2007SUMMARY ANNUAL REPORT These Voices of Experience Are the People Bank Mutual Is Fortunate to Work with Every Day

VOICES OF EXPERIENCE 2007SUMMARY ANNUAL REPORT These Voices of Experience are the people Bank Mutual is fortunate to work with every day. They are respected experts in their field, whether that be pouring concrete, broadcasting, or developing and managing commercial real estate. They look for that same level of experience and expertise in their financial partner, and they find it at Bank Mutual. We invite you to read what they have to say about their experiences with Bank Mutual through the years. TABLE OF CONTENTS 1. Letter to Shareholders 4. Additional Financial Perspectives 6. Detailed Financial Highlights 8. Voices of Experience On the cover John Kersey. See page 15 for his story. Inset photo: Courtesy of the Milwaukee County Historical Society. LETTER TO SHAREHOLDERS For the year ending December 31, 2007, diluted earnings per share were $0.31, a decrease of 8.8 percent from 2006 earnings of $0.34 per share. Earnings totaled $17.1 million for the year, compared to $20.6 million in 2006. These calculations reflect our ongoing stock repurchase program, through which nearly 11 million shares were purchased in 2007. At the same time, we rewarded shareholders with dividends four times this year, marking the 28th consecutive quarterly dividend since going public in 2000. The total cash dividends for 2007 were $0.33 per share, an increase of more than 13 percent over the previous year. While it is not customary for cash dividends to be greater than earnings for the year, we found ourselves in a strong capital position and felt that continuing and increasing these payments to shareholders was a preferred strategy for deploying our excess capital. Positive News in a Negative Banking Environment 2007 was a difficult year for the banking industry as a whole, as net interest margins were stagnant, earnings decreased, stock prices fell and loan losses soared. Fortunately, the growth strategies we put in place a few years ago immunized Bank Mutual, to a certain extent, from the extreme reactions that plagued many other financial institutions. The price of Bank Mutual Corporation stock was $10.57 as of December 31, 2007, down 12.7 percent from the previous year-end. By comparison, our peers, as measured by the SNL Midwest Thrift Index, experienced a drop of 17.80 percent for the same 12-month period. The broader America’s Community Bankers NASDAQ Index (ACBQ), experienced a drop of 24.8 percent for the same 12-month period. That ACBQ benchmark includes more than 500 community banks with total market capitalizations exceeding $182 billion. Michael T. Crowley Jr. Chairman, President & Chief Executive Officer, Bank Mutual Corporation Bank Mutual Corporation Summary Annual Report • 1 The roadblocks enumerated in last year’s report maintain the integrity of our balance sheet and constructed unfortunately persisted longer than was previously a solid foundation upon which to build for the future. anticipated, preventing us from realizing our goal of increased profitability in 2007. The yield curve remained Additions to Our Governance inverted, with short-term Fed rates higher than long-term In the fourth quarter of 2007, Director David J. Rolfs rates for much of the year. It was not until the third quarter announced that he would not stand for re-election to the — when some of the larger banks and brokerage houses Board of Directors of Bank Mutual Corporation at the 2008 showed signs of problems with the subprime market — Annual Meeting of Shareholders. Speaking for the entire that the Fed started to ease up on rates. In addition, fierce board and the shareholders of Bank Mutual Corporation, competition for shrinking deposits and loan business drove I would like to thank Mr. Rolfs for his 24 years of service to up the costs of deposits and borrowings — more than the board and the valuable counsel he provided during offsetting any increases in interest income. That pressure that time. abated somewhat, however, in the fourth quarter of 2007. Also in the fourth quarter of 2007, we added two new Working in our favor were three components of members to the board of our subsidiary, Bank Mutual. our strategic plan: 1.) We increased fee income; 2.) We managed our expenses with extreme discipline, David C. Boerke is principal and commercial real estate maintaining an exceptional expense ratio that’s well below advisor of The Boerke Company, Inc., a member of the comparably positioned financial institutions; 3.) Our Cushman Wakefield Alliance and president of Boerke conservative underwriting standards continued to serve us Advocates, Inc., both commercial real estate companies. In well. We do not engage in what is generally considered addition, Mr. Boerke