8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)                     July 20, 2007
MUTUALFIRST FINANCIAL, INC. (Exact name of registrant as specified in its chapter)
Maryland (State or other jurisdiction of incorporation	000-27905 (Commission File Number)	35-2085640 (IRS Employer Identification No.)

110 E. Charles Street, Muncie, Indiana (Address of principal executive offices) 47305-2419 (Zip Code)

Registrant's telephone number, including area code                      (765) 747-2800              

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

         On July 20, 2007, the Registrant issued a press release announcing earnings for the second quarter ended June 30, 2007. A copy of the press release, including unaudited financial information released as a part thereof, is attached as Exhibit 99 to this Current Report on Form 8-K and incorporated by reference herein.

Item 9.01.  Financial Statements and Exhibits

(d)	Exhibits
	99	Press release dated July 20, 2007.

SIGNATURES

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

	MUTUALFIRST FINANCIAL, INC.
Date: July 20, 2007	By:   /s/ David W. Heeter                                   David W. Heeter        President and Chief Executive Officer

EXHIBIT INDEX

Exhibit Number	Description
99	Press Release, dated July 20, 2007

EX-99

MutualFirst Announces Second Quarter 2007 Earnings

MUNCIE, Ind., July 20 /PRNewswire-FirstCall/ -- MutualFirst Financial, Inc. (Nasdaq: MFSF), the holding company of Mutual Federal Savings Bank (the "Bank"), announced today that net income for the second quarter ended June 30, 2007 was $1.1 million, or $.27 for basic and diluted earnings per share. This compared to net income for the comparable period in 2006 of $1.3 million, or $.32 for basic and $.31 for diluted earnings per share. Annualized return on assets was .48% and return on tangible equity was 6.24% for the second quarter of 2007 compared to .56% and 7.18% respectively, for the same period last year. On a linked quarter basis, second quarter 2007 basic and diluted earnings per share increased $.02, or 8% when compared to the first quarter 2007. "We continue to face a difficult operating environment; however, we are focused on activities that can improve our performance," said David Heeter, Chief Executive Officer.

Net income for the six months ended June 30, 2007 was $2.2 million or $.53 for basic and $.52 for diluted earnings per share. This compared to net income for the comparable period in 2006 of $2.9 million or $.68 for basic and $.67 for diluted earnings per share. Annualized return on average assets was .46% and return on average tangible equity was 6.01% for the first half of 2007 compared to .60% and 7.75% respectively, for the same period last year.

The comparative reduction of income for the three and six month periods was primarily due to shrinking net interest margin and a reduction in earning assets as discussed below. The increase in net interest margin over the last two consecutive quarters is also discussed below.

Assets totaled $948.7 million at June 30, 2007, a decrease from December 31, 2006 of $12.2 million, or 1.3%. Loans, excluding loans held for sale, decreased $10.4 million or 1.3%. Consumer loans increased $941,000, or .4%, while commercial loans decreased $5.1 million, or 3.5%, and residential mortgage loans held in the portfolio decreased $6.1 million, furthering our strategy to reduce the percentage of fixed rate real estate mortgage loans to total loans. Mortgage loans held for sale decreased $329,000 and mortgage loans sold during the first half of 2007 totaled $12.1 million. The decreased loan balances are due primarily to prepayments exceeding slower than projected production. CEO Heeter commented, "Our loan pipeline is strong and we expect those loans to fund over the remainder of the year." Investment securities available for sale decreased $1.5 million, or 3.5%, compared to December 31, 2006.

Allowance for loan losses increased $122,000 to $8.3 million when comparing December 31, 2006 to June 30, 2007. Net charge offs for the first half of 2007 were $744,000 or .18% of average loans on an annualized basis compared to $841,000, or .20% of average loans for the comparable period in 2006. The decrease was primarily due to a recovery of $196,000 for previously charged off commercial leases during the 2007 period. As of June 30, 2007 the allowance for loan losses as a percentage of loans receivable and non-performing loans was 1.03% and 169.16%, respectively, compared to 1.00% and 143.59%, respectively, at December 31, 2006.

Total deposits were $690.9 million at June 30, 2007, a decrease from $703.4 at December 31, 2006. This decrease was due primarily to decreases in wholesale deposits of $14.7 million and retail certificates of deposit of $5.3 million. Consistent with our strategy, these decreases were partially offset by increases in core demand, money market and savings deposits of $7.6 million. Total borrowings decreased $3.0 million to $155.8 million at June 30, 2007 from $158.9 million at December 31, 2006.

