SUMMARY

This summary highlights material information from this prospectus and may not contain all the information that is important to you. To understand the conversion and offering fully, you should read this entire document carefully. In this prospectus, the terms “we,” “us” and “our” refer to MSB Financial — Federal and its consolidated subsidiaries or its successor MSB Financial — Maryland, unless the context requires otherwise.

Our Company

MSB Financial Corp. MSB Financial – Federal is a federally chartered corporation organized in 2004 for the purpose of acquiring all of the capital stock that Millington Savings Bank issued in its mutual holding company reorganization. In January 2007, MSB Financial – Federal conducted its initial public offering and sold 2,529,281 shares including 202,342 shares acquired by the Millington Savings Bank employee stock ownership plan for net proceeds of approximately $24.5 million. At December 31, 2014, we had total assets of $340.3 million, total deposits of $266.1 million and total stockholders’ equity of $41.0 million. As of December 31, 2014, we had a total of 5,010,437 shares outstanding of which 3,091,344 shares, or approximately 61.7% of the outstanding shares, were owned by MSB Financial, MHC.

MSB Financial, MHC . MSB Financial, MHC is a federally chartered mutual holding company that was formed in 2004 in connection with the mutual holding company reorganization. MSB Financial, MHC has not engaged in any significant business since its formation. So long as MSB Financial, MHC is in existence, it will at all times own a majority of the outstanding stock of MSB Financial — Federal.

Millington Savings Bank . Millington Savings Bank is a New Jersey-chartered stock savings bank and its deposits are insured by the Federal Deposit Insurance Corporation. As of December 31, 2014, Millington Savings Bank had 57 full time equivalent employees. Effective with the completion of the conversion, Millington Savings Bank will change its name to “Millington Bank.” References in this document to Millington Bank refer to Millington Savings Bank up until the name change is effective and Millington Bank thereafter.

Our primary business is attracting retail deposits from the general public and using those deposits, together with funds generated from operations, principal repayments on securities and loans and borrowed funds, for our lending and investing activities. Our loan portfolio consists of one-to four-family residential real estate mortgages, commercial real estate mortgages, construction loans, commercial and industrial loans, home equity loans and lines of credit, and other consumer loans. We also invest in U.S. Government obligations and mortgage-backed securities and, to a lesser extent, corporate bonds.

Millington Bank is regulated by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. MSB Financial, MHC and MSB Financial – Federal are regulated as savings and loan holding companies by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).

MSB Financial — Maryland. MSB Financial — Maryland is a newly formed Maryland corporation. Following the completion of the conversion and offering, MSB Financial — Maryland will be the holding company for Millington Bank and will succeed MSB Financial — Federal as the publicly-traded holding company of Millington Bank. In connection with the completion of the conversion, Millington Bank will revoke its Section 10(l) election so that MSB Financial — Maryland will be a bank holding company under the Bank Holding Company Act of 1956, as amended, subject to supervision and regulation by the Federal Reserve Board. The shares of MSB Financial — Maryland’s common stock will also trade on the Nasdaq Global Market under the symbol “MSBF.”

 

Our principal executive offices are located at 1902 Long Hill Road, Millington, New Jersey 07946-0417 and our telephone number at that address is (908) 647-4000. Our web site address is www.millingtonsb.com . Information on our web site should not be considered a part of this prospectus.

Our Market Area

We are headquartered in Millington, New Jersey, which is located in Morris County, approximately 20 miles west of Newark. Our remaining four branch locations are located in Somerset County, New Jersey. Both Morris and Somerset Counties are among the top 10 wealthiest counties in the United States. The demographics of Morris County reflect the impact of nearly 50 of the nation’s Fortune 500 companies that are headquartered or have a major facility in Morris County, including finance, insurance, real estate, pharmaceuticals, technology and others. Somerset County is comprised of a balance between urban and suburban neighborhoods where pharmaceutical and technology companies represent major sources of employment. Both counties also serve as desired suburban locations for commuting into New York City.

Due to the attractiveness of the market area, our competition for deposits and loans is strong. Historically our competition has come from other insured financial institutions such as local and regional commercial banks, savings institutions, and credit unions located in our primary market area. We also compete with mortgage banking and finance companies for real estate loans and with commercial banks and savings institutions for consumer loans, and we face competition for funds from investment products such as mutual funds, short-term money funds and corporate and government securities. There are large competitors operating throughout our total market area, and we also face strong competition from other community-based financial institutions. Based on FDIC data, as of June 30, 2014, our deposits in Morris County represented less than 1% of total deposits in the county, while in Somerset County our deposits were slightly in excess of 1%.

Our Business Strategy

Our goal is to continue to evolve from a traditional thrift business model toward that of a full service, community bank profitably deploying capital and enhancing earnings through a variety of balance sheet growth and diversification strategies. The key strategic initiatives of our business plan are presented below accompanied by an overview of our activities and achievements in support of those initiatives:

Aggressive Growth Strategy. Our business plan calls for us to grow significantly in the next few years. In particular, we plan to significantly increase our loan portfolio, with an emphasis on commercial lending. To help accomplish this goal, in the first quarter of 2015, we hired a new chief lending officer. We plan on also hiring two commercial lending officers and a business development officer to actively seek out quality commercial real estate and multi-family real estate loans. In addition, so as to provide the necessary infrastructure to support this loan growth, we hired a chief operating officer in the first quarter of 2015. While our business plan calls for residential loans to decrease as a percentage of total loans in our portfolio, we will continue to originate these loans and plan on hiring a mortgage loan originator to increase residential loans on an absolute basis. As a complement to organic growth strategies, we expect to seek out opportunities to deploy capital, diversify our balance sheet mix, enter new markets and enhance earnings through mergers and acquisitions with other financial institutions, although there are no agreements or arrangements for any such acquisitions.

 

Expand Commercial Real Estate and Multifamily Mortgage Lending as Well as Commercial Business Lending to Increase Profitability . Historically, our loan portfolio has consisted primarily of one-to four-family real estate loans. At December 31, 2014, these loans totaled $145.0 million or 61.19% of our total loan portfolio with commercial and multi-family real estate and commercial and industrial loans representing 13.35% and 4.08% of our loan portfolio at December 31, 2014, respectively. We have recently hired a new chief lending officer with significant experience in our market in these types of loans. We plan to continue to increase our portfolio of commercial mortgage loans by expanding commercial loan volume through all available channels, including loan participations, so as to diversify our portfolio and increase the overall yield. So as not to incur undue risk from the diversification, we intend to continue to improve and strengthen our commercial lending infrastructure and resources, including through the hiring of additional personnel with commercial real estate lending expertise. In addition, we will attempt to expand our relationships with these borrowers to include commercial deposits and other products, with the goal of increasing our non-interest income.

