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WATERSTONE FINANCIAL, INC. ANNOUNCES RESULTS OF OPERATIONS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2022
Wauwatosa, WI – 1/26/2023 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $935,000, or $0.04 per diluted share for the quarter ended December 31, 2022 compared to $12.6 million, or $0.53 per diluted share for the quarter ended December 31, 2021. Net income per diluted share was $0.89 for the twelve months ended December 31, 2022 compared to net income per diluted share of $2.96 for the twelve months ended December 31, 2021.
"The quarter was mixed as the community banking segment continued to achieve excellent loan growth while the mortgage banking segment lagged with lower volumes and declining margins,” said Douglas Gordon, Chief Executive Officer of Waterstone Financial, Inc. “Net interest income grew in the quarter as we added $156.0 million to the loan portfolio and efficiently used our cash as interest rates continued to rise. The mortgage banking segment continues to face significant challenges as a result of increases in mortgage rates year-over-year and the decline in affordable housing inventories. We are focused on controlling expenses and being prepared to capitalize when the mortgage market improves.”
Highlights of the Quarter Ended December 31, 2022
Waterstone Financial, Inc. (Consolidated)
- Consolidated net income of Waterstone Financial, Inc. totaled $935,000 for the quarter ended December 31, 2022, compared to $12.6 million for the quarter ended December 31, 2021.
- Consolidated return on average assets was 0.19% for the quarter ended December 31, 2022 compared to 2.22% for the quarter ended December 31, 2021.
- Consolidated return on average equity was 0.99% for the quarter ended December 31, 2022 and 11.14% for the quarter ended December 31, 2021.
- Dividends declared during the quarter ended December 31, 2022 totaled $0.20 per common share.
- We repurchased approximately 159,000 shares at a cost of $2.6 million, or $16.53 per share, during the quarter ended December 31, 2022.
- Nonperforming assets as percentage of total assets was 0.22% at December 31, 2022, 0.27% at September 30, 2022, and 0.26% at December 31, 2021.
- Past due loans as percentage of total loans was 0.41% at December 31, 2022, 0.48% at September 30, 2022, and 0.59% at December 31, 2021.
- Book value per share was $16.71 at December 31, 2022 and $17.45 at December 31, 2021. The decrease reflects an $0.79 per share impact resulting from an increase in the unrealized loss on available for sale securities.
Community Banking Segment
- Pre-tax income totaled $7.0 million for the quarter ended December 31, 2022, which represents a $1.4 million, or 16.4%, decrease compared to $8.4 million for the quarter ended December 31, 2021.
- Net interest income totaled $15.7 million for the quarter ended December 31, 2022, which represents a $2.5 million, or 19.2%, increase compared to $13.2 million for the quarter ended December 31, 2021.
- Average loans held for investment totaled $1.41 billion during the quarter ended December 31, 2022, which represents an increase of $201.9 million, or 16.7%, compared to $1.21 billion for the quarter ended December 31, 2021. Average loans held for investment increased $102.1 million compared to $1.31 billion for the quarter ended September 30, 2022.
- The community banking segment purchased $112.0 million adjustable-rate loans that were originated by the mortgage banking segment during the quarter ended December 31, 2022. Other noninterest expense includes fees totaling $2.0 million during the quarter ended December 31, 2022 which were paid to the mortgage banking segment and eliminated on a consolidated basis.
- Net interest margin increased 82 basis points to 3.29% for the quarter ended December 31, 2022 compared to 2.47% for the quarter ended December 31, 2021, which was a result of a decrease in the average balance of cash, as funds were utilized to fund loans held for investment, purchase investment securities and pay down borrowings. In addition, yields increased on loans receivable, loans held for sale, mortgage related securities, debt securities, federal funds sold and short term investments category. Net interest margin decreased five basis points compared to 3.34% for the quarter ended September 30, 2022, driven by an increase in weighted average cost of deposits and borrowings as the federal funds rate increases resulted in increased funding rates.
- The segment had a provision for credit losses - loans of $290,000 for the quarter ended December 31, 2022 compared to a negative provision for loan losses of $1.5 million for the quarter ended December 31, 2021. The current quarter increase was primarily due to an increase in loans held for investment during the quarter. The provision for credit losses - unfunded commitments was $334,000 as the loan pipeline increased from the prior quarter end.
- The efficiency ratio was 54.49% for the quarter ended December 31, 2022, compared to 53.02% for the quarter ended December 31, 2021.
- Average deposits (excluding escrow accounts) totaled $1.21 billion during the quarter ended December 31, 2022, a decrease of $35.3 million, or 2.8%, compared to $1.25 billion during the quarter ended December 31, 2021. Average deposits increased $18.1 million, or 6.1% annualized compared to the $1.19 billion for the quarter ended September 30, 2022 due to an increase in certificate of deposits rates attracting more customers.
