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Wauwatosa, Wis. — 6/23/2022  —  On June 23, 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 August 2, 2022, to shareholders of record at the close of business on July 11, 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/27^th 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.

Wauwatosa, Wis. – 5/27/2022 – WaterStone Bank announced today that it has donated scholarship funds to more than 40 local high schools.
The scholarships, an annual donation from the WaterStone Bank Foundation, are awarded to graduating seniors who have demonstrated exceptional character, academic commitment, and a desire to excel in their educational endeavors.

“WaterStone Bank would like to congratulate all our graduating Seniors,” said WaterStone Bank CEO, Doug Gordon. “The scholarship recipients, and their parents, should be proud of their high school achievements as they are our future leaders.”

The WaterStone Bank Foundation was established in 2002 with the Waukesha County Community Foundation in order to ensure the bank’s ability to continually give back to the communities in which it serves. In 2019, the WaterStone Bank Foundation donated over $700,000 to more than 200 local nonprofits.

WaterStone Bank donated scholarship funds to the following organizations in 2022: Alexander Hamilton High School, Arrowhead Scholarship Fund, Carmen High Schools of Science (South, Southeast, and Northwest Campus), Casimir Pulaski High School, Cristo Rey Jesuit High School Milwaukee, Cudahy High School, Divine Savior Holy Angels High School, Elmbrook Education Foundation, Franklin Public Schools, Germantown Community Scholarship Fund, Golda Meir School, Greendale High School, Greenfield High School, Hamilton High School, James E. Dottke High School, Kettle Moraine Lutheran High School, Martin Luther High School, Menomonee Falls High School, Milwaukee Lutheran High School, New Berlin Eisenhower High School, New Berlin West High School, Nicolet High School, Oak Creek High School, Oconomowoc Area High School, Pewaukee Scholarship Fund, Pius Xi High School, Ronald Reagan High School, Rufus King High School, South Milwaukee High School, St. Francis High School, St. Thomas More High School, Veritas High School, Waukesha North High School, Waukesha South High School, Waukesha West High School, Wauwatosa East High School, Wauwatosa West High School, West Allis Central High School, West Allis Nathan Hale High School, Whitnall High School, Wisconsin Lutheran High School.

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.

Wauwatosa, Wis. – 5/18/2022– WaterStone Bank has promoted an Assistant Branch Manager to the role of Community President.

Laura Christenson now serves as Community President of the bank’s Pewaukee branch (1230 George Towne Dr). Before the promotion, she served as Assistant Branch Manager of the Wauwatosa branch location. Christenson joined WaterStone Bank in September of 2021 from the restaurant industry, where she served in various leadership and training roles over the course of sixteen years.

Laura’s involvement as a board member of Wauwatosa Crime Stoppers displays her commitment to community and volunteerism. In her spare time, she enjoys all sorts of outdoor activities including camping, hiking, kayaking, winter-skiing, and building snowmen with her 3-year-old. Christenson recently purchased a new home in Lannon and looks forward serving in her new role at Pewaukee branch.

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.

WAUWATOSA, Wis. — 5/2/2022 — The Milwaukee Journal Sentinel names WaterStone Bank a recipient of 2022 Top Workplaces Award.

For the past thirteen years, the Milwaukee Journal Sentinel has collaborated with Energage,a workplace consulting firm based out of Philadelphia, to survey employees of southeastern Wisconsin companies and award the Top Workplaces honor. All Top Workplaces awards are based solely on employee feedback, making the award one of the most credible employer recognition programs.

Energage’s employee feedback survey analyzes job satisfaction and engagement along with the values and organizational health of the company. The process aims to capture several aspects of workplace culture including alignment, performance and connection, to name a few.

“The most valuable asset of WaterStone Bank is its employees,” said Doug Gordon, CEO of WaterStone Bank. “We hire great people and give them the freedom to be exceptional. Being a great place to work is the difference between a good company and a great company.”

In addition to being known for its excellent customer service and robust charitable foundation, the bank provides employees with a flexible work environment, opportunities for personal and professional development and exemplary benefits.

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.

WAUWATOSA, WI – 4/21/2022 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $5.3 million, or $0.23 per diluted share for the quarter ended March 31, 2022 compared to $21.3 million, or $0.89 per diluted share for the quarter ended March 31, 2021. “We are pleased with the Company’s performance given the challenging economic conditions,” said Douglas Gordon, Chief Executive Officer of Waterstone Financial, Inc. “While loan growth was modest during the quarter, we maintain a loan pipeline that is stronger than it has been over the past year. We continued to position ourselves for the future by reducing outstanding wholesale borrowings at the community banking segment, and growing our branch network at the mortgage banking segment, as we continued to focus on strategic opportunities to add talented loan originators. Additionally, we were able to continue returning shareholder value through quarterly dividends and stock buybacks.”

