Bank Mutual profit up 33% in Q3

Higher loan profits drive increase

Bank Mutual headquarters
The Bank Mutual headquarters in Brown Deer.

Brown Deer-based Bank Mutual Corp. reported a 33 percent increase in net income in the third quarter, driven by higher loan profits.

Bank Mutual headquarters
The Bank Mutual headquarters in Brown Deer.

The company, which operates 65 Bank Mutual branches, reported net income of $4.5 million, or 10 cents per diluted share, in the third quarter, up 33 percent from $3.3 million, or 7 cents per diluted share, in the third quarter of 2015.

The company attributed the increase to higher net interest income, higher loan-related fees, higher mortgage banking revenue and lower compensation-related expenses. The gains were offset by lower brokerage and insurance commissions and higher advertising and marketing expenses year-over-year.

Net interest income was $18.7 million, up from $17 million in the same period a year ago. Non-interest income was $6.9 million, up from $6 million in the third quarter of 2015.

Bank Mutual has closed 11 branches since the first quarter of 2015, and froze its benefits under the defined benefit pension plan in December 2015, which led to the lower compensation costs.

Baumgarten
Baumgarten

Bank Mutual had $2.7 billion in total assets as of the end of the third quarter.

“Although our loan growth slowed a bit in the third quarter, it continued to be robust and continued to drive increases in our net interest income and loan-related fee income,” said David Baumgarten, president and chief executive officer of Bank Mutual. “Another positive sign in the quarter was that our net interest margin expanded slightly compared to the second quarter. So, we are hopeful that the long decline in this important measure of our profitability has come to an end.

“However, we recognize that the amount of multi-family and construction loans in our loan portfolio has grown in recent periods to a level that could receive increased regulatory attention under federal banking guidelines. Although we are confident in our ability to manage the credit risk associated with these loans, it is likely that growth in these loan types will be lower in 2017 than it has been in recent periods.”

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Molly Dill, former BizTimes Milwaukee managing editor.

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