WAUWATOSA, Wis., April 22, 2025 (GLOBE NEWSWIRE) -- Waterstone Financial, Inc. (NASDAQ:WSBF), holding company for WaterStone Bank, reported net income of $3.0 million, or $0.17 per diluted share, for the quarter ended March 31, 2025, compared to $3.0 million, or $0.16 per diluted share, for the quarter ended March 31, 2024.

"The Community Banking segment continues to perform well in a challenging interest rate environment," said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. "We increased net interest income 6.9% at the Community Banking segment and net interest margin increased 32 bps compared to the quarter ended March 31, 2024. Asset quality continues to remain strong and low historical loan losses are reflected in the decrease in provision for credit losses during the quarter. The Mortgage Banking segment pre-tax loss reflects a market-wide decrease in loan origination volumes and elevated legal expense associated with the final settlement of a previously disclosed lawsuit. In spite of the results of the Mortgage Banking segment, Waterstone Financial, Inc. exceeded the prior year's same quarter earnings per share, added to book value per share through our share repurchase program and maintained our strong quarterly dividend." 

Highlights of the Quarter Ended March 31, 2025

Waterstone Financial, Inc. (Consolidated)

Community Banking Segment

Mortgage Banking Segment

About Waterstone Financial, Inc.

Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank, a community-focused financial institution established in 1921. WaterStone Bank offers a comprehensive suite of personal and business banking products and operates 14 branch locations across southeastern Wisconsin. WaterStone Bank is also the parent company of WaterStone Mortgage Corporation, a national lender licensed in 48 states.

With a long-standing commitment to innovation, integrity, and community service, Waterstone Financial, Inc. supports the financial and homeownership goals of customers nationwide.

For more information about WaterStone Bank, visit wsbonline.com.

Forward-Looking Statements

This press release contains statements or information that may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as "may," "expects," "anticipates," "estimates" or "believes." Any such statements are based upon current expectations that involve a number of risks and uncertainties and are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. Factors that might cause such a difference include changes in interest rates; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk factors referenced in Item 1A. Risk Factors in Waterstone's most recent Annual Report on Form 10-K and as may be described from time to time in Waterstone's subsequent SEC filings, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only Waterstone's belief as of the date of this press release.

Non-GAAP Financial Measures 

Management uses non-GAAP financial information in its analysis of the Company's performance. Management believes that this non-GAAP measure provides a greater understanding of ongoing operations and enhance comparability of results of operations with prior periods. The Company's management believes that investors may use this non-GAAP measure to analyze the Company's financial performance without the impact of unusual items or events that may obscure trends in the Company's underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in this measure and that different companies might calculate this measure differently. 

Contact: Mark R. Gerke

Chief Financial Officer

414-459-4012

markgerke@wsbonline.com

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 
  For The Three Months Ended March 31, 
  2025  2024 
  (In Thousands, except per share amounts) 
Interest income:        
Loans $25,078  $24,484 
Mortgage-related securities  1,191   1,098 
Debt securities, federal funds sold and short-term investments  1,486   1,323 
Total interest income  27,755   26,905 
Interest expense:        
Deposits  11,332   8,970 
Borrowings  3,847   6,798 
Total interest expense  15,179   15,768 
Net interest income  12,576   11,137 
Provision (credit) for credit losses  (558)  67 
Net interest income after provision (credit) for loan losses  13,134   11,070 
Noninterest income:        
Service charges on loans and deposits  593   424 
Increase in cash surrender value of life insurance  481   348 
Mortgage banking income  15,728   20,068 
Other  295   408 
Total noninterest income  17,097   21,248 
Noninterest expenses:        
Compensation, payroll taxes, and other employee benefits  17,047   19,876 
Occupancy, office furniture, and equipment  1,929   2,108 
Advertising  723   914 
Data processing  1,212   1,206 
Communications  235   226 
Professional fees  1,736   743 
Real estate owned  (10)  13 
Loan processing expense  920   1,046 
Other  2,558   1,418 
Total noninterest expenses  26,350   27,550 
Income before income taxes  3,881   4,768 
Income tax expense  845   1,730 
Net income $3,036  $3,038 
Income per share:        
Basic $0.17  $0.16 
Diluted $0.17  $0.16 
Weighted average shares outstanding:        
Basic  18,267   19,021 
Diluted  18,280   19,036 



WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 
  March 31,  December 31, 
  2025  2024 
  (Unaudited)     
Assets (In Thousands, except per share amounts) 
Cash $37,459  $35,182 
Federal funds sold  5,550   4,302 
Interest-earning deposits in other financial institutions and other short term investments  280   277 
Cash and cash equivalents  43,289   39,761 
Securities available for sale (at fair value)  213,615   208,549 
Loans held for sale (at fair value)  116,290   135,909 
Loans receivable  1,663,519   1,680,576 
Less: Allowance for credit losses ("ACL") - loans  17,905   18,247 
Loans receivable, net  1,645,614   1,662,329 
         
