BKMU Bank Mutual Corp. (delisted)

MILWAUKEE, Oct. 19, 2016 /PRNewswire/ -- Bank Mutual Corporation (NASDAQ: BKMU) reported net income of $4.5 million or $0.10 per diluted share in the third quarter of 2016, which was a 33.2% increase over net income of $3.3 million or $0.07 per diluted share in the same quarter of 2015.  Year-to-date, Bank Mutual Corporation ("Bank Mutual") reported net income of $12.9 million or $0.28 per diluted share in 2016 compared to $10.5 million or $0.22 per diluted share in the same nine-month period in 2015.  The improvements between these periods were primarily due to higher net interest income, higher loan-related fees, higher mortgage banking revenue, and lower compensation-related expenses.  Also contributing to the year-to-date improvement were lower net losses and expenses on foreclosed real estate and lower occupancy, equipment, and data processing costs.   These improvements were partially offset by provisions for loan losses in the 2016 periods compared to recoveries in the 2015 periods, as well as reduced gains on real estate held for investment and higher income tax expense. Also negatively impacting the year-to-date comparison were lower brokerage and insurance commissions and higher advertising and marketing expenses in 2016 compared to 2015. 

David A. Baumgarten, President and Chief Executive Officer of Bank Mutual, commented, "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."  He added, "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."  He continued, "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."  Baumgarten concluded, "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." 

Bank Mutual's net interest income increased by $1.7 million or 10.1% and by $2.8 million or 5.4% during the three and nine months ended September 30, 2016, respectively, compared to the same periods in 2015.  These increases were due in part to an increase in Bank Mutual's average earning assets in the 2016 periods compared to the same periods in the prior year, as well as an increase in funding from non-interest bearing checking accounts between the periods.  Also contributing to the increase in the 2016 three- and nine-month periods were call premiums of $577,000 and $1.1 million, respectively, which Bank Mutual received on mortgage-related securities that were called during these periods.  These favorable developments were partially offset by a decrease in Bank Mutual's net interest margin in the 2016 periods compared to the same periods in 2015.

Bank Mutual's average earning assets increased by $180.5 million or 8.2% during the nine months ended September 30, 2016, compared to the same period in 2015.  This increase was primarily attributable to a $189.2 million or 11.6% increase in average loans receivable during the 2016 nine-month period compared to the same period in the prior year. 

Also contributing favorably to Bank Mutual's net interest income in the 2016 periods, as well as its net interest margin, was an increase in funding from non-interest-bearing checking accounts.  The average balance in these accounts increased by $34.1 million or 16.7% during the nine months ended September 30, 2016, compared to the same period in 2015. 

Bank Mutual's net interest margin was 3.08% and 3.03% during the three and nine months ended September 30, 2016, respectively.  However, excluding the impact of the aforementioned call premiums, net interest margin for these periods would have been 2.98% and 2.97%, respectively.  These amounts compared to 3.05% and 3.12% during the same periods of 2015, respectively.  During the nine months ended September 30, 2016, the average yield on Bank Mutual's earning assets declined by 11 basis points (excluding call premiums) and its average cost of funds increased by four basis points compared to the same period in 2015.  The decline in the average yield on earning assets was largely due to the continued repricing of Bank Mutual's loan portfolio to lower yields in the current interest rate environment, as well as its continued emphasis on the origination of variable-rate loans, which generally have lower initial yields than fixed-rate loans.  However, management is hopeful that the negative impact these developments have had on Bank Mutual's loan portfolio yield may have run their course and that the loan portfolio yield may stabilize or even improve slightly in the near term.  However, there can be no assurances; future results will depend in large part on developments affecting interest rates throughout the U.S. economy.  Also contributing to the decline in yield on earning assets in the 2016 periods has been the purchase of mortgage-related securities in the current year at yields that were less than the prevailing rates in the investment portfolio. 

The increase in Bank Mutual's average cost of funds was primarily due to a six basis point increase in its average cost of deposits during the nine months ended September 30, 2016, compared to the same period in the prior year.  The impact of this increase was offset slightly by a decline in the average cost of borrowings from the Federal Home Loan Bank ("FHLB") of Chicago.  This decline was caused by an increase in overnight borrowings, which were drawn to fund growth in earning assets, as previously noted.  Overnight borrowings generally have a lower interest cost than the rates Bank Mutual offers on its certificates of deposit.   

