY
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1
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RISK
FACTORS
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2
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USE
OF PROCEEDS
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8
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REGULATORY
CONSIDERATIONS
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8
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DESCRIPTION
OF WARRANT
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9
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DESCRIPTION
OF CAPITAL STOCK
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10
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SELLING
SECURITYHOLDERS
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16
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PLAN
OF DISTRIBUTION
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17
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LEGAL
MATTERS
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EXPERTS
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ABOUT
THIS PROSPECTUS
This prospectus is part of a
registration statement that we filed with the Securities and Exchange Commission
(the “SEC”) using a “shelf” registration, or continuous offering,
process. Under this process, the selling securityholders may from
time to time sell or otherwise dispose of the securities covered by this
prospectus in one or more offerings.
You should rely only on the information
contained or incorporated by reference in this prospectus and any supplement to this
prospectus. We have not,
and the selling securityholders have not, authorized anyone to provide you
with information different from that contained in this prospectus. The
selling securityholders are offering to sell, and
seeking offers to buy, our
securities only in
jurisdictions where it is lawful to do so. The information in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or any sale of our securities. Neither the delivery of
this prospectus nor any sale made
under this
prospectus shall, under any
circumstances, create any implication that there has been no
change in our affairs since the date of this prospectus or that the information
contained or incorporated by reference in this prospectus is correct as of any
time subsequent to the date of such information.
All references in this prospectus to
“we,” “us,” “our” or similar references mean MutualFirst Financial, Inc. and its consolidated subsidiaries and all references in this prospectus
to “MutualFirst Financial” mean MutualFirst Financial, Inc. excluding its
subsidiaries, in each case unless otherwise expressly stated or the context
otherwise requires. When we refer to “MutualBank” in this prospectus, we
mean our subsidiary,
MutualBank, a federal savings bank. We sometimes refer to MutualBank
as the “Bank.”
This prospectus and the documents incorporated by
reference may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements often include the
words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,”
“plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar
expressions or future or conditional verbs such as “may,” “will,” “should,”
“would” and “could.” These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that could cause the actual
results to differ materially from the forward-looking statements,
including:
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expected
cost savings, synergies and other financial benefits from our recently
completed acquisition of MFB Corp. might not be realized within the
anticipated time frames and costs or difficulties relating to integration
matters might be greater than
expected;
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the
credit risks of lending activities, including changes in the level and
direction of loan delinquencies and write-offs and changes in estimates of
the adequacy of the allowance for loan losses;
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competitive
pressures among depository
institutions;
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interest
rate movements and their impact on customer behavior and net interest
margin;
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the
impact of repricing and competitors’ pricing initiatives on loan and
deposit products;
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the
ability to adapt successfully to technological changes to meet customers’
needs and developments in the market place;
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the
ability to access cost-effective funding;
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changes
in financial markets; changes in economic conditions in general and
in the state of Indiana in
particular;
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the
costs, effects and outcomes of
litigation;
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new
legislation or regulatory changes, including but not limited to changes in
federal and/or state tax laws or interpretations thereof by taxing
authorities;
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changes
in accounting principles, policies or
guidelines;
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future
acquisitions by MutualFirst of other
depository institutions or lines of business;
and
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our
success at managing the risks involved in the
foregoing.
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Some of these and other factors are
discussed in this
prospectus under the caption “Risk Factors” and elsewhere in this prospectus and
in the incorporated documents. The development of any or all of these
factors could have an
adverse impact on our financial position and our results of
operations.
Any forward-looking statements are based
upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly
update or revise any forward-looking statements included or incorporated by
reference in this prospectus or to update the reasons why actual results could
differ from those contained in such statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking statements discussed in this prospectus or the
incorporated documents might not occur, and you should not put undue reliance on
any forward-looking statements.
We are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Accordingly, we file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy any reports,
statements or other information that we may file with the SEC at the SEC’s
Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C., 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements and other information about
issuers that file electronically with the SEC. The address of the SEC’s Internet
site is http://www.sec.gov.
The SEC allows us to incorporate by
reference the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information that we incorporate by reference is considered to be a part of this
prospectus, and the information we later file with the SEC that is incorporated by reference in
this prospectus will
automatically update information previously contained in this prospectus
and any incorporated
document. Any statement contained in this prospectus
or in a document incorporated by reference in this prospectus will be deemed
modified or superseded to the extent that a later statement contained in this
prospectus or in an
incorporated document modifies or supersedes such earlier
statement.
This prospectus incorporates by
reference the documents listed below that we have filed with the SEC (excluding
any portion of these
documents that has been furnished to and deemed not to be filed with the
SEC):
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Report(s)
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Period(s) of Report(s) or Date(s) Filed
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• Annual
Report on Form 10-K
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For the year ended December 31, 2007
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• Quarterly
Reports on Form
10-Q
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For the quarters ended March 31, 2008, June 30, 2008 and September 30,
2008
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• Current
Reports on Form
8-K
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Filed on January 8, 2008, January 10,
2008, February 14, 2008, February 19, 2008 (two reports), March 21, 2008,
May 16, 2008, June 12, 2008, June 27, 2008, July 15, 2008, July 21, 2008,
July 24, 2008 (as amended on Form 8-K/A filed on October 3, 2008), August
14, 2008, September 3, 2008, October 17, 2008, November 21, 2008, December
5, 2008 and December 23, 2008
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We also incorporate by reference any future documents we may file with
the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, excluding any document or portion
thereof that has been furnished to and deemed not to be filed with the
SEC. In
addition, we incorporate by reference the description of our common stock
contained in the Registration Statement on Form 8-A we filed with the SEC on
November 2, 1999.
These documents are available without
charge to you on the Internet at www.bankwithmutual.com by clicking “Investor Relations” and
then “SEC Filings” or if
you call or write to: Investor Relations, MutualFirst Financial, Inc., 110 E. Charles Street, Muncie, Indiana
47305-2419, telephone:
(765) 747-2800. The reference to our website
is not intended to be an active link and the information on our website is not,
and you must not consider the information to be, a part of this
prospectus.
We have also filed a registration
statement with the SEC relating to the securities offered by this
prospectus. This prospectus, which constitutes part
of the registration statement, does not contain all of the information presented
or incorporated by reference in the registration statement and its exhibits. You
may obtain from the SEC a copy of the registration statement and exhibits that
we filed with the SEC as
described above.
The registration statement may contain
additional information that may be important to you.
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This
summary highlights information contained elsewhere in, or incorporated by
reference into, this prospectus. As a result, it does not contain all of
the information that may be important to you or that you should consider
before investing in our securities. You should read this entire
prospectus, including the “Risk Factors” section, and the documents
incorporated by reference, which are described under “Where You Can Find
More Information” in this prospectus.
MutualFirst Financial,
Inc.
MutualFirst Financial, Inc. is a savings and
loan holding company incorporated under the laws of the State of
Maryland. We conduct our business primarily through our wholly
owned subsidiary, MutualBank, a federal savings bank originally formed in
1889. The Bank currently operates from 33 full service
financial centers located in Delaware, Elkhart, Grant, Kosciusko,
Randolph, St. Joseph and Wabash counties, Indiana, with its main office
located in Muncie. The Bank also has trust offices in Carmel
and Crawfordsville, Indiana and a loan origination office in New Buffalo,
Michigan. The Bank’s principal business consists of attracting
deposits from the general public and originating fixed and variable rate
loans secured primarily by first mortgage liens on residential and
commercial real estate, consumer goods, and business
assets. MutualFirst Financial is subject to
regulation by the Office of Thrift Supervision (the “OTS”), and the Bank
is subject to regulation by the OTS, its chartering authority, and the
Federal Deposit Insurance Corporation (the “FDIC”), as insurer of its
deposits.
MutualFirst Financial’s primary source of
liquidity is dividend payments from the Bank. The Bank is subject to
certain legal restrictions on its ability to pay dividends or make loans
or advances to MutualFirst Financial. For
information about these restrictions, please see “Regulation” in this prospectus and
“Item 1. Business—How We Are Regulated” contained in our Annual Report on
Form 10-K for the year ended December 31, 2007, which has been filed with
the SEC and is available as described under “Where You Can Find More
Information.”
Our common stock is traded on the
NASDAQ Global Market under the ticker symbol “MFSF.” Our
principal executive offices are located at 110 E. Charles Street, Muncie,
Indiana 47305-2419. Our telephone number is (765) 747-2800.
Securities
Being Offered
The securities being offered by
this prospectus consist of (i) a warrant, or portions thereof, which
expires on December 23, 2018, to purchase 625,135 shares of our common
stock at an exercise price of $7.77 per share, subject to adjustment as
described in this prospectus, and (ii) the shares of our common stock
which may be purchased upon exercise of the warrant. We issued
the warrant on December 23, 2008 to the United States Department of the
Treasury (the “Treasury”) pursuant to Treasury’s Troubled Asset Relief
Program Capital Purchase Program. Concurrent with the issuance of the
warrant, we sold to Treasury 32,382 shares of our Fixed Rate Cumulative
Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”),
liquidation preference amount $1,000 per share, for an aggregate purchase
price of $32.4 million. The issuances of the warrant and the
Series A Preferred Stock were completed in a private placement to Treasury
exempt from the registration requirements of the Securities Act of
1933. We were required under the terms of the related
securities purchase agreement between us and Treasury to register for
resale the warrant and the shares of our common stock underlying the
warrant. The terms of the warrant and the terms of our common
stock and the Series A Preferred Stock are described under “Description of
Warrant” and “Description of Capital Stock.” The securities
purchase agreement between us and Treasury was attached as Exhibit 10.1 to
our Current Report on Form 8-K filed on December 23, 2008 and incorporated
into this prospectus by reference. See “Where You Can Find More
Information.”
