SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-31207
| | A. | | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
Bank Mutual Corporation 401(k) Plan
4949 W. Brown Deer Road
P.O. Box 245034
Milwaukee, WI 53224-9534
| | B. | | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
Bank Mutual Corporation
4949 W. Brown Deer Road
P.O. Box 245034
Milwaukee, WI 53224-9534
Bank Mutual Corporation
401(k) Plan
Milwaukee, Wisconsin
Financial Statements and
Supplemental Schedule
Years Ended December 31, 2002 and 2001
Bank Mutual Corporation 401(k) Plan
Financial Statements and Supplemental Schedule
Years Ended December 31, 2002 and 2001
Table of Contents
Independent Auditor’s Report
Board of Trustees
Bank Mutual Corporation 401(k) Plan
Milwaukee, Wisconsin
We have audited the accompanying statements of net assets available for benefits of Bank Mutual Corporation 401(k) Plan as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2002 and 2001, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2002, is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Wipfli Ullrich Bertelson LLP
June 3, 2003
Green Bay, Wisconsin
1
Bank Mutual Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
| | | 2002 | | Restated 2001 |
|
Assets | | | | |
Investments | | $18,186,536 | | $16,002,412 |
Receivable—Employer contribution | | 0 | | 401,121 |
|
Net assets available for benefits | | $18,186,536 | | $16,403,533 |
|
See accompanying notes to financial statements.
2
Bank Mutual Corporation 401(k) Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2002 and 2001
| | | 2002
| | Restated 2001
|
Additions to net assets attributed to: | | | | | | |
Investment income: | | | | | | |
Net appreciation in fair value of investments | | $ | 1,193,926 | | $ | 392,887 |
Interest and dividends | | | 220,173 | | | 116,579 |
|
Total investment income | | | 1,414,099 | | | 509,466 |
|
Contributions: | | | | | | |
Participant | | | 1,249,858 | | | 591,988 |
Employer | | | 159,764 | | | 482,243 |
Rollover | | | 78,397 | | | 0 |
|
Total contributions | | | 1,488,019 | | | 1,074,231 |
|
Transfer from other plan | | | 0 | | | 11,469,748 |
|
Total additions | | | 2,902,118 | | | 13,053,445 |
|
Deductions from net assets attributed to: | | | | | | |
Benefits paid to participants | | | 1,114,796 | | | 285,001 |
Investment advisory fees | | | 4,319 | | | 0 |
|
Total deductions | | | 1,119,115 | | | 285,001 |
|
Net additions | | | 1,783,003 | | | 12,768,444 |
Net assets available for benefits at beginning | | | 16,403,533 | | | 3,635,089 |
|
Net assets available for benefits at end | | $ | 18,186,536 | | $ | 16,403,533 |
|
See accompanying notes to financial statements.
3
Bank Mutual Corporation 401(k) Plan
Notes toFinancial Statements
The following description of Bank Mutual Corporation 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan Agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution 401(k) plan covering substantially all employees of Bank Mutual Corporation (the “Corporation”) who have been employed for one year, earn 1,000 hours of service, and are 21 years of age. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. The Plan is administered by certain officers of the Corporation.
Employee Contributions
Participants may elect to contribute up to the maximum contribution allowable under IRS Code Sections 401(k), 404, and 415. Amounts contributed are deducted from gross wages for each payroll period and are remitted to the Plan in accordance with the investment options selected by the participant.
Employer Contributions
The Corporation makes matching contributions equal to 20% of the employee’s contributions. Employee contributions over 5% of annual cash compensation are not matched. Matching contributions are funded at each payroll date along with employee contributions. In addition, the Corporation, at its discretion, may make certain additional contributions as determined by the Board of Directors of the Corporation. No discretionary contributions were made in 2002. In 2001, an additional contribution of 6.75% of qualified participants’ annual cash compensation was made to participants of the First Northern Savings Bank 401(k) Savings Plan. The assets of the First Northern Savings Bank 401(k) Savings Plan were transferred to the Plan at the end of 2001.
4
Bank Mutual Corporation 401(k) Plan
Notes toFinancial Statements
NOTE 1 | PLAN DESCRIPTION (Continued) |
Participants’ Accounts
All investments in participants’ accounts are participant directed. The Plan allows participants to select from a variety of mutual funds with a mix of common stocks and bonds. The Plan also allows participants to invest in common stock of the Corporation and Bank certificates of deposit.
Each participant’s account is credited with the participant’s contributions, the Corporation’s matching and discretionary contributions, and plan earnings (based on participant’s investment election and account balance).