Highlights of the Quarter Ended March 31, 2022

Waterstone Financial, Inc. (Consolidated)

• Consolidated net income of Waterstone Financial, Inc. totaled $5.3 million for the quarter ended March 31, 2022, compared to $21.3 million for the quarter ended March 31, 2021.
• Consolidated return on average assets was 1.00% for the quarter ended March 31, 2022 compared to 3.99% for the quarter ended March 31, 2021.
• Consolidated return on average equity was 5.00% for the quarter ended March 31, 2022 and 20.49% for the quarter ended March 31, 2021.
• Dividends declared during the quarter ended March 31, 2022 totaled $0.20 per common share.
• We repurchased approximately 681,000 shares at a cost of $13.8 million during the quarter ended March 31, 2022.

Community Banking Segment

• Pre-tax income totaled $5.4 million for the quarter ended March 31, 2022, which represents a $3.7 million, or 40.6%, decrease compared to $9.1 million for the quarter ended March 31, 2021.
• Net interest income totaled $11.7 million for the quarter ended March 31, 2022, which represents a $2.6 million, or 18.2%, decrease compared to $14.2 million for the quarter ended March 31, 2021.
• Average loans held for investment totaled $1.20 billion during the quarter ended March 31, 2022, which represents a decrease of $142.2 million, or 10.6%, compared to $1.35 billion for the quarter ended March 31, 2021. Average loans held for investment decreased $6.3 million compared to $1.21 billion for the quarter ended December 31, 2021.
• Net interest margin decreased 42 basis points to 2.38% for the quarter ended March 31, 2022 compared to 2.80% for the quarter ended March 31, 2021, which was a result of lower rates and average balance on loans and a higher average interest earnings cash balance within the debt securities, federal funds sold and short term investments category. Net interest margin decreased nine basis points compared to 2.47% for the quarter ended December 31, 2021, driven by a decrease in average loan balance and a higher average cash balance.
• The segment had a negative provision for credit losses of $140,000 for the quarter ended March 31, 2022 compared to a negative provision for loan losses of $1.1 million for the quarter ended March 31, 2021.
• We adopted the current expected credit losses (“CECL”) model on January 1, 2022, which resulted in an opening balance adjustment of $430,000 to increase the allowance for credit losses. Additionally, there was a $1.4 million opening balance adjustment to record an allowance for credit losses on unfunded loan commitments, which is presented in Other Liabilities on the Consolidated Statements of Financial Condition. Net of tax impact, the adoption of the CECL model resulted in a $1.4 million reduction to retained earnings.
• Net recoveries totaled $616,000 for the quarter ended March 31, 2022, as one significant loan recovery payment was received during the quarter, compared to net charge-offs of $27,000 for the quarter ended March 31, 2021. With the adoption of CECL, estimated recoveries may be accounted for within the calculation and do not impact the provision for credit losses line item when cash is received.
• The efficiency ratio was 59.59% for the quarter ended March 31, 2022, compared to 48.17% for the quarter ended March 31, 2021.
• Average deposits (excluding escrow accounts) totaled $1.23 billion during the quarter ended March 31, 2022, an increase of $24.2 million, or 2.0%, compared to $1.21 billion during the quarter ended March 31, 2021. Average deposits decreased $15.6 million, or 5.0% annualized compared to the $1.25 billion for the quarter ended December 31, 2021.
• Nonperforming assets as percentage of total assets was 0.34% at March 31, 2022, 0.26% at December 31, 2021, and 0.20% at March 31, 2021.
• Past due loans as percentage of total loans was 0.53% at March 31, 2022, 0.59% at December 31, 2021, and 0.52% at March 31, 2021.