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RISK
FACTORS
An
investment in our securities is subject to certain risks. You should carefully
review the following risk factors and other information contained in this
prospectus and the documents incorporated by reference, before deciding whether
an investment in our securities is suited to your particular
circumstances. The risks and uncertainties not presently known to us
or that we currently deem immaterial also may impair our business operations. If
any of the following risks actually occur, our business, results of operations
and financial condition could suffer. In that event, the value of our securities
could decline, and you may lose all or part of your investment. The risks
discussed below also include forward-looking statements, and our actual results
may differ materially from those discussed in these forward-looking
statements.
Risks
Relating to MutualFirst
Financial, Inc.
Dramatic declines in the housing market,
with decreasing home prices and increasing delinquencies and
foreclosures, have
negatively impacted the credit performance of mortgage and construction loans
and resulted in significant write-downs of assets by many financial
institutions. In addition, the values of real estate collateral
supporting many loans have declined and may continue to decline. General
downward economic trends, reduced availability of commercial credit and
increasing unemployment have negatively affected the credit performance of commercial and
consumer credit, resulting in additional
write-downs. Concerns over the stability of the financial
markets and the economy have resulted in decreased lending by financial
institutions to their customers and to each other. This market
turmoil and tightening of credit has led to increased commercial and consumer
delinquencies, lack of customer confidence, increased
market volatility and widespread reduction in general business activity. Competition among depository
institutions for deposits has increased significantly. Financial institutions
have experienced decreased access to deposits and/or borrowings.
The resulting economic pressure on
consumers and businesses and the lack of confidence in the financial markets may
adversely affect our business, financial condition, results of operations and
stock price.
Our ability to assess the creditworthiness of
customers and to estimate the losses inherent in our credit exposure is made
more complex by these difficult market and economic conditions. As a
result of the foregoing factors, there is a potential for new laws and regulations regarding lending and
funding practices and liquidity standards, and bank regulatory agencies are
expected to be very aggressive in responding to concerns and trends identified
in examinations. This increased government action may increase
our costs and limit our
ability to pursue certain business opportunities. We
also may be required to pay even higher FDIC premiums than the recently increased
level, because financial institution failures resulting from the depressed
market conditions have
depleted and may continue to deplete the deposit insurance fund and reduce its
ratio of reserves to insured deposits.
We do not believe these
difficult conditions are likely to improve in
the near future. A worsening of these conditions would likely
exacerbate the adverse
effects of these difficult market and economic conditions on us, our customers
and the other financial institutions in our market area. As a result, we may
experience increases in foreclosures, delinquencies and customer bankruptcies,
as well as more restricted
access to funds.
Recent
legislative and regulatory initiatives to address difficult market and economic
conditions may not stabilize the U.S. banking system.
The recently enacted Emergency Economic
Stabilization Act of 2008 (the “EESA”) authorizes Treasury to purchase
from financial institutions and their holding companies up to $700 billion in
mortgage loans, mortgage-related securities and certain other financial
instruments, including debt and equity securities issued by financial
institutions and their holding companies, under a troubled asset relief
program, or “TARP.” The purpose of TARP is to
restore confidence and stability to the U.S. banking system and to encourage
financial institutions to increase their lending to customers and to each
other. The Treasury has allocated $250 billion towards the TARP
Capital Purchase Program. Under the TARP Capital Purchase
Program, Treasury
is purchasing equity securities from participating
institutions. The warrant offered by this
prospectus, together with our Series A Preferred Stock, was
issued by us to Treasury pursuant to the
TARP Capital Purchase Program. The EESA also increased federal deposit insurance on most deposit accounts from $100,000 to
$250,000. This increase is in place until the end of 2009 and is not
covered by deposit insurance premiums paid by the banking
industry.
The EESA followed, and has been followed
by, numerous actions by the Board of Governors of the Federal Reserve System,
the U.S. Congress, Treasury, the FDIC, the SEC and others to address the current
liquidity and credit crisis that has followed the sub-prime meltdown that
commenced in 2007. These measures include homeowner relief that
encourage loan restructuring and modification; the establishment of significant
liquidity and credit facilities for financial institutions and investment
banks; the lowering of the
federal funds rate; emergency action against short selling practices; a
temporary guaranty program for money market funds; the establishment
of a commercial paper
funding facility to provide back-stop liquidity to commercial paper issuers; and
coordinated international efforts to address illiquidity and other weaknesses in
the banking sector. The purpose of these legislative and
regulatory actions is to stabilize the U.S. banking system. The EESA and the other regulatory initiatives described above may not have their desired effects. If the volatility in the
markets continues
and economic conditions fail to improve or
worsen, our business,
financial condition and
results of operations could
be materially and adversely affected.
Current
levels of market volatility are unprecedented.
The capital and credit markets have been experiencing
volatility and disruption for more than a year. In recent months, the volatility and disruption
has reached unprecedented levels. In some cases, the markets have
produced downward pressure on stock prices and credit availability for certain
issuers without regard to those issuers’ underlying financial
strength. If current levels of market disruption
and volatility continue or worsen, there can be no assurance that we will not
experience an adverse effect, which may be material, on our ability to access
capital and on our business, financial condition and results of operations.
Our
allowance for loan losses may prove to be insufficient to absorb probable losses
in our loan portfolio.
Lending money is a substantial part of
our business. Every loan carries a certain risk that it will not be repaid in
accordance with its terms
or that any underlying collateral will not be sufficient to assure repayment.
This risk is affected by, among other things:
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cash
flow of the borrower and/or the project being
financed;
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in
the case of a collateralized loan, the changes and uncertainties as to the
future value of the collateral;
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the
credit history of a particular
borrower;
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changes
in economic and industry conditions;
and
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the
duration of the loan.
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We maintain an allowance for loan losses
which we believe is appropriate to provide for potential losses in our loan portfolio.
The amount of this allowance is determined by our management through a periodic
review and consideration of several factors, including, but not limited
to:
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an
ongoing review of the quality, size and diversity of the loan
portfolio;
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evaluation
of non-performing loans;
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historical
default and loss experience;
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historical
recovery experience;
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existing
economic conditions;
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risk
characteristics of the various classifications of loans;
and
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the
amount and quality of collateral, including guarantees, securing the
loans.
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If our loan losses exceed our allowance
for probable loan losses, our business, financial condition and profitability
may suffer.
Our
loan portfolio possesses increased risk due to our substantial number of
multi-family, commercial real estate, consumer and commercial business
loans.
Approximately 52.47% of our loan portfolio as of
September 30, 2008 consisted of multi-family, commercial real
estate, consumer and commercial business loans. Multi-family and
commercial real estate
loans accounted for approximately 16.22% of our total loan portfolio as of
September 30,
2008. Our commercial
business and consumer loans accounted, respectively, for approximately
12.47% and 23.78% of our total loan portfolio as of
September 30, 2008. Generally, we consider these types of
loans to involve a higher degree of risk compared to first mortgage loans on
one- to four-family, owner-occupied residential properties. In addition, we plan
to increase our emphasis on consumer, commercial real estate and commercial business
lending. Because of our planned increased emphasis on and increased investment
in consumer, commercial real estate and commercial business lending, it may
become necessary to increase the level of our provision for loan losses, which could decrease our net
profits. For further information concerning the risks associated with
multi-family, commercial real estate, consumer loans and commercial business
loans, see “Item 1.
Business—Lending Activities” and “—Asset Quality” in our Annual Report on Form 10-K for the
year ended December 31, 2007, which is incorporated herein by
reference. See “Where You Can Find More
Information.”
Rising
interest rates may hurt our profits.
To be profitable, we have to earn more
money in interest we
receive on loans and investments than we pay to our depositors and lenders in
interest. If interest rates rise, our net interest income and the value of our
assets could be reduced if interest paid on interest-bearing liabilities, such
as deposits and borrowings, increases more
quickly than interest received on interest-earning assets, such as loans, other
mortgage-related investments and investment securities. This is most likely to
occur if short-term interest rates increase at a faster rate than long-term interest rates, which would
cause income to go down. In addition, rising interest rates may hurt our income,
because they may reduce the demand for loans and the value of our
securities.
If
economic conditions deteriorate, our results of operations and financial
condition could be adversely impacted as borrowers’ ability to repay loans
declines and the value of the collateral securing our loans
decreases.
Our financial results may be adversely
affected by changes in prevailing economic conditions, including decreases in real estate
values, changes in interest rates that cause a decrease in interest rate
spreads, adverse employment conditions, the monetary and fiscal policies of the
federal government and other significant external events. In addition, we have a significant amount of
real estate loans. Accordingly, decreases in real estate values could adversely
affect the value of collateral securing our loans. Adverse changes in the
economy may also have a negative effect on the ability of our borrowers to make timely repayments of
their loans. In this regard, a substantial majority of our loans are to
individuals and businesses in north and central Indiana. These factors could expose us to an
increased risk of loan defaults and losses and have an adverse impact on our
earnings.
Liquidity
risk could impair our ability to fund operations and jeopardize our financial
condition.
Liquidity is essential to our business.
