M&I Bank was the largest bank in Milwaukee until Toronto-based BMO Financial Group acquired it last July and combined it with Harris Bank to create BMO Harris Bank.
Bank Mutual was founded 120 years ago and has 79 branches in Wisconsin and Minnesota.
The key for Bank Mutual in grabbing market share has been its local decision making and responsiveness to the opportunities available when M&I was absorbed, said Dave Baumgarten, Bank Mutual president.
In 2011, Bank Mutual was able to improve sales performance by more than $200 million in new products and grow demand deposit accounts by more than 16 percent, he said.
"Anytime when there's an acquisition of a bank that's headquartered in a local market like Milwaukee, there's always some market disruptions that occur because customers tend to wonder about what changes will be made in the future," Crowley said.
The signs on M&I branches will change in the next few months, and then computer systems will be converted.
So, Bank Mutual still has plenty of time to gain market share, Crowley said.
"The market share shift is probably more something that would be an opportunity for the near to intermediate term," he said. "We're trying to position ourselves to be the go-to bank as an alternative choice."
In addition, some employees from M&I are considering a career change during the BMO transition. Bank Mutual has hired 14 new people in community banking and investment management in the last year and a half, most of them from competitors in the Milwaukee market, Baumgarten said.
While many M&I employees retired or stayed on during the merger transition, Bank Mutual has positioned itself to welcome BMO employees who do not agree with changes made by the new management, Crowley said.
"We made contact with several of them, and it's a matter of just ongoing discussion," he said.
Baumgarten has worked to enhance the image of Bank Mutual as a leading community bank since he joined the company in 2010.
"A lot of our advantage today is geared around the community line of business," he said. "The opportunities for us are greater in 2012 than they were in 2011."
The company also is focusing on community business lending, investment real estate lending and expanded retail services, said Crowley, who also has his eye on Generation X and Y customers, with updated electronic and mobile banking services.
"We just redid our website to make it easier for users to conduct business on the website," he said.
Although Bank Mutual is optimistic about its future, the company has been struggling over the last couple of years. The company reported a net loss of $72.6 million in 2010 because of a loss on an early repayment to the Federal Home Loan Bank of Chicago. In 2011, Bank Mutual reported a net loss of $47.6 million. The company attributed the loss to a $52.6 million goodwill payment in the second quarter.
For the fourth quarter of 2011, the corporation reported net income of $1.4 million.
But those numbers don't show the whole picture, Crowley said. Excluding the goodwill impairment, Bank Mutual earned $5 million in 2011, he said.
"Our business last year was really profitable except for one thing — there was a noncash entry that was more or less driven by accounting regulations," he said. "I think in the economy that we were faced with in 2011 we did a good job in keeping profitable and preparing for our future."
The company's plan for future growth include improving performance, growing its loan portfolio and attracting more business lending opportunities.
"We also have the potential for acquisitions because of our strong capital standing," Crowley said. "We have that on our radar screen."
Baumgarten expects acquisition opportunities to present themselves at the end of 2012 and into 2013.
"We're going to be opportunistic and strategic in our thought process," Baumgarten said. "I think there's going to be consolidation in the banking industry."