- Other noninterest expense increased $1.8 million to $2.5 million during the quarter ended December 31, 2022 compared to $651,000 during the quarter ended December 31, 2021. The increase was driven by fees paid to the mortgage banking segment for the purchase of single-family adjustable rate mortgage loans. See the note on the loans purchased from the mortgage banking segment above. These fees are eliminated in the consolidated statements of income.
Mortgage Banking Segment
- Pre-tax loss totaled $6.5 million for the quarter ended December 31, 2022, compared to $7.3 million of pre-tax income for the quarter ended December 31, 2021.
- Loan originations decreased $446.5 million, or 45.0%, to $546.6 million during the quarter ended December 31, 2022, compared to $993.1 million during the quarter ended December 31, 2021. Origination volume relative to purchase activity accounted for 95.6% of originations for the quarter ended December 31, 2022 compared to 73.8% of total originations for the quarter ended December 31, 2021.
- Mortgage banking non-interest income decreased $22.6 million, or 55.6%, to $18.1 million for the quarter ended December 31, 2022, compared to $40.7 million for the quarter ended December 31, 2021.
- Gross margin on loans sold decreased to 3.41% for the quarter ended December 31, 2022, compared to 4.18% for the quarter ended December 31, 2021.
- Total compensation, payroll taxes and other employee benefits decreased $10.5 million, or 37.6%, to $17.4 million during the quarter ended December 31, 2022 compared to $27.9 million during the quarter ended December 31, 2021. The decrease primarily related to decreased commission expense and branch manager compensation driven by decreased loan origination volume and branch profitability as gross margins decreased.
- Other noninterest expense increased $1.1 million to $2.6 million during the quarter ended December 31, 2022 compared to $1.4 million during the quarter ended December 31, 2021. The increase related to an increase in provision of loan sale losses.
- During the year ended December 31, 2022 the segment has added 11 branches and a total of 130 loan origination personnel. Losses associated with these new branches totaled approximately $725,000 for the quarter ended December 31, 2022 and $1.9 million for the year ended December 31, 2022. These branch losses are net of corporate revenue of approximately $641,000 for the quarter ended December 31, 2022 and $1.2 million for the year ended December 31, 2022.
About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.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, including significant disruption to financial market and other economic activity caused by the outbreak of COVID-19; 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.
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WATERSTONE FINANCIAL DECLARES REGULAR QUARTERLY CASH DIVIDEND
WAUWATOSA, WI – 12/15/2022 – On December 15, 2022, the Board of Directors of Waterstone Financial, Inc. (NASDAQ: WSBF) declared a regular quarterly cash dividend of $0.20 per common share. The dividend is payable on February 1, 2023, to shareholders of record at the close of business on January 9, 2023.
About Waterstone Financial, Inc
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.
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WaterStone Bank Partners with Association of Military Banks of America
WAUWATOSA, Wis. – 11/10/2022 – WaterStone Bank announced today that they received accreditation to join the Association of Military Banks of America (AMBA) and confirmed their commitment to help bank Veterans by joining the Veterans Benefits Banking Program (VBBP) as a participating financial institution.
According to a recent Federal Reserve report there were approximately 250,000 unbanked or underbanked Veterans in the United States. To combat this issue, the AMBA and Veterans Affairs teamed up to create the VBBP. It works to connect Veterans with financial institutions who understand their financial needs and are dedicated to supporting them with the highest level of service.
WaterStone Bank is passionate about the military and veterans. “WaterStone believes in giving back to our veterans for all they have done for our country and the freedoms we enjoy as a result of their efforts. These brave women and men deserve all the support we can give,” said Doug Gordon, CEO of WaterStone Bank.
WaterStone provides active-duty service members, military veterans, reserve, and national guard service members financial support and exclusive benefits through the Military Valor Program (MVP). WaterStone Bank is dedicated to being a top financial resource in the communities it serves and knows the impact that having a local banking option can make in a Veteran’s life.
About WaterStone Bank
WaterStone Bank, established in 1921, offers a full suite of personal and business banking products. The community bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com. Follow WaterStone Bank on Facebook, Twitter, LinkedIn, YouTube, and Instagram.
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Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Nine Months Ended September 30, 2022.
WAUWATOSA, WI – 10/26/2022 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $5.3 million, or $0.25 per diluted share for the quarter ended September 30, 2022 compared to $19.0 million, or $0.79 per diluted share for the quarter ended September 30, 2021. Net income per diluted share was $0.83 for the nine months ended September 30, 2022 compared to net income per diluted share of $2.43 for the nine months ended September 30, 2021.
"We were pleased with the execution of the community banking segment as loan growth remained strong through the quarter,” said Douglas Gordon, Chief Executive Officer of Waterstone Financial, Inc. “We were able to grow our net interest income and expand margin at the community banking segment as we deployed our cash to fund loans. The results of the mortgage banking segment were disappointing and reflect the significant headwinds that the industry continues to face due to an increase in rates and resulting decline in demand. We continue to execute on cost containment measures, while we also seek opportunities to add production talent.”
