Bank Mutual returns to profitability
Brown Deer-based Bank Mutual Corp. reported first quarter net income of $1.0 million, or 2 cents per share, down 52 percent from net income of $2.1 million, or 5 cents per share, in the same quarter a year ago.
However, the first quarter profit was a major improvement compared with the fourth quarter of 2010, when the bank reported a net loss of $76.4 million. The company said the fourth quarter loss was due in large part to a charge related to repayment of $756 million that it had borrowed from the Federal Home Loan Bank of Chicago.
"We are very pleased that we have returned to profitability so soon after the loss we experienced in the fourth quarter of 2010," said Michael Crowley Jr., chairman and chief executive officer. "The favorable impact of our decision to repay high-cost borrowings last December has, as anticipated, positively impacted our net interest income, which almost doubled from what it was in the fourth quarter of last year."
Bank Mutual’s provision for loan losses was $3.2 million during the first quarter of 2011 compared to $3.4 for the first quarter of 2010 and $20.4 million for the fourth quarter of 2010.
"We are also pleased that our loan loss provision returned to a much lower level during the quarter compared to late 2010. Although our non-performing loans increased modestly during the period, based on a current analysis we are cautiously optimistic that our problem loans will be lower by the end of 2011," said David Baumgarten, president of Bank Mutual. "We’ve completed an extensive review of our loan portfolio and have a good handle on our troubled loans. Reducing the level of non-performing loans will continue to be our top priority for the near term."
Bank Mutual management has taken proactive steps in recent months to improve the outlook for loan growth, Baumgarten said.
"We have expanded our commercial banking capabilities in recent months, to include the hiring of additional experienced commercial relationship managers,” he said. “We expect to add a few more experienced relationship managers during the remainder of 2011. We have the capital and management expertise to continue to be a stable, reliable partner for our business and retail customers in Wisconsin and expect to introduce additional products and services in the coming months."