Bank Mutual's provision for (recovery of) loan losses was $1.4 million in the third quarter of 2016 compared to $(930,000) in the same quarter last year.  The provision (recovery) for the nine months ended September 30, 2016, was $2.0 million compared to $(2.6) million in the same period last year.  Management believes that general economic, employment, and real estate conditions continue to be relatively stable in Bank Mutual's local markets.  In addition, Bank Mutual's level of non-performing loans, as well as its actual loan charge-offs, have continued to trend lower in recent periods, as noted later in this release.  However, economic growth in the United States has slowed in recent periods and the global economy, which has also slowed, has experienced increased political-, trade-, and currency-related challenges.  In addition, Bank Mutual has experienced a modest increase in classified loans in recent months, as described later in this release. Management believes that these developments are early indications of emerging difficulties in the credit and lending environment for Bank Mutual.  These considerations, along with growth in Bank Mutual's loan portfolio, contributed to management's conclusion that an increase in the allowance for loan losses was appropriate.  As such, Bank Mutual's allowance for loan losses increased from $17.6 million at December 31, 2015, to $19.2 million at September 30, 2016.  Management anticipates that Bank Mutual's provision for loan losses may continue to consist of provisions rather than recoveries for the foreseeable future.  This is expected to be particularly true if Bank Mutual's loan portfolio continues to grow as it has in recent periods. 

Trends in the credit quality of Bank Mutual's loan portfolio are subject to many factors that are outside of Bank Mutual's control, such as economic and market conditions that can fluctuate considerably from period to period.  As such, there can be no assurances that there will not be significant fluctuations in Bank Mutual's non-performing loans, classified loans, and/or loan charge-off activity from period to period, which may result in significant variability in Bank Mutual's provision for loan losses. 

Deposit-related fees and charges increased slightly in the third quarter of 2016 compared to the same quarter in the prior year.  Year-to-date, however, deposit-related fees were down modestly in 2016 compared to 2015.   Deposit-related fees and charges consist of overdraft fees, ATM and debit card fees, merchant processing fees, account service charges, and other revenue items related to services performed by Bank Mutual for its retail and commercial deposit customers.  Management attributes the fluctuations in deposit-related fees and charges to changes in customer spending behavior in recent years which has generally resulted in lower revenue from overdraft charges and from check printing commissions.  Benefiting this revenue line item in recent periods, however, has been increased revenue from treasury management and merchant card processing services that Bank Mutual offers to commercial depositors. 

Loan-related fees were $1.1 million and $4.0 million during the three and nine months ended September 30, 2016, respectively.  These amounts compared to $476,000 and $1.4 million during the same periods in 2015, respectively.  Loan-related fees consist of periodic income from lending activities that are not deferred as yield adjustments under the applicable accounting rules.  The largest source of fees in this revenue category is interest rate swap fees related to commercial loan relationships.  Bank Mutual mitigates the interest rate risk associated with certain of its loan relationships by executing interest rate swaps, the accounting for which results in the recognition of a certain amount of fee income at the time the swap contracts are executed.  The increases in loan-related fees in the 2016 periods were the result of increased loan production, as well as a lower interest rate environment that has increased borrower preference for the types of loan transactions that generate interest rate swap fees.  Management believes this source of revenue will vary considerably from period to period depending on the rate environment and on borrower preference for the types of transactions that generate interest rate swaps.  Furthermore, a potential decline in the origination of multi-family and construction loans, which are the types of loans that generate most of Bank Mutual's interest rate swap fees, could have a negative impact on such fee income in the future, as more fully discussed elsewhere in this release.        

Brokerage and insurance commissions were slightly lower during the third quarter of 2016 than they were in the same quarter of the previous year.  Year-to-date this source of revenue was $298,000 or 10.5% lower than the same period in 2015.  This revenue item generally consists of commissions earned on sales of tax-deferred annuities, mutual funds, and certain other securities, fees earned for investment advisory services, and commissions earned on sales of personal and business insurance products.  However, the prior year periods included certain non-recurring incentive payments.  Excluding those payments, brokerage and insurance commissions during the three and nine months ended September 30, 2016, were approximately 15% and 30% higher in the 2016 periods than they were in the same periods of 2015, respectively.  Management attributes these increases to new products, services, systems, and investment advisors that Bank Mutual has added in recent periods. 

Mortgage banking revenue, net, was $1.4 million and $3.3 million during three and nine months ended September 30, 2016, respectively.  These amounts compared to $798,000 and $2.6 million during the same periods in 2015, respectively.  The following table presents the components of mortgage banking revenue, net, for the periods indicated:

Loan servicing revenue, net, decreased during the three- and nine-month periods in 2016 compared to the same periods in 2015.  These decreases were caused in part by a decline in gross servicing fees due to an overall decline in loans serviced for third-party investors.  As of September 30, 2016, Bank Mutual serviced $1.003 billion in loans for third-party investors compared to $1.039 billion at December 31, 2015.   Also contributing to the decrease in loan servicing revenue, net, in the 2016 periods was an increase in amortization of mortgage servicing rights ("MSRs").  These increases were caused by lower market interest rates for one- to four-family loans in 2016, which resulted in increased loan prepayment activity and faster amortization of the related MSRs.

The change in valuation allowance that Bank Mutual establishes against its MSRs is recorded as a recovery or loss, as the case may be, in the period in which the change occurs.  As of September 30, 2016, Bank Mutual had no valuation allowance against its MSRs, which had a net book value of $6.6 million as of that date.  MSR valuation allowances typically increase in periods of lower market interest rates, which results in a charge to earnings in the period of the increase.  During lower market interest rate environments, such as that which has occurred in recent months, loan refinance activity and expectations for future loan prepayments generally increase, which typically reduces the fair value of MSRs and results in an increase in the MSR valuation allowance.  However, market interest rates for one- to four-family mortgage loans as of September 30, 2016, were not sufficiently low enough to generate an MSR valuation allowance as of that date.   However, there can be no assurances that an increase in the MSR valuation allowance will not be required in the future, particularly if market interest rates for one- to four-family residential loans remain low or decline further.         

Gain on loan sales activities, net, was $1.4 million and $3.0 million during the three and nine months ended September 30, 2016 and 2015, respectively, compared to $586,000 and $2.1 million during the same periods in 2015.   Bank Mutual typically sells most of the fixed-rate, one- to four-family mortgage loans that it originates.  During the nine months ended September 30, 2016, sales of these loans were $108.0 million, which was $23.7 million or 28.1% higher than the same period of 2015.  Management attributes this increase to lower market interest rates for one- to four-family mortgage loans in 2016 compared to 2015.  The origination and sale of residential loans are subject to variations in market interest rates and other factors outside of management's control.  Accordingly, there can be no assurances that such originations and sales will increase or will not fluctuate considerably from period to period.

During the three months ended September 30, 2016 and 2015, Bank Mutual recorded $12,000 and $378,000, respectively, in gains on the disposition of certain real estate properties that it held for investment purposes.  On a year-to-date basis, the gain in 2015 was only $212,000 because of net losses Bank Mutual had recorded on certain other real estate properties earlier in that year.  Bank Mutual continues to actively market certain of the properties that it holds for investment purposes.  There can be no assurances that Bank Mutual will be able to sell such properties or that gains or losses on sales, if any, will not fluctuate considerably from period to period. 

Compensation-related expenses decreased by $975,000 or 8.5% and $2.5 million or 7.4% during the three and nine months ended September 30, 2016, respectively, compared to the same periods in 2015.  These decreases were mostly due to lower costs associated with Bank Mutual's defined benefit pension plan, which was due in part to an increase in the discount rate used to determine the present value of the pension obligation, but also to a freeze of the plan's benefits at the end of 2015.  This latter change also resulted in a lengthening of the amortization period for unrealized losses in the pension plan, which further contributed to lower pension costs in 2016.  Also contributing to the decreases in compensation-related expenses in the 2016 periods compared to the same periods in the prior year was a decline in the number of employees at Bank Mutual.  This decline was primarily due to the consolidation of seven retail banking offices in the third quarter of 2015 and an additional four in the first quarter of 2016.  These developments were partially offset by normal annual merit increases granted to most employees at the beginning of 2016, as well as higher stock-based compensation and employee commission expense compared to the 2015 periods. 

Occupancy, equipment, and data processing expenses were $3.3 million and $10.1 million during the three and nine months ended September 30, 2016, respectively.  These amounts compared to $3.4 million and $10.5 million during the same periods in 2015, respectively.   The nine-month period in 2015 included $269,000 in one-time costs associated with Bank Mutual's consolidation of seven retail branch offices in that period.  Other on-going occupancy costs related to these consolidations, as well as four others that were completed in the first quarter of 2016, declined by $65,000 and $418,000 during the quarter and year-to-date periods in 2016, respectively, compared to the same periods in 2015.  However, these cost reductions were partially offset by increased data processing, software, and equipment costs associated with other initiatives undertaken by Bank Mutual in the past few periods.  

Advertising and marketing-related expenses were $737,000 and $2.3 million during the three and nine months ended September 30, 2016, respectively, compared to $736,000 and $1.6 million during the same periods in 2015.  Bank Mutual has generally increased spending on advertising and marketing in 2016 in an effort to increase sales and expand Bank Mutual's overall brand awareness, especially as such relates to the retail deposit business.  Management anticipates that for the entire year 2016 Bank Mutual's advertising and marketing-related expenses are likely to be 20% to 25% higher than they were in 2015.  However, this increase depends on future management decisions and there can be no assurances.

Federal deposit insurance premiums were $273,000 and $382,000 during the three months ended September 30, 2016 and 2015, respectively.  Year-to-date, these premiums were $1.1 million in both the 2016 and 2015 periods.  Earlier in 2016 the Federal Deposit Insurance Corporation ("FDIC") issued a final rule that changed how insured financial institutions less than $10 billion in assets, such as Bank Mutual, will be assessed for deposit insurance.  The new rule, which became effective in the third quarter of 2016, resulted in a lower deposit insurance assessment rate for Bank Mutual during the period.

Net losses and expenses on foreclosed real estate were $169,000 and $150,000 during the three months ended September 30, 2016 and 2015, respectively.  On a year-to-date basis these amounts were $80,000 and $687,000 in 2016 and 2015, respectively.  Although the third quarter of 2016 was an exception, Bank Mutual has generally experienced lower net losses and expenses related to foreclosed properties in recent periods due to reduced holdings of such properties.  

Other non-interest expenses were $2.3 million and $7.0 million during the three and nine months ended September 30, 2016, respectively.  During these periods Bank Mutual elected to prepay certain fixed-rate FHLB of Chicago advances and incurred prepayment penalties of $134,000 and $341,000, respectively.  These advances had originally been drawn to fund the purchase of mortgage-related securities that were called by the issuer during the periods, as previously noted.   Excluding these prepayment penalties, other non-interest expenses were $2.2 million and $6.7 million during the three and nine months ended September 30, 2016, respectively.  These amounts compared to $2.4 million and $6.9 million during the same periods in 2015, respectively.   In 2016 Bank Mutual has experienced lower processing costs related to its ATM network, lower deposit account fraud losses, and lower amortization expense related to certain intangible assets.  Also, the 2015 periods included a one-time cost to terminate a contract with a third-party vendor.

Income tax expense was $2.5 million and $2.1 million during the third quarters of 2016 and 2015, respectively, and was $7.4 million and $6.3 million during the year-to-date periods in the same years, respectively.  The effective tax rates ("ETRs") for the quarter periods were 35.8% and 38.6%, respectively, and for the year-to-date periods were $36.5% and 37.4%, respectively.  Bank Mutual's ETR will vary from period to period due primarily to the impact of non-taxable revenue items, such as earnings from BOLI and tax-exempt interest income.  The ETR will also vary because of certain tax deductions related to employee exercises of stock options, which is the primary reason the ETR declined in the 2016 periods.

Bank Mutual's total assets increased by $151.2 million or 6.0% during the nine months ended September 30, 2016, due principally to an increase in total loans receivable.  This increase was primarily funded by increases in deposit liabilities, other borrowings, and advance payments by borrowers.  Also providing funds for the increase in loans receivable was a decrease in mortgage-related securities during the nine-month period.  Bank Mutual's total shareholders' equity was $288.9 million at September 30, 2016, compared to $279.4 million at December 31, 2015.

Bank Mutual's loans receivable increased by $185.4 million or 10.7% during the nine months ended September 30, 2016.  During this period increases in multi-family, commercial real estate, and construction loans (net of the undisbursed portion) were partially offset by declines in most of Bank Mutual's other loan categories.  Management attributes the increases in part to a low interest rate environment that has encouraged loan growth in Bank Mutual's local markets, particularly for loans secured by multi-family and commercial real estate.  This rate environment has also improved the competitiveness of Bank Mutual's loan offerings linked to its interest rate swap loan program, as noted earlier in this release.  Because of this improvement, Bank Mutual has been able to increase new loan production, as well as retain in its loan portfolio a larger portion of construction loans transitioning to permanent financing than it typically has in prior periods.  However, management is not certain that the loan growth experienced in recent periods can be sustained in the future.  The loan portfolio is subject to economic, market, and competitive factors outside of Bank Mutual's control and there can be no assurances that expected loan growth will continue or that total loans will not decrease in future periods.

In recent months banking regulatory agencies have publicly expressed increased concern about financial institutions whose holdings of non-owner-occupied commercial real estate and construction loans and whose growth in such loans exceed guidelines established in certain regulatory pronouncements.  Specifically, these guidelines indicate that financial institutions whose holdings of such loans exceed 300% of total risk-based capital and whose growth in such loans exceeds 50% over the past three years can expect increased scrutiny from their primary regulator.   As of September 30, 2016, Bank Mutual's holdings of and three-year growth in these types of loans exceed these guidelines. As such, Bank Mutual's regulator could subject its lending operations and risk management controls to increased scrutiny.  Although management of Bank Mutual is confident of the quality of its lending operations and controls, it is likely that growth in multi-family and construction loans will be lower in future periods than it has been in recent periods.  Such decline would likely have a negative impact on Bank Mutual's net interest income and interest rate swap fees in future periods.

Bank Mutual's deposit liabilities increased by $71.5 million or 4.0% during the nine months ended September 30, 2016.  Transaction deposits, which consist of checking, savings, and money market accounts, increased by $79.2 million or 6.3% during the period and certificates of deposit decreased by $7.7 million or 1.4%.  Management believes that the increase in transaction deposits in recent periods, particularly a $55.1 million or 25.8% increase in non-interest-bearing checking accounts, is due in part to improved marketing and sales efforts.  However, management also believes that the low interest rate environment that has persisted for the past few years has encouraged some customers to switch to transaction deposits in an effort to retain flexibility in the event interest rates increase in the future.  If interest rates increase in the future, customer preference may shift from transaction deposits back to certificates of deposit, which typically have a higher interest cost to Bank Mutual.  This development could increase Bank Mutual's cost of funds in the future, which would also have an adverse impact on its net interest margin.

Bank Mutual's shareholders' equity was $288.9 million at September 30, 2016, compared to $279.4 million at December 31, 2015.  This increase was due to $12.9 million in net income and a $2.4 million decrease in accumulated other comprehensive loss.  These developments were only partially offset by $7.3 million in regular cash dividends.  The decrease in accumulated other comprehensive loss was mostly due to an increase in the fair value of available-for-sale securities (net of income tax effect), which was caused by a decline in market interest rates during the period.  Bank Mutual did not repurchase a significant amount of its common stock during the nine months ended September 30, 2016.  The book value of Bank Mutual's common stock was $6.32 per share at September 30, 2016, compared to $6.15 at December 31, 2015.     

Bank Mutual's non-performing loans were $9.2 million or 0.48% of loans receivable as of September 30, 2016, compared to $13.6 million or 0.78% of loans receivable as of December 31, 2015.  Non-performing assets, which includes non-performing loans, were $11.9 million or 0.45% of total assets and $16.9 million or 0.68% of total assets as of these same dates, respectively. The decreases noted in the 2016 figures were primarily the result of the payoff of a $4.8 million non-performing commercial loan relationship in the third quarter. 

Non-performing assets are classified as "substandard" in accordance with Bank Mutual's internal risk rating policy.  In addition to these non-performing assets, at September 30, 2016, management was closely monitoring $63.8 million in additional loans that were classified as either "special mention" or "substandard" in accordance with Bank Mutual's internal risk rating policy.  This amount compared to $55.9 million at December 31, 2015.  As of September 30, 2016, most of these additional classified loans were secured by commercial real estate, multi-family real estate, land, and certain commercial business assets.  Management does not believe any of these loans were impaired as of September 30, 2016, although there can be no assurances that the loans will not become impaired in future periods.  The increase in additional classified loans during the nine months ended September 30, 2016, was primarily the result of management's assessment that the credit condition of a number of commercial loan relationships, most of which were manufacturing related, had deteriorated in recent months. 

Bank Mutual's allowance for loan losses was $19.2 million or 1.00% of loans receivable at September 30, 2016, compared to $17.6 million or 1.01% at December 31, 2015.  As a percent of non-performing loans, Bank Mutual's allowance for loan losses was 209.8% at September 30, 2016, compared to 129.5% at December 31, 2015.  The reasons for the increase in the dollar amount of Bank Mutual's allowance for loan losses during the nine months ended September 30, 2016, were described earlier in this release.  The significant increase in the allowance as a percent of non-performing loans during this period was primarily the result of the aforementioned payoff of a non-performing commercial loan relationship.  Management believes the allowance for loan losses at September 30, 2016, was adequate to cover probable and estimable losses in Bank Mutual's loan portfolio as of that date.  However, future increases to the allowance may be necessary and results of operations could be adversely affected if future conditions differ from the assumptions used by management to determine the allowance for loan losses as of the end of the period. 

Bank Mutual Corporation is the third largest financial institution holding company headquartered in the state of Wisconsin based on total assets.  Its stock is quoted on the NASDAQ Global Select Market under the ticker BKMU.  As of September 30, 2016, its subsidiary bank operated 64 banking locations in the state of Wisconsin and one in Minnesota. 

Cautionary Statements        

This release contains or incorporates by reference various forward-looking statements concerning Bank Mutual's prospects that are based on the current expectations and beliefs of management.  Forward-looking statements may contain, and are intended to be identified by, words such as "anticipate," "believe," "estimate," "expect," "objective," "projection," "intend," and similar expressions; the use of verbs in the future tense and discussions of periods after the date on which this report is issued are also forward-looking statements.  The statements contained herein and such future statements involve or may involve certain assumptions, risks, and uncertainties, many of which are beyond Bank Mutual's control, that could cause Bank Mutual's actual results and performance to differ materially from what is stated or expected.  In addition to the assumptions and other factors referenced specifically in connection with such statements, the following factors could impact the business and financial prospects of Bank Mutual:  general economic conditions, including volatility in credit, lending, and financial markets; weakness and declines in the real estate market, which could affect both collateral values and loan activity; periods of relatively high unemployment or economic weakness and other factors which could affect borrowers' ability to repay their loans; negative developments affecting particular borrowers, which could further adversely impact loan repayments and collection; legislative and regulatory initiatives and changes, including action taken, or that may be taken, in response to difficulties in financial markets and/or which could negatively affect the rights of creditors; monetary and fiscal policies of the federal government; the effects of further regulation and consolidation within the financial services industry; regulators' strict expectations for financial institutions' capital levels and restrictions imposed on institutions, as to payments of dividends, share repurchases, or otherwise, to maintain or achieve those levels; recent, pending, and/or potential rulemaking or other actions by various federal regulatory agencies that could affect Bank Mutual; increased competition and/or disintermediation within the financial services industry; changes in tax rates, deductions and/or policies; potential further changes in FDIC premiums and other governmental assessments; changes in deposit flows; changes in the cost of funds; fluctuations in general market rates of interest and/or yields or rates on competing loans, investments, and sources of funds; demand for loan or deposit products; illiquidity of financial markets and other negative developments affecting particular investment and mortgage-related securities, which could adversely impact the fair value of and/or cash flows from such securities; changes in customers' demand for other financial services; Bank Mutual's potential inability to carry out business plans or strategies; changes in accounting policies or guidelines; natural disasters, acts of terrorism, or developments in the war on terrorism or other global conflicts; the risk of failures in computer or other technology systems or data maintenance, or breaches of security relating to such systems; and the factors discussed in Bank Mutual's filings with the Securities and Exchange Commission, particularly under Part I, Item 1A, "Risk Factors," of Bank Mutual's 2015 Annual Report on Form 10-K.

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SOURCE Bank Mutual Corporation