Stockholders' equity increased $402,000, or .5%, from $87.3 million at December 31, 2006, to $87.7 million at June 30, 2007. The increase was due primarily to net income of $2.2 million, Employee Stock Ownership Plan (ESOP) and RRP shares earned of $321,000 and exercised stock options of $87,000. This increase was partially offset by the repurchase of 43,000 shares of common stock for $854,000 and dividend payments of $1.3 million. Also, the market value of securities available for sale compared to their book value decreased $25,000 from a loss of $355,000 at December 31, 2006 to a loss of $380,000 at June 30, 2007.

Net interest income before the provision for loan losses decreased $638,000 from $6.8 million for the three months ended June 30, 2006 to $6.1 million for the three months ended June 30, 2007. The reasons for the decrease were a $25.8 million, or 2.9%, decrease in average interest earning assets and a 20 basis point decrease in the net interest margin reflecting the Bank's liability sensitive nature. The reduction in average interest earning assets was due primarily to a restructuring of the balance sheet in the fourth quarter of 2006 and decreased loan balances during the first half of 2007. On a linked quarter basis, net interest margin increased to 2.85% for the three months ended June 30, 2007 compared to 2.79% for the three months ended March 31, 2007. This is the second consecutive quarter net interest margin has increased due primarily to the restructuring of the balance sheet in the fourth quarter 2006 and a flattening of deposit repricing during the first two quarters of 2007.

Net interest income before the provision for loan losses decreased $1.7 million for the six months ended June 30, 2007 compared to the six months ended June 30, 2006. The reasons for the decrease were similar to those stated above. Average interest earning assets decreased $21.8 million, or 2.5% and the net interest margin decreased by 31 basis points from 3.13% for the six months ended June 30, 2006 to 2.82% for the same period in 2007.

The provision for loan losses for the second quarter of 2007 was $533,000, compared to $525,000 for last year's comparable period. Non-performing loans to total loans at June 30, 2007 were .61% compared to .79% at June 30, 2006. Non-performing assets to total assets were .80% at June 30, 2007 compared to .90% at June 30, 2006.

Non-interest income increased $277,000 to $2.0 million, or 16.5%, for the three months ended June 30, 2007 compared to the same period in 2006. The increase was due primarily to increases in service fees on transaction accounts of $133,000, or 11.9%, increases in commission income of $90,000, or 58.4%, and improved earnings on cash surrender value of life insurance of $50,000, or 18.7%. On a linked quarter basis, non-interest income increased $221,000, or 12.8%. This increase was due primarily to increases in service fees on transaction accounts of $182,000 and increases in commission income of $47,000.

For the six month period ended June 30, 2007 non-interest income increased $348,000, or 10.4%, to $3.7 million compared to $3.3 million for the same period in 2006. The reasons are similar to those mentioned above.

Non-interest expense remained flat at $6.2 million for the three months ended June 30, 2007 compared to the same period in 2006. Increases in current quarter non-interest expense compared to the same period in 2006 include increases in data processing expense of $84,000 due primarily to technological upgrades, increases in occupancy expense of $32,000 and increases in salaries and employee benefits of $28,000. These increases were offset by decreases in marketing expense of $69,000, professional fees of $56,000 and other expenses of $36,000. On a linked quarter basis non-interest expense was flat at $6.2 million. Heeter added, "Our staff continues to be diligent in effectively managing our expenses in this difficult environment."

Non-interest expense remained flat at $12.4 million for the six months ended June 30, 2007 compared to the same period in 2006.

Income tax expense decreased $134,000 for the three months ended June 30, 2007 compared to the same period in 2006 due primarily to less taxable income. The effective tax rate also decreased from 20.0% to 15.2% due to an increased percentage of low income housing tax credits to taxable income when comparing the second quarter of 2007 to the second quarter of 2006, respectively.

For the six-month period ended June 30, 2007, income tax expense decreased $520,000 compared to the same period in 2006. The decrease was due primarily to decreased taxable income. The effective tax rate also decreased from 22.7% to 13.4% due to an increased percentage of low income housing tax credits to taxable income when comparing the first half of 2007 to the first half of 2006, respectively.

MutualFirst Financial, Inc. and Mutual Federal Savings Bank are headquartered in Muncie, Indiana with twenty-one full service offices in Delaware, Grant, Kosciusko, Randolph, and Wabash counties.

Statements contained in this release, which are not historical facts, are forward-looking statements, as that term is defined in the Private Securities Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those currently anticipated due to a number of factors, which include, but are not limited to changes in interest rates; the loss of deposits and loan demand to competitors; substantial changes in financial markets; changes in real estate values and the real estate market; or regulatory changes.

MUTUALFIRST FINANCIAL INC.