An inability to raise funds through deposits, borrowings, the sale of loans and
other sources could have a
substantial negative effect on our liquidity. Our access to funding sources in
amounts adequate to finance our activities or the terms of which are acceptable
to us could be impaired by factors that affect us specifically or
the financial services industry or economy
in general. Factors that could detrimentally impact our access to liquidity
sources include a decrease in the level of our business activity as a result of
a downturn in the markets in which our loans are concentrated or adverse regulatory action against
us. Our ability to
borrow could also be impaired by factors
that are not specific to us, such as a disruption in the financial markets or
negative views and expectations about the prospects for the financial services
industry in light of the
recent turmoil faced by banking organizations and the continued deterioration in
credit markets.
We
may elect or be compelled to seek additional capital in the future, but that
capital may not be available when it is needed.
We are required by federal regulatory
authorities to maintain adequate levels of capital to support our
operations. In addition, we may elect to raise additional capital to
support our business or to finance acquisitions, if any, or we may otherwise
elect or be required to raise additional
capital. In that regard, a number of financial institutions have
recently raised considerable amounts of capital in response to a deterioration in their results of
operations and financial condition arising from the turmoil in the mortgage loan market, deteriorating
economic conditions, declines in real estate values and other
factors. Should we be required by regulatory authorities to raise
additional capital, we may seek to do so through the issuance of, among other
things, our common stock or preferred
stock.
Our ability to raise additional capital,
if needed, will depend on conditions in the capital markets, economic conditions
and a number of other factors, many of which are outside our control, and on our
financial performance.
Accordingly, we cannot assure you of our ability to raise additional capital if
needed or on terms acceptable to us. If we cannot raise additional capital when
needed, it may have a material adverse effect on our financial condition,
results of operations and
prospects.
If
we are unable to redeem our Series A Preferred Stock after five years, the cost
of this capital to us will increase substantially.
If we are unable to redeem the Series A
Preferred Stock prior to February 15, 2014, the cost of this capital to us will
increase substantially on that date, from 5.0% per annum (approximately $1.6
million annually) to 9.0% per annum (approximately $2.9 million
annually). See “Description of Capital Stock—Series A Preferred
Stock-Redemption and Repurchases.” Depending on our financial
condition at the time, this increase in the annual dividend rate on the Series A
Preferred Stock could have a material negative effect on our
liquidity.
We
operate in a highly regulated environment, and we may be adversely affected by
changes in laws and regulations.
The Bank is subject to extensive regulation,
supervision and examination by the OTS, its chartering authority, and by the
FDIC, as insurer of its
deposits. MutualFirst Financial also is subject to regulation
and supervision by the OTS.
This regulation and supervision governs the activities in which we may engage,
and are intended primarily for the protection of the deposit insurance fund and depositors.
Regulatory authorities have extensive discretion in their supervisory and enforcement activities,
including the imposition of restrictions on our operations, the classification
of our assets and determination of the level of our allowance for loan losses.
Any change in this regulation and oversight, whether in the form of regulatory policy, regulations,
legislation or supervisory action, may have a material impact on our
operations.
Strong
competition within our market area may limit our growth and
profitability.
Competition in the banking and financial
services industry is
intense. In our market area, we compete with commercial banks, savings
institutions, mortgage brokerage firms, credit unions, finance companies, mutual
funds, insurance companies, and brokerage and investment banking firms operating
locally and elsewhere. Many of these competitors have
substantially greater resources and lending limits than we do and may offer
certain services that we do not or cannot provide. Our profitability depends
upon our continued ability to successfully compete in our market.
We
rely on dividends from the Bank for substantially all of our
revenue.
MutualFirst Financial receives substantially all of
its revenue as dividends from the Bank. OTS regulations limit the
amount of dividends that the Bank may pay to MutualFirst
Financial. See “Regulatory Considerations.” In the event
the Bank becomes unable to pay dividends to MutualFirst Financial, MutualFirst
Financial may not be able to service its debt, pay its other obligations or pay
dividends on its common stock. Accordingly, our inability to receive
dividends from the Bank could also have a material adverse effect on our
business, financial condition and results of operations and the value of your
investment in our common stock.
Risks
Relating to Our Common Stock
The
price of our common stock may fluctuate significantly, and this may make it
difficult for you to resell our common stock when you want or at prices you find
attractive.
We cannot predict how our common stock
will trade in the future. The market value of our common stock will likely continue to
fluctuate in response to a number of factors including the following, most of
which are beyond our control, as well as the other factors described
in this “Risk Factors” section:
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actual
or anticipated quarterly fluctuations in our operating and financial
results;
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developments
related to investigations, proceedings or litigation that involve
us;
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changes
in financial estimates and recommendations by financial
analysts;
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dispositions,
acquisitions and financings;
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fluctuations
in the stock prices and operating results of our
competitors;
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regulatory
developments; and
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other
developments related to the financial services
industry.
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The market value of our common stock may also be affected
by conditions affecting the financial markets in general, including price and
trading fluctuations. These conditions may result in (i) volatility in the
level of, and fluctuations in, the market prices of stocks generally and, in
turn, our common stock and (ii) sales of
substantial amounts of our common stock in the market, in each case that could
be unrelated or disproportionate to changes in our operating performance. These
broad market fluctuations may adversely affect the market value of our common stock. Our common stock also has a low
average daily trading
volume relative to many other stocks, which may limit an investor’s ability to quickly accumulate or divest
themselves of large blocks of our stock. This can lead to significant price
swings even when a relatively small number of shares are being traded.
There
may be future sales of additional common stock or preferred stock or other
dilution of our equity, which may adversely affect the market price of our
common stock.
We are not restricted from issuing
additional common stock or
preferred stock, including
any securities that are convertible into or exchangeable for, or that represent
the right to receive, common stock or preferred stock or any substantially similar securities.
The market
value of our common stock
could decline as a result of sales by us of a large number of shares of common
stock or preferred stock or similar securities in the market or the perception that such
sales could occur.
Anti-takeover
provisions could negatively impact our shareholders.
Provisions in our charter and bylaws, the corporate law of the State of
Maryland and federal regulations could delay,
defer or prevent a third party from acquiring us, despite the possible benefit
to our
stockholders, or otherwise
adversely affect the
market price of
any class of our equity
securities, including our
common stock. These provisions include: a prohibition on voting shares of common
stock beneficially owned in excess of 10% of total shares outstanding,
supermajority voting
requirements for certain business combinations with any person who beneficially owns
more than 10% of our outstanding common stock; the election of directors to staggered
terms of three years; advance notice requirements for nominations for election
to our Board of
Directors and for proposing
matters that stockholders may act on at stockholder meetings, a requirement that only directors may
fill a vacancy in our Board of Directors, supermajority voting requirements to
remove any of our directors and the other provisions
described under “Description of Capital
Stock─Anti-Takeover Effects.” Our charter also authorizes our Board of Directors to issue preferred stock, and preferred stock could be issued as a
defensive measure in response to a takeover proposal. For further
information, see “Description of Capital Stock—Preferred
Stock.” In addition, pursuant to OTS regulations, as a general
matter, no person or company, acting individually or in concert with others, may
acquire more than 10% of our common stock without prior approval from the
OTS.
These provisions may discourage
potential takeover attempts, discourage bids for our common stock at a premium
over market price or adversely affect the market price of, and the voting and
other rights of the holders of, our common stock. These provisions could also discourage
proxy contests and make it more difficult for holders of our common stock
to elect directors other
than the candidates nominated by our Board of Directors.
The
voting limitation provision in our charter could limit your voting rights as a
holder of our common stock.
Our charter provides that any person or group who acquires
beneficial ownership of our common stock in excess of 10% of the outstanding
shares may not vote the excess shares. Accordingly, if you acquire
beneficial ownership of more than 10% of the outstanding shares of our common
stock, your voting rights with respect to the common stock will not be
commensurate with your economic interest in our company.
The
securities purchase agreement between us and Treasury limits our ability to pay
dividends on and repurchase our common stock.
The securities purchase agreement
between us and Treasury provides that prior to the earlier of (i) December 23,
2011 and (ii) the date on which all of the shares of the Series A Preferred
Stock have been redeemed by us or transferred by Treasury to third parties, we
may not, without the consent of Treasury, (a) increase the cash dividend on our
common stock or (b) subject to limited exceptions, redeem, repurchase or
otherwise acquire shares of our common stock or preferred stock (other than the
Series A Preferred Stock) or any trust preferred securities then
outstanding. In addition, we are unable to pay any dividends on our
common stock unless we are current in our dividend payments on the Series A
Preferred Stock. These restrictions, together with the potentially
dilutive impact of the warrant described in the next risk factor, could have a
negative effect on the value of our common stock. Moreover, holders of our common stock
are entitled to receive
dividends only when, as and if declared by our Board of Directors. Although we have historically
paid cash dividends on our common stock, we
are not required to do so and our Board of Directors could reduce or eliminate our common stock
dividend in the future.
The
Series A Preferred Stock impacts net income available to our common shareholders
and earnings per common share, and the warrant we issued to Treasury may be
dilutive to holders of our common stock.
The dividends declared on the Series A Preferred Stock will reduce the net income available to
common shareholders and our earnings per common
share. The Series A Preferred Stock will also receive preferential treatment
in the event of liquidation, dissolution or winding up of MutualFirst Financial. Additionally, the ownership interest of the existing
holders of our common stock will be diluted to the extent the warrant we
issued to Treasury in
conjunction with the sale
to Treasury of the Series A Preferred Stock is exercised. The shares
of common stock underlying
the warrant represent approximately 8.2% of the shares of our common stock outstanding as
of January 21, 2009 (including the shares issuable upon
exercise of the warrant in total shares outstanding). Although
Treasury has agreed not to
vote any of the shares of common stock it receives upon exercise of the warrant,
a transferee of any portion of the warrant or of any shares of common stock
acquired upon exercise of the warrant is not bound by this
restriction.
