Brown Deer-based Bank Mutual Corp. saw profits rise 10.5 percent in the fourth quarter of 2016, driven by increased loan revenues and lower compensation and occupancy costs.
The company reported fourth quarter net income of $4.1 million, or 9 cents per diluted share, up from $3.7 million, or 8 cents per share, in the fourth quarter of 2015.
Bank Mutual attributed the earnings increase to higher net interest income, higher loan-related fees, higher mortgage banking revenue, lower compensation-related expenses and lower occupancy, equipment and data processing costs. The bank’s occupancy and compensation-related expenses have been on the decline since it closed 11 branches and froze its employee benefit pension plan in 2015 and 2016.
Net interest income was $18.5 million in the fourth quarter, up from $17.2 million in the same period a year ago. Non-interest income was $6.7 million, up from $5.8 million in the fourth quarter of 2015.
Full-year profit totaled $17 million, or 37 cents per diluted share, up from $14.2 million, or 31 cents per share, in 2015. Bank Mutual attributed the increase to lower net losses and expenses on foreclosed real estate, which was offset by provisions for loan losses and lower brokerage and insurance commissions. Its provision for loan losses was $1 million in the fourth quarter, compared with a $1 million recovery of loan losses in the same period in 2015.
Bank Mutual increased its total assets to $2.6 billion in 2016, up from $2.5 billion in 2015.
“Growth in our loan portfolio slowed in the fourth quarter as we expected,” said David Baumgarten, president and chief executive officer of Bank Mutual. “Some of this decline was seasonal in nature. However, much of it was due to efforts on our part to prudently manage the growth in our multi-family and construction loans, which have received increased regulatory scrutiny in recent months.”
While he celebrated Bank Mutual’s significant improvements in 2016, he struck a cautious note looking ahead to 2017 earnings.
“Looking forward, we remain optimistic that we will continue to increase our total revenue, maintain our asset quality, and effectively manage our non-interest expenses so that earnings in 2017 will continue to show improvement,” Baumgartner said. “However, we do not anticipate the same level of earnings improvement we achieved in 2016 to be realized in 2017.”