Expand Funding Through Retail Deposits . We intend to expand our funding through retail deposit growth within our existing branch network, with the greatest emphasis on growth in our non-maturity/non-interest-bearing deposits. Our total deposits increased by $2.7 million to $266.1 million at December 31, 2014 from $263.4 million at June 30, 2014. We expect to place greater strategic emphasis on leveraging the opportunities to increase market share and expand the depth and breadth of customer relationships within our existing branch system rather than opening new branches. We continue to develop and deploy strategies to promote the “relationship banking” business model throughout our branch network with an emphasis on expanding relationships linked to our business lending initiatives. In addition, we have the ability to use other sources of deposit gathering including interbank deposit programs and other non-retail deposit sources. We may consider additional branching opportunities at a later date but we have no specific plans at this time.

Continue to Improve Asset Quality . Working through our problem assets remains one of our top priorities. Non-performing loans increased significantly during the recent recession from 2008 through 2010, reaching $16.8 million at June 30, 2012. Our efforts toward resolving these credits have reduced the level to $6.1 million at December 31, 2014. In addition, accruing loans that had been modified in troubled debt restructurings totaled $11.5 million at December 31, 2014. While the level of nonperforming loans has decreased substantially in the past five years, our level of troubled debt restructurings remain above average and continue to require an increased level of monitoring.

Increase Residential Mortgage Lending . We plan to continue to increase our portfolio of one- to four-family first mortgages so as to increase the overall ratio of loans as a percentage of assets while maintaining our conservative underwriting standards. To help accomplish this goal, we intend on hiring a mortgage loan originator.

See “Our Business” for additional information.

 

Description of the Conversion and Reorganization

Millington Savings Bank has been organized in the mutual holding company structure since 2004 and MSB Financial — Federal completed its initial public offering in 2007. Our current mutual holding company ownership structure is as follows:

 

The “second-step” conversion process that we are now undertaking involves a series of transactions by which we will convert our organization from the partially public mutual holding company form to the fully public stock holding company structure. In the stock holding company structure, all of Millington Bank’s common stock will be owned by MSB Financial — Maryland, and all of MSB Financial — Maryland’s common stock will be owned by the public. We are conducting the conversion and offering under the terms of our plan of conversion and reorganization (which is referred to as the “plan of conversion”). Upon completion of the conversion and offering, MSB Financial — Federal and MSB Financial, MHC will cease to exist.

As part of the conversion, we are offering for sale common stock representing the 61.7% ownership interest of MSB Financial — Federal that is currently held by MSB Financial, MHC. At the conclusion of the conversion and offering, existing public shareholders of MSB Financial — Federal will receive shares of common stock in MSB Financial — Maryland in exchange for their existing shares of common stock of MSB Financial — Federal, based upon an exchange ratio of 0.7317 to 1.1384 at the minimum and maximum, as adjusted of the offering range, respectively. The actual exchange ratio will be determined at the conclusion of the conversion and the offering based on the total number of shares sold in the offering, and is intended to result in MSB Financial — Federal’s existing public shareholders owning approximately the same percentage interest, of MSB Financial — Maryland common stock as they currently own of MSB Financial — Federal common stock, as adjusted to reflect the assets of MSB Financial, MHC and dividends previously waived by MSB Financial, MHC, without giving effect to cash paid in lieu of issuing fractional shares or shares that existing shareholders may purchase in the offering. The adjustments described above will decrease MSB Financial – Federal’s shareholders’ ownership interest in MSB Financial – Maryland from 38.3% to 36.7% at December 31, 2014 after completion of the offering. See “Impact of MSB Financial, MHC’s Assets and Waived Dividends on Minority Stock Ownership.”

 

After the conversion and offering, our ownership structure will be as follows:

 

The normal business operations of Millington Bank will continue without interruption during the conversion and offering, and the same officers and directors who currently serve MSB Financial — Federal and Millington Bank in the mutual holding company structure will serve the new holding company and Millington Bank in the fully converted stock form.

Reasons for the Conversion and Offering

Our primary reasons for the conversion and offering are the following:

 

•

Eliminate the uncertainties associated with the mutual holding company structure under financial reform legislation. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Federal Reserve Board became the federal regulator of all savings and loan holding companies and mutual holding companies, which has resulted in changes in regulations applicable to MSB Financial, MHC and MSB Financial – Federal particularly changes with respect to the waiver of dividends by MSB Financial, MHC, which is a key component of our mutual holding company structure and impacts the value of MSB Financial-Federal’s common stock. The Federal Reserve currently requires “grandfathered” mutual holding companies, like MSB Financial, MHC, to obtain depositor approval and comply with other procedural requirements prior to waiving dividends, which makes dividend waivers more difficult and costly to obtain. As a result, MSB Financial — Federal has suspended its dividend during the past few years. The conversion will eliminate our mutual holding company structure and will eliminate the risk that the Federal Reserve Board will amend existing regulations applicable to the conversion process in a manner disadvantageous to our public shareholders or depositors. It will also enable us to pay dividends without the limitations described above, subject to the customary legal, regulatory and financial considerations applicable to all financial institutions. See “ Our Dividend Policy .”

 

•

Raise Additional Capital to Support our Growth Strategy. Our business plan contemplates significant growth in the next few years. The conversion will enable us to support additional growth and assist us in managing our interest rate risk in a rising interest rate environment.

 

•

Transition us to a more familiar and flexible organizational structure. The stock holding company structure is a more familiar form of organization, which we believe will make our common stock more appealing to investors. The stock holding company structure will also give us greater flexibility to access the capital markets through possible future equity and debt offerings, although we have no current plans or arrangements for any such offerings.

 

•

Improve the liquidity of our shares of common stock. The larger number of shares that will be outstanding after completion of the conversion and offering is expected to result in a more liquid and active market for MSB Financial — Maryland common stock. A more liquid and active market will make it easier for our shareholders to buy and sell our common stock and will give us greater flexibility in implementing capital management strategies.