Highlights of the Quarter Ended September 30, 2022
Waterstone Financial, Inc. (Consolidated)
● | Consolidated net income of Waterstone Financial, Inc. totaled $5.3 million for the quarter ended September 30, 2022, compared to $19.0 million for the quarter ended September 30, 2021. |
● | Consolidated return on average assets was 1.08% for the quarter ended September 30, 2022 compared to 3.38% for the quarter ended September 30, 2021. |
● | Consolidated return on average equity was 5.38% for the quarter ended September 30, 2022 and 17.25% for the quarter ended September 30, 2021. |
● | Dividends declared during the quarter ended September 30, 2022 totaled $0.20 per common share. |
● | We repurchased approximately 425,000 shares at a cost of $7.3 million, or $17.05 per share, during the quarter ended September 30, 2022. |
● | Nonperforming assets as percentage of total assets was 0.27% at September 30, 2022, 0.39% at June 30, 2022, and 0.18% at September 30, 2021. |
● | Past due loans as percentage of total loans was 0.48% at September 30, 2022, 0.60% at June 30, 2022, and 0.92% at September 30, 2021. |
● | Book value per share was $16.86 at September 30, 2022 and $17.45 at December 31, 2021. The decrease reflects an $0.80 per share impact resulting from an increase in the unrealized loss on available for sale securities. |
Community Banking Segment
● | Pre-tax income totaled $8.5 million for the quarter ended September 30, 2022, which represents a $309,000, or 3.5%, decrease compared to $8.9 million for the quarter ended September 30, 2021. |
● | Net interest income totaled $15.5 million for the quarter ended September 30, 2022, which represents a $1.4 million, or 10.1%, increase compared to $14.1 million for the quarter ended September 30, 2021. |
● | Average loans held for investment totaled $1.31 billion during the quarter ended September 30, 2022, which represents an increase of $55.4 million, or 4.4%, compared to $1.26 billion for the quarter ended September 30, 2021. Average loans held for investment increased $63.7 million compared to $1.25 billion for the quarter ended June 30, 2022. |
● | Net interest margin increased 66 basis points to 3.34% for the quarter ended September 30, 2022 compared to 2.68% for the quarter ended September 30, 2021, which was a result of a decrease in the average balance of cash, as funds were utilized to fund loans held for investment, purchase investment securities and pay down borrowings. In addition, yields increased on loans receivable, loans held for sale, mortgage related securities, debt securities, federal funds sold and short term investments category. Net interest margin increased 32 basis points compared to 3.02% for the quarter ended June 30, 2022, driven by an increase in weighted average yield on loans and weighted average yield on average debt securities, federal funds sold and short term investments. In addition, excess cash was utilized to fund loans held for investment and pay down borrowings. |
● | The segment had a provision for credit losses of $234,000 for the quarter ended September 30, 2022 compared to a negative provision for loan losses of $750,000 for the quarter ended September 30, 2021. The increase was primarily due to an increase in loans held for investment during the quarter. |
● | The efficiency ratio was 47.16% for the quarter ended September 30, 2022, compared to 48.74% for the quarter ended September 30, 2021. |
● | Average deposits (excluding escrow accounts) totaled $1.19 billion during the quarter ended September 30, 2022, a decrease of $62.7 million, or 5.0%, compared to $1.25 billion during the quarter ended September 30, 2021. Average deposits decreased $14.9 million, or 4.9% annualized compared to the $1.21 billion for the quarter ended June 30, 2022. |
● | Other noninterest expense increased $1.1 million to $1.5 million during the quarter ended September 30, 2022 compared to $422,000 during the quarter ended September 30, 2021. The increase was driven by fees paid to the mortgage banking segment for the purchase of single-family adjustable rate mortgage loans. These fees are eliminated in the consolidated statements of income. |
Mortgage Banking Segment
● | Pre-tax loss totaled $1.8 million for the quarter ended September 30, 2022, compared to $15.6 million for the quarter ended September 30, 2021. |
● | There was a $4.0 million gain on sale of mortgage servicing rights during the three months ended September 30, 2021 compared to none during the three months ended September 30, 2022. |
● | Loan originations decreased $286.4 million, or 26.9%, to $778.8 million during the quarter ended September 30, 2022, compared to $1.06 billion during the quarter ended September 30, 2021. Origination volume relative to purchase activity accounted for 90.4% of originations for the quarter ended September 30, 2022 compared to 73.8% of total originations for the quarter ended September 30, 2021. |
● | Mortgage banking non-interest income decreased $24.0 million, or 46.8%, to $27.3 million for the quarter ended September 30, 2022, compared to $51.3 million for the quarter ended September 30, 2021. |
● | Gross margin on loans sold decreased to 3.80% for the quarter ended September 30, 2022, compared to 4.54% for the quarter ended September 30, 2021. |
● | Total compensation, payroll taxes and other employee benefits decreased $7.1 million, or 24.6%, to $21.8 million during the quarter ended September 30, 2022 compared to $29.0 million during the quarter ended September 30, 2021. The decrease primarily related to decreased commission expense and branch manager compensation driven by decreased loan origination volume and branch profitability as gross margins decreased. |
● | Other noninterest expense increased $301,000 to $2.6 million during the quarter ended September 30, 2022 compared to $2.3 million during the quarter ended September 30, 2021. The increase related to an increase in provision of loan sale losses. |
● | During the nine months ended September 30, 2022 the segment has added 11 branches and a total of 130 loan origination personnel. Losses associated with these new branches totaled approximately $683,000 for the quarter ended September 30, 2022 and $1.2 million for the nine months ended September 30, 2022. These branch losses are net of corporate revenue of approximately $492,000 for the quarter ended September 30, 2022 and $599,000 for the nine months ended September 30, 2022. |
About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.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, including significant disruption to financial market and other economic activity caused by the outbreak of COVID-19; 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.