USE
OF PROCEEDS
All securities sold pursuant to this
prospectus will be sold by the selling securityholders and we will not receive
the proceeds from such sales.
As a savings and loan holding company,
MutualFirst Financial is subject to regulation,
supervision and examination by the OTS. For a discussion of elements of the
regulatory framework applicable to savings and loan holding companies and their
subsidiaries, please refer to our Annual Report on Form 10-K for the year ended
December 31, 2007 and the other documents incorporated herein by reference as
described under “Where You Can Find More Information.” This
regulatory framework is intended primarily for the protection of depositors and
the federal deposit insurance fund and not for the protection of security
holders, including holders of our common stock. As a result of this
regulatory framework, our results of operations and financial condition are
affected by actions of the OTS and the FDIC, which insures the deposits of our
subsidiary federal savings bank, MutualBank.
Our ability to pay dividends on our
common stock depends primarily on dividends we receive from the
Bank. Under federal regulations, the dollar amount of capital
distributions (including dividends) the Bank may make depends upon its capital
position and recent net income. Generally, savings institutions, that
before and after the proposed distribution remain well-capitalized, may make
capital distributions during any calendar year equal to up to 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 OTS may have its dividend authority restricted by the
OTS.
Under Maryland law, MutualFirst Financial is generally prohibited from
paying a dividend or making any other distribution if, after making such
distribution, it would be unable to pay its debts as they become due in the
usual course of business, or if its total assets would be less than the sum of
its total liabilities plus the amount that would be needed if it were dissolved
at the time of the distribution, to satisfy preferential rights on dissolution
of holders of preferred stock ranking senior in right of payment to the capital
stock on which the applicable distribution is made.
There are numerous other governmental
requirements and regulations that affect our business activities. A change in
applicable statutes, regulations or regulatory policy may have a material effect
on our business and on our ability to pay dividends on our common
stock. Depository institutions, like the Bank, are also affected by
various federal laws, including those relating to consumer protection and
similar matters.
In addition to the foregoing regulatory
restrictions, we are and may in the future become subject to contractual
restrictions that would limit or prohibit us from paying dividends on our common
stock, including those contained in the securities purchase agreement between us
and Treasury, as described under “Description of Capital Stock—Common
Stock-Restrictions on Dividends and Repurchases Under Agreement with
Treasury.”
DESCRIPTION
OF WARRANT
This section summarizes specific terms and provisions
of the warrant we issued to
Treasury on December 23, 2008 concurrent with our sale to Treasury of 32,382
shares of Series A Preferred Stock pursuant to the TARP Capital Purchase
Program. The description of the warrant contained
in this section is qualified in its entirety by the actual terms of the warrant, a copy of which was attached as
Exhibit 4.2 to our Current Report on Form 8-K filed on December 23, 2008 and
incorporated by reference into this prospectus. See “Where You Can
Find More Information.”
General
The warrant gives the holder the right
to initially purchase up to 625,135 shares of our common stock at an exercise
price of $7.77 per share. Subject to the limitations on exercise to
which Treasury is subject described under “—Transferability,” the warrant is
immediately exercisable and expires on December 23, 2018. The
exercise price may be paid (i) by having us withhold from the shares of common
stock that would otherwise be issued to the warrant holder upon exercise, a
number of shares of common stock having a market value equal to the aggregate
exercise price or (ii) if both we and the warrant holder consent, in
cash.
Possible
Reduction in Number of Shares
If we (or any successor to us by a
business combination) complete one or more Qualified Equity Offerings on or
before December 31, 2009 resulting in aggregate gross proceeds of at least
$32,382,000 (plus the aggregate liquidation preference amount of any preferred
stock issued to Treasury by a successor to us), the number of shares of common
stock underlying the warrant then held by Treasury will be reduced by
50%. The number of shares subject to the warrant are subject to
further adjustment as described below under “—Other
Adjustments.”
A “Qualified Equity Offering” is defined
as the sale for cash by MutualFirst Financial (or its successor)
of preferred stock or
common stock that qualifies as Tier 1 capital under applicable regulatory capital
guidelines.
Transferability
The warrant is not subject to any
restrictions on transfer; however, Treasury may only transfer or exercise the
warrant with respect to one-half of the shares underlying the warrant prior to
the earlier of (i) the date on which we (or any successor to us by a business
combination) have received aggregate gross proceeds of at least $32,382,000
(plus the aggregate liquidation preference amount of any preferred stock issued
to Treasury by a successor to us) from one or more Qualified Equity Offerings
(including those by any successor to us by a business combination) and (ii)
December 31, 2009.
Voting
of Warrant Shares
Treasury has agreed that it will not
vote any of the shares of common stock that it acquires upon exercise of the
warrant. This does not apply to any other person who acquires any
portion of the warrant, or the shares of common stock underlying the warrant,
from Treasury. Our charter provides, however, that any person who
beneficially owns shares of our common stock in excess of 10% of the outstanding
shares may not vote the excess shares. See “Description of Capital
Stock—Anti-Takeover Effects-Voting Limitation.”
Other
Adjustments
The exercise price of the warrant
and the number of shares underlying the warrant
automatically adjust upon
the following events:
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any stock split, stock dividend,
subdivision, reclassification or combination of our common
stock;
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until
the earlier of (i) the date on which Treasury no longer holds any portion
of the warrant and (ii) December 23, 2011, issuance of our common stock
(or securities convertible into our common
stock)
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for consideration (or having a
conversion price per share) less than 90% of then
current market value, except for issuances in connection with benefit
plans, business
acquisitions and public or other broadly marketed
offerings;
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a
pro rata repurchase by us of our common stock;
or
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a determination by our Board of
Directors to make an adjustment to the anti-dilution provisions as
are reasonably
necessary, in the good faith opinion of the Board, to protect the purchase
rights of the warrant holders.
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In addition, if we declare any dividends
or distributions on our common stock other than our historical, ordinary cash
dividends, dividends paid in our common stock and other dividends or
distributions covered by the first bullet point above, the exercise price of the
warrant will be adjusted to reflect such distribution.
In the event of any merger,
consolidation, or other business combination to which we are a party, the
warrantholder’s right to receive shares of our common stock upon exercise of the
warrant will be converted into the right to exercise the warrant to acquire the
number of shares of stock or other securities or property (including cash) which
the common stock issuable upon exercise of the warrant immediately prior to such
business combination would have been entitled to receive upon consummation of
the business combination. For purposes of the provision described in
the preceding sentence, if the holders of our common stock have the right to
elect the amount or type of consideration to be received by them in the business
combination, then the consideration that the warrantholder will be entitled to
receive upon exercise will be the amount and type of consideration received by a
majority of the holders of the common stock who affirmatively make an
election.
No
Rights as Shareholders
The warrant does not entitle its
holder to any of the rights of a shareholder
of MutualFirst Financial prior to
exercise.
Our authorized capital stock consists
of:
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20,000,000
shares of common stock, par value $.01 per share;
and
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5,000,000
shares of preferred stock, par value $.01 per
share.
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As of January 20, 2009, there were 6,984,754 shares of our common stock issued and
outstanding and 32,382 shares of our preferred stock issued
and outstanding, all of
which consisted of our Series A Preferred Stock.
In this section we describe certain features and rights
of our capital stock. The summary does not purport to be exhaustive and is
qualified in its entirety by reference to our charter and bylaws and to applicable Maryland law.
Common Stock
General.
Except as described below
under “—Anti-takeover Effects
–Voting Limitation,” each holder of common stock is entitled
to one vote for each share on all matters to be voted upon by the common
stockholders. There are no cumulative voting
rights. Subject to preferences to which holders of any shares of preferred stock
may be entitled, holders of common stock will be entitled to receive ratably any
dividends that may be declared from time to time by the Board of Directors out
of funds legally available for that purpose. In the event of our liquidation,
dissolution or winding up, holders of common stock will be entitled to share in
our assets remaining after the payment or provision for payment of our debts and
other liabilities, and the satisfaction of the liquidation preferences of the
holders of the Series A Preferred Stock and any other series of our preferred stock
then outstanding. Holders of common stock have no
preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund
provisions that apply to the common stock. All shares of common stock currently
outstanding are fully paid and nonassessable. The rights, preferences and
privileges of the holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of preferred
stock that we may designate in the future.
Restrictions on
Dividends and Repurchases Under Agreement with Treasury. The securities purchase agreement
between us and Treasury provides that prior to the earlier of (i) December 23,
2011 and (ii) the date on which all of the shares of the Series A Preferred
Stock have been redeemed by us or transferred by Treasury to third parties, we
may not, without the consent of Treasury, (a) increase the cash dividend on our
common stock or (b) subject to limited exceptions, redeem, repurchase or
otherwise acquire shares of our common stock or preferred stock (other than the
Series A Preferred Stock) or trust preferred securities.