Mortgage Banking Segment

• Pre-tax income totaled $1.4 million for the quarter ended March 31, 2022, compared to $19.1 million for the quarter ended March 31, 2021.
• Loan originations decreased $406.6 million, or 36.5%, to $708.5 million during the quarter ended March 31, 2022, compared to $1.12 billion during the quarter ended March 31, 2021. Origination volume relative to purchase activity accounted for 77.3% oforiginations for the quarter ended March 31, 2022 compared to 56.1% of total originations for the quarter ended March 31, 2021.
• Mortgage banking non-interest income decreased $26.4 million, or 48.0%, to $28.6 million for the quarter ended March 31, 2022, compared to $55.0 million for the quarter ended March 31, 2021.
• Gross margin on loans sold decreased to 4.00% for the quarter ended March 31, 2022, compared to 4.86% for the quarter ended March 31, 2021. 
• Total compensation, payroll taxes and other employee benefits decreased $8.8 million, or 30.2%, to $20.4 million during the quarter ended March 31, 2022 compared to $29.3 million during the quarter ended March 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.
• Professional fees increased $862,000 to $338,000 of expense during the quarter ended March 31, 2022 compared to $524,000 of income during the quarter ended March 31, 2021. The increase related to receiving a legal settlement award during the quarter ended March 31, 2021.
• Other noninterest expense decreased $372,000 to $2.3 million during the quarter ended March 31, 2022 compared to $2.7 million during the quarter ended March 31, 2021. The decrease related to a decrease in the amortization expense on mortgage servicing rights due to the bulk sale of mortgage servicing rights during 2021. 

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.

WAUWATOSA, Wis. – 3/24/2022 – WaterStone Bank announces the addition of Michael Danielson as Vice President of Business Banking and Nicole DeAngelis as Vice President, Director of Loan Servicing.

Michael “Big Mike” Danielson joins WaterStone Bank as a new Vice President of Business Banking. He comes to WaterStone Bank with sixteen years of business banking experience, most recently at Waukesha State Bank.

During 2020-2021, Mike originated nearly 600 PPP (Paycheck Protection Program) loans to keep struggling small businesses alive during the pandemic. Mike resides in Elm Grove and serves as a board member and treasurer for both the Elm Grove Community Foundation and the Elm Grove Police Academy.

Nicole DeAngelis is the new Vice President, Director of Loan Servicing at WaterStone Bank, with over twenty years of experience in the Retail Banking industry. In her former role at BMO Harris Bank, Nicole managed the Production Maintenance team that supported all lines of the business. She also co-led the outsourcing and training process for a portion of BMO’s Portfolio to their India Team Members.

Outside of work, Nicole enjoys spending quality time with her family playing board games, watching movies, and visiting the Milwaukee Zoo.

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.

Wauwatosa, Wis. — 3/15/2022 — On March 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 May 3, 2022, to shareholders of record at the close of business on April 11, 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.

WAUWATOSA, Wis. – 3/14/2022 –WaterStone Bank welcomes the addition of a Community President at its Germantown/Menomonee Falls branch.

Joel Maske now serves as the Community President of WaterStone Bank’s Germantown/Menomonee Falls branch. Joel brings 26 years of experience in sales, coaching, and leadership to his new role at WaterStone Bank.

In his free time, Joel likes to golf. When not on the green, he enjoys the Milwaukee live music scene as both a concert goer and a professional musician!

Kanini McDaniel, Regional Manager of the Germantown branch, says “He is ready to take his branch to new heights.” She mentioned that Joel has already joined the local Chamber of Commerce to help make WaterStone Bank a household name in the Germantown community.

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.

Wauwatosa, WI – 1/27/2022 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $12.6 million, or $0.53 per diluted share for the quarter ended December 31, 2021 compared to $27.8 million, or $1.17 per diluted share for the quarter ended December 31, 2020. Net income per diluted share was $2.96 for the year ended December 31, 2021 compared to net income per diluted share of $3.30 for the year ended December 31, 2020.

“We achieved another quarter of strong financial results due to the continued dedication and efforts of our employees,” said Douglas Gordon, Chief Executive Officer of Waterstone Financial, Inc. “We continue to execute and build a stronger financial position. Given the performance over the past two years, we were excited to announce a new 3.5 million share repurchase program and declare a $0.50 special dividend during the quarter as we continue to deliver for our valued shareholders.”

Highlights of the Quarter Ended December 31, 2021

Waterstone Financial, Inc. (Consolidated)

• Consolidated net income of Waterstone Financial, Inc. totaled $12.6 million for the quarter ended December 31, 2021, compared to $27.8 million for the quarter ended December 31, 2020.
• Consolidated return on average assets was 2.22% for the quarter ended December 31, 2021 compared to 4.96% for the quarter ended December 31, 2020.
• Consolidated return on average equity was 11.14% for the quarter ended December 31, 2021 and 27.11% for the quarter ended December 31, 2020.
• Dividends declared during the quarter ended December 31, 2021 totaled $0.70 per common share.
• We authorized a new share repurchase program, under which we will seek to repurchase up to 3.5 million shares, representing approximately 14.1% of outstanding shares.
• We repurchased approximately 264,000 shares at a cost of $5.5 million during the quarter ended December 31, 2021.