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| For The Three Months Ended September 30, |
|
| For The Nine Months Ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (In Thousands, except per share amounts) |
| |||||||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
| $ | 16,235 |
|
| $ | 16,131 |
|
| $ | 44,281 |
|
| $ | 49,214 |
|
Mortgage-related securities |
|
| 903 |
|
|
| 471 |
|
|
| 2,326 |
|
|
| 1,448 |
|
Debt securities, federal funds sold and short-term investments |
|
| 987 |
|
|
| 904 |
|
|
| 2,964 |
|
|
| 2,637 |
|
Total interest income |
|
| 18,125 |
|
|
| 17,506 |
|
|
| 49,571 |
|
|
| 53,299 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
| 981 |
|
|
| 947 |
|
|
| 2,511 |
|
|
| 3,542 |
|
Borrowings |
|
| 1,746 |
|
|
| 2,445 |
|
|
| 5,717 |
|
|
| 7,414 |
|
Total interest expense |
|
| 2,727 |
|
|
| 3,392 |
|
|
| 8,228 |
|
|
| 10,956 |
|
Net interest income |
|
| 15,398 |
|
|
| 14,114 |
|
|
| 41,343 |
|
|
| 42,343 |
|
Provision (credit) for credit losses (1) |
|
| 332 |
|
|
| (700 | ) |
|
| 304 |
|
|
| (2,520 | ) |
Net interest income after provision for loan losses |
|
| 15,066 |
|
|
| 14,814 |
|
|
| 41,039 |
|
|
| 44,863 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on loans and deposits |
|
| 529 |
|
|
| 1,136 |
|
|
| 1,705 |
|
|
| 2,483 |
|
Increase in cash surrender value of life insurance |
|
| 354 |
|
|
| 312 |
|
|
| 1,394 |
|
|
| 1,297 |
|
Mortgage banking income |
|
| 26,064 |
|
|
| 46,547 |
|
|
| 83,749 |
|
|
| 150,587 |
|
Other |
|
| 457 |
|
|
| 4,941 |
|
|
| 1,612 |
|
|
| 6,812 |
|
Total noninterest income |
|
| 27,404 |
|
|
| 52,936 |
|
|
| 88,460 |
|
|
| 161,179 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation, payroll taxes, and other employee benefits |
|
| 26,174 |
|
|
| 34,229 |
|
|
| 77,502 |
|
|
| 102,278 |
|
Occupancy, office furniture, and equipment |
|
| 2,296 |
|
|
| 2,488 |
|
|
| 6,540 |
|
|
| 7,346 |
|
Advertising |
|
| 1,137 |
|
|
| 835 |
|
|
| 3,004 |
|
|
| 2,570 |
|
Data processing |
|
| 1,084 |
|
|
| 986 |
|
|
| 3,430 |
|
|
| 2,871 |
|
Communications |
|
| 302 |
|
|
| 331 |
|
|
| 900 |
|
|
| 988 |
|
Professional fees |
|
| 393 |
|
|
| 550 |
|
|
| 1,203 |
|
|
| 804 |
|
Real estate owned |
|
| 1 |
|
|
| 1 |
|
|
| 6 |
|
|
| (11 | ) |
Loan processing expense |
|
| 1,120 |
|
|
| 1,135 |
|
|
| 3,685 |
|
|
| 3,670 |
|
Other |
|
| 3,187 |
|
|
| 2,768 |
|
|
| 9,408 |
|
|
| 9,104 |
|
Total noninterest expenses |
|
| 35,694 |
|
|
| 43,323 |
|
|
| 105,678 |
|
|
| 129,620 |
|
Income before income taxes |
|
| 6,776 |
|
|
| 24,427 |
|
|
| 23,821 |
|
|
| 76,422 |
|
Income tax expense |
|
| 1,506 |
|
|
| 5,427 |
|
|
| 5,269 |
|
|
| 18,184 |
|
Net income |
| $ | 5,270 |
|
| $ | 19,000 |
|
| $ | 18,552 |
|
| $ | 58,238 |
|
Income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 0.25 |
|
| $ | 0.80 |
|
| $ | 0.84 |
|
| $ | 2.45 |
|
Diluted |
| $ | 0.25 |
|
| $ | 0.79 |
|
| $ | 0.83 |
|
| $ | 2.43 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 21,342 |
|
|
| 23,785 |
|
|
| 22,193 |
|
|
| 23,790 |
|
Diluted |
|
| 21,454 |
|
|
| 23,960 |
|
|
| 22,323 |
|
|
| 23,987 |
|
(1) The Company adopted ASU 2016-13 as of January 1, 2022. The 2021 amount presented is calculated under the prior accounting standard.
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
| September 30, |
|
| December 31, |
| ||
|
| 2022 |
|
| 2021 |
| ||
|
| (Unaudited) |
|
|
|
|
| |
Assets |
| (In Thousands, except per share amounts) |
| |||||
Cash |
| $ | 37,231 |
|
| $ | 343,016 |
|
Federal funds sold |
|
| 16,007 |
|
|
| 13,981 |
|
Interest-earning deposits in other financial institutions and other short term investments |
|
| 19,703 |
|
|
| 19,725 |
|
Cash and cash equivalents |
|
| 72,941 |
|
|
| 376,722 |
|
Securities available for sale (at fair value) |
|
| 197,298 |
|
|
| 179,016 |
|
Loans held for sale (at fair value) |
|
| 186,049 |
|
|
| 312,738 |
|
Loans receivable |
|
| 1,354,465 |
|
|
| 1,205,785 |
|
Less: Allowance for credit losses ("ACL") - loans (1) |
|
| 17,452 |
|
|
| 15,778 |
|
Loans receivable, net |
|
| 1,337,013 |
|
|
| 1,190,007 |
|
|
|
|
|
|
|
|
|
|
Office properties and equipment, net |
|
| 21,491 |
|
|
| 22,273 |
|
Federal Home Loan Bank stock (at cost) |
|
| 15,750 |
|
|
| 24,438 |
|
Cash surrender value of life insurance |
|
| 66,099 |
|
|
| 65,368 |
|
Real estate owned, net |
|
| 148 |
|
|
| 148 |
|
Prepaid expenses and other assets |
|
| 78,262 |
|
|
| 45,148 |
|
Total assets |
| $ | 1,975,051 |
|
| $ | 2,215,858 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Demand deposits |
| $ | 246,487 |
|
| $ | 214,409 |
|
Money market and savings deposits |
|
| 346,960 |
|
|
| 392,314 |
|
Time deposits |
|
| 593,681 |
|
|
| 626,663 |
|
Total deposits |
|
| 1,187,128 |
|
|
| 1,233,386 |
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
| 319,951 |
|
|
| 477,127 |
|
Advance payments by borrowers for taxes |
|
| 24,084 |
|
|
| 4,094 |
|
Other liabilities |
|
| 67,714 |
|
|
| 68,478 |
|
Total liabilities |
|
| 1,598,877 |
|
|
| 1,783,085 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
| - |
|
|
| - |
|
Common stock |
|
| 223 |
|
|
| 248 |
|
Additional paid-in capital |
|
| 130,731 |
|
|
| 174,505 |
|
Retained earnings |
|
| 277,514 |
|
|
| 273,398 |
|
Unearned ESOP shares |
|
| (13,353 | ) |
|
| (14,243 | ) |
Accumulated other comprehensive loss, net of taxes |
|
| (18,941 | ) |
|
| (1,135 | ) |
Total shareholders' equity |
|
| 376,174 |
|
|
| 432,773 |
|
Total liabilities and shareholders' equity |
| $ | 1,975,051 |
|
| $ | 2,215,858 |
|
|
|
|
|
|
|
|
|
|
Share Information |
|
|
|
|
|
|
|
|
Shares outstanding |
|
| 22,318 |
|
|
| 24,795 |
|
Book value per share |
| $ | 16.86 |
|
| $ | 17.45 |
|
|
|
|
|
|
|
|
| |
(1) The Company adopted ASU 2016-13 as of January 1, 2022. The 2021 amount presented is calculated under the prior accounting standard.
