Edgar Filing: MSB FINANCIAL INC

Filed by Monarch Community Bancorp, Inc.
Pursuant to Rule 425 under the Securities Act of 1933

Subject Company: MSB Financial, Inc.
Commission File No.: 0-24898

On September 2, 2003, Monarch Community Bancorp, Inc., a Maryland
Corporation, issued the following press release:

PRESS RELEASE

*FOR IMMEDIATE RELEASE*

MONARCH COMMUNITY BANCORP, INC. AND MSB FINANCIAL, INC.
ANNOUNCE MERGER

Coldwater, Michigan and Marshall, Michigan, September 2, 2003 -- Monarch
Community Bancorp, Inc. (Nasdaq SmallCap: MCBF), Coldwater, Michigan, and MSB
Financial, Inc. (Nasdaq SmallCap: MSBF), Marshall, Michigan, jointly announced
today that they have signed a definitive merger agreement under which MSB
Financial will merge into Monarch Community Bancorp in a transaction valued at
approximately $24.5 million. The transaction will increase Monarch Community
Bancorp's assets from $216.6 million as of June 30, 2003 to approximately $309.0
million and increase its number of banking offices from five to eight. Under the
terms of the transaction, as described in more detail below, shareholders of MSB
Financial will be entitled to receive cash and shares of Monarch Community
Bancorp common stock currently valued at $18.80, based on the current stock
price of Monarch Community Bancorp and subject to exchange ratio limits, in
exchange for each share of MSB Financial common stock.

John R. Schroll, President and Chief Executive Officer of Monarch
Community Bancorp stated, "We are very pleased to announce our agreement for MSB
Financial to merge with Monarch Community Bancorp. This merger of two
community-oriented institutions represents a significant extension of our
franchise into a new market. A year ago, we converted to a public company in
part to facilitate franchise growth. We are familiar with the Marshall market
and believe that access to such market will help us create a stronger franchise
by maximizing our collective resources, i.e., manpower, banking products,
customer-driven services and geographic footprint. We feel this merger addresses
these strategic goals, and we look forward to continuing to emphasize the
personal service and community banking focus that our customers expect and
appreciate."

"We believe that this transaction is an excellent opportunity for our
shareholders and our customers," said Charles B. Cook, President and Chief
Executive Officer of MSB Financial. "Our commitments to maximizing shareholder
value and to preserving a community bank atmosphere and high quality of service
will be met by this merger. Our shareholders will receive

a strong premium to the current market price of MSB Financial common stock and
will continue ownership in the merged institution. Our customers will also
benefit from access to a greater selection of services."

The merger is expected to be completed in the first quarter of 2004.

Monarch Community Bancorp's management team and board of directors will
remain intact following the merger. Two members of MSB Financial's board of
directors will be added to the boards of directors of Monarch Community Bancorp
and Monarch Community Bank.

In connection with this transaction, RP Financial, LC. acted as financial
advisor to Monarch Community Bancorp and Keefe, Bruyette & Woods, Inc. acted as
financial advisor to MSB Financial. Muldoon Murphy & Faucette LLP represented
Monarch Community Bancorp, while Silver, Freedman & Taff, L.L.P. represented MSB
Financial.

Monarch Community Bancorp is the holding company for Monarch Community
Bank. Monarch Community Bank operates out of five offices in southern Michigan.
At June 30, 2003, Monarch Community Bancorp had total assets of $216.6 million
and total deposits of $117.7 million.

MSB Financial is the holding company for Marshall Savings Bank, F.S.B.
Marshall Savings Bank operates out of three offices in southern Michigan. At
June 30, 2003, MSB Financial had total assets of $103.2 million and total
deposits of $72.8 million.

TERMS OF THE MERGER

Under the terms of the agreement, MSB Financial shareholders will receive
shares of Monarch Community Bancorp common stock according to the formula
described below and $15.04 in cash in exchange for each share of MSB Financial
common stock. The transaction is expected to be taxable to MSB Financial
shareholders for both the cash and stock portions of the merger consideration.

