Mutual Federal Bancorp : Annual Report

MUTUAL FEDERAL BANCORP, INC.

CHICAGO, ILLINOIS

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020 and 2019

MUTUAL FEDERAL BANCORP, INC.
CHICAGO, ILLINOIS
Consolidated Financial Statements
December 31, 2020 and 2019
	Page
Independent Auditor's Report ......................................................................................................................	1
Consolidated Statements of Financial Condition .........................................................................................	2
Consolidated Statements of Operations ......................................................................................................	3
Consolidated Statements of Comprehensive Income .................................................................................	4
Consolidated Statements of Stockholders' Equity .......................................................................................	5
Consolidated Statements of Cash Flows .....................................................................................................	6
Notes to Consolidated Financial Statements ...............................................................................................	7

Crowe LLP

Independent Member Crowe Global

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of

Mutual Federal Bancorp, Inc.

Chicago, Illinois

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Mutual Federal Bancorp, Inc., which comprise the consolidated statements of financial condition as of December 31, 2020 and 2019, 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.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements 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 the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mutual Federal Bancorp, Inc. as of December 31, 2020 and 2019, 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.

Crowe LLP

Oak Brook, Illinois

July 1, 2021

1.

MUTUAL FEDERAL BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

December 31, 2020 and 2019

(Dollar amounts in thousands except per share data)

			December 31,
ASSETS			2020					2019
Cash and cash equivalents ...............................................................	$	15,465	$	7,889
Securities available-for-sale ..............................................................			165				1,236
Loans held for sale, at fair value ......................................................			17,097					7,010
Loans, net of allowance for loan losses of $921 at December 31,
2020 and $721 at December 31, 2019 .........................................			51,160				51,660
Real estate owned, acquired through foreclosure ............................			765					788
Land available-for-sale......................................................................			-				1,250
Premises and equipment, net ...........................................................			1,730				1,462
Federal Home Loan Bank stock, at cost ...........................................			900					188
Accrued interest receivable...............................................................			378					194
Other assets .....................................................................................			822					397
Total assets ...................................................................................		$	88,482			$	72,074
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest-bearing deposits...........................................................	$	2,571	$	2,541
Interest-bearing deposits...................................................................			61,274					52,577
................................................................................Total deposits			63,845					55,118
Feder Home Loan Bank advances ...................................................			5,000				-
Advance payments by borrowers for taxes and insurance ...............			860					803
Accrued interest payable and other liabilities....................................			2,212					907
............................................................................Total liabilities			71,917					56,828
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized at
December 31, 2020 and 2019...................................................			-				-
Common stock, $0.01 par value, 12,000,000 shares authorized,
3,636,875 shares issued at December 31, 2020 and 2019 ......			36					36
Additional paid-in capital ...............................................................			10,199				10,199
Treasury stock, at cost ..................................................................			(3,075)				(3,075)
Retained earnings .........................................................................			9,401				8,085
Accumulated other comprehensive income ..................................			4					1
..........................................................Total stockholders' equity			16,565					15,246
Total liabilities and stockholders' equity ...............................	$	88,482		$	72,074

See accompanying notes to consolidated financial statements.

2.

MUTUAL FEDERAL BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2020 and 2019

(Dollar amounts in thousands except per share data)

			For the years ended
			December 31,
Interest and dividend income:			2020						2019
Loans, including fees ....................................................................	$	3,374		$	3,264
Securities.......................................................................................			12					31
Interest earning deposits...............................................................			66					346
...........................................Total interest and dividend income			3,452						3,641
Interest expense:
Deposits ........................................................................................			421						503
Borrowings ....................................................................................			40					-
...............................................................Total interest expense			461						503
Net interest income ...........................................................................			2,991						3,138
Provision for loan losses ...................................................................			200						-
Net interest income after provision for loan losses ...........................			2,791						3,138
Non-interest income:
Mortgage banking income.............................................................			8,067						2,422
Other income.................................................................................			261						307
..............................................................Total non-interest income			8,328						2,729
Non-interest expense:
Compensation and benefits ..........................................................			7,811					3,979
Occupancy and equipment ...........................................................			365						314
Data processing ............................................................................			458					251
Professional fees...........................................................................			334					352
Real estate owned.........................................................................			110						72
Other expense...............................................................................			726						662
............................................................Total non-interest expense			9,804						5,630
Income before income taxes.............................................................			1,315						237
Income tax expense ..........................................................................			-						-
Net income .......................................................................................	$	1,315		$	237

See accompanying notes to consolidated financial statements.

3.