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
|
| At or For the Three Months Ended |
| |||||||||||||||||
|
| September 30, |
|
| June 30, |
|
| March 31, |
|
| December 31, |
|
| September 30, |
| |||||
|
| 2022 |
|
| 2022 |
|
| 2022 |
|
| 2021 |
|
| 2021 |
| |||||
|
| (Dollars in Thousands, except per share amounts) |
| |||||||||||||||||
Condensed Results of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
| $ | 15,398 |
|
| $ | 14,081 |
|
| $ | 11,864 |
|
| $ | 13,172 |
|
| $ | 14,114 |
|
Provision (credit) for credit losses (1) |
|
| 332 |
|
|
| 48 |
|
|
| (76 | ) |
|
| (1,470 | ) |
|
| (700 | ) |
Total noninterest income |
|
| 27,404 |
|
|
| 31,238 |
|
|
| 29,818 |
|
|
| 42,016 |
|
|
| 52,936 |
|
Total noninterest expense |
|
| 35,694 |
|
|
| 35,050 |
|
|
| 34,935 |
|
|
| 40,974 |
|
|
| 43,323 |
|
Income before income taxes |
|
| 6,776 |
|
|
| 10,221 |
|
|
| 6,823 |
|
|
| 15,684 |
|
|
| 24,427 |
|
Income tax expense |
|
| 1,506 |
|
|
| 2,231 |
|
|
| 1,532 |
|
|
| 3,131 |
|
|
| 5,427 |
|
Net income |
| $ | 5,270 |
|
| $ | 7,990 |
|
| $ | 5,291 |
|
| $ | 12,553 |
|
| $ | 19,000 |
|
Income per share – basic |
| $ | 0.25 |
|
| $ | 0.36 |
|
| $ | 0.23 |
|
| $ | 0.53 |
|
| $ | 0.80 |
|
Income per share – diluted |
| $ | 0.25 |
|
| $ | 0.36 |
|
| $ | 0.23 |
|
| $ | 0.53 |
|
| $ | 0.79 |
|
Dividends declared per share |
| $ | 0.20 |
|
| $ | 0.20 |
|
| $ | 0.20 |
|
| $ | 0.70 |
|
| $ | 0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios (annualized): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets - QTD |
|
| 1.08 | % |
|
| 1.61 | % |
|
| 1.00 | % |
|
| 2.22 | % |
|
| 3.38 | % |
Return on average equity - QTD |
|
| 5.38 | % |
|
| 7.93 | % |
|
| 5.00 | % |
|
| 11.14 | % |
|
| 17.25 | % |
Net interest margin - QTD |
|
| 3.34 | % |
|
| 3.02 | % |
|
| 2.38 | % |
|
| 2.47 | % |
|
| 2.68 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets - YTD |
|
| 1.22 | % |
|
| 1.30 | % |
|
| 1.00 | % |
|
| 3.20 | % |
|
| 3.54 | % |
Return on average equity - YTD |
|
| 6.09 | % |
|
| 6.42 | % |
|
| 5.00 | % |
|
| 16.38 | % |
|
| 18.08 | % |
Net interest margin - YTD |
|
| 2.90 | % |
|
| 2.69 | % |
|
| 2.38 | % |
|
| 2.68 | % |
|
| 2.75 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past due loans to total loans |
|
| 0.48 | % |
|
| 0.60 | % |
|
| 0.53 | % |
|
| 0.59 | % |
|
| 0.92 | % |
Nonaccrual loans to total loans |
|
| 0.37 | % |
|
| 0.59 | % |
|
| 0.55 | % |
|
| 0.46 | % |
|
| 0.32 | % |
Nonperforming assets to total assets |
|
| 0.27 | % |
|
| 0.39 | % |
|
| 0.34 | % |
|
| 0.26 | % |
|
| 0.18 | % |
Allowance for credit losses to loans receivable (1) |
|
| 1.29 | % |
|
| 1.35 | % |
|
| 1.40 | % |
|
| 1.31 | % |
|
| 1.37 | % |
(1) The Company adopted ASU 2016-13 as of January 1, 2022. The 2021 amounts presented are calculated under the prior accounting standard.
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
(Unaudited)
|
| At or For the Three Months Ended |
| |||||||||||||||||
|
| September 30, |
|
| June 30, |
|
| March 31, |
|
| December 31, |
|
| September 30, |
| |||||
|
| 2022 |
|
| 2022 |
|
| 2022 |
|
| 2021 |
|
| 2021 |
| |||||
Average balances |
| (Dollars in Thousands) |
| |||||||||||||||||
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and held for sale |
| $ | 1,492,462 |
|
| $ | 1,433,452 |
|
| $ | 1,361,839 |
|
| $ | 1,517,984 |
|
| $ | 1,573,194 |
|
Mortgage related securities |
|
| 172,807 |
|
|
| 168,000 |
|
|
| 138,863 |
|
|
| 119,709 |
|
|
| 108,743 |
|
Debt securities, federal funds sold and short term investments |
|
| 162,211 |
|
|
| 269,823 |
|
|
| 519,116 |
|
|
| 475,574 |
|
|
| 409,559 |
|
Total interest-earning assets |
|
| 1,827,480 |
|
|
| 1,871,275 |
|
|
| 2,019,818 |
|
|
| 2,113,267 |
|
|
| 2,091,496 |
|
Noninterest-earning assets |
|
| 114,274 |
|
|
| 117,248 |
|
|
| 128,813 |
|
|
| 131,703 |
|
|
| 137,454 |
|
Total assets |
| $ | 1,941,754 |
|
| $ | 1,988,523 |
|
| $ | 2,148,631 |
|
| $ | 2,244,970 |
|
| $ | 2,228,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand accounts |
| $ | 75,058 |
|
| $ | 70,674 |
|
| $ | 69,736 |
|
| $ | 70,762 |
|
| $ | 68,478 |
|
Money market, savings, and escrow accounts |
|
| 398,643 |
|
|
| 412,321 |
|
|
| 404,413 |
|
|
| 398,210 |
|
|
| 391,599 |
|
Certificates of deposit |
|
| 586,012 |
|
|
| 584,244 |
|
|
| 610,681 |
|
|
| 643,546 |
|
|
| 663,343 |
|
Total interest-bearing deposits |
|
| 1,059,713 |
|
|
| 1,067,239 |
|
|
| 1,084,830 |
|
|
| 1,112,518 |
|
|
| 1,123,420 |
|
Borrowings |
|
| 296,111 |
|
|
| 326,068 |
|
|
| 440,252 |
|
|
| 481,971 |
|
|
| 475,000 |
|
Total interest-bearing liabilities |
|
| 1,355,824 |
|
|
| 1,393,307 |
|
|
| 1,525,082 |
|
|
| 1,594,489 |
|
|
| 1,598,420 |
|
Noninterest-bearing demand deposits |
|
| 153,591 |
|
|
| 154,070 |
|
|
| 152,900 |
|
|
| 153,303 |
|
|
| 153,436 |
|
Noninterest-bearing liabilities |
|
| 43,683 |
|
|
| 36,962 |
|
|
| 41,232 |
|
|
| 49,982 |
|
|
| 40,148 |
|
Total liabilities |
|
| 1,553,098 |
|
|
| 1,584,339 |
|
|
| 1,719,214 |
|
|
| 1,797,774 |
|
|
| 1,792,004 |
|
Equity |
|
| 388,656 |
|
|
| 404,184 |
|
|
| 429,417 |
|
|
| 447,196 |
|
|
| 436,946 |
|
Total liabilities and equity |
| $ | 1,941,754 |
|
| $ | 1,988,523 |
|
| $ | 2,148,631 |
|
| $ | 2,244,970 |
|
| $ | 2,228,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield/Costs (annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable and held for sale |
|
| 4.32 | % |
|
| 4.07 | % |
|
| 4.02 | % |
|
| 3.96 | % |
|
| 4.07 | % |
Mortgage related securities |
|
| 2.07 | % |
|
| 1.96 | % |
|
| 1.76 | % |
|
| 1.68 | % |
|
| 1.72 | % |
Debt securities, federal funds sold and short term investments |
|
| 2.41 | % |
|
| 1.56 | % |
|
| 0.72 | % |
|
| 0.77 | % |
|
| 0.88 | % |
Total interest-earning assets |
|
| 3.93 | % |
|
| 3.52 | % |
|
| 3.02 | % |
|
| 3.11 | % |
|
| 3.32 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand accounts |
|
| 0.08 | % |
|
| 0.09 | % |
|
| 0.08 | % |
|
| 0.08 | % |
|
| 0.08 | % |
Money market and savings accounts |
|
| 0.21 | % |
|
| 0.19 | % |
|
| 0.21 | % |
|
| 0.22 | % |
|
| 0.24 | % |
Certificates of deposit |
|
| 0.51 | % |
|
| 0.37 | % |
|
| 0.37 | % |
|
| 0.40 | % |
|
| 0.42 | % |
Total interest-bearing deposits |
|
| 0.37 | % |
|
| 0.28 | % |
|
| 0.29 | % |
|
| 0.31 | % |
|
| 0.33 | % |
Borrowings |
|
| 2.34 | % |
|
| 1.95 | % |
|
| 2.20 | % |
|
| 2.09 | % |
|
| 2.04 | % |
Total interest-bearing liabilities |
|
| 0.80 | % |
|
| 0.67 | % |
|
| 0.84 | % |
|
| 0.85 | % |
|
| 0.84 | % |
COMMUNITY BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
|
| At or For the Three Months Ended |
| |||||||||||||||||
|
| September 30, |
|
| June 30, |
|
| March 31, |
|
| December 31, |
|
| September 30, |
| |||||
|
| 2022 |
|
| 2022 |
|
| 2022 |
|
| 2021 |
|
| 2021 |
| |||||
|
| (Dollars in Thousands) |
| |||||||||||||||||
Condensed Results of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
| $ | 15,507 |
|
| $ | 13,710 |
|
| $ | 11,652 |
|
| $ | 13,197 |
|
| $ | 14,090 |
|
Provision (credit) for credit losses (1) |
|
| 234 |
|
|
| (41 | ) |
|
| (140 | ) |
|
| (1,500 | ) |
|
| (750 | ) |
Total noninterest income |
|
| 1,116 |
|
|
| 1,640 |
|
|
| 1,432 |
|
|
| 1,459 |
|
|
| 1,726 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation, payroll taxes, and other employee benefits |
|
| 4,424 |
|
|
| 4,596 |
|
|
| 5,212 |
|
|
| 5,085 |
|
|
| 5,360 |
|
Occupancy, office furniture and equipment |
|
| 955 |
|
|
| 876 |
|
|
| 937 |
|
|
| 960 |
|
|
| 909 |
|
Advertising |
|
| 213 |
|
|
| 244 |
|
|
| 227 |
|
|
| 278 |
|
|
| 233 |
|
Data processing |
|
| 539 |
|
|
| 531 |
|
|
| 608 |
|
|
| 531 |
|
|
| 531 |
|
Communications |
|
| 108 |
|
|
| 63 |
|
|
| 94 |
|
|
| 100 |
|
|
| 122 |
|
Professional fees |
|
| 123 |
|
|
| 118 |
|
|
| 114 |
|
|
| 151 |
|
|
| 130 |
|
Real estate owned |
|
| 1 |
|
|
| - |
|
|
| 5 |
|
|
| 14 |
|
|
| 1 |
|
Loan processing expense |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Other |
|
| 1,477 |
|
|
| 1,006 |
|
|
| 600 |
|
|
| 651 |
|
|
| 422 |
|
Total noninterest expense |
|
| 7,840 |
|
|
| 7,434 |
|
|
| 7,797 |
|
|
| 7,770 |
|
|
| 7,708 |
|
Income before income taxes |
|
| 8,549 |
|
|
| 7,957 |
|
|
| 5,427 |
|
|
| 8,386 |
|
|
| 8,858 |
|
Income tax expense |
|
| 1,983 |
|
|
| 1,658 |
|
|
| 1,167 |
|
|
| 1,690 |
|
|
| 2,092 |
|
Net income |
| $ | 6,566 |
|
| $ | 6,299 |
|
| $ | 4,260 |
|
| $ | 6,696 |
|
| $ | 6,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio - QTD |
|
| 47.16 | % |
|
| 48.43 | % |
|
| 59.59 | % |
|
| 53.02 | % |
|
| 48.74 | % |
Efficiency ratio - YTD |
|
| 51.20 | % |
|
| 53.57 | % |
|
| 59.59 | % |
|
| 48.58 | % |
|
| 47.21 | % |
(1) The Company adopted ASU 2016-13 as of January 1, 2022. The 2021 amounts presented are calculated under the prior accounting standard.
MORTGAGE BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
|
| At or For the Three Months Ended |
| |||||||||||||||||
|
| September 30, |
|
| June 30, |
|
| March 31, |
|
| December 31, |
|
| September 30, |
| |||||
|
| 2022 |
|
| 2022 |
|
| 2022 |
|
| 2021 |
|
| 2021 |
| |||||
|
| (Dollars in Thousands) |
| |||||||||||||||||
Condensed Results of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
| $ | (155 | ) |
| $ | 370 |
|
| $ | 183 |
|
| $ | (49 | ) |
| $ | (2 | ) |
Provision (credit) for credit losses (2) |
|
| 98 |
|
|
| 89 |
|
|
| 64 |
|
|
| 30 |
|
|
| 50 |
|
Total noninterest income |
|
| 27,305 |
|
|
| 30,126 |
|
|
| 28,604 |
|
|
| 40,692 |
|
|
| 51,290 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation, payroll taxes, and other employee benefits |
|
| 21,864 |
|
|
| 21,311 |
|
|
| 20,438 |
|
|
| 27,866 |
|
|
| 28,981 |
|
Occupancy, office furniture and equipment |
|
| 1,341 |
|
|
| 1,180 |
|
|
| 1,251 |
|
|
| 1,306 |
|
|
| 1,579 |
|
Advertising |
|
| 924 |
|
|
| 718 |
|
|
| 678 |
|
|
| 680 |
|
|
| 602 |
|
Data processing |
|
| 543 |
|
|
| 613 |
|
|
| 588 |
|
|
| 542 |
|
|
| 450 |
|
Communications |
|
| 194 |
|
|
| 195 |
|
|
| 246 |
|
|
| 221 |
|
|
| 209 |
|
Professional fees |
|
| 265 |
|
|
| 222 |
|
|
| 338 |
|
|
| 306 |
|
|
| 421 |
|
Real estate owned |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Loan processing expense |
|
| 1,120 |
|
|
| 1,134 |
|
|
| 1,431 |
|
|
| 940 |
|
|
| 1,135 |
|
Other |
|
| 2,571 |
|
|
| 2,733 |
|
|
| 2,309 |
|
|
| 1,445 |
|
|
| 2,270 |
|
Total noninterest expense |
|
| 28,822 |
|
|
| 28,106 |
|
|
| 27,279 |
|
|
| 33,306 |
|
|
| 35,647 |
|
(Loss) income before income taxes |
|
| (1,770 | ) |
|
| 2,301 |
|
|
| 1,444 |
|
|
| 7,307 |
|
|
| 15,591 |
|
Income tax (benefit) expense |
|
| (470 | ) |
|
| 578 |
|
|
| 377 |
|
|
| 1,443 |
| ||||