The quick sell-off of BKMU may have something to do with BKMU's dividend policy statement in its news release:

"Bank Mutual has paid 35 consecutive quarterly cash dividends since its initial stock offering in November 2000. Cash dividends paid in the third quarters of 2009 and 2008 were $0.09 per share in each period. Dividends paid for the nine months ended September 30, 2009 and 2008, were $0.27 per share in each period. While Bank Mutual's capital remains strong, regulators' and lawmakers' increasing focus on capital levels of financial institutions may affect required capital levels and/or the percentage of income which an institution may use for dividends or share repurchases in the future; therefore, Bank Mutual cannot provide assurance as to the continuing level (if any) of dividend payments and/or share repurchases."

On a positive note, BKMU's NPAs have stabilized, declining slightly from 2.23% to 2.14% from June to Sept 2009. BKMU appears to be well reserved with 41.1% bad debt reserve of non-performing assets. Its shareholders capital of 11.4% remains strong.

By apparently eliminating the dividend and stock buybacks for the time being, BKMU is being cautious, as they have been the past years with their lending.

At $7, this bank is selling for about 80% of book value and could be a mid-term buy.