Community Banking Segment

• Pre-tax income totaled $8.4 million for the quarter ended December 31, 2021, which represents a $338,000 , or 3.9%, decrease compared to $8.7 million for the quarter ended December 31, 2020.
• Net interest income totaled $13.2 million for the quarter ended December 31, 2021, which represents a $1.3 million, or 9.3%, decrease compared to $14.5 million for the quarter ended December 31, 2020.
• Average loans held for investment totaled $1.21 billion during the quarter ended December 31, 2021, which represents a decrease of $191.8 million, or 13.7%, compared to $1.40 billion for the quarter ended December 31, 2020. Average loans held for investment decreased $44.4 million compared to $1.26 billion for the quarter ended September 30, 2021 as residential real estate loans continued to prepay at an accelerated rate.
• Net interest margin decreased 26 basis points to 2.47% for the quarter ended December 31, 2021 compared to 2.73% for the quarter ended December 31, 2020, which was a result of lower rates and average balance on loans and a higher average interest earnings cash balance within the debt securities, federal funds sold and short term investments category. Net interest margin decreased 21 basis points compared to 2.68% for the quarter ended September 30, 2021, driven by a decrease in average loan balance and a higher average cash balance.
• The segment had a negative provision for loan losses of $1.5M for the quarter ended December 31, 2021 compared to no provision for loan losses for the quarter ended December 31, 2020. Net recoveries totaled $458,000 for the quarter ended December 31, 2021, as one significant loan recovery payment was received during the quarter, compared to net charge-offs of $51,000 for the quarter ended December 31, 2020. 
• The efficiency ratio was 53.02% for the quarter ended December 31, 2021, compared to 46.15% for the quarter ended December 31, 2020.
• Average deposits (excluding escrow accounts) totaled $1.25 billion during the quarter ended December 31, 2021, an increase of $65.5 million, or 5.6%, compared to $1.18 billion during the quarter ended December 31, 2020. Average deposits decreased $9.9 million, or 3.2% annualized compared to the $1.26 billion for the quarter ended September 30, 2021.
• Nonperforming assets as percentage of total assets was 0.26% at December 31, 2021, 0.18% at September 30, 2021, and 0.27% at December 31, 2020.
• Past due loans as percentage of total loans was 0.59% at December 31, 2021, 0.92% at September 30, 2021, and 0.57% at December 31, 2020.
• PPP loans totaled $1.8 million as of December 31, 2021. The average balance for the quarter ended December 31, 2021 was $2.7 million. For the quarter ended December 31, 2021, PPP loan interest income recognized was approximately $7,000 and the amortization of fee income was approximately $101,000.
• The Company held approximately $3.3 million in loans, representing 0.3% of the total loan portfolio as of December 31, 2021, which had been modified as either a deferment of principal or principal and interest since the beginning of the pandemic. Of the $3.3 million in loans, $405,000 qualify as modifications under the Coronavirus Aid, Relief and Economic Security (“CARES Act”). The remaining $2.9 million is composed of three loan relationships that are classified as troubled debt restructurings. 

Mortgage Banking Segment

• Pre-tax income totaled $7.3 million for the quarter ended December 31, 2021, compared to $28.3 million for the quarter ended December 31, 2020.
• Loan originations decreased $289.2 million, or 22.6%, to $993.1 million during the quarter ended December 31, 2021, compared to $1.28 billion during the quarter ended December 31, 2020. Origination volume relative to purchase activity accounted for 73.8% of originations for the quarter ended December 31, 2021 compared to 59.2% of total originations for the quarter ended December 31, 2020.
• Mortgage banking non-interest income decreased $27.8 million, or 40.6%, to $40.7 million for the quarter ended December 31, 2021, compared to $68.5 million for the quarter ended December 31, 2020. During the quarter ended December 31, 2020, the Company sold mortgage servicing rights related to $975.9 million in loans receivable and with a book value of $6.4 million for $7.0 million resulting in a gain on sale of $600,000. There was no comparable sale during the quarter ended December 31, 2021. As of December 31, 2021, the Company maintained servicing rights related to $160.8 million in loans previously sold to third parties.
• Gross margin on loans sold decreased to 4.18% for the quarter ended December 31, 2021, compared to 5.40% for the quarter ended December 31, 2020. 
• Total compensation, payroll taxes and other employee benefits decreased $5.5 million, or 16.4%, to $27.9 million during the quarter ended December 31, 2021 compared to $33.3 million during the quarter ended December 31, 2020. 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 decreased $665,000 to $1.4 million during the quarter ended December 31, 2021 compared to $2.1 million during the quarter ended December 31, 2020. The decrease related to a decrease in the amortization expense on mortgage servicing rights due to the bulk sale of mortgage servicing rights during 2021 and a reduced provision for loan sale losses as origination volumes decreased. 