	30-Jun		31-Dec
Selected Financial Condition Data (Unaudited):	2007		2006
	(000)		(000)
TotalAssets	$	948,662	$	960,842
Cash and cash equivalents		23,795		24,915
Loansheld for sale		1,001		1,330
Loansreceivable, net		795,203		805,625
Investment securities available for sale, at fair value		39,902		41,363
Totaldeposits		690,930		703,359
Totalborrowings		155,804		158,852
Totalstockholders' equity		87,666		87,264

	Three			Three			Three			Six			Six
	Months			Months			Months			Months			Months
	Ended			Ended			Ended			Ended			Ended
	30-Jun			31-Mar			30-Jun			30-Jun			30-Jun
Selected Operations Data (Unaudited):	2007			2007			2006			2006			2006
	(000)			(000)			(000)			(000)			(000)
Total interest income	$	14,056		$	13,809		$	13,911		$	27,865		$	27,500
Total interest expense		7,941			7,814			7,158			15,755			13,715
Net interest income		6,115			5,995			6,753			12,110			13,785
Provision for loan losses		533			332			525			865			918
Net interest income after
provision for loan losses		5,582			5,663			6,228			11,245			12,867
Non-interest income
Fees and service charges		1,246			1,064			1,113			2,309			2,119
Equity in gains (losses) of
limited partnerships		(27	)		(27	)		(13	)		(53	)		(2	)
Commissions		244			197			154			441			352
Net gain (loss) on loan sales
and servicing		96			91			101			187			235
Increase in cash surrender
value of life insurance		317			338			267			655			504
Other income		78			70			55			148			131
Total non-interest income		1,954			1,733			1,677			3,687			3,339
Non-interest expense
Salaries and benefits		3,654			3,639			3,626			7,293			7,375
Occupancy and equipment		864			908			832			1,772			1,710
Data processing fees		298			256			214			554			432
Professional fees		177			179			233			356			491
Marketing		229			209			298			437			442
Other expenses		982			1,028			1,018			2,011			1,991
Total non-interest expense		6,204			6,219			6,221			12,423			12,441
Income before taxes		1,332			1,177			1,684			2,509			3,765
Income tax provision		203			133			337			336			856
Net income	$	1,129		$	1,044		$	1,347		$	2,173		$	2,909

Average Balances, Net Interest Income, Yield Earned and Rates Paid

			Three							Three
			mos ended							mos ended
			06/30/2007							06/30/2006
	Average		Interest		Average			Average		Interest		Average
	Outstanding		Earned/		Yield/			Outstanding		Earned/		Yield/
	Balance		Paid		Rate			Balance		Paid		Rate
Interest-Earning
Assets:
Interest -bearing deposits	$	3,187	$	31		3.89	%	$	1,698	$	15		3.53	%
Mortgage-backed securities:
Available-for-sale		9,041		112		4.96			11,025		116		4.21
Investment securities:
Available-for-sale		30,525		398		5.22			30,186		352		4.66
Loans receivable		806,907		13,405		6.65			832,373		13,304		6.39
Stock in FHLB of Indianapolis		9,938		110		4.43			10,126		125		4.94
Total interest-earning assets (3)		859,598		14,056		6.54			885,408		13,912		6.29
Non-interest earning assets,
net of allowance for loan
losses and unrealized gain/loss		87,451							85,041
Total assets	$	947,049						$	970,449
Interest-Bearing
Liabilities:
Demand and NOW accounts	$	123,554	$	727		2.35	%	$	94,920	$	331		1.39	%
Savings deposits		56,666		72		0.51			62,601		78		0.50
Money market Accounts		25,167		162		2.57			37,881		173		1.83
Certificate accounts		446,168		5,197		4.66			454,032		4,576		4.03
Total deposits		651,555		6,158		3.78			649,434		5,158		3.18
Borrowings		140,767		1,784		5.07			171,387		2,000		4.67
Total interest-bearing accounts		792,322		7,942		4.01			820,821		7,158		3.49
Non-interest bearing deposit accounts		50,829							46,148
Other liabilities		16,143							14,544
Total liabilities		859,294							881,513
Stockholders' equity		87,755							88,936
Total liabilities and stockholders'      equity	$	947,049						$	970,449
Net earning assets	$	67,276						$	64,587
Net interest income			$	6,114						$	6,754
Net interest rate spread						2.53	%						2.80	%
Net yield on average
interest-earning assets						2.85	%						3.05	%
Averageinterest-earningassets to
averageinterest-bearingliabilities						108.49	%						107.87	%

  