Preferred
Stock-General
Our charter permits our Board of Directors to authorize the issuance of up to
5,000,000 shares of preferred stock, par
value $0.01, in one or more series, without stockholder action. The Board of Directors can fix the designation, powers,
preferences and rights of each series. Therefore, without approval of the holders of our common stock or
the Series A Preferred Stock (except as may be required under the terms of the Series A
Preferred Stock (see “—Series A Preferred Stock—Voting Rights”) or by the rules of the NASDAQ Stock Market or any other exchange or
market on which our securities may then be listed or quoted), our Board of Directors may authorize the issuance of preferred
stock with voting, dividend, liquidation and conversion and other rights that
could dilute the voting power or other rights or adversely affect the market
value of our common stock and may assist management
in impeding any unfriendly takeover or attempted change in
control. See “—Anti-Takeover
Effects – Authorized Shares.”
Series A Preferred
Stock
This section summarizes specific terms and provisions of the Series A Preferred Stock. The description of the
Series A Preferred Stock set forth below is qualified in its entirety by
the actual terms of the Series A Preferred Stock, as are stated in the articles
supplementary for the Series A Preferred Stock, a copy of which was attached as
Exhibit 3.1 to our Current Report on Form 8-K filed on December 23, 2008 and
incorporated by reference into this prospectus. See “Where You Can
Find More Information.”
General.
The Series A Preferred Stock constitutes a single series of our preferred stock,
consisting of 32,382
shares, par value $0.01 per
share, having a liquidation preference amount of $1,000 per share. The Series A Preferred Stock
has no maturity date. We issued the shares of Series A Preferred
Stock to Treasury on December 23, 2008 in connection with the TARP Capital
Purchase Program for a purchase price of $32.4 million.
Dividend Rate.
Dividends on the
Series A
Preferred Stock
are payable quarterly in arrears, when, as
and if authorized and declared by our Board of Directors out of legally available funds, on a
cumulative basis on the $1,000 per share liquidation preference amount plus the amount of accrued and
unpaid dividends for any prior dividend periods, at a rate of (i) 5% per annum, from the
original issuance date to but excluding the first day of the first dividend
period commencing after the fifth anniversary of the original issuance date
(i.e., 5% per annum from December 23, 2008 to but excluding February 15, 2014),
and (ii) 9% per annum, from and after the first day of the first dividend period
commencing after the fifth anniversary of the original issuance date (i.e., 9%
per annum on and after February 15, 2014). Dividends are payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, commencing on February 15, 2009.
Dividends on the Series A Preferred Stock will be cumulative.
If for any reason our Board of Directors does not declare a dividend on the
Series A Preferred Stock for a particular dividend period, or if our Board of Directors declares less than a full dividend, we
will remain obligated to
pay the unpaid portion of the dividend for that period and the unpaid dividend
will compound on each subsequent dividend date (meaning that dividends for
future dividend periods will accrue on any unpaid dividend amounts for prior
dividend periods).
We are not obligated to pay holders of the Series A Preferred Stock any dividend in excess
of the dividends on the Series A Preferred Stock that are payable as
described above. There is no sinking fund with respect to
dividends on the Series A
Preferred Stock.
Priority of
Dividends. So
long as the Series A Preferred Stock remains outstanding, we may not declare or
pay a dividend or other distribution on our common stock or any other shares of
Junior Stock (other than dividends
payable solely in common stock) or
Parity Stock (other than dividends paid on a pro rata basis with the Series A
Preferred Stock), and we generally may not directly or indirectly purchase,
redeem or otherwise acquire any shares of common stock, Junior Stock or Parity
Stock unless all accrued and unpaid dividends on the Series A Preferred Stock
for all past dividend periods are paid in full.
“Junior Stock” means our common stock
and any other class or series of our stock the terms of which expressly provide
that it ranks junior to the Series A Preferred Stock as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of MutualFirst Financial. We currently have
no outstanding class or series of stock constituting Junior Stock other than our
common stock.
“Parity Stock” means any class or series
of our stock, other than the Series A Preferred Stock, the terms of which do not
expressly provide that such class or series will rank senior or junior to the
Series A Preferred Stock as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of MutualFirst Financial, in each case without regard
to whether dividends accrue cumulatively or non-cumulatively. We
currently have no outstanding class or series of stock constituting Parity
Stock.
Liquidation
Rights. In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of MutualFirst Financial, holders of the Series A
Preferred Stock will be entitled to receive for each share of Series A Preferred
Stock, out of the assets of MutualFirst Financial or proceeds available for
distribution to our shareholders, subject to any rights of our creditors, before
any distribution of assets or proceeds is made to or set aside for the holders
of our common stock and any other class or series of our stock ranking junior to
the Series A Preferred
Stock, payment of an amount equal to the sum of (i) the $1,000 liquidation
preference amount per share and (ii) the amount of any accrued and unpaid
dividends on the Series A Preferred Stock (including dividends accrued on any
unpaid dividends). To the extent the assets or proceeds available for
distribution to shareholders are not sufficient to fully pay the liquidation
payments owing to the holders of the Series A Preferred Stock and the holders of
any other class or series of our stock ranking equally with the Series A
Preferred Stock, the holders of the Series A Preferred Stock and such other
stock will share ratably in the distribution.
For purposes of the liquidation rights
of the Series A Preferred Stock, neither a merger or consolidation of
MutualFirst Financial with another entity nor a
sale, lease or exchange of all or substantially all of MutualFirst Financial’s assets will constitute a
liquidation, dissolution or winding up of the affairs of MutualFirst Financial.
Redemption and
Repurchases. Subject to the
prior approval of the
OTS, the Series A Preferred
Stock is redeemable at our option in whole or in part at a
redemption price equal
to 100% of the liquidation
preference amount of $1,000
per share plus any accrued and unpaid
dividends to but excluding
the date of redemption (including dividends accrued on any unpaid
dividends), provided that any declared but unpaid
dividend payable on a redemption date that occurs subsequent to the record date
for the dividend will be payable to the holder of record of the redeemed shares
on the dividend record date, and provided further that the Series A Preferred Stock may be
redeemed prior to the first dividend payment date falling after the third anniversary of
the original issuance date (i.e., prior to February 15,
2012) only if (i)
we have, or our successor
following a business combination with another entity which also participated in
the TARP Capital Purchase Program has, raised aggregate gross proceeds in one
or more Qualified Equity
Offerings (as defined above under “Description of Warrant—Possible Reduction in
Number of Shares”) of at least the Minimum Amount and (ii) the aggregate redemption
price of the Series A Preferred Stock
does not exceed the
aggregate net proceeds from such Qualified Equity Offerings by us and any successor. The “Minimum Amount” means
$8,095,500 plus, in the event we are succeeded in a business combination by
another entity which also participated in the TARP Capital Purchase Program, 25%
of the aggregate liquidation preference amount of the preferred stock issued by
that entity to Treasury.
Shares of Series A Preferred Stock that
we redeem, repurchase or otherwise acquire will revert to authorized but
unissued shares of preferred stock, which may then be reissued by us as any
series of preferred stock other than the Series A Preferred
Stock.
No Conversion
Rights. Holders of the
Series A Preferred Stock have no right to exchange or convert their shares into
common stock or any other securities.
Voting Rights.
The holders of the
Series A
Preferred Stock do not have
voting rights other than those described below, except to the extent specifically required by Maryland law.
Whenever dividends have not been paid on
the Series A Preferred Stock for six or more quarterly dividend periods, whether
or not consecutive, the authorized number of directors of MutualFirst Financial will automatically increase
by two and the holders of the Series A Preferred Stock will have the right, with
the holders of shares of any other classes or series of Voting Parity Stock
outstanding at the time, voting together as a class, to elect two directors (the
“Preferred
Directors”) to fill such newly created directorships
at our next annual meeting of shareholders (or at a special meeting called for that purpose prior to
the next annual meeting) and at each subsequent annual meeting of shareholders until all
accrued and unpaid dividends for all past dividend periods on all outstanding
shares of Series A Preferred Stock have been paid in full at which time this
right will terminate with respect to the Series A Preferred Stock, subject to
revesting in the event of each and every subsequent default by us in the payment
of dividends on the Series A Preferred Stock.
Upon any termination of the right of the
holders of the Series A Preferred Stock and Voting Parity Stock as a class to
vote for directors as described above, the Preferred Directors will cease to be
qualified as directors, the terms of office of all Preferred Directors then in
office will terminate immediately and the authorized number of directors will be
reduced by the number of Preferred Directors which had been elected by the
holders of the Series A Preferred Stock and the Voting Parity Stock. Any
Preferred Director may be removed at any time, with or without cause, and any
vacancy created by such a removal may be filled, only by the affirmative vote of
the holders a majority of the outstanding shares of Series A
Preferred Stock voting
separately as a class together with the holders of shares of Voting Parity
Stock, to the extent the voting rights of such holders described above are then
exercisable. If the office of any Preferred Director becomes vacant for any
reason other than removal from office, the remaining Preferred Director may
choose a successor who will hold office for the unexpired term of the office in
which the vacancy occurred.
The term “Voting Parity Stock” means
with regard to any matter as to which the holders of the Series A Preferred
Stock are entitled to vote, any series of Parity Stock (as defined under
“—Priority of Dividends”) upon which voting rights similar to those of the
Series A Preferred Stock have been conferred and are exercisable with respect to
such matter. We currently have no outstanding shares of Voting Parity
Stock.
