Mutual Federal Bancorp : 2021 Annual Report - Mutual Federal Bancorp, Inc.

MUTUAL FEDERAL BANCORP, INC.

CHICAGO, ILLINOIS

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021 and 2020

MUTUAL FEDERAL BANCORP, INC.
CHICAGO, ILLINOIS
Consolidated Financial Statements
December 31, 2021 and 2020
	Page
Independent Auditor's Report ......................................................................................................................	1
Consolidated Statements of Financial Condition .........................................................................................	3
Consolidated Statements of Operations ......................................................................................................	4
Consolidated Statements of Comprehensive Income .................................................................................	5
Consolidated Statements of Stockholders' Equity .......................................................................................	6
Consolidated Statements of Cash Flows .....................................................................................................	7
Notes to Consolidated Financial Statements ...............................................................................................	8

Crowe LLP

Independent Member Crowe Global

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of

Mutual Federal Bancorp, Inc.

Chicago, Illinois

Opinion

We have audited the consolidated financial statements of Mutual Federal Bancorp, Inc., which comprise the consolidated statements of financial condition as of December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Mutual Federal Bancorp, Inc. as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Mutual Federal Bancorp, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Mutual Federal Bancorp, Inc.'s ability to continue as a going concern for one year from the date the consolidated financial statements are available to be issued.

1.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Mutual Federal Bancorp, Inc.'s internal control. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting accounting estimates made by management, consolidated financial statements.

policies used and the reasonableness of significant as well as evaluate the overall presentation of the

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Mutual Federal Bancorp, Inc.'s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Crowe LLP

Oak Brook, Illinois

May 17, 2022

2.

MUTUAL FEDERAL BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

December 31, 2021 and 2020

(Dollar amounts in thousands except per share data)

			2021					2020
ASSETS
Cash and cash equivalents ...............................................................	$	22,973		$	15,465
Securities available-for-sale ..............................................................			99					165
Loans held for sale, at fair value ......................................................			6,619					17,097
Loans, net of allowance for loan losses of $950 at December 31,
2021 and $921 at December 31, 2020 .........................................			58,637					51,160
Real estate owned, acquired through foreclosure ............................			882					765
Premises and equipment, net ...........................................................			1,678					1,730
Federal Home Loan Bank stock, at cost ...........................................			900					900
Accrued interest receivable...............................................................			309					378
Other assets .....................................................................................			276					822
Total assets ...................................................................................	$	92,373		$	88,482
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest-bearing deposits ...........................................................	$	3,175		$	2,575
Interest-bearing deposits...................................................................			65,663					62,270
Total deposits ................................................................................			68,838					63,845
Federal Home Loan Bank advances.................................................			5,000					5,000
Advance payments by borrowers for taxes and insurance ...............			908					860
Accrued interest payable and other liabilities....................................			700					2,212
Total liabilities ............................................................................			75,446					71,917
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized at
December 31, 2021 and 2020...................................................			-				-
Common stock, $0.01 par value, 12,000,000 shares authorized,
3,636,875 shares issued at December 31, 2021 and 2020 ......			36					36
Additional paid-in capital ...............................................................			10,208					10,199
Treasury stock, at cost ..................................................................			(3,075)				(3,075)
Retained earnings .........................................................................			9,756					9,401
Accumulated other comprehensive income ..................................			2				4
Total stockholders' equity..........................................................			16,927					16,565
Total liabilities and stockholders' equity ...............................	$	92,373		$	88,482

See accompanying notes to consolidated financial statements.

3.