Vesting
All employee contributions are 100% vested immediately. Employer contributions made after December 31, 2001, are also 100% vested immediately. Employer contributions made prior to January 1, 2002, continue to vest under the vesting schedules in place prior to the plan merger described in Note 7. Under the predecessor plans, Mutual Savings Bank’s employer contributions were 100% vested immediately and First Northern Savings Bank’s contributions vested at 25% after two years of service, 50% after three years of service, and 100% after four years of service.
Expenses of the Plan
Substantially all administrative and other expenses incurred in conjunction with the Plan are paid by the Corporation. Investment advisory fees are paid by the Plan.
Payment of Benefits
Plan benefits are available at normal retirement, deferred retirement, early withdrawal, disability retirement, death, or termination of employment. Participants receive benefit payments in the form of a lump-sum distribution.
Plan Termination
The Corporation has reserved the right to terminate the Plan at any time. In the event of termination, all amounts credited to participants’ accounts will be distributed to participants in accordance with the Plan’s provisions.
5
Bank Mutual Corporation 401(k) Plan
Notes toFinancial Statements
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Method of Accounting
The accounting records of Bank Mutual Corporation 401(k) Plan are maintained on the accrual basis of accounting in accordance with generally accepted accounting principles.
Use of Estimates in Preparation of Financial Statements
The preparation of the accompanying financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from these estimates.
Investment Valuation
Investments are stated at fair value. Investments in certificates of deposit are stated at cost, which approximates fair value. Mutual funds are carried at current value, which represents the quoted market values of the underlying investments. The fair value of Bank Mutual Corporation common stock is its quoted market price. Security transactions are accounted for on the trade-date basis (the date the order to buy or sell is executed).
Both realized and unrealized appreciation or depreciation is reflected for the year in the statement of changes in net assets available for benefits. Gains or losses on security transactions are recorded as the difference between proceeds received and the carrying value of the investments. Interest income is recognized on the accrual method, and dividend income is recorded on the ex-dividend date.
NOTE 3 | PRIOR PERIOD ADJUSTMENT—CORRECTION OF AN ERROR |
The accompanying financial statements for 2001 have been restated to correct an error in accounting for the transfer of net assets of First Northern Savings Bank 401(k) Savings Plan. The transfer was consummated on December 31, 2001; however, the 2001 financial statements were originally prepared as if the transfer took place in January 2002. The effect of the restatement was to recognize an increase in net assets available for benefits as discussed in Note 7. Investments and transfers from other plans at December 31, 2001, have been adjusted for the effects of the restatement on prior years.
6
Bank Mutual Corporation 401(k) Plan
Notes toFinancial Statements
The following is a schedule of investments that individually represent 5% or more of the Plan’s net assets at December 31:
| | | 2002
| | 2001
|
| | | Asset Fair
Value | | Percent of
Net Assets | | Asset Fair
Value | | Percent of
Net Assets |
|
Bank Mutual Certificate of Deposit | | $ | 1,046,435 | | 5.8 | | $ | 749,758 | | 4.6 |
AIM Mid Cap Core Equity Fund | | | 932,448 | | 5.1 | | | 0 | | 0.0 |
Dreyfus Appreciation Fund | | | 1,688,816 | | 9.3 | | | 309,560 | | 1.9 |
Strong Small Cap Value Fund | | | 1,650,370 | | 9.1 | | | 0 | | 0.0 |
Large Company Growth Fund | | | 1,085,659 | | 6.0 | | | 0 | | 0.0 |
Bank Mutual Corporation | | | | | | | | | | |
Common Stock | | | 7,908,401 | | 43.5 | | | 1,966,567 | | 12.0 |
During 2002 and 2001, the Plan’s investments (including investments bought or sold during the year as well as those held at the end of the year) appreciated (depreciated) as follows:
| | | 2002 | | | 2001 | |
|
Mutual funds | | ($1,400,904 | ) | | ($363,111 | ) |
Bank Mutual Corporation common stock | | 2,594,830 | | | 755,998 | |
|
Net appreciation | | $1,193,926 | | | $392,887 | |
|
7
Bank Mutual Corporation 401(k) Plan
Notes to Financial Statements
NOTE 5 | TRANSACTIONS WITH PARTIES-IN-INTEREST |
The Plan had the following transactions with Bank Mutual Corporation:
| | | 2002 | | 2001 |
|
Purchases of stock: | | | | | | |
Number of shares | | | 7,600 | | | 14,722 |
Value of shares on transaction dates | | $ | 155,218 | | $ | 199,148 |
Sales of stock: | | | | | | |
Number of shares | | | 5,000 | | | 13,251 |
Value of shares on transaction dates | | $ | 95,307 | | $ | 197,274 |
At December 31, 2002 and 2001, the Plan held 341,911 shares and 339,311 shares, respectively, of Bank Mutual Corporation common stock.