Recent Developments:

COVID-19 Pandemic and the CARES Act

The CARES Act, signed into law at the end of March 2020, allowed for a temporary delay in the adoption of accounting guidance under Accounting Standards Codification Topic 326, “Financial Instruments – Credit Losses (“CECL”) until the earlier of December 31, 2020 or the 60th day after the end of the COVID-19 national emergency.  During the quarter ended June 30, 2020, pursuant to the CARES Act and guidance from the Securities and Exchange Commission (“SEC”) and Financial Accounting Standards Board (“FASB”), we elected to delay adoption of CECL.  On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law.  Among other provisions, this Act extended the temporary delay on the adoption of CECL until January 1, 2022.  We have elected to continue to delay adoption of CECL.  As a result, our financial statements for the quarter and year ended December 31, 2021 include an allowance for loan losses that was prepared under the existing incurred loss methodology.

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.

Wauwatosa, WI – 1/25/2022 – Waterstone Financial, Inc. (NASDAQ: WSBF) (the "Company") announced that on January 24, 2022, William Bruss was elected President of the Company and its wholly owned subsidiary WaterStone Bank SSB (the “Bank”).  Douglas Gordon will continue to lead both the Company and the Bank as Chief Executive Officer, a role he has served since 2007.  The Company further announced that Julie Glynn and Ryan Gordon were each elected Executive Vice Presidents of the Company and the Bank, joining Chief Financial Officer Mark Gerke in that capacity.   “The promotions of Bill, Julie and Ryan exhibits the strength and depth of the management team at Waterstone Financial,” said CEO Doug Gordon.  “Their experience and expertise will continue to lead us in our strategic initiatives.”

Bruss began as the Bank’s in-house counsel in 1997 and has served as Executive Vice President, COO and Secretary of the Company and the Bank since 2013 with management responsibility for the Bank’s legal, operational and support areas; Bruss chairs the Bank’s Executive Committee and is a member of the Bank’s Officers’ Loan Committee and the board of directors of Waterstone Mortgage Corporation.  Glynn joined the Bank in 2018 with over 30 years of retail banking leadership experience and steers the Bank’ retail banking initiatives as its Chief Retail Officer; Glynn is also a member of the Bank’s Executive and Asset/Liability Committees.  Ryan Gordon began his career with the Bank in 2008 with a focus on credit administration and was named the Bank’s Chief Credit Officer in 2018; Gordon also serves as chair of the Bank’s Officers’ Loan Committee and is a member of its Executive Committee and the board of directors of Waterstone Mortgage Corporation. 

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.

Wauwatosa, Wis. — 12/15/2021 — On December 15, 2021 the Board of Directors of Waterstone Financial, Inc. (NASDAQ: WSBF) declared both a regular quarterly cash dividend of $0.20 per common share, as well as a special cash dividend of $0.50 per common share.  The dividends are payable on February 1, 2022, to shareholders of record at the close of business on January 10, 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.

WAUWATOSA, WI – 12/10/2021 – Waterstone Financial, Inc. (NASDAQ: WSBF) (the "Company") announced that on December 10, 2021, its Board of Directors authorized a share repurchase program pursuant to which the Company intends to repurchase up to 3,500,000 of its issued and outstanding shares, representing approximately 14.1% of its issued and outstanding shares of common stock. The repurchase program will commence on or about December 13, 2021. This share repurchase program follows the Board of Directors termination of the previous repurchase program during which the Company repurchased a total of 1,453,554 shares of its common stock at a weighted average price of $17.16 per share. The timing of the repurchases will depend on certain factors, including but not limited to market conditions and prices, available funds and alternative uses of capital. The stock repurchase program may be carried out through open-market repurchases, block trades, negotiated private transactions and pursuant to a trading plan that will be adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Any repurchased shares will be treated as authorized but unissued by the Company. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The repurchase program does not obligate the Company to repurchase any particular number of shares.