The number of shares of Monarch Community Bancorp common stock into which
each MSB Financial share will be exchanged will be based on the price of Monarch
Community Bancorp common stock over a measurement period prior to the closing,
as follows:

IF THE AVERAGE CLOSING PRICE OF MONARCH
COMMUNITY BANCORP COMMON STOCK DURING THEN MSB FINANCIAL STOCKHOLDERS WILL RECEIVE,
THE MEASUREMENT PERIOD IS: IN EXCHANGE FOR EACH MSB FINANCIAL SHARE:
------------------------------------------- ---------------------------------------------------

o $10.60 or less o 0.3547 shares of Monarch Community Bancorp
common stock
o between $10.60 and $16.60 o a number of shares equal to $3.76 divided by
the average closing price
o $16.60 or more o 0.2265 shares of Monarch Community Bancorp
common stock

The value of the cash component of the merger consideration will remain
fixed at $15.04. The value of the stock component of the merger consideration
will remain fixed between the exchange ratio limits at $3.76 and will fluctuate
outside of the exchange ratio limits. The current value of the merger
consideration is $18.80 per share based on the current stock price of Monarch
Community Bancorp.

The merger is subject to certain conditions, including the approval of the
shareholders of MSB Financial and receipt of regulatory approval.

FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking statements about the
proposed merger of Monarch Community Bancorp and MSB Financial. These statements
include statements regarding the anticipated closing date of the transaction,
anticipated cost savings, and anticipated future results. Forward-looking
statements can be identified by the fact that they do not relate strictly to
historical or current facts. They often include words like "believe," "expect,"
"anticipate," "estimate," and "intend" or future or conditional verbs such as
"will," "would," "should," "could" or "may." Certain factors that could cause
actual results to differ materially from expected include delays in completing
the merger, difficulties in achieving cost savings from the merger or in
achieving such cost savings within the expected time frame, difficulties in
integrating Monarch Community Bancorp and MSB Financial, increased competitive
pressures, changes in the interest rate environment, changes in general economic
conditions, legislative and regulatory changes that adversely affect the
business in which Monarch Community Bancorp and MSB Financial are engaged, and
changes in the securities markets.

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT

SHAREHOLDERS OF MSB FINANCIAL AND OTHER INVESTORS ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS THAT WILL BE INCLUDED IN THE REGISTRATION STATEMENT
ON FORM S-4 THAT MONARCH COMMUNITY BANCORP WILL FILE WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") IN CONNECTION WITH THE PROPOSED MERGER BECAUSE IT
WILL CONTAIN IMPORTANT INFORMATION ABOUT MONARCH COMMUNITY BANCORP, MSB
FINANCIAL, THE MERGER, THE PERSONS SOLICITING PROXIES IN THE MERGER AND THEIR
INTERESTS IN THE MERGER AND RELATED MATTERS. Investors will be able to obtain
all documents filed with the SEC by Monarch Community Bancorp and MSB Financial
free of charge at the SEC's website, www.sec.gov. In addition, documents filed
with the SEC by Monarch Community Bancorp will be available free of charge from
the Corporate Secretary of Monarch Community Bancorp at 375 North Willowbrook
Road, Coldwater, Michigan 49036, telephone (517) 278-4566. Documents filed with
the SEC by MSB Financial will be available free of charge from the Corporate
Secretary of MSB Financial at 107 North Park Street, Marshall, Michigan 49068,
telephone (269) 781-5103. READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE
MAKING A DECISION CONCERNING THE MERGER.

MSB Financial and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from MSB Financial's shareholders to
approve the merger. Information about the directors and executive officers of
MSB Financial and their ownership of MSB Financial's common stock is set forth
in MSB Financial's proxy statement for its 2002 annual meeting of shareholders
as filed with the SEC on September 23, 2002.

For further information contact:

John R. Schroll
President and Chief Executive Officer
Monarch Community Bancorp, Inc.
(517) 278-4566

Charles B. Cook
President and Chief Executive Officer
MSB Financial, Inc.
(269) 781-5103