NOTE 6 | TAX-EXEMPT STATUSOF PLAN |
On September 9, 1994, the Internal Revenue Service declared that the Plan is qualified pursuant to Section 401 of the Internal Revenue Code. Plan management believes any amendments and events since the effective date of the last Internal Revenue Service determination letter do not affect the qualified status of the Plan. Accordingly, the Plan is exempt from federal and state income taxes under current provisions of their respective laws.
NOTE 7 | TRANSFER FROM OTHER PLAN |
On December 31, 2001, First Northern Savings Bank 401(k) Savings Plan was merged with Mutual Savings Bank Savings and Investment Plan, and the legal name for the Plan was changed to Bank Mutual Corporation 401(k) Plan. Assets totaling $11,469,748 were transferred into the Plan as part of the merger.
8
Supplemental Schedule
9
Bank Mutual Corporation 401(k) Plan
Plan’s EIN #39-0491685 Plan #002
Schedule H, Line 4i—Schedule of Assets (Held at End of Year)
December 31, 2002
Identity of Issue, Borrower, Lessor, or Similar Party | | Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par, or Maturity Value | | Cost | | Current Value |
|
Bank Mutual* | | 4.43%, due February 28, 2005—Certificate of deposit | | $N/R | | $ 1,046,435 |
|
Wells Fargo* | | 43,288.120 shares—Cash Investment Fund | | N/R | | 43,288 |
| | | 93,060.510 shares—Short-term Investment Fund | | N/R | | 93,061 |
| | | 24,001.278 shares—Stable Return Fund | | N/R | | 819,092 |
| | | 19,549.476 shares—Diversified Bond Fund | | N/R | | 509,460 |
| | | 5,704.921 shares—ABN AMRO Chicago Capital Growth Fund | | N/R | | 103,088 |
| | | 44,024.915 shares—AIM Mid Cap Core Equity Fund | | N/R | | 932,448 |
| | | 39,680.255 shares—American Century Equity Income Fund | | N/R | | 259,112 |
| | | 53,989.944 shares—Dreyfus Appreciation Fund | | N/R | | 1,688,816 |
| | | 17,032.857 shares—Dreyfus Premier International Value Fund | | N/R | | 206,209 |
| | | 11,574.041 shares—Managers Special Equity Fund | | N/R | | 637,498 |
| | | 29,002.376 shares—MFS Value Fund | | N/R | | 479,119 |
| | | 30,402.083 shares—Strong Small Cap Value Fund | | N/R | | 1,650,370 |
| | | 86,645.498 shares—Large Company Growth Fund | | N/R | | 1,085,659 |
| | | 1,421.993 shares—Outlook 2010 Fund | | N/R | | 15,016 |
| | | 2,636.090 shares—Outlook 2020 Fund | | N/R | | 28,417 |
| | | 54,394.430 shares—Outlook 2030 Fund | | N/R | | 594,531 |
| | | 1,059.031 shares—Outlook 2040 Fund | | N/R | | 11,851 |
|
Total Wells Fargo | | | | | | 9,157,035 |
|
Bank Mutual Corporation* | | 341,911 shares—Common stock | | N/R | | 7,908,401 |
|
Participant Loans | | 5.25% to 10.35% notes maturing over the next five years | | N/R | | 74,665 |
|
| | | Total assets (held at end of year) | | | | $18,186,536 |
|
*Party-in-interest
N/R—Cost information is not required for participant-directed investments.
See Independent Auditor’s Report.
10
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
BANK MUTUAL CORPORATION 401(K) PLAN |
|
/S/ MICHAEL T. CROWLEY, JR.
|
Michael T. Crowley, Jr., Trustee |
|
/S/ EUGENE H. MAURER
|
Eugene H. Maurer, Trustee |
|
/S/ MICHAEL D. MEEUWSEN
|
Michael D. Meeuwsen, Trustee |
|
/S/ RICK B. COLBERG
|
Rick B. Colberg, Trustee |
Date: June 26, 2003
11
BANK MUTUAL CORPORATION 401(k) PLAN
EXHIBIT INDEX
TO
FORM 11-K
Exhibit
Number
| | Description
| | Incorporated Herein
by reference to
| | Filed
Herewith
|
| | | |
| 23.1 | | Consent of Wipfli Ullrich Bertelson LLP | | | | X |
| | | |
| 99.1 | | Certification of the CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | | X |
| | | |
| 99.2 | | Certification of the CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | | X |