Office properties and equipment, net  19,223   19,389 
Federal Home Loan Bank stock (at cost)  18,351   20,295 
Cash surrender value of life insurance  75,093   74,612 
Real estate owned, net  135   505 
Prepaid expenses and other assets  43,757   48,259 
Total assets $2,175,367  $2,209,608 
         
Liabilities and Shareholders' Equity        
Liabilities:        
Demand deposits $170,183  $171,115 
Money market and savings deposits  296,203   283,243 
Time deposits  914,814   905,539 
Total deposits  1,381,200   1,359,897 
         
Borrowings  395,853   446,519 
Advance payments by borrowers for taxes  12,628   5,630 
Other liabilities  44,326   58,427 
Total liabilities  1,834,007   1,870,473 
         
Shareholders' equity:        
Preferred stock  -   - 
Common stock  193   193 
Additional paid-in capital  90,470   91,214 
Retained earnings  277,521   277,196 
Unearned ESOP shares  (10,386)  (10,682)
Accumulated other comprehensive loss, net of taxes  (16,438)  (18,786)
Total shareholders' equity  341,360   339,135 
Total liabilities and shareholders' equity $2,175,367  $2,209,608 
         
Share Information        
Shares outstanding  19,281   19,343 
Book value per share $17.70  $17.53 



WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

SUMMARY OF KEY QUARTERLY FINANCIAL DATA

(Unaudited)

 
  At or For the Three Months Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2025  2024  2024  2024  2024 
  (Dollars in Thousands, except per share amounts) 
Condensed Results of Operations:                    
Net interest income $12,576  $12,835  $11,517  $10,679  $11,137 
Provision (credit) for credit losses  (558)  367   (377)  (225)  67 
Total noninterest income  17,097   19,005   22,552   26,497   21,248 
Total noninterest expense  26,350   25,267   28,560   30,259   27,550 
Income before income taxes  3,881   6,206   5,886   7,142   4,768 
Income tax expense  845   996   1,158   1,430   1,730 
Net income $3,036  $5,210  $4,728  $5,712  $3,038 
Income per share – basic $0.17  $0.28  $0.26  $0.31  $0.16 
Income per share – diluted $0.17  $0.28  $0.26  $0.31  $0.16 
Dividends declared per common share $0.15  $0.15  $0.15  $0.15  $0.15 
                     
Performance Ratios (annualized):                    
Return on average assets - QTD  0.57%  0.94%  0.83%  1.02%  0.56%
Return on average equity - QTD  3.61%  6.05%  5.55%  6.84%  3.56%
Net interest margin - QTD  2.47%  2.42%  2.13%  2.01%  2.15%
                     
Return on average assets - YTD  0.57%  0.84%  0.81%  0.79%  0.56%
Return on average equity - YTD  3.61%  5.48%  5.30%  5.17%  3.56%
Net interest margin - YTD  2.47%  2.17%  2.09%  2.08%  2.15%
                     
Asset Quality Ratios:                    
Past due loans to total loans  0.67%  0.95%  0.63%  0.76%  0.64%
Nonaccrual loans to total loans  0.45%  0.34%  0.32%  0.33%  0.29%
Nonperforming assets to total assets  0.35%  0.28%  0.25%  0.25%  0.23%
Allowance for credit losses - loans to loans receivable  1.08%  1.09%  1.07%  1.10%  1.10%



WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS

(Unaudited)

 
  At or For the Three Months Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2025  2024  2024  2024  2024 
Average balances (Dollars in Thousands) 
Interest-earning assets                    
Loans receivable and held for sale $1,768,617  $1,819,574  $1,870,627  $1,859,608  $1,805,102 
Mortgage related securities  170,947   168,521   170,221   171,895   172,077 
Debt securities, federal funds sold and short term investments  123,004   124,658   115,270   107,992   110,431 
Total interest-earning assets  2,062,568   2,112,753   2,156,118   2,139,495   2,087,610 
Noninterest-earning assets  105,030   100,627   104,600   104,019   103,815 
Total assets $2,167,598  $2,213,380  $2,260,718  $2,243,514  $2,191,425 
                     
Interest-bearing liabilities                    
Demand accounts $87,393  $92,247  $89,334  $91,300  $87,393 
Money market, savings, and escrow accounts  300,686   306,478   304,116   293,483   281,171 
Certificates of deposit - retail  818,612   810,340   786,228   758,252   739,543 
Certificates of deposit - brokered  97,101   59,254   -   -   - 
Total interest-bearing deposits  1,303,792   1,268,319   1,179,678   1,143,035   1,108,107 
Borrowings  397,053   464,964   600,570   622,771   602,724 
Total interest-bearing liabilities  1,700,845   1,733,283   1,780,248   1,765,806   1,710,831 
Noninterest-bearing demand deposits  80,372   87,889   91,532   93,637   92,129 
Noninterest-bearing liabilities  44,905   49,645   49,787   48,315   45,484 
Total liabilities  1,826,122   1,870,817   1,921,567   1,907,758   1,848,444 
Equity  341,476   342,563   339,151   335,756   342,981 
Total liabilities and equity $2,167,598  $2,213,380  $2,260,718  $2,243,514  $2,191,425 
                     
