<PAGE> 1
FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
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Date of Report: November 1, 2000
BANK MUTUAL CORPORATION
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(Exact name of registrant as specified in its charter)
U.S.A. 000-31207 39-2004336
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4949 West Brown Deer Road, Milwaukee, WI 53223
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(414) 354-1500
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In accordance with Commission rules, this Amendment is being filed to
provide Bank Mutual pro forma financial information in Item 7(b), reflecting the
regulatory restructuring and acquisition reported in the original Report on Form
8-K. The pro forma information was not reasonably available when the original
8-K was filed on November 15, 2000. The pro forma financial statements relate to
Bank Mutual's acquisition of First Northern Capital Corp., as well as the
restructuring of Mutual Savings Bank and related subscription offering of Bank
Mutual, all as completed on November 1, 2000.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following pro forma condensed combined financial information of
Bank Mutual, all of which is unaudited, reflects the regulatory restructuring of
Mutual Savings Bank into mutual holding company form and the acquisition by Bank
Mutual of First Northern Capital Corp. It is included on the following pages of
this report:
Unaudited Pro Forma Condensed Combined Financial Information
<TABLE>
<CAPTION>
Page No.
Herein
-------
<S> <C>
Introductory Notes.................................................................. PF-1
Balance Sheet at September 30, 2000................................................. PF-2
Notes to Pro Forma Balance Sheet.................................................... PF-2
Statements of Income:
Nine months ended September 30, 2000....................................... PF-4
Year ended December 31, 1999............................................... PF-4
Notes to Pro Forma Statements of Income............................................. PF-5
</TABLE>
-2-
<PAGE> 3
PRO FORMA DATA REFLECTING THE BANK MUTUAL CORPORATION RESTRUCTURING AND STOCK
OFFERING, AND THE FIRST NORTHERN CAPITAL CORPORATION MERGER
In the following tables, we provide unaudited pro forma condensed combined
financial data of Bank Mutual Corporation and subsidiaries, which includes the
historical data for Mutual Savings Bank, and First Northern Capital Corporation
plus adjustments to give effect to the regulatory restructuring of Mutual
Savings, the Bank Mutual stock offering and the First Northern merger as
described in the previously submitted Report on Form 8-K. The data are based on
the issuance of 6,141,006 common shares of Bank Mutual in the subscription
offering, and the consideration in the First Northern merger of 5,007,485 common
shares for 40% of First Northern shares outstanding, and cash for the remaining
60% of First Northern shares outstanding. The transactions occurred on November
1, 2000.
In accordance with generally accepted accounting principles the First Northern
merger is being accounted for using the purchase method. Accordingly, the assets
and liabilities of First Northern have been adjusted to fair value. To the
extent that the purchase price, consisting of the number of shares of Bank
Mutual issued to former First Northern shareholders plus cash paid to former
First Northern shareholders, exceeded the fair value of the net assets of First
Northern at the merger date, that excess is reported as an intangible asset to
be amortized to the consolidated income of Bank Mutual in future periods.
Pro forma operating results data assumes that the restructuring, stock offering
and merger occurred on the first day of each period shown, whereas pro forma
financial condition data assumes that these transactions occurred on September
30, 2000. We assume the shares had been sold at the beginning of the period and
the net proceeds from the offering had been invested at the indicated rate,
which represents the yield on the one-year U.S. Government securities on the
indicated date. The yield on the one-year U.S. Government securities was used
rather than the arithmetic average of the average yield on total
interest-earning assets and the average rate paid on deposits, because the yield
on one-year U.S. Government securities is believed to be more reflective of
market interest rates. Additional assumptions are discussed in the notes that
follow the table. The per share information is calculated assuming the number of
shares outstanding is unchanged throughout each respective time period.
In accordance with generally accepted accounting principles, the Mutual Savings
restructuring is accounted for at historical cost. Accordingly, the carrying
value of Mutual Savings' assets, liabilities and equity will not be affected by
the restructuring and will be reflected in Bank Mutual's financial statements
based upon their historical amounts. Mutual Savings' historical operating
results for the period prior to the restructuring are carried over to Bank
Mutual and are not affected by the restructuring.
We present this pro forma data as an illustration only. It does not necessarily
indicate the financial condition or operating results that would have actually
been reported if the restructuring and merger had occurred as of September 30,
2000, or at the beginning of the periods presented, nor does it necessarily
indicate future financial condition or operating results.
PF-1
<PAGE> 4
UNAUDITED PRO FORMA CONDENSED
BALANCE SHEET
September 30, 2000
(In thousands)
<TABLE>
<CAPTION>
Historic Historic Pre Stock Stock Offering
Mutual First Merger offering and Consolidated
Savings Northern Adjustments combined Restructuring Bank Mutual
----------- ----------- ------------ ----------- ------------- ------------
Assets
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and Cash $ 36,841 $ 8,947 $ (83,304) (a)(b) $ (37,516) $ 57,585 (d)(e) $ 20,069
Equivalents (f)
Investments 529,994 53,146 (216) (c) 582,924 582,924
Loans, net 1,136,666 821,571 (5,996) (c) 1,952,241 1,952,241
Office Properties 31,599 8,230 9,698 (c) 49,527 49,527
and Equipment
Intangible Assets 10,792 51,873 (a),(c) 64,946 64,946
Other Assets 34,479 36,036 2,281 (c) 70,515 597 (f) 71,112
--------------------------------------- -------------------------- ------------
Total Assets 1,780,371 927,930 (25,664) 2,682,637 58,182 2,740,819
======================================= ========================== ============
Liabilities
Deposits 1,296,920 570,514 700 (c) 1,868,134 1,868,134
Borrowings 270,520 263,399 (280) (c) 533,639 533,639
Other Liabilities 38,334 17,690 168 (b)(c) 56,192 597 (f) 56,789
--------------------------------------- -------------------------- ------------
Total Liabilities 1,605,774 851,603 588 2,457,965 597 2,458,562
Shareholders' Equity 174,597 76,327 (26,252) (a)(b)(c) 224,672 57,585 (d),(e)(f)(g) 282,257
--------------------------------------- -------------------------- ------------
Total Liabilities and
Shareholders' Equity $ 1,780,371 $ 927,930 $ (25,664) $ 2,682,637 $ 58,182 $ 2,740,819
======================================= ========================== ============
</TABLE>
Notes to Pro Forma Balance Sheet
(a) Reflects the exchange of 5,007,485 shares of Bank Mutual common stock for
40% of First Northern's 8,345,808 outstanding shares of common stock, and
the cash payment of $15 per share for the remaining 60% of the outstanding
First Northern stock, resulting in a cash payment of $75.1 million to
former First Northern shareholders.
(b) Adjustment to record the effects of non-recurring merger-related charges of
$8.2 million, or $5.7 million net of tax effect, which were charged to
earnings for First Northern immediately prior to the First Northern merger
which consist of the following (in thousands):
<TABLE>
<S> <C>
Merger related professional fees * $ 941
Buy-back of outstanding options 5,746
Restructuring charges 824
Benefit plan accruals 681
---------
8,192
Tax benefit 2,538
---------
Total non-recurring charges $5,654
=========
</TABLE>
* Amount not tax effected as it is not deductible for federal and state
tax purposes.
PF-2
<PAGE> 5
(c) Under purchase accounting, First Northern's assets and liabilities are
adjusted to their estimated fair values. The estimated fair value
adjustments have been determined by Bank Mutual based upon available
information. The following sets forth the purchase accounting adjustments
made to reflect First Northern's assets and liabilities to fair values at
the merger date (in thousands):
<TABLE>
<S> <C> <C>
Historical shareholders' equity 9/30/00, net of $70,660
merger adjustments
Investments (216)
Loans receivable (5,996)
Office properties and equipment 9,698
Other assets - loan servicing rights 2,281
Deposit based intangible 4,146
Deposits (700)
Borrowings 280
Other liabilities - deferred tax benefit (2,693)
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Adjusted shareholders' equity 77,460
Purchase price - cash 75,112
Purchase price - stock 50,075
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125,187
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Cost in excess of net assets of business acquired $47,727
============
</TABLE>
(d) Reflects the capitalization by Mutual Savings of Mutual Savings Bancorp,
MHC, the mutual holding company of Mutual Savings (the "MHC"), for $100,000
upon the restructuring and contribution of Mutual Savings to Bank Mutual.
The restructuring is accounted for at historical cost.
(e) Reflects the net stock proceeds based on the sale of 6,141,006 shares at
$10 per share generating gross proceeds of $61.4 million less marketing
fees and other issuance expenses of $3.1 million.
(f) Reflects the 59,725 shares issued in the stock offering to the Bank Mutual
employee stock ownership plan ("ESOP"). These funds were borrowed by the
ESOP from Bank Mutual.
(g) Reflects the 11,193,174 shares issued to the MHC as a result of the
restructuring and merger. Results in 50.1% majority ownership of Bank
Mutual by the MHC.
PF-3
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UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENTS OF INCOME
Nine Months Ended September 30, 2000
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Stock
Historic Historic Pre Stock Offering
Mutual First Merger Offering and Consolidated
Savings Northern Adjustments Combined(a) Restructuring Bank Mutual
------------------------------------------- ---------------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 91,694 $ 46,478 $ (1,288) (b)(c) $136,884 $ 2,671 (i) $139,555
Interest expense 56,734 30,241 370 (d) 87,345 87,345
------------------------------------------- ------------------------- -----------
Net interest income 34,960 16,237 (1,658) 49,539 2,671 52,210
Provision for 276 495 771 771
losses on loans
------------------------------------------- ------------------------- -----------
Net interest income 34,684 15,742 (1,658) 48,768 2,671 51,439
after provision
for losses on
loans
Total non-interest
income 6,287 3,266 (287) (e) 9,266 9,266
Total non-interest
expense 25,232 11,493 2,167 (f),(g) 38,892 38,982
------------------------------------------- ------------------------- -----------
Income (loss) 15,739 7,515 (4,112) 19,142 2,671 21,813
before taxes
Income taxes 5,811 2,379 (822) (h) 7,368 935 8,303
------------------------------------------- ------------------------- -----------
Net income (loss) $ 9,928 $ 5,136 $ (3,290) $ 11,774 $ 1,736 $ 13,510
=========================================== ========================= ===========
Earnings per Share (j) $.61
===========
</TABLE>
UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENTS OF INCOME
Year Ended December 31, 1999
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Stock
Historic Historic Pre Stock Offering
Mutual First Merger Offering and Consolidated
Savings Northern Adjustments Combined (a) Restructuring Bank Mutual
------------------------------------------- ------------------------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $118,302 $ 52,770 $ (1,582) (b)(c) $169,490 $ 3,456 (i) $172,946
Interest expense 75,337 30,686 493 (d) 106,516 106,516
------------------------------------------- ------------------------- -----------
Net interest income 42,965 22,084 (2,075) 62,974 3,456 66,430
Provision for
losses on loans 350 472 822 822
------------------------------------------- ------------------------- -----------
Net interest income 42,615 21,612 (2,075) 62,152 3,456 65,608
after provision
for losses on
loans
Total non-interest 7,984 3,854 (383) (e) 11,455 11,455
income
Total non-interest
expense 51,279 14,564 2,889 (f),(g) 68,732 68,732
------------------------------------------- ------------------------- -----------
Income (loss)
before taxes (680) 10,902 (5,347) 4,875 3,456 8,331
Income taxes 3,803 3,525 (1,049) (h) 6,279 1,210 7,489
------------------------------------------- ------------------------- -----------
Net income (loss) $(4,483) $7,377 $(4,298) ($ 1,404) $ 2,246 $ 842
=========================================== ========================= ===========
Earnings per Share
(j) $.03
===========
</TABLE>
PF-4
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Notes to Pro Forma Statements of Income
(a) Reflects the historical combined earnings of Mutual Savings and First
Northern prior to the restructuring and stock offering of Bank Mutual.
(b) Reflects the loss of interest revenue on $75.1 million of cash outflows
related to the First Northern merger at 6.11% and 5.93% at September 30,
2000 and December 31, 1999, respectively, which represents the yield on the
then current one year U.S. treasury note.
(c) Reflects the amortization of the fair market value adjustment of loans
using the interest method over the estimated remaining life.
(d) Reflects accretion of premium related to deposits and borrowings using the
interest method over the estimated remaining life.
(e) Reflects amortization of loan servicing rights over a fifteen-year period
in a manner proportionate to the expected cash flows of net servicing
income.
(f) Reflects additional depreciation resulting from write-up in value of office
properties over 30 years using the straight-line method.
(g) Reflects amortization of intangible assets from the First Northern merger
over a 20-year life using the straight-line method for goodwill and 15
years for the deposit based intangible.
(h) Tax effect assuming a 35.0% marginal tax rate of pro forma adjustments,
except for goodwill amortization, which has no tax effect.
(i) Reflects interest revenue earned on $57.6 million of cash received for the
sale of stock to minority shareholders at 6.11% and 5.93% at September 30,
2000 and December 31, 1999, respectively, which represents the yield on the
then current one year U.S. treasury note.
PF-5
<PAGE> 8
(j) Basic earnings per share calculations are determined by (i) starting with
the number of shares sold in the conversion and stock offering excluding
shares acquired by the ESOP, (ii) adding the number of shares issued to
shareholders of First Northern, and (iii) adding the average ESOP shares
that have been committed for release during the period. Set forth below is
a reconciliation of the number of shares used in making the earnings per
share and book value per share calculations:
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
----------------------------------------------------
<S> <C> <C>
Shares issued in stock offering 6,141,006 6,141,006
Shares issued to First Northern shareholders 5,007,485 5,007,485
Shares issued to MHC 11,193,174 11,193,174
----------------------------------------------------
Total shares outstanding and used to calculate 22,341,665 22,341,665
book value per share
Less shares sold to ESOP (59,725) (59,725)
Plus average ESOP shares assumed committed for 2,240 2,986
release
----------------------------------------------------
Number of shares used in calculating basic and
diluted earnings per share 22,284,180 22,284,926
====================================================
</TABLE>
(k) 59,725 of the shares of common stock issued in the stock offering were
purchased by the Bank Mutual ESOP. The funds used to acquire the shares
were borrowed by the ESOP from Bank Mutual. Bank Mutual intends to make
contributions to the ESOP over a ten-year period in an amount at least
equal to the principal and interest requirements of the debt. The pro forma
earnings assumes (i) that the loan to the ESOP is payable over ten years in
equal installments of principal with the ESOP shares having an average fair
value of $10.00 per share; (ii) that the ESOP expense for the period is
equivalent to the principal payment allocable to the period and is made
during the period, and (iii) only the ESOP shares committed to be released
during the period are considered outstanding for the purposes of the
earnings per share calculations based on the average shares to be released
during the year. (The ESOP has the authority to acquire up to an additional
832,154 shares in open market acquisitions at current market prices. These
pro formas do not reflect market purchases made by the ESOP.)
PF-6
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 27, 2000 /s/ Eugene H. Maurer
-----------------------------------------
Eugene H. Maurer
Senior Vice President and Secretary