is a real estate developer and investor, “subprime mortgage lending” and we do not intend to developing as a principal or on behalf of clients or partners, in the future. more than 30 commercial development projects, including a variety of office, retail and industrial properties. In short, we took the necessary steps to avoid the tough market conditions, while preparing for better times. Richard A. Brown was an audit partner with KPMG LLP, an So, while 2007 was a challenging year, we managed to international public accounting firm, until his retirement Bank Mutual Corporation’s Stock Price Diluted Earnings Cash Dividends Paid (NASDAQ: BKMU) At December 31, Per Share 2003 2004 2005 2006 2007 2008 $14.00 $0.50 1st Qtr. $0.027 $0.040 $0.060 $0.070 $0.080 $0.090 $0.43 2nd Qtr. 0.027 0.040 0.060 0.070 0.080 $12.17 $12.00 $1 2.11 $0.38 3rd Qtr. 0.030 0.050 0.065 0.075 0.085 $11.39 $0.40 $1 $10.75** $10.57 0.60 4th Qtr. 0.035 0.050 0.065 0.075 0.085 $10.00 $0.34 $0.31 $0.30 $0.29 $0.120 $0.180 $0.250 $0.290 $0.330 $8.00 $6.31 $6.00 $0.20 $4.00 $4.16 $2.59 $0.10 * $2.00 Adjusted to reflect the October 29, 2003 full conversion transaction and related 3.6686-for-one share exchange. $0.00 $0.00 ** Closing price as of February 29, 2008. ‘00* ‘ 01* ‘02* ‘03 ‘04 ‘05 ‘06 ’07 ’08 ‘03 ‘04 ‘05 ‘06 ‘07 in April 2006. He served as managing partner of KPMG’s In Memory of Max McGee Milwaukee office during the last four years before his 1932–2007 retirement. As an audit partner, he primarily served banks, savings banks and other companies in the financial services industry, along with public and private companies in other industries. More recently, Mr. Brown has acted as interim chief financial officer and in other capacities for Families International, Inc., a not-for-profit organization. Both of these individuals are being proposed for shareholder consideration as directors of Bank Mutual Corporation at our upcoming Annual Meeting of Shareholders. I feel that we will greatly benefit from their insights as we endeavor to implement strategies for the bank and improve the products and services that we offer our customers. In October 2007, Bank Mutual lost a dear friend In conclusion, I would like to thank Bank Mutual’s and cherished spokesperson with the sudden passing management and staff for their unyielding commitment of beloved Packers legend and radio broadcaster to providing outstanding customer service and for helping Max McGee. Bank Mutual thrive as a well-respected, independent bank. I would also like to thank you, our valued shareholders, for Max helped the Green Bay Packers win five World your ongoing support. We remain dedicated to our goal Championships and two Super Bowls during the Vince of rewarding you with dividends and long-term growth in Lombardi era of the 1960s. He is probably best known shareholder value. for catching the first touchdown pass and scoring the first points in Super Bowl I in 1967. After retiring from Best regards, football, Max began a successful business career and became the color voice of the Green Bay Packers radio network from 1979 to 1998. Michael T. Crowley Jr. Chairman, President and Chief Executive Officer For the past few years, Max and broadcast partner Jim Irwin recorded a number of commercials for Bank Mutual and were the stars of our Ultimate Tailgate Party event. Whether on the air or in person, Max charmed everyone with colorful stories of his days on the field and in the booth. We will greatly miss Max’s sense of humor, enthusiasm and friendship. Bank Mutual Corporation Summary Annual Report • 2-3 StrateGIES FOR GROWTH A Recap of Successful Initiatives program. In 2007, we repurchased 10.8 million shares of Last year saw the successful deployment of a new common stock at an average price of $11.15, bringing the investment advisory service by our wholly-owned subsidiary, total amount of stock repurchased since our “second step” BancMutual Financial & Insurance Services. We expect that public offering in 2003 to nearly 29 million shares. this service will be instrumental in capturing new business from the soon-to-retire Baby Boomer market. Fee income Promoting Our Brand and commissions from this service should play an important Bank Mutual continued to promote the “Trust. The feeling role in boosting our non-interest income during 2008. is Mutual.” brand message through a variety of advertising campaigns in 2007. Bank Mutual also rolled out its improved cash management Capitalizing on our service in 2007, providing a valuable service to attract new strong presence in business and retain our profitable business clients. We sports sponsorships, anticipate that this service will continue to have a positive we introduced a impact on our financial condition in 2008.

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