Average Yield/Costs (annualized)                    
Loans receivable and held for sale  5.75%  5.75%  5.65%  5.54%  5.46%
Mortgage related securities  2.83%  2.67%  2.66%  2.63%  2.57%
Debt securities, federal funds sold and short term investments  4.90%  4.85%  5.05%  4.82%  4.82%
Total interest-earning assets  5.46%  5.46%  5.39%  5.27%  5.18%
                     
Demand accounts  0.11%  0.11%  0.11%  0.11%  0.11%
Money market and savings accounts  2.10%  2.00%  1.94%  1.89%  1.79%
Certificates of deposit - retail  4.33%  4.53%  4.54%  4.41%  4.19%
Certificates of deposit - brokered  4.18%  4.18%  0.00%  0.00%  0.00%
Total interest-bearing deposits  3.52%  3.58%  3.53%  3.42%  3.26%
Borrowings  3.93%  4.11%  4.77%  4.92%  4.54%
Total interest-bearing liabilities  3.62%  3.72%  3.95%  3.95%  3.71%



COMMUNITY BANKING SEGMENT

SUMMARY OF KEY QUARTERLY FINANCIAL DATA

(Unaudited)

 
  At or For the Three Months Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2025  2024  2024  2024  2024 
  (Dollars in Thousands) 
Condensed Results of Operations:                    
Net interest income $12,403  $12,886  $12,250  $11,234  $11,598 
Provision (credit) for credit losses  (518)  331   (302)  (279)  105 
Total noninterest income  1,348   1,595   1,227   1,491   990 
Noninterest expenses:                    
Compensation, payroll taxes, and other employee benefits  5,212   4,883   5,326   5,116   5,360 
Occupancy, office furniture and equipment  1,076   825   904   983   1,000 
Advertising  171   204   311   229   174 
Data processing  712   691   720   687   693 
Communications  100   89   80   72   65 
Professional fees  347   196   190   177   208 
Real estate owned  (10)  12   -   1   13 
Loan processing expense  -   -   -   -   - 
Other  596   563   602   672   691 
Total noninterest expense  8,204   7,463   8,133   7,937   8,204 
Income before income taxes  6,065   6,687   5,646   5,067   4,279 
Income tax expense  1,427   1,399   941   718   1,639 
Net income $4,638  $5,288  $4,705  $4,349  $2,640 
                     
Efficiency ratio - QTD (non-GAAP)  59.66%  51.54%  60.35%  62.37%  65.17%
Efficiency ratio - YTD (non-GAAP)  59.66%  59.58%  62.58%  63.77%  65.17%



MORTGAGE BANKING SEGMENT

SUMMARY OF KEY QUARTERLY FINANCIAL DATA

(Unaudited)

 
  At or For the Three Months Ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2025  2024  2024  2024  2024 
  (Dollars in Thousands) 
Condensed Results of Operations:                    
Net interest income (loss) $152  $(92) $(760) $(552) $(541)
Provision (credit) for credit losses  (40)  36   (75)  54   (38)
Total noninterest income  15,731   17,455   21,386   25,081   20,328 
Noninterest expenses:                    
Compensation, payroll taxes, and other employee benefits  12,054   13,781   15,930   16,886   14,756 
Occupancy, office furniture and equipment  853   754   953   1,046   1,108 
Advertising  552   523   615   758   740 
Data processing  498   542   570   549   508 
Communications  135   135   152   168   161 
Professional fees  1,373   917   379   569   520 
Real estate owned  -   -   -   -   - 
Loan processing expense  920   486   697   861   1,046 
Other  1,751   814   1,261   1,641   617 
Total noninterest expense  18,136   17,952   20,557   22,478   19,456 
(Loss) income before income taxes (benefit) expense  (2,213)  (625)  144   1,997   369 
Income tax (benefit) expense  (588)  (428)  194   684   71 
Net (loss) income $(1,625) $(197) $(50) $1,313  $298 
                     
Efficiency ratio - QTD (non-GAAP)  114.18%  103.39%  99.67%  91.64%  98.33%
Efficiency ratio - YTD (non-GAAP)  114.18%  97.74%  96.23%  94.62%  98.33%
                     
Loan originations $387,729  $470,650  $558,729  $634,109  $485,109 
Purchase  87.5%  82.1%  88.9%  92.7%  93.0%
Refinance  12.5%  17.9%  11.1%  7.3%  7.0%
Gross margin on loans sold(1)  3.98%  3.74%  3.83%  3.93%  4.10%

(1) Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations