Bank Mutual Corp: Discusses its Application to Repurchase Shares
Bank Mutual Corporation
Michael T. Crowley Jr.
Chairman and Chief Executive Officer
Rick B. Colberg
Chief Financial Officer
April 13, 2004
Bank Mutual Corporation (NASDAQ: BKMU) today announced that its request for a waiver from Office of Thrift Supervision rules to permit it to repurchase shares of its common stock in advance of the one?year anniversary of its October 29, 2003 conversion to a fully shareholder-owned corporation, was denied by the OTS. Bank Mutual Corporation is evaluating whether to request that the OTS reconsider its decision.
OTS regulations generally do not permit a converting institution or holding company to repurchase shares within one year of a conversion transaction. Bank Mutual Corporation had sought a waiver from this rule to permit it to repurchase shares pursuant to stock options already outstanding under the Bank Mutual Corporation 2001 Stock Incentive Plan which are either vested or will vest in the near future. The OTS indicated that Bank Mutual Corporation had not presented “extraordinary circumstances” or a “compelling business purpose” such that a waiver would be granted. Therefore, through the one-year anniversary, Bank Mutual Corporation expects to issue authorized but previously unissued shares to cover any exercises of stock options under the 2001 Plan.
The OTS action by its terms does not address the ability of Bank Mutual Corporation to repurchase shares to fund potential restricted stock (“MRP”) grants which would be permitted under the proposed Bank Mutual Corporation 2004 Stock Incentive Plan. However, those repurchases could only occur if the Plan is approved by shareholders. The Plan will be voted upon by Bank Mutual Corporation shareholders at the annual meeting on May 3, 2004. While Bank Mutual Corporation believes that such purchases could be made in accordance with OTS rules, it is confirming the effect of the OTS’s order. Future stock options under the 2004 Plan, if the 2004 Plan is approved, would not be exercisable until after the one-year anniversary of the conversion. Bank Mutual Corporation is the fifth largest financial institution holding company headquartered in the state of Wisconsin and its stock is quoted on The Nasdaq Stock Marketâ under the symbol “BKMU”. Its subsidiary bank, Bank Mutual, operates 70 offices in the state of Wisconsin and one office in Minnesota.
The discussions in this news release which are not historical statements contain forward-looking statements that involve risk and uncertainties. Statements which are not historical statements include those relating to possible repurchases in the event of shareholder approval of the Bank Mutual Corporation 2004 Stock Incentive Plan. That Plan remains subject to shareholder approval, which we cannot assure. Bank Mutual Corporation also cannot assure that the OTS would not take future action which would inhibit the Company’s ability to repurchase shares to fund the Plan. Bank Mutual Corporation’s ability to make any repurchase will depend upon its actual future results and financial condition; many factors could affect those results and its condition. These factors include changing interest rates, changes in demand for loans or other services, competition from other institutions, the results of lending activities and loan loss experience, general economic and political developments, and other factors discussed in Bank Mutual Corporation’s filings with the Securities and Exchange Commission.