 

•

Facilitate future mergers and acquisitions. Although we do not currently have any understandings or agreements regarding any specific acquisition transaction, the stock holding company structure will give us greater flexibility to structure, and make us a more attractive and competitive bidder for, mergers and acquisitions of other financial institutions as opportunities arise. The additional capital raised in the offering also will enable us to consider larger merger transactions. In addition, although we intend to remain an independent financial institution, the stock holding company structure may make us a more attractive acquisition candidate for other institutions. Applicable regulations prohibit the acquisition of MSB Financial — Maryland for three years following completion of the conversion. Certain provisions in MSB Financial — Maryland’s articles of incorporation and bylaws, such as a prohibition on any beneficial owner voting in excess of 10% of MSB Financial — Maryland’s common stock and supermajority voting requirements, will also make it more difficult for companies or persons to exercise control of MSB Financial — Maryland without the consent of our board of directors. See “ Risk Factors—The articles of incorporation and bylaws of MSB Financial – Maryland and certain laws and regulations may prevent or make more difficult certain transactions, including a sale or merger of MSB Financial — Maryland,” and “Restrictions on Acquisition of MSB Financial — Maryland .”

Terms of the Offering

We are offering between 2,422,500 and 3,277,500 shares of common stock in a subscription offering to eligible depositors of Millington Bank and to our tax-qualified employee stock ownership plan. To the extent shares remain available, we may offer shares in a community offering to natural persons residing in Morris and Somerset Counties in New Jersey, to our public shareholders as of             , 2015 and to the general public. We may also offer for sale shares of common stock not purchased in the subscription or community offering through a syndicate of broker dealers. With regulatory approval, we may increase the number of shares to be sold up to 3,769,125 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Federal Reserve will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations, and changes in financial market conditions. If necessary, we will also offer shares to the general public in a syndicated offering. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [DATE 2], or the number of shares of common stock to be sold is increased to more than 3,769,125 shares or decreased to less than 2,422,500 shares. We may terminate the conversion and offering with the concurrence of the Federal Reserve Board. If terminated, orders for common stock already submitted will be canceled, subscribers’ funds will be promptly returned with interest calculated at Millington Bank’s statement savings rate and all deposit account withdrawal authorizations will be canceled. If we extend the offering beyond [DATE 2], all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Millington Bank’s statement savings rate or cancel your deposit account withdrawal

 

authorization. If we intend to sell fewer than 2,422,500 shares or more than 3,769,125 shares, we will promptly return all funds and set a new offering range. All subscribers will be resolicited and given the opportunity to place a new order.

The purchase price is $10.00 per share. All investors will pay the same purchase price per share. Investors will not be charged a commission to purchase shares of common stock in the offering. Keefe, Bruyette & Woods, our conversion advisor and marketing agent in the offering, will use its best efforts to assist us in selling shares of our common stock in the subscription and community offering. Keefe, Bruyette & Woods is not obligated to purchase any shares of common stock in the subscription or the community offerings or the syndicated offering, if any.

How We Determined the Offering Range and Exchange Ratio

Federal regulations require that the aggregate purchase price of the securities sold in the offering be based upon our estimated pro forma market value after the conversion ( i.e. , taking into account the expected receipt of proceeds from the sale of securities in the offering), as determined by an independent appraisal. In accordance with the regulations of the Federal Reserve Board, a valuation range is established which ranges from 15% below to 15% above this pro forma market value. We have retained RP Financial, which is experienced in the evaluation and appraisal of financial institutions, to prepare the appraisal. RP Financial has indicated that in its valuation as of February 6, 2015, the full market value of MSB Financial — Maryland’s common stock was $45.0 million, resulting in a range from $38.3 million at the minimum to $51.8 million at the maximum. Based on this valuation, we are selling the number of shares representing the 61.7% of MSB Financial — Federal currently owned by MSB Financial, MHC. This results in an offering range of $24.2 million to $32.8 million, with a midpoint of $28.5 million. RP Financial will receive fees totaling $55,000 for its appraisal report, plus $5,000 for any appraisal updates (of which there will be at least one) and reimbursement of out-of-pocket expenses.

In preparing its appraisal, RP Financial considered the information in this prospectus, including our financial statements. RP Financial also considered the following factors, among others:

 

•

the trading market for MSB Financial — Federal common stock and securities of comparable institutions and general conditions in the market for such securities;

 

•

our historical and projected operating results and financial condition, including, but not limited to, net interest income, the amount and volatility of interest income and interest expense relative to changes in market conditions and interest rates, asset quality, levels of loan loss provisions, the amount and sources of noninterest income, and the amount of noninterest expense;

 

•

the economic, demographic and competitive characteristics of our market area, including, but not limited to, employment by industry type, unemployment trends, size and growth of the population, trends in household and per capita income, and deposit market share;

 

•

a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded banks and bank and savings and loan holding companies, which included a comparative analysis of balance sheet composition, income statement and balance sheet ratios, credit and interest rate risk exposure; and

 

•

the effect of the capital raised in this offering on our net worth and earnings potential, including, but not limited to, the increase in consolidated equity resulting from the offering, the estimated increase in earnings resulting from the investment of the net proceeds of the offering, and the estimated impact on consolidated equity and earnings resulting from adoption of the proposed employee stock benefit plans.

 

Four measures that some investors use to analyze whether a stock might be a good investment are the ratios of the offering price to the issuer’s “book value” and “tangible book value” and the ratios of the offering price to the issuer’s earnings and “core earnings.” RP Financial considered these ratios in preparing its appraisal, among other factors. Book value is the same as total equity and represents the difference in value between the issuer’s assets and liabilities. Tangible book value is equal to total equity minus intangible assets. For purposes of the appraisal, core earnings is defined as net earnings after taxes, excluding the after-tax portion of income from non-recurring items.

The appraisal was based in part upon MSB Financial — Federal’s financial condition and results of operations, the effect of the additional capital that will be raised from the sale of common stock in this offering and an analysis of a peer group of eleven publicly traded thrift holding companies that RP Financial considered comparable to MSB Financial — Federal. The appraisal peer group consists of the companies listed below. Except as noted, total assets are as of December 31, 2014.