In addition to any other vote or consent
required by Maryland law or by our charter, the vote or consent of the holders of at
least 66 2/3% of the outstanding shares of
Series A Preferred Stock, voting as a separate class, is
required in order to do the following:
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amend
our charter or the articles supplementary for the Series A Preferred Stock
to authorize or create or increase the authorized amount of, or any
issuance of, any shares of, or any securities convertible into or
exchangeable or exercisable for shares of, any class or series of stock
ranking senior to the Series A Preferred Stock with respect to the payment
of dividends and/or the distribution of assets on any liquidation,
dissolution or winding up of MutualFirst Financial;
or
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·
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amend
our charter or the articles supplementary for the Series A Preferred Stock
in a way that materially and adversely affect the rights, preferences,
privileges or voting powers of the Series A Preferred Stock;
or
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consummate
a binding share exchange or reclassification involving the Series A
Preferred Stock or a merger or consolidation of MutualFirst Financial
with another entity, unless (i) the shares of Series A Preferred
Stock remain outstanding or, in the case of a merger or consolidation in
which MutualFirst Financial
is not the surviving or resulting entity, are converted into or exchanged
for preference securities of the surviving or resulting entity or its
ultimate parent, and (ii) the shares of Series A Preferred Stock
remaining outstanding or such preference securities, have such rights,
preferences, privileges, voting powers, limitations and restrictions,
taken as a whole, as are not materially less favorable than the rights,
preferences, privileges, voting powers, limitations and restrictions of
the Series A Preferred Stock prior to consummation of the transaction,
taken as a whole;
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provided, however, that
(1) any increase in the amount of our authorized but unissued shares of
preferred stock, and (2) the creation and issuance, or an increase in the
authorized or issued amount, of any other series of preferred stock, or any
securities convertible into or exchangeable or exercisable for any other series
of preferred stock, ranking equally with and/or junior to the Series A Preferred
Stock with respect to the payment of dividends, whether such dividends are
cumulative or non-cumulative and the distribution of assets upon our
liquidation, dissolution or winding up, will not be deemed to materially and
adversely affect the rights, preferences, privileges or voting powers of the
Series A Preferred Stock and will not require the vote or consent of the holders
of the Series A Preferred Stock.
To the extent holders of the Series A
Preferred Stock are entitled to vote, holders of shares of the Series A
Preferred Stock will be entitled to one for each share then
held.
Anti-takeover
Effects
The provisions of our charter and bylaws summarized in the following paragraphs
may have anti-takeover effects and could delay, defer, or prevent a tender offer
or takeover attempt that a stockholder might consider to be in such
stockholder’s best interest, including those
attempts that might result in a premium over the market price for the shares
held by stockholders, and may make removal of
the incumbent management and directors more difficult.
Authorized
Shares. Our charter authorizes the issuance of 20,000,000 shares of common stock and
5,000,000 shares of preferred
stock. These shares of common stock and preferred stock provide our
Board of Directors with as much flexibility as possible to effect, among other
transactions, financings, acquisitions, stock dividends, stock splits and
the granting of equity
incentive awards. However, these additional
authorized shares may also be used by the Board of Directors consistent with its
fiduciary duty to deter future attempts to gain control of us. The
Board of Directors also has sole authority to determine the terms of any one or
more series of preferred stock, including voting rights, conversion rates, and
liquidation preferences. As a result of the ability to fix voting
rights for a series of preferred stock, the Board has the power to the extent
consistent with its fiduciary duty to issue a series of preferred stock to
persons friendly to management in order to attempt to block a tender offer,
merger or other transaction by which a third party seeks control of
us.
Voting Limitation. Our charter generally prohibits any
stockholder that beneficially owns more than 10% of the outstanding shares of
our common stock from voting shares in excess of this limit. This
provision would limit the voting power of a beneficial owner of
more than 10% of our outstanding shares of common stock in a proxy contest or on
other matters on which such person is entitled to vote.
The Maryland General Corporation Law
contains a control share acquisition statute which, in general terms, provides
that where a stockholder acquires issued and outstanding shares of a
corporation’s voting stock (referred to as control shares) within one of several
specified ranges (one-tenth or more but less than one-third, one-third or more
but less than a majority, or a majority or more), approval by stockholders of
the control share acquisition must be obtained before the acquiring stockholder
may vote the control shares. The required stockholder vote is two-thirds of all
votes entitled to be cast, excluding “interested shares,” defined as shares held
by the acquiring person, officers of the corporation and employees who are also
directors of the corporation. A corporation may, however, opt-out of the control
share statute through a charter or bylaw provision, which we have done pursuant
to our charter. Accordingly, the Maryland control share acquisition statute does
not apply to acquisitions of shares of our common stock. Though not anticipated,
we could seek stockholder approval of an amendment to our charter to eliminate
the opt-out provision; such an amendment would require a supermajority
vote. See “—Amendment of Charter and Bylaws.”
Board of
Directors. Except with respect to any directors who
may be elected by any class or series of preferred stock, our Board of Directors is divided into
three classes, each of which contains approximately one-third of the members of the
Board. The members of each class are elected for a term of three
years, with the terms of office of all members of one class expiring each year
so that approximately one-third of the total number of directors is elected each
year. The classification of directors, together with the provisions
in our charter described below that limit the ability
of stockholders to remove directors and that permit
only the remaining directors to fill any vacancies on the Board of Directors,
have the effect of making it more difficult for stockholders to change the composition of the Board
of Directors. As a result, at least two annual meetings of stockholders will be required for the stockholders
to change a majority of the directors,
whether or not a change in the Board of Directors would be beneficial and
whether or not a majority of stockholders believe that such a change would be
desirable. Our charter
provides that stockholders may not cumulate their votes in the election of
directors.
Our charter provides that we will have
the number of directors fixed from time to time by our Board of Directors by a
vote of a majority of the Board. MutualFirst Financial currently has 13
directors. Our charter provides that, subject to the rights of the
holders of any series of preferred stock then outstanding, vacancies in the
Board of Directors may be filled by a majority vote of the directors then in
office, though less than a quorum, and any director so chosen shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred. Our charter further provides that, subject to the
rights of the holders of any series of preferred stock then outstanding,
directors may be removed from office only for cause and only by the vote of the
holders of at least 80% of the voting power of the outstanding shares of capital
stock entitled to vote generally in the election of directors, voting together
as a single class.
The foregoing description of our Board
of Directors does not apply with respect to directors who may be elected by the
holders of the Series A Preferred Stock in the event we do not pay dividends on
the Series A Preferred Stock for six or more dividend periods. See
“—Series A Preferred Stock-Voting Rights.”
Special
Meetings of
Stockholders. Our bylaws provide that special meetings of
stockholders may be called
by our Board of Directors
by vote of a majority of
the whole Board (meaning the total number of directors
we would have if there were no vacancies). Our bylaws also provide that a special meeting of stockholders
shall be called by on the
written request of stockholders entitled to cast at least a majority of all
votes entitled to be cast at the meeting.
Action by
Stockholders Without A Meeting. Our bylaws provide that, except as described
in the following sentence, any action required or permitted to be taken at a
meeting of stockholders may instead be taken
without a meeting if a consent which sets forth the action given in writing or
by electronic transmission by each stockholder entitled to vote on the matter.
The bylaws also provide that, unless our charter provides otherwise, the holders
of any class of
our stock, other than
common stock, that is entitled to vote generally in the election of directors
may act by consent delivered in writing or by electronic transmission by the
holders entitled to cast the minimum number of votes that would be necessary to
approve the action at a meeting of stockholders.
Business
Combinations With Certain Persons. Our charter provides that certain
business combinations (for example, mergers, share exchanges, significant asset
sales and significant stock issuances) involving “interested stockholders” of
MutualFirst Financial require, in addition to any vote
required by law, the approval of the holders of at least 80% of the voting power
of the outstanding shares of stock entitled to vote generally in the election of
directors, voting together as a single class, unless either (i) a majority
of the disinterested directors have approved the business combination or
(ii) certain fair price and procedure requirements are satisfied. An
“interested stockholder” generally means a person who is a greater than 10%
stockholder of MutualFirst Financial or who is an affiliate of MutualFirst Financial and at any time within the past two
years was a greater than 10% stockholder of MutualFirst Financial.
The Maryland General Corporation Law
contains a business combination statute that prohibits a business combination
between a corporation and an interested stockholder (one who beneficially owns
10% or more of the voting power) for a period of five years after the interested
stockholder first becomes an interested stockholder, unless the transaction has
been approved by the board of directors before the interested stockholder became
an interested stockholder or the corporation has exempted itself from the
statute pursuant to a charter provision. After the five-year period has elapsed,
a corporation subject to the statute may not consummate a business combination
with an interested stockholder unless (i) the transaction has been
recommended by the board of directors and (ii) the transaction has been approved by
(a) 80% of the outstanding shares entitled to be cast and
(b) two-thirds of the votes entitled to be cast other than shares owned by
the interested stockholder. This approval requirement need not be met if certain
fair price and terms criteria have been satisfied. We have opted-out
of the Maryland business combination statute through a provision in our
charter.
Amendment of Charter
and
Bylaws. Our charter generally may be
amended upon approval by the Board of Directors and the holders of a majority of
the outstanding shares of our common stock. The amendment of certain
provisions of our charter, however, requires the vote of the holders of at least
80% of the voting power of the
outstanding shares of capital stock
entitled to vote generally in the election of directors, voting together as a
single class. These include provisions relating to: the authorization of the
Board of Directors to issue preferred stock; voting limitations on greater than
10% stockholders; our opt-out of the Maryland control share acquisition statute
(see “—Voting Limitation” above); the number, classification, election and
removal of directors; certain business combinations with greater than 10%
stockholders; indemnification of directors and officers; and amendments to the
charter and bylaws.
Our bylaws may be amended either by the
Board of Directors, by a vote of a majority of the whole Board, or by our
stockholders, by the vote of the holders of at least 80% of the voting power of
the outstanding shares of capital stock entitled to vote generally in the
election of directors, voting together as a single class.
Advance Notice
Provisions. Our bylaws provide that we must receive
written notice of any stockholder proposal for business at an annual meeting of
stockholders, or any stockholder director nomination for an annual meeting of
stockholders, not less than 90 days or more than 120 days before the
anniversary of the preceding year’s annual meeting. If, however, the
date of the current year annual meeting is advanced by more than 30 days or
delayed by more than 60 days from the anniversary date of the preceding
year’s annual meeting, notice of the proposal or nomination must be received by
us no earlier than the 120th day prior to the annual meeting or
later than the close of business on the later of the 90th day prior to the annual meeting or the
10th day following the day
on which notice of the date of the meeting is mailed or public announcement of
the meeting date is first made.
Transfer
Agent
The transfer agent and registrar for our
common stock is Continental
Stock Transfer and Trust Company.
SELLING
SECURITYHOLDERS
The selling securityholders may include
(i) Treasury, which acquired the warrant and all of the shares of Series A
Preferred Stock from us on December 23, 2008 in a private placement exempt from
the registration requirements of the Securities Act of 1933, and (ii) any other
person or persons holding any portion of the warrant and any shares of our
common stock issued upon exercise of the warrant to whom Treasury has
transferred its registration rights under the terms of the securities purchase
agreement between us and Treasury. Treasury is required to notify us
in writing of any such transfer of its registration rights within ten days after
the transfer, including the name and address of the transferee and the number
and type of securities with respect to which the registration rights have been
assigned. As of the date of this prospectus, Treasury has not
notified us of any such transfer. Accordingly, we believe that
Treasury currently holds record and beneficial ownership of the entire amount of
the warrant (none of which has been exercised) covered by this
prospectus.
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a ten-year warrant to purchase
625,135 shares of our common stock at an exercise price of $7.77 per
share, subject to adjustment as described under “Description of Warrant”;
and
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the 625,135 shares of our common
stock issuable upon exercise of the warrant (subject to adjustment as
described under “Description of Warrant”), which shares, if issued, would
represent ownership of approximately 8.2% of the shares of our
common stock outstanding as of January 21, 2009 (including the shares
issuable upon exercise of the warrant in total shares
outstanding).
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For purposes
of this prospectus, we have assumed that, after completion of the offering, none
of the securities covered by this prospectus will be held by the selling
securityholders.
We do not
know when or in what amounts the selling securityholders may offer the
securities for sale. The selling securityholders might not sell any or all of
the securities offered by this prospectus. Because the selling securityholders
may offer all or some of the securities pursuant to this offering, and because,
to our knowledge, no sale of any of the securities is currently subject to any
agreements, arrangements or understandings, we cannot estimate the number of the
securities that will be held by the selling securityholders after completion of
the offering.
The only
potential selling securityholder whose identity we are currently aware of is
Treasury. Other than with respect to Treasury’s acquisition of the
Series A Preferred Stock and warrant from us, Treasury has not had a material
relationship with us.
Information
about the selling securityholders may change over time and changed information
will be set forth in supplements to this prospectus if and when
necessary.
The selling securityholders may sell all or a portion of the
securities beneficially owned by them and offered
by this
prospectus from time to
time directly or through one or more underwriters, broker-dealers or agents. If securities
are sold through
underwriters or broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent’s commissions. The securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions. The selling securityholders may use any one or more of the
following methods when selling shares:
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on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale;
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in
the over-the-counter market;
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in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
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through
the writing of options, whether such options are listed on an options
exchange or otherwise;
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
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an
exchange distribution in accordance with the rules of the applicable
exchange;
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privately
negotiated transactions;
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settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
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broker-dealers
may agree with the selling securityholders to sell a specified number of
such shares at a stipulated price per
share;
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a
combination of any such methods of sale;
and
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any
other method permitted pursuant to applicable
law.
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The selling securityholders may also sell securities under Rule 144 under the Securities
Act of 1933, if available, rather than under this
prospectus.
Broker-dealers engaged by the selling securityholders may arrange for other brokers-dealers to participate in
sales. If the selling
securityholders effect such
transactions by selling securities to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions
from the selling
securityholders or
commissions from purchasers of the
securities for whom they may act as agent or to
whom they may sell as principal. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent will be in
amounts to be negotiated, which are not expected to be in excess of those
customary in the types of transactions involved.
In connection with sales of securities, the selling securityholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
securities in the course of hedging in positions
they assume. The selling
securityholders may also
sell securities
short and if such
short sale shall take place
after the date that the registration statement of which this prospectus is a part
is declared effective by
the SEC, the selling securityholders may deliver securities covered by this prospectus to close out
short positions and to return borrowed shares in connection
with such short sales. The selling securityholders may also loan or pledge securities to broker-dealers that in turn may sell
such shares. The selling
securityholders may also
enter into option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities which require
the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The selling securityholders may pledge or grant a security
interest in some or all of the securities owned by them and, if they
default in the performance
of their secured obligations, the pledgees or secured parties may offer and sell
the securities from time to time pursuant to this
prospectus or any amendment or supplement to this prospectus under Rule 424(b)(3)
or other applicable
provision of the Securities Act of 1933, amending, if necessary, the
identification of
selling
securityholders to include
the pledgee, transferee or other successors in interest as selling securityholders under this prospectus. The
selling
securityholders also may transfer and donate the
securities in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.
The selling securityholders and any broker-dealer participating in the
distribution of the securities may be deemed to be “underwriters” within the meaning of the Securities
Act of 1933, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be
deemed to be underwriting
commissions or discounts under the Securities Act of 1933. At the time a particular offering of
securities is made, a prospectus supplement, if
required, will be distributed which will set forth (i) the name of each
such selling
securityholder and of the participating
broker-dealer(s), (ii) the number of securities involved, (iii) the price at which
such securities
were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, and
(v) any other facts material to the
transaction.
The aggregate proceeds to the selling
securityholders from the sale of the securities will be the purchase price
of the securities less discounts and commissions, if
any.
Under the securities laws of some
states, the securities covered by this prospectus may be sold in such states only through
registered or licensed brokers or dealers. In addition, in some states
the securities may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied
with.
There can be no assurance that any
selling securityholder will sell any or all of the
securities registered pursuant to the registration
statement of which this prospectus forms a
part.
If a selling securityholder uses this prospectus for any sale of securities, it will be subject to the prospectus
delivery requirements of the Securities Act of 1933. The selling securityholders and any other person participating
in such distribution will
be subject to applicable provisions of the Securities Exchange Act of 1934 and
the rules and regulations thereunder, including, without limitation, Regulation
M under the Exchange Act, which may limit the
timing of purchases and sales of any of the securities by the selling securityholders and any other participating person.
Regulation M may also restrict the ability of any person engaged in the
distribution of securities
to engage in market-making
activities with respect to such securities. All of the foregoing may affect the
marketability of the
securities covered by this prospectus and the ability of any person or entity
to engage in market-making activities with respect to such securities.
Pursuant to the securities purchase
agreement between us and Treasury, we will pay substantially all expenses of the registration of the
securities covered by this
prospectus, including,
without limitation, SEC
filing fees and expenses of
compliance with state securities or “blue sky” laws; provided, however, that a selling securityholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling securityholders against liabilities, including some
liabilities under the Securities Act of 1933, in accordance with the securities purchase agreement between us
and Treasury, or the
selling
securityholders will be
entitled to contribution. We have agreed under the
securities purchase agreement between us and Treasury to cause such of our
directors and senior executive officers to execute customary
lock-up agreements in such form and for such time period up to 90 days as may be
requested by a managing underwriter with respect to an underwritten offering of
securities covered by this prospectus.
The validity of the securities offered
by this prospectus has been passed upon for us by Silver, Freedman & Taff, L.L.P,
Washington, D.C.
EXPERTS
The consolidated financial statements of
MutualFirst Financial, Inc. as of December 31, 2007 and 2006, and for each of the years in the three
year period ended December
31, 2007, and management’s assessment of the
effectiveness of internal control over financial reporting as of December 31, 2007, have been incorporated by reference
herein in reliance upon the report of BKD, LLP, independent registered public
accounting firm, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
625,135
Shares of Common Stock and a Warrant to Purchase Such
Shares
MutualFirst Financial,
Inc.
_______________________________
PROSPECTUS
___________________________
,
2009
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities covered by the registration
statement of which this prospectus is a part. MutualFirst Financial, Inc.
(the “Registrant”) will bear all of these expenses.
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Registration
fee under the Securities Act
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$ |
161 |
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Legal
fees and expenses*
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$ |
50,000 |
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Accounting
fees and expenses*
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$ |
15,000 |
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Printing
and other miscellaneous fees and expenses*
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$ |
10,000 |
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| Total |
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$ |
75,161 |
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*Estimated
solely for the purpose of this Item. Actual expenses may be more or
less.
