Bank Mutual Corporation reports increase in income for fourth quarter

Special to The Freeman

Jan. 14, 2015

MILWAUKEE Bank Mutual Corporation (NASDAQ: BKMU) reported net income of $3.8 million or $0.08 per diluted share in the fourth quarter of 2014, which was a 42.3 percent improvement over net income of $2.7 million or $0.06 per diluted share in the same quarter of 2013. 

This improvement was due primarily to higher net interest income and lower provision for loan losses or, in the 2014 quarter, a recovery. These developments were partially offset by higher occupancy and equipment costs and higher other non-interest expenses.  

On a full-year basis Bank Mutual Corporation ("Bank Mutual") reported net income of $14.7 million or $0.31 per diluted share in 2014, which was a 35.8 percent improvement over net income of $10.8 million or $0.23 per diluted share in 2013. This improvement was due principally to higher net interest income, lower provision for loan losses, lower compensation-related expenses, and lower losses and expenses on foreclosed real estate.  These developments were partially offset by lower net mortgage banking revenue, higher occupancy and equipment costs, and a non-recurring charge in the first quarter of 2014 related to state income taxes.

David A. Baumgarten, President and Chief Executive Officer of Bank Mutual, commented, "Efforts to restructure our balance sheet the past few years have clearly paid off in 2014, resulting in our highest net interest margin as a public company, as well as a fourth-straight year of higher earnings."  Baumgarten said, "However, this period of restructuring is drawing to a close and we expect our net interest margin to be slightly lower in 2015.  We also expect our non-interest expenses to be higher in 2015. We are confident, though, that growth in our loan portfolio, which has averaged 7.3 percent annually the past three years, can continue to fuel an improvement in earnings in 2015, as will modest improvements in our non-interest sources of revenue." 

Bank Mutual's net interest income increased by $731,000 or 4.3 percent and by $3.5 million or 5.3 percent during the three and twelve months ended December 31, 2014, respectively, compared to the same periods in 2013.