 

Company Name and Ticker Symbol		Exchange		Headquarters		Total Assets
						(in millions)
Alliance Bancorp, Inc. of Pennsylvania		Nasdaq		Broomall, PA		$	423	*
Cape Bancorp, Inc.		Nasdaq		Cape May Court House, NJ		$	1,080
Fox Chase Bancorp, Inc.		Nasdaq		Hatboro, PA		$	1,095
Georgetown Bancorp, Inc.		Nasdaq		Georgetown, MA		$	271
Malvern Bancorp, Inc.		Nasdaq		Paoli, PA		$	603
Ocean Shore Holding Co.		Nasdaq		Ocean City, NJ		$	1,025
Oneida Financial Corp.		Nasdaq		Oneida, NY		$	798
Prudential Bancorp, Inc.		Nasdaq		Philadelphia, PA		$	527
Severn Bancorp, Inc.		Nasdaq		Annapolis, MD		$	777
Wellesley Bancorp, Inc.		Nasdaq		Wellesley, MA		$	535
WVS Financial Corp.		Nasdaq		Pittsburgh, PA		$	295

 

*	Total assets as of September 30, 2014

In applying each of the valuation methods, RP Financial considered adjustments to our pro forma market value based on a comparison of MSB Financial — Maryland with the peer group. RP Financial made a downward adjustment for profitability, growth and viability of earnings and dividends and made an upward adjustment for our primary market area.

 

The following table presents a summary of selected pricing ratios for the peer group companies utilized by RP Financial in its appraisal and the pro forma pricing ratios for us as calculated by RP Financial in its appraisal report, based on financial data as of and for the twelve months ended December 31, 2014. Stock prices are as of February 6, 2015, as reflected in the appraisal report.

 

		Price to Earnings Multiple				Price to Core Earnings Multiple (1)				Price to Book Value Ratio				Price to Tangible Book Value Ratio
MSB Financial — Federal (pro forma):
Minimum			58.70x				58.70x				61.46	%			61.46	%
Midpoint			69.94x				69.94x				68.07				68.07
Maximum			81.47x				81.47x				73.91				73.91
Maximum, as adjusted			95.10x				95.10x				79.94				79.94
Peer group companies as of February 6, 2015:
Average			19.64x				20.09x				92.18	%			97.44	%
Median			21.12				21.12				95.52				95.52

 

(1)	Price to core earnings multiples calculated by RP Financial in the independent appraisal are based on an estimate of “core” or recurring earnings on a trailing twelve month basis through December 31, 2014. These ratios are different than presented in “Pro Forma Data.”

Compared to the average pricing ratios of the peer group, at the maximum of the offering range, our common stock would be priced at a premium of 314.8% to the peer group on a price-to-earnings basis, a discount of 19.8% to the peer group on a price-to-book basis and discount of 24.1% to the peer group on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be more expensive than the peer group on an earnings basis and less expensive than the peer group on a book value and tangible book value basis.

Compared to the average pricing ratios of the peer group, at the minimum of the offering range, our common stock would be priced at premium of 198.9% to the peer group on a price-to-earnings basis, a discount of 33.3% to the peer group on a price-to-book basis and at a discount of 36.9% to the peer group on a price-to-tangible book basis. This means that, at the minimum of the offering range, a share of our common stock would be more expensive than the peer group on an earnings basis and less expensive than the peer group on a book value and tangible book value basis.

Our board of directors reviewed RP Financial’s appraisal report, including the methodology and the assumptions used by RP Financial, and determined that the offering range was reasonable and adequate. Our board of directors has decided to offer the shares for a price of $10.00 per share. The purchase price of $10.00 per share was determined by us, taking into account, among other factors, the market price of our stock before adoption of the plan of conversion, the requirement under Federal Reserve Board regulations that the common stock be offered in a manner that will achieve the widest distribution of the stock, and desired liquidity in the common stock after the offering. Based upon such formula and the offering range, the exchange ratio will range from a minimum of 0.7317 to a maximum of 0.9899 shares of MSB Financial — Maryland common stock (1.1384 shares if we sell 3,769,125 shares in the offering) for each current share of MSB Financial — Federal common stock, with a midpoint of 0.8608. Based upon this exchange ratio, we expect to issue between 1,404,162 and 2,184,710 shares of MSB Financial — Maryland common stock to the holders of MSB Financial — Federal common stock outstanding immediately before the completion of the conversion and offering.

 

Because of differences in important factors such as operating characteristics, location, financial performance, asset size, capital structure and business prospects between us and other fully converted institutions, you should not rely on these comparative valuation ratios as an indication as to whether or not our common stock is an appropriate investment for you. The appraisal is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing our common stock. The appraisal does not indicate market value. You should not assume or expect that the appraisal described above means that our common stock will trade at or above the $10.00 purchase price after the offering.

Our board of directors makes no recommendation of any kind as to the advisability of purchasing shares of common stock in the offering.

Possible Change in Offering Range

RP Financial will update its appraisal before we complete the conversion and offering. If, as a result of regulatory considerations, demand for the shares or changes in financial market conditions, RP Financial determines that our estimated pro forma market value has increased, we may sell up to 3,769,125 shares without further notice to you. If our pro forma market value at that time is either below $38.2 million or above $59.5 million, then, after consulting with the Federal Reserve Board, we may: terminate the offering and promptly return all funds with interest; set a new offering range and give all subscribers the opportunity to place a new order; or take such other actions as may be permitted by the Federal Reserve Board and the Securities and Exchange Commission.

Impact of MSB Financial, MHC’s Assets and Waived Dividends on Minority Stock Ownership  

The public shareholders of MSB Financial — Federal will receive shares of common stock of MSB Financial — Maryland in exchange for their shares of common stock of MSB Financial — Federal pursuant to an exchange ratio that is designed to provide, subject to adjustment, that the shareholders will own the same percentage of the common stock of MSB Financial – Maryland after the conversion as they held in MSB Financial — Federal immediately prior to the conversion, without giving effect to new shares purchased in the offering or cash paid in lieu of any fractional shares. However, the exchange ratio will be adjusted downward to reflect assets held by MSB Financial, MHC (other than shares of stock of MSB Financial — Federal), which assets consist primarily of cash relating to dividends paid by MSB Financial — Federal. MSB Financial, MHC had net assets of $166,000 as of December 31, 2014, not including MSB Financial — Federal common stock. The appraisal also accounts for dividends that MSB Financial, MHC waived the receipt of during the years 2007 – 2012 as permitted under applicable law at the time. Waived dividends totaled $1.6 million. The adjustments described above will decrease MSB Financial — Federal’s pro forma shareholders’ ownership interest in MSB Financial — Maryland from 38.3% to 36.7% of common stock at December 31, 2014 after completion of the offering.