Item
15. Indemnification of Officers and Directors
Section
2-405.2 of the Maryland General Corporation Law permits a Maryland corporation
to include in its charter a provision limiting the liability of its directors
and officers to the corporation and its stockholders for monetary damages
except: (1) to the extent it is proven that the director or officer
actually received an improper benefit or profit, for the amount of the improper
benefit or profit; or (2) to the extent a final judgment or adjudication against
the director or officer is based on a determination that the director=s or
officer=s act or
failure to act was the result of active and deliberate dishonesty and was
material to the cause of action against the director or officer. The
Registrant=s charter
contains such a provision, thereby limiting the liability of its directors and
officers to the maximum extent permitted by Maryland law.
Section
2-418 of the Maryland General Corporation Law permits a Maryland corporation to
indemnify a director or officer who is made a party to any proceeding by reason
of service in that capacity against judgments, penalties, fines, settlements and
reasonable expenses actually incurred unless it is proven that: (1) the act or
omission of the director or officer was material to the matter giving rise to
the proceeding and was committed in bad faith or with active and deliberate
dishonesty; (2) the director or officer actually received an improper personal
benefit; or (3) in the case of a criminal proceeding, the director or officer
had reason to believe that his conduct was unlawful. The Maryland
General Corporation Law provides that where a director or officer is a defendant
in a proceeding by or in the right of the corporation, the director or officer
may not be indemnified if he or she is found liable to the
corporation. The Maryland General Corporation Law also provides that
a director or officer may not be indemnified in respect of any proceeding
alleging improper personal benefit in which he or she was found liable on the
grounds that personal benefit was improperly received. A director or
officer found liable in a proceeding by or in the right of the corporation or in
a proceeding alleging improper personal benefit may petition a court to
nevertheless order indemnification of expenses if the court determines that the
director or officer is fairly and reasonably entitled to indemnification in view
of all the relevant circumstances.
Section
2-418 of the Maryland General Corporation Law provides that unless limited by
the charter of a Maryland corporation, a director or officer who is
successful on the merits or otherwise in defense of any proceeding must be
indemnified against reasonable expenses. Section 2-418 also provides
that a Maryland corporation may advance reasonable expenses to a director or
officer upon the corporation's receipt of (a) a written affirmation by the
director or officer of his or her good faith belief that he or she has met the
standard of conduct necessary for indemnification by the corporation and (b) a
written undertaking by the director or officer or on his or her behalf to repay
the amount paid or reimbursed by the corporation if it is ultimately determined
that the standard of conduct was not met.
The
Registrant's charter provides for indemnification of directors and officers to
the maximum extent permitted by the Maryland General Corporation
Law.
Under a
directors= and
officers= liability
insurance policy, directors and officers of the Registrant are insured against
certain liabilities.
Item
16. Exhibits
The
following exhibits are filed with or incorporated by reference into this
registration statement:
|
Exhibit
Number
|
|
Description
of Document
|
|
|
|
|
|
3.1
|
|
Charter
of the Registrant(1)
|
|
|
|
|
|
3.2
|
|
Articles
Supplementary to the Charter of the Registrant containing the terms of the
Registrant’s Fixed Rate Cumulative Perpetual Preferred Stock, Series
A(2)
|
|
|
|
|
|
3.3
|
|
Bylaws
of the Registrant(3)
|
|
|
|
|
|
4.1
|
|
Warrant
to purchase shares of the Registrant’s common stock dated December 23,
2008(2)
|
|
|
|
|
|
4.2
|
|
Letter
Agreement (including Securities Purchase Agreement Standard Terms attached
as Exhibit A) dated December 23, 2008 between the Registrant and the
United States Department of the Treasury(2)
|
|
|
|
|
|
5.1
|
|
Opinion
of Silver, Freedman & Taff, L.L.P.
|
|
|
|
|
|
23.1
|
|
Consent
of BKD, LLP
|
|
|
|
|
|
23.2
|
|
Consent
of Silver, Freedman & Taff, L.L.P. (contained in its opinion filed as
Exhibit 5.1)
|
|
|
|
|
|
24.1
|
|
Power
of attorney (contained in the signature page of the registration
statement)
|
|
________________
|
|
|
(1)
|
Attached
as exhibit to the Quarterly Report on Form 10-Q of the Registrant for the
quarter ended June 30, 2008 and incorporated herein by
reference.
|
|
|
(2)
|
Attached
as an exhibit to the Current Report on Form 8-K filed by the Registrant on
December 23, 2008 and incorporated herein by reference.
|
| |
(3) |
Attached
as an exhibit to the Current Report on Form 8-K filed by the Registrant on
October 15, 2007 and incorporated herein by
reference.
|
Item
17. Undertakings
The
undersigned Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided, however, that
Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by
the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934
that are
incorporated by reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i) Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be
deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration
statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in
Rule 430B, for liability purposes of the issuer and any person that is at
that date an underwriter, such date shall be deemed to be a new effective date
of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(5) That,
for the purpose of determining liability of the Registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned Registrant undertakes that in a primary offering of securities of an
undersigned Registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of an undersigned Registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned Registrant or used or referred to by the undersigned
Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned Registrant or its securities provided
by or on behalf of the undersigned Registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
Registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant’s annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of
Muncie, State of Indiana, on the 22nd day of January, 2009.
| |
MUTUALFIRST FINANCIAL,
INC. |
|
| |
|
|
|
|
|
By:
|
/s/ David
W. Heeter |
|
| |
|
David
W. Heeter |
|
| |
|
President
and Chief Executive Officer |
|
| |
|
(Duly
Authorized Representative |
|
POWER
OF ATTORNEY
Each
person whose signature appears below appoints David W. Heeter or Timothy J.
McArdle or either of them, as his or her true and lawful attorney-in-fact and
agent, for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any Registration Statement (including any
amendment thereto) for this offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he or she might or would do in person, hereby ratifying and
confirming all that said attorney-in fact and agent may lawfully do or cause to
be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
| /s/
David W. Heeter |
|
/s/
Wilbur R. Davis |
|
David
W. Heeter
|
|
Wilbur
R. Davis
|
|
President,
Chief Executive Officer and Director
(Principal
Executive Officer)
|
|
Chairman
of the Board
|
|
|
|
|
|
Date: January
22, 2009
|
|
Date: January
22, 2009
|
|
|
|
|
| /s/
Patrick C. Botts |
|
/s/
Linn A. Crull |
|
Patrick
C. Botts
|
|
Linn
A. Crull
|
|
Director
|
|
Director
|
|
|
|
|
|
Date: January
22, 2009
|
|
Date: January
22, 2009
|
|
|
|
|
|
|
|
/s/
William V. Hughes |
|
Edward
J. Dobrow
|
|
William
V. Hughes
|
|
Director
|
|
Director
|
|
|
|
|
|
Date:
|
|
Date: January
22, 2009
|
|
|
|
|
|
|
|
/s/
Edward C. Levy |
|
Jonathan
E. Kintner
|
|
Edward
C. Levy
|
|
Director
|
|
Director
|
|
|
|
|
|
Date:
|
|
Date: January
22, 2009
|
|
|
|
|
| /s/
Michael J. Marien |
|
|
|
Michael
J. Marien
|
|
Jon
R. Marler
|
|
Director
|
|
Director
|
|
|
|
|
|
Date: January
22, 2009
|
|
Date:
|
|
|
|
|
| /s/
Timothy J. McArdle |
|
|
|
Timothy
J. McArdle
|
|
Jerry
D. McVicker
|
|
Senior
Vice President, Treasurer and
Controller
(Principal Financial
and
Accounting
Officer)
|
|
Director
|
|
|
|
|
|
Date: January
22, 2009
|
|
Date:
|
|
|
|
|
| /s/
James D. Rosema |
|
/s/
Charles J. Viater |
|
James
D. Rosema
|
|
Charles
J. Viater
|
|
Director
|
|
Director
|
|
|
|
|
|
Date: January
22, 2009
|
|
Date: January
22, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT
INDEX
|
Exhibit
Number
|
|
Description
of Document
|
|
|
|
|
|
3.1
|
|
Charter
of the Registrant(1)
|
|
|
|
|
|
3.2
|
|
Articles
Supplementary to the Charter of the Registrant containing the terms of the
Registrant’s Fixed Rate Cumulative Perpetual Preferred Stock, Series
A(2)
|
|
|
|
|
|
3.3
|
|
Bylaws
of the Registrant(3)
|
|
|
|
|
|
4.1
|
|
Warrant
to purchase shares of the Registrant’s common stock dated December 23,
2008(2)
|
|
|
|
|
|
4.2
|
|
Letter
Agreement (including Securities Purchase Agreement Standard Terms attached
as Exhibit A) dated December 23, 2008 between the Registrant and the
United States Department of the Treasury(2)
|
|
|
|
|
|
5.1
|
|
Opinion
of Silver, Freedman & Taff, L.L.P.
|
|
|
|
|
|
23.1
|
|
Consent
of BKD, LLP
|
|
|
|
|
|
23.2
|
|
Consent
of Silver, Freedman & Taff, L.L.P. (contained in its opinion filed as
Exhibit 5.1)
|
|
|
|
|
|
24.1
|
|
Power
of attorney (contained in the signature page of the registration
statement)
|
|
________________
|
|
|
(1)
|
Attached
as exhibit to the Quarterly Report on Form 10-Q of the Registrant for the
quarter ended June 30, 2008 and incorporated herein by
reference.
|
|
|
(2)
|
Attached
as an exhibit to the Current Report on Form 8-K filed by the Registrant on
December 23, 2008 and incorporated herein by
reference.
|
|
|
(3)
|
Attached
as an exhibit to the Current Report on Form 8-K filed by the Registrant on
October 15, 2007 and incorporated herein by
reference.
|