	Three			Three			Three
	Months			Months			Months
	Ended			Ended			Ended
Selected Financial Ratios and Other	30-Jun			31-Mar			30-Jun
Financial Data (Unaudited):	2007			2007			2006
Share and per share data:
Average common shares outstanding
Basic	4,120,844			4,129,925			4,227,308
Diluted	4,173,986			4,197,120			4,303,654
Per share:
Basic earnings	$	0.27		$	0.25		$	0.32
Diluted earnings	$	0.27		$	0.25		$	0.31
Dividends	$	0.15		$	0.15		$	0.14
Dividend payout ratio		55.56	%		60.00	%		45.16	%
Performance Ratios:
Return on average assets (ratio of
net income to average totalassets)(1)		0.48	%		0.44	%		0.56	%
Return on average tangible equity (ratio of
net income to average tangible equity)(1)		6.24	%		5.79	%		7.18	%
Interest rate spread information:
Average during the period(1)		2.53	%		2.49	%		2.81	%
Net interest margin(1)(2)		2.85	%		2.79	%		3.05	%
Efficiency Ratio		76.89	%		80.47	%		73.80	%
Ratio of average interest-earning
assets to average interest-bearing liabilities		108.49	%		108.12	%		107.87	%
Allowance for loan losses:
Balance beginning of period	$	8,219		$	8,156		$	8,029
Charge offs:
One- to four- family		64			120			33
Multi-family		0			0			0
Commercial real estate		0			0			0
Construction or development		0			0			0
Consumer loans		314			413			178
Commercial business loans		267			0			300
Sub-total		645			533			511
Recoveries:
One- to four- family		48			0			77
Multi-family		0			0			0
Commercial real estate		0			0			0
Construction or development		0			0			0
Consumer loans		121			64			47
Commercial business loans		1			200			10
Sub-total		170			264			134
Net charge offs		475			269			377
Additions charged to operations		533			332			525
Balance end of period	$	8,277		$	8,219		$	8,177
Net loan charge-offs to average loans (1)		0.24	%		0.13	%		0.18	%

		Six Months			Six Months
		Ended			Ended
Selected Financial Ratios and Other		30-Jun			30-Jun
Financial Data (Unaudited):		2007			2006
Share and per share data:
Average common shares outstanding
Basic		4,125,935			4,248,603
Diluted		4,186,103			4,330,914
Per share:
Basic earnings	$	0.53		$	0.68
Diluted earnings	$	0.52		$	0.67
Dividends	$	0.30		$	0.28
Dividend payout ratio		57.69	%		41.79	%
Performance Ratios:
Return on average assets (ratio of
net income to average total assets)(1)		0.46	%		0.60	%
Return on average tangible equity (ratio of
net income to average tangible equity)(1)		6.01	%		7.75	%
Interest rate spread information:
Average during the period(1)		2.51	%		2.88	%
Net interest margin(1)(2)		2.82	%		3.13	%
Efficiency Ratio		78.64	%		72.65	%
Ratio of average interest-earning
assets to average interest-bearing liabilities		108.24	%		107.83	%
Allowance for loan losses:
Balance beginning of period	$	8,156		$	8,100
Charge offs:
One- to four- family		184			255
Multi-family		0			0
Commercial real estate		0			0
Construction or development		0			0
Consumer loans		727			425
Commercial business loans		267			325
Sub-total		1,178			1,005
Recoveries:
One- to four- family		48			77
Multi-family		0			0
Commercial real estate		0			0
Construction or development		0			0
Consumer loans		185			77
Commercial business loans		201			10
Sub-total		434			164
Net charge offs		744			841
Additions charged to operations		865			918
Balance end of period	$	8,277		$	8,177
Net loan charge-offs to averageloans (1)		0.18	%		0.20	%

	June 30,			March 31,			June 30,
	2007			2007			2006
Total shares outstanding	4,329,183			4,357,130			4,439,620
Tangible book value per share	$	16.71		$	16.58		$	16.73
Nonperforming assets (000's)
Loans: Non-accrual	$	4,383		$	5,144		$	4,135
Accruing loans past due 90 days or more		400			48			2,404
Restructured loans		110			111			114
Total nonperforming loans		4,893			5,303			6,653
Real estate owned		1,519			1,003			1,360
Other repossessed assets		1,207			1,254			813
Total nonperforming assets	$	7,619		$	7,560		$	8,826
Asset Quality Ratios:
Non-performing assets to total assets		0.80	%		0.80	%		0.90	%
Non-performing loans to total loans		0.61	%		0.66	%		0.79	%
Allowance for loan losses to non-performing loans		169.16	%		154.99	%		122.91	%
Allowance for loan losses to loans receivable		1.03	%		1.02	%		0.98	%

(1) Ratios for the three periods have been annualized.

(2) Net interest income divided by average interest earning assets.

(3) Calculated net of deferred loan fees, loan discounts, loans in process and loss reserves.

SOURCE MutualFirst Financial, Inc.

-0- 07/20/2007

/CONTACT: Tim McArdle, Senior Vice President and Treasurer of MutualFirst Financial, Inc., +1-765-747-2818/

/First Call Analyst: /

/FCMN Contact: ccook@mfsbank.com /

/Web site: http://www.mfsbank.com/

(MFSF)