 

The Exchange of Existing Shares of MSB Financial — Federal Common Stock

If you are a shareholder of MSB Financial — Federal on the date we complete the conversion and offering, your existing shares will be canceled and exchanged for shares of MSB Financial — Maryland. The number of shares you will receive will be based on an exchange ratio, which will depend on our final appraised value and the percentage of shares owned by the public shareholders, as adjusted for the assets of MSB Financial MHC and its previously-waived dividends. The following table shows how the exchange ratio will vary based on the number of shares sold in our offering. The table also shows how many shares a hypothetical owner of 100 shares of MSB Financial — Federal common stock would receive in the exchange, based on the number of shares sold in the offering.

 

		Shares to be Sold in the Offering								Shares to be Exchanged for Existing Shares of MSB Financial — Federal								Total Shares of Common Stock to be Outstanding (1)				Exchange Ratio (1)				Equivalent per Share Value (2)				Equivalent Pro Forma Book Value Per Exchanged Share (3)				Shares to be Received For 100 Existing Shares (4)
		Amount				Percent				Amount				Percent
Minimum			2,422,500				63.3	%			1,404,162				36.7	%			3,826,662				0.7317			$	7.32			$	11.90			$	73
Midpoint			2,850,000				63.3	%			1,651,955				36.7	%			4,501,955				0.8608			$	8.61			$	12.65			$	86
Maximum			3,277,500				63.3	%			1,899,748				36.7	%			5,177,248				0.9899			$	9.90			$	13.39			$	98
Maximum, as adjusted			3,769,125				63.3	%			2,184,710				36.7	%			5,953,835				1.1384			$	11.38			$	14.24			$	113

 

(1)

Valuation and ownership ratios reflect dilutive impact of MSB Financial, MHC’s assets and previously-waived dividends upon completion of the conversion. See “— Impact of MSB Financial, MHC’s Assets and Waived Dividends On Minority Stock Ownership ” for more information regarding the dilutive impact of MSB Financial, MHC’s assets and previously-waived dividends on the valuation and ownership ratios.

(2)	Represents the value of shares of MSB Financial — Maryland common stock received in the conversion by a holder of one share of MSB Financial — Federal common stock at the exchange ratio, assuming a market price of $10.00 per share.

(3)	Represents the pro forma book value per share at each level of the offering range multiplied by the respective exchange ratio.

(4)	Cash will be paid instead of issuing any fractional shares.

No fractional shares of MSB Financial — Maryland common stock will be issued in the conversion and offering. For each fractional share that would otherwise be issued, we will pay cash in an amount equal to the product obtained by multiplying the fractional share interest to which the holder would otherwise be entitled by the $10.00 per share offering price.

We also will convert options previously awarded under the MSB Financial Corp. 2008 Stock Compensation and Incentive Plan into options to purchase MSB Financial — Maryland common stock. At December 31, 2014, there were outstanding options to purchase 275,410 shares of MSB Financial — Federal common stock, all of which had vested. The number of outstanding options and related per share exercise prices will be adjusted based on the exchange ratio. The aggregate exercise price, term and vesting period of the outstanding options will remain unchanged. If any options are exercised before we complete the offering, the number of shares of MSB Financial – Federal common stock outstanding will increase and the exchange ratio would be adjusted. Because federal regulations prohibit us from repurchasing our common stock during the first year following the conversion unless compelling business reasons exist for such repurchases, we may use authorized but unissued shares to fund option exercises that occur during the first year following the conversion. If all existing options were exercised and funded with authorized but unissued shares of common stock following the conversion, stockholders would experience ownership dilution of approximately 6.0% at the minimum of the offering range.

 

How We Intend to Use the Proceeds of this Offering

The following table summarizes how we intend to use the proceeds of the offering, based on the sale of shares at the minimum and maximum of the offering range.

 

		2,422,500 Shares at $10.00 per Share				3,277,500 Shares at $10.00 per Share
		(In thousands)
Offering Proceeds		$	24,225			$	32,775
Less: offering expenses			1,235				1,317
Net offering proceeds			22,990				31,458
Less:
Proceeds contributed to Millington Bank			11,495				15,729
Proceeds used for loan to employee stock ownership plan			969				1,311
		$	10,526			$	14,418

Initially, we intend to invest the proceeds of the offering in short-term investments. In the future, MSB Financial — Maryland may use the funds it retains to invest in securities, repurchase shares of its common stock (subject to regulatory restrictions), pay cash dividends or for general corporate purposes. Millington Bank intends to use the portion of the proceeds that it receives to fund new loans, to invest in securities or for general corporate purposes. However, we have not allocated specific dollar amounts to any particular area of our loan portfolio. The amount of time that it will take to deploy the proceeds of the offering into loans will depend primarily on the level of loan demand. We may also use the proceeds of the offering to acquire other companies as opportunities arise, primarily in or adjacent to our existing market areas, although we have no specific understandings or agreements to do so at this time.

Purchases by Directors and Executive Officers

We expect that our directors and executive officers, together with their associates, will subscribe for approximately 123,000 shares, which is 4.32% of the midpoint of the offering. Our directors and executive officers will pay the same $10.00 per share price as everyone else who purchases shares in the offering. Like all of our depositors, our directors and executive officers have subscription rights based on their deposits and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in this prospectus. See “ The Conversion and Offering – Subscription Offering and Subscription Rights .” Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering. Following the conversion and offering, and including shares received in exchange for shares of MSB Financial — Federal, our directors and executive officers, together with their associates, are expected to own 301,957 shares of MSB Financial — Maryland common stock, which would equal 6.71% of our outstanding shares if shares are sold at the midpoint of the offering range.

Persons Who Can Order Stock in the Offering

We are offering shares of MSB Financial — Maryland common stock first in a subscription offering to the following persons in the following order of priority:

 

1.

Persons with aggregate balances of $50 or more on deposit at Millington Bank as of the close of business on September 30, 2013.

 

2.

Our employee stock ownership plan.

 

3.

Persons with aggregate balances of $50 or more on deposit at Millington Bank as of the close of business on March 31, 2015 who are not eligible in category 1 above.

 

4.

Millington Bank’s depositors as of the close of business on [DATE 4], who are not eligible under categories 1 or 3 above.

If we receive subscriptions for more shares than are to be sold in this offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in this prospectus. See “The Conversion and Offering—Subscription Offering and Subscription Rights” for a description of the allocation procedure.

Shares of common stock not purchased in the subscription offering will be offered for sale to the general public in a community offering, with a preference given first to natural persons (including trusts of natural persons) residing in Morris and Somerset Counties in New Jersey, second to MSB Financial — Federal’s public shareholders as of [DATE 4] and finally to members of the general public. The community offering may begin concurrently with, or any time after, the subscription offering. We also may offer for sale shares of common stock not purchased in the subscription offering or the community offering through a syndicated offering, which would be an offering to the general public on a best efforts basis by a syndicate of selected broker-dealers. We have the right to accept or reject, in our sole discretion, orders received in the community offering or in a syndicated offering. Any determination to accept or reject stock orders in the community offering or any syndicated offering will be based on the facts and circumstances available to management at the time of the determination.

Subscription Rights are Not Transferable

You are not allowed to transfer your subscription rights and we will act to ensure that you do not do so. You will be required to certify that you are purchasing shares solely for your own account and that you have no agreement or understanding with another person to sell or transfer subscription rights or the shares that you purchase. We will not accept any stock orders that we believe involve the transfer of subscription rights. Eligible depositors who enter into agreements to allow ineligible investors to participate in the subscription offering may be violating federal and state law and may be subject to civil enforcement actions or criminal prosecution. On the order form, you cannot add the names of others for joint stock registration who do not have subscription rights or who qualify only in a lower subscription offering priority than you do. You may add only those who are eligible to purchase shares of common stock in the subscription offering at your date of eligibility. In addition, the stock order form requires that you list all deposit accounts, giving all names on each account and the account number at the applicable eligibility date. Failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation if there is an oversubscription.

Purchase Limitations

Pursuant to our plan of conversion, our board of directors has established limitations on the purchase of common stock in the offering. These limitations include the following:

 

•

The minimum purchase is 25 shares.

 

•

No individual (or individuals exercising subscription rights through a single qualifying account held jointly) may purchase more than $300,000 of common stock (which equals 30,000 shares) in the offering. In addition, if any of the following persons purchase shares of common stock, their purchases, in all categories of the offering combined, when aggregated with your purchases, cannot exceed $1,000,000 of common stock (which equals 100,000 shares):

 

•

Any person who is related by blood or marriage to you and who either lives in your home or who is a director or officer of Millington Bank;

 

•

Companies or other entities in which you are an officer or partner or have a 10% or greater beneficial ownership interest; and

 

•

Trusts or other estates in which you have a substantial beneficial interest or as to which you serve as a trustee or in another fiduciary capacity.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying accounts registered to the same address will be subject to this overall purchase limitation. We have the right to determine, in our sole discretion, whether prospective purchasers are associates or acting in concert.

No individual, together with any associates, and no group of persons acting in concert may purchase shares of common stock so that, when combined with shares of MSB Financial — Maryland common stock received in exchange for shares of MSB Financial — Federal common stock, such person or persons would hold more than 9.9% of the number of shares of MSB Financial — Maryland common stock outstanding upon completion of the conversion and offering. No person will be required to divest any shares of MSB Financial — Federal common stock or be limited in the number of shares of MSB Financial — Maryland to be received in exchange for shares of MSB Financial — Federal common stock as a result of this purchase limitation.

Subject to the Federal Reserve Board’s approval, we may increase or decrease the purchase limitations at any time. If we increase the maximum purchase limitation to 5.0% of the shares of common stock sold in the offering, we may further increase the maximum purchase limitation to 9.99%, provided that orders for common stock exceeding 5.0% of the shares of common stock sold in the offering may not exceed in the aggregate 10.0% of the total shares of common stock sold in the offering. Our tax-qualified employee benefit plans, including our employee stock ownership plan, are authorized to purchase up to 10% of the shares sold in the offering, without regard to these purchase limitations.

How to Purchase Common Stock

In the subscription offering and the community offering, you may pay for your shares by:

 

•

personal check, bank check or money order made payable directly to “MSB Financial Corp.” (Checks will only be accepted subject to collection); or

 

•

authorizing us to withdraw money from the types of Millington Bank deposit accounts identified on the stock order form.

Millington Bank is not permitted to lend funds (including funds drawn on a Millington Bank line of credit) to anyone to purchase shares of common stock in the offering.

You may not designate on your stock order form a direct withdrawal from a retirement account at Millington Bank. Additionally, you may not designate on your stock order form a direct withdrawal from Millington Bank accounts with check-writing privileges. Instead, a check must be provided. If you request a direct withdrawal, we reserve the right to interpret that as your authorization to treat those funds as if we had received a check for the designated amount and we will immediately withdraw the amount from your checking account.

 

Personal checks will be immediately cashed, so the funds must be available within the account when your stock order form is received by us. Subscription funds submitted by check or money order will be held in a segregated account at Millington Bank. We will pay interest calculated at Millington Bank’s statement savings rate from the date those funds are processed until completion or termination of the offering. Withdrawals from certificate of deposit accounts at Millington Bank to purchase common stock in the offering may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with Millington Bank must be available within the deposit accounts at the time the stock order form is received. A hold will be placed on the amount of funds designated on your stock order form. Those funds will be unavailable to you during the offering; however, the funds will not be withdrawn from the accounts until the offering is completed and will continue to earn interest at the applicable contractual deposit account rate until the completion of the offering.

You may deliver your stock order form in one of three ways: by mail, using the stock order reply envelope provided; by overnight delivery to the address indicated on the stock order form or by hand-delivery to the main office of Millington Bank, which is located at 1902 Long Hill Road, Millington, New Jersey. Stock order forms will not be accepted at our other Millington Savings Bank offices and should not be mailed to Millington Savings Bank. Once submitted, your order is irrevocable. We are not required to accept copies or facsimiles of order forms.

Using IRA Funds to Purchase Shares in the Offering

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA. If you wish to use some or all of the funds in your Millington Bank IRA or other retirement account, the applicable funds must first be transferred to a self-directed retirement account maintained by an unaffiliated institutional trustee or custodian, such as a brokerage firm. An annual fee may be payable to the new trustee. If you do not have such an account, you will need to establish one and transfer your funds before placing your stock order. Our Stock Information Center can give you guidance if you wish to place an order for stock using funds held in a retirement account at Millington Bank or elsewhere. Because processing retirement account transactions takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the [DATE 1] offering deadline. Whether you may use retirement funds for the purchase of shares in the offering will depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

Deadline for Ordering Stock in the Subscription and Community Offerings

The subscription offering will end at 2:00 p.m., Eastern time, on [DATE 1]. If you wish to purchase shares, a properly completed and signed original stock order form, together with full payment for the shares of common stock, must be received (not postmarked) no later than this time. We expect that the community offering, if held, will terminate at the same time, although it may continue until [DATE 2], or longer if the Federal Reserve Board approves a later date. No single extension may be for more than 90 days. We are not required to provide notice to you of an extension unless we extend the offering beyond [DATE 2], in which case all subscribers in the subscription and community offerings will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest calculated at Millington Bank’s statement savings rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 2,422,500 shares or more than 3,769,125 shares, we will promptly return all funds and set a new offering range. All subscribers will be notified and given the opportunity to place a new order.

 

Conditions to Completing the Conversion and Offering

We cannot complete the conversion and offering unless:

 

•

the plan of conversion is approved by at least a majority of votes eligible to be cast by depositors of Millington Savings Bank;

 

•

the plan of conversion is approved by at least two-thirds of the outstanding shares of MSB Financial — Federal, including shares held by MSB Financial, MHC;

 

•

the plan of conversion is approved by at least a majority of the votes eligible to be cast by shareholders of MSB Financial — Federal, excluding shares held by MSB Financial, MHC;

 

•

we sell at least the minimum number of shares offered; and

 

•

we receive the final approval of the Federal Reserve Board to complete the conversion and offering.

MSB Financial, MHC, which owns 61.7% of the outstanding shares of MSB Financial — Federal, intends to vote these shares in favor of the plan of conversion. In addition, as of December 31, 2014, directors and executive officers of MSB Financial — Federal and their associates beneficially owned 439,247 shares (inclusive of options that may be exercised within 60 days) of MSB Financial — Federal or 8.06% of the outstanding shares.

Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

We must sell a minimum of 2,422,500 shares to complete the conversion and offering. Purchases by our directors and executive officers and by our employee stock ownership plan will count towards the minimum number of shares we must sell to complete the offering. If we do not receive orders for at least 2,422,500 shares of common stock in the subscription and community offerings or in any syndicated offering, we may increase the purchase limitations and/or seek regulatory approval to extend the offering beyond [DATE 2] (provided that any such extension will require us to resolicit subscribers). Alternatively, we may terminate the offering, in which case we will promptly return your funds with interest calculated at Millington Bank’s statement savings rate, which is currently     % per annum, and cancel all deposit account withdrawal authorizations.

Benefits of the Conversion to Management

We will recognize additional compensation expense related to the expanded employee stock ownership plan and the intended new equity incentive plan. The actual expense will depend on the market value of our common stock and will increase as the value of our common stock increases. As reflected under “Pro Forma Data,” based upon assumptions set forth therein, the annual expense related to the employee stock ownership plan and the intended new equity incentive plan would have been $371,000 for the fiscal year ended June 30, 2014 on an after-tax basis, assuming shares are sold at the maximum of the offering range. If awards under the intended new equity incentive plan are funded from authorized but unissued stock, your ownership interest would be diluted by up to approximately 8.2%. See “Pro Forma Data” for an illustration of the effects of each of these plans.

Employee Stock Ownership Plan. Our existing employee stock ownership plan intends to purchase an amount of shares equal to 4.0% of the shares sold in the offering. The plan will use the

 

proceeds from a 20-year loan from MSB Financial — Maryland to purchase these shares. We reserve the right to purchase shares of common stock in the open market following the offering to fund all or a portion of the intended purchases. As the loan is repaid and shares are released from collateral, the shares will be allocated to the accounts of employee participants based on an individual’s compensation as a percentage of total plan compensation. Non-employee directors are not eligible to participate in the plan. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan.

New Equity Incentive Plan. We intend to implement a new equity incentive plan no earlier than six months after completion of the conversion and offering. We will submit this plan to our shareholders for their approval. Under this plan, we may grant stock options in an amount up to 10.0% of the number of shares sold in the offering and restricted stock awards in an amount equal to 4.0% of the shares sold in the offering. Stock options will be granted at an exercise price equal to 100% of the fair market value of our common stock on the option grant date. Shares of restricted stock will be awarded at no cost to the recipient. We will incur additional compensation expense as a result of this plan. See “Pro Forma Data” for an illustration of the effects of this plan. The new equity incentive plan may award a greater number of options and restricted stock if the plan is adopted after one year from the date of the completion of the conversion. We have not yet determined the number of shares that would be reserved for issuance under this plan. The new equity incentive plan will comply with all applicable Federal Reserve Board regulations. The new equity incentive plan will supplement awards granted under our 2008 Stock Compensation and Incentive Plan, which will continue as a plan of MSB Financial — Maryland.

The following table summarizes, at the maximum of the offering range, the total number and value of the shares of common stock that the employee stock ownership plan expects to acquire and the total value of all restricted stock awards and stock options that are expected to be available under the new equity incentive plan (assuming the equity incentive plan is implemented within one year following the completion of the conversion). The equity incentive plan may award a greater number of options and restricted stock awards if the plan is adopted more than one year after completion of the conversion.

 

		Number of new shares or options to be granted (1)																Value of new available grants (2)
		At minimum of offering range				At maximum, as adjusted of offering range				As a percentage of common common stock to be issued in the offering (3)				Maximum Dilution resulting from the issuance of shares for stock benefit plans				At minimum of offering range				At maximum, as adjusted of offering range
		(Dollars in thousands)
Employee stock ownership plan (1)			96,900				150,765				4.00	%			0.00	%		$	969			$	1,508
Restricted stock awards (1)			96,900				150,765				4.00	%			2.47	%			969				1,508
Stock options (2)			242,250				376,913				10.00	%			5.95	%			676				1,052
Total			436,050				678,443				18.00	%			8.14	%		$	2,614			$	4,068

 

(1)	Assumes the value of MSB Financial — Maryland common stock is $10.00 per share for determining the total estimated value.

(2)	Assumes the value of a stock option is $2.79, which was determined using the Black-Scholes option pricing formula. See “ Pro Forma Data .”

(3)	At the minimum and the maximum, as adjusted, of the offering range, we will sell 2,422,500 shares and 3,769,125 shares.

We may fund our plans through open market purchases, as opposed to new issuances of authorized common stock; however, if any options previously granted under our 2008 Stock Compensation and Incentive Plan are exercised during the first year following completion of the offering, they will be funded with newly-issued shares as Federal Reserve Board regulations do not permit us to

 

repurchase our shares during the first year following the completion of this offering except to fund the grants of restricted stock under the stock-based incentive plan or, with prior regulatory approval, under extraordinary circumstances. The Federal Reserve Board has previously advised that the exercise of outstanding options and cancellation of treasury shares in the conversion will not constitute an extraordinary circumstance or a compelling business purpose for satisfying this test.

The following table presents information regarding our existing employee stock ownership plan, options and restricted stock previously awarded under our 2008 Stock Compensation and Incentive Plan, additional shares to be purchased by our employee stock ownership plan, and our proposed new equity incentive plan. The table below assumes that 5,170,188 shares are outstanding after the offering, which includes the sale of 3,277,500 shares in the offering at the maximum of the offering range and the issuance of 1,892,688 shares in exchange for shares of MSB Financial — Federal using an exchange ratio of 0.9862. It is also assumed that the value of the stock is $10.00 per share.

 

Existing and New Stock Benefit Plans		Eligible Participants		Number of Shares at Maximum of Offering Range				Estimated Value of Shares				Percentage of Shares Outstanding After the Conversion and Offering
Employee Stock Ownership Plan:		Employees
Shares purchased in 2007 offering (1)					200,298	(2)		$	2,002,983				3.87	%
Shares to be purchased in this offering					131,100				1,311,000				2.53	%
Total					331,398				3,313,983				6.40	%
Restricted Stock Awards:		Directors and employees
2008 Stock Compensation and Incentive Plan (1)					109,051	(3)			1,090,511				2.11	%
New shares of restricted stock					131,100				1,311,000	(4)			2.53	%
Total					240,151				2,401,511				4.64	%
Stock Options:		Directors and employees
2008 Stock Compensation and Incentive Plan (1)					272,628	(5)			760,633	(6)			5.27	%
New stock options					327,750				914,423	(7)			6.33	%
Total					600,378				1,675,056				11.60	%
Total					1,171,928			$	7,390,551				22.64	%

 

(1)	Number of shares has been adjusted for the 0.9899 exchange ratio at the maximum of the offering range.

(2)	As of December 31, 2014, of these shares, 133,532 (134,895 before adjustment) have been allocated to the accounts of participants and 66,766 (67,447 before adjustment) remain unallocated.

(3)	As of December 31, 2014, of these shares, 108,176 (109,280 before adjustment) have been awarded and 875 shares (884 shares before adjustment) remain available for future awards. As of December 31, 2014, awards covering 109,280 shares have vested and the shares have been distributed.

(4)	The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. For purposes of this table, fair value is assumed to be the same as the offering price of $10.00 per share.

(5)	As of December 31, 2014, of these shares, options for 272,628 shares (275,410 shares before adjustment) have been awarded. As of December 31, 2014, none of these options had been exercised.

(6)

The fair value of stock options granted and outstanding under the 2008 Stock Compensation and Incentive Plan has been estimated using the Black-Scholes option pricing model. Before the adjustment for the exchange ratio, there were 275,410 outstanding options with a weighted-average fair value of $2.99 per option. Using this value and adjusting for the exchange ratio at the maximum of the offering range, the fair value of stock options granted or available for grant under the 2008 Stock Compensation and Incentive Plan has been estimated at $4.79 per option.

(7)

For purposes of this table, the fair value of stock options to be granted under the new equity incentive plan has been estimated at $2.79 per option using the Black-Scholes option pricing model with the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 0.00%; expected life, 10 years; expected volatility, 14.56%; and risk-free interest rate, 2.17%.

 

Market for MSB Financial — Maryland’s Common Stock

MSB Financial — Federal’s common stock currently trades on the Nasdaq Global Market under the symbol “MSBF,” and the shares of MSB Financial — Maryland’s common stock will also trade on the Nasdaq Global Market under the symbol “MSBF.” Once shares of the common stock begin trading, you may contact a stock broker to buy or sell shares. Persons purchasing the common stock in the offering may not be able to sell their shares at or above the $10.00 offering price. Brokerage firms typically charge commissions related to the purchase or sale of securities.

Our Dividend Policy

MSB Financial — Federal does not currently pay a cash dividend on its common stock. Assuming completion of the conversion and offering, our board of directors will consider adopting a policy of paying regular cash dividends. We cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future. In determining the amount of any dividends, the board of directors will take into account our financial condition and results of operations, tax considerations, capital requirements and alternative uses for capital, industry standards and economic conditions. See “ Our Dividend Policy ” in the prospectus for additional information.

Tax Consequences

MSB Financial, MHC, MSB Financial — Federal, Millington Bank and MSB Financial – Maryland have received an opinion of counsel, Jones Walker LLP, regarding the material federal income tax consequences of the conversion, and have received an opinion of BDO USA, LLP regarding the material New Jersey state tax consequences of the conversion. As a general matter, (1) the conversion will not be a taxable transaction for purposes of federal or state income taxes to us or to existing shareholders of MSB Financial — Federal who receive MSB Financial — Maryland common stock in exchange for their MSB Financial — Federal common stock and (2) the conversion will not be a taxable transaction for purposes of federal or state income taxes to us or persons who receive or exercise subscription rights. Existing shareholders of MSB Financial — Federal who receive cash in lieu of fractional share interests in shares of MSB Financial — Maryland will recognize gain or loss equal to the difference between the cash received and the tax basis of the fractional share. Jones Walker LLP and BDO USA, LLP have issued us opinions to this effect, which are summarized under “The Conversion and Offering—Material Income Tax Consequences.”

Book Entry Delivery

All shares of common stock sold will be issued in book-entry form. Stock certificates will not be issued. A statement reflecting ownership of shares of common stock issued in the subscription and community offerings or in any syndicated offering will be mailed by our transfer agent to the persons entitled thereto at the registration address noted by them on their stock order forms as soon as practicable following consummation of the conversion and offering. We expect trading in the stock to begin on the day of the completion of the conversion and offering or the next business day. The conversion and offering are expected to be completed as soon as practicable following satisfaction of the conditions described above in “—Conditions to Completing the Conversion and Offering.” It is possible that until a statement reflecting ownership of shares of common stock is available and delivered to purchasers, purchasers might not be able to sell the shares of common stock that they purchased, even though the common stock will have begun trading. Your ability to sell your shares of common stock before receiving your statement will depend on arrangements you may make with a brokerage firm.

 

Stock Information Center

Our banking office personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the offering, please call our Stock Information Center at                     . The Stock Information Center will be open Monday through Friday from 10:00 a.m. to 4:00 p.m., Eastern Time. The Stock Information Center will be closed on bank holidays.