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corresp

[BKMU letterhead]

June 28, 2005

VIA EDGAR AND OVERNIGHT DELIVERY

Mr. Donald Walker

Senior Assistant Chief Accountant

Division of Corporation Finance

Securities and Exchange Commission

450 5th Street, N.W.

Judiciary Plaza

Washington DC 20549

    RE:

    Bank Mutual Corporation (“BKMU”)

    Commission File No. 000-31207

    Response to Comment Letter of June 8, 2005

Dear Mr. Walker:

     This letter responds to the requests for information which Commission Staff made in its letter
dated June 8, 2005 to Michael T. Crowley, Jr., BKMU’s chief executive officer, relating to BKMU’s
Form 10-K for the fiscal year ended December 31, 2004. We previously requested, and were granted,
an extension until June 28, 2005 to respond.

     Before addressing the Staff’s precise questions, we would note that BKMU’s participation in
the FHLB Original Mortgage Partnership Finance program (the “Program”) has never been significant.
By means of illustration, BKMU’s last sales of loans to the Program were in 2002. In that year, 6
loans totaling $424,000 were sold to the Program. The total principal balances of loans serviced
under the Program were $930,000 at December 31, 2003 (as compared to BKMU’s total residential
mortgage loans of $793.2 million outstanding on that date), and $358,000 at December 31, 2004
(compared to $903.5 million in total BKMU residential mortgage loans on that date). No sales to
the Program occurred in 2003 or 2004.

     Responses are made keying to the sub-bullets of numbered paragraph 1 in your letter. For
convenient reference, a copy of your letter is attached to the delivered copy of this letter. In
this letter, “we” and “us” refer to BKMU and predecessor institutions and their management
generally.

Mr. Donald Walker

June 28, 2005

Page 2

    Sub-bullet

    No.

    BKMU Response

    1, 2 and 3

    In determining whether the transfer of mortgage loans under the
Program qualified for sale treatment, we considered the fact
that we relinquished control of the transferred mortgage loans
and had no ability to reclaim the loans from the FHLB. Our
recourse under the Program only applies to losses in excess of
the FHLB’s first loss position and is contractually limited.
We also considered the fact that the Program was widely offered
by the FHLB, which publicly disseminated significant
information about the Program and utilized standard agreements
and documentation. We discussed accounting aspects of the
Program with the FHLB in connection with our participation. As
a result of the publicly-available information and relatively
widespread participation by financial institutions, combined
with the our relatively small participation in the Program, we
did not believe it was necessary or cost effective to obtain a
“true sale” opinion.

    4

    The journal entries recorded by us for each sale of mortgage loans under the Program were based
on Statement of Accounting Standards No. 140 and were as follows:

    Account

    Description

    Dr.

    Cash

    Proceeds from FHLB

    Cr.

    MPF loan sales (contra loan)

    Principal amount of loan

    Cr.

    Interest income

    Interest earned from loan close to sale

    Cr.

    Gain on sale of loan

    Contractual agency fee earned on sale

    Also:

    Dr.

    Originated mortgage servicing right

    Present value of
anticipated net servicing fees
for the estimated life of the loan

    Cr.

    Gain on sale of loan

    Gain from OMSR

    5

    The following table sets forth
BKMU’s total gain on sale of
loans, and the portion of that
gain which is represented by
sales of loans to the Program,
in the prior three fiscal
years:

    Total Gain on

    Gain on Sale of

    Year

    Sale of Loans

    Loans to the Program

    (in thousands)

    2002

    $
    5,993

    $
    11

    2003

    $
    6,855

    ‑0-

    2004

    $
    1,590

    ‑0-

Mr. Donald Walker

June 28, 2005

Page 3

    6

    The following table
sets forth BKMU’s
total mortgage loans
sold, as compared to
the total amount of
loans which BKMU sold
to the Program, during
the past three years.

    Total Mortgage

    Sales

    Year

    Loan Sales

    to the Program

    (in millions)

    2002

    $
    368.6

    $
    0.4

    2003

    $
    461.1

    -0-

    2004

    $
    120.1

    -0-

     Based upon our responses above and the immateriality of the items involved, we do not believe
it necessary to revise our prior filing. We will, of course, keep this review process in mind when
preparing future disclosure documents.

*      *      *

     On behalf of BKMU, and as requested in your letter, we acknowledge that:

    •

    BKMU is responsible for the adequacy and accuracy of the disclosure in
its filings;

    •

    staff comments or changes in disclosure in response to staff comments in
the filings reviewed by the staff do not foreclose the Commission from taking any
action with respect to the filing; and

    •

    BKMU may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the
United States.

Mr. Donald Walker

June 28, 2005

Page 4

     We trust that you will find this letter responsive to your comments. Please feel free to
contact me at (920) 437-7101, or Ken Hallett of Quarles & Brady LLP, our outside counsel, at (414)
277-5345 if you have any questions or need further information.

    Very truly yours,

BANK MUTUAL CORPORATION

    By:
    /s/ Rick B. Colberg

    Rick B. Colberg

    Chief Financial Officer

    cc:

    Mr. Michael T. Crowley, Jr.

    Kenneth V. Hallett, Esq.