MutualFirst Announces Sale of Investment

Thursday, September 04, 2008

September 3, 2008 - MutualFirst Financial Inc. (the "Company") (Nasdaq: MFSF), the holding company of MutualBank (the "Bank") headquartered in Muncie, Indiana, announced today that earnings for the third quarter will be negatively impacted due to the loss incurred on the sale of the Bank's investment in the AMF Ultra Short Mortgage Fund and the AMF Ultra Short Fund (the "Funds").

The Company recorded a loss in the third quarter of $2.6 million related to the sale of its $14.8 million investment in the Funds. During the third quarter, the net asset value of the Funds declined significantly due to the lack of liquidity in the mortgage backed securities market in addition to the downgrade of certain securities in the Funds' portfolio by various rating agencies. The sale was implemented by the Bank redeeming its shares in the Funds for cash and underlying securities in the third quarter. The result of the transaction discussed above will be a decrease to earnings in the third quarter of $1.6 million after tax or $.26 per share. "The industry is in challenging times given the current economic environment," said David W. Heeter, CEO. He continued, "Despite the challenges, MutualBank continues to operate as a well capitalized and prudently run financial institution."

MutualBank has assets of over $1.4 billion and operates thirty-two full service financial centers in nine Indiana counties.

Forward-Looking Statement

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.