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.

WAUWATOSA, Wis. – 11/30/2021 – WaterStone Bank donates to Children’s Wisconsin following the Waukesha Christmas Parade mass casualty event on November 21.

WaterStone Bank has been a steadfast philanthropic partner of Children’s Wisconsin since 2006. Children’s vision that “the children of Wisconsin will be the healthiest in the nation” closely aligns with WaterStone Bank’s core giving initiative of supporting women and children. As a community bank, WaterStone Bank takes pride in being a good corporate citizen and supporting their community when it needs them the most.

With the Waukesha Christmas Parade incident in mind, WaterStone Bank is committing to a monetary donation to the Child Life program at Children’s Wisconsin. Child life specialists are an incredible source of comfort and passion when kids are in the hospital. They are specially trained to provide bedside services and support to patients and their families. None of this work is covered by insurance and so it was identified as the greatest area of need following the tragedy.

“Our hearts and prayers go out to the family and friends of all the victims of this horrific tragedy, as well as the countless others deeply affected by such senseless carnage,” said Doug Gordon, President/CEO of WaterStone Bank. “We are very lucky to have health care workers and first responders caring for our Community. You are our heroes!”

Waterstone Mortgage, a subsidiary of WaterStone Bank, has also directed funds to the United for Waukesha Community Fund organized by the Waukesha County Community Foundation and United Way of Greater Milwaukee & Waukesha.

After tragedy unfolds, many seek ways to help and get involved in the process of healing their communities. If you are feeling called to serve but don’t know where to start, here are three ways to support those impacted by the Christmas Parade incident: donate blood at Versiti Blood Center of Wisconsin or the American Red Cross, make a monetary donation to the Children’s Wisconsin or the United for Waukesha Community Fund, and share mental health resources like the Disaster Distress Helpline which you can call or text in to (800) 985-5990.

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.

WAUWATOSA, Wis. – 11/23/2021 – WaterStone Bank welcomes two new Community Presidents at its Fox Point and Milwaukee/Oklahoma Ave. branches.

Brianna Burgess now leads as Community President of the bank’s Fox Point branch. Formerly a branch manager at Associated Bank, Burgess brings seven years of banking experience to her new role and co-chairs for the black colleagues resource group. She is passionate about educating the community, coaches a local cheerleading team, and volunteers for the annual Back to School event at the Sherman Park Boys and Girls Club. Burgess resides in the Whitefish Bay area and looks forward to serving the Fox Point community.

Bryan Krajewski joins WaterStone Bank as Community President of the Milwaukee/Oklahoma Ave. branch. Krajewski brings 20 years of retail experience where he was a Store Manager at retailers Ross Dress for Less, Petco, and Michael’s Arts and Crafts respectively. In his time as a manager, Krajewski rebuilt failing stores and reestablished company standards and expectations. He is an avid animal lover who volunteers his time at the Wisconsin Humane Society and enjoys going to the zoo. Krajewski looks forward to serving the Milwaukee community.

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.

WAUWATOSA, Wis. – 11/19/2021 – WaterStone Bank announces the addition of Kevin Stelzer as their new Vice President of Business Banking at their Waukesha location.

“I am pleased to announce that Kevin Stelzer has joined WaterStone Bank as a vice president in our business banking group. Kevin will be helping us grow our customer base of small to mid-sized privately held companies,” shared Andy Boario, Director of Business Banking.

Stelzer joins WaterStone Bank with over 10 years of previous experience from US Bank. During his tenure at US Bank he worked in various roles, most recently serving as the AVP Business Banking Relationship Manager in Waukesha. After receiving his Bachelor’s in Finance and Marketing from UW Milwaukee in 2009, he returned to his alma mater to receive an MBA in 2015.

Outside of work, Stelzer regularly volunteers and fundraises for the Crohn’s and Colitis Foundation as well as the Wisconsin Waterfowl Association. He likes to stay active and enjoy the great outdoors with a range of activities such as fishing, boating, and golfing. Stelzer resides in his recently purchased home in Pewaukee with his wife, three kids, and two dogs.

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.

Wauwatosa, Wis. – 11/8/2021 –WaterStone Bank today announced the winner of its new mascot contest and introduced its new bank mascot to the community, Blue the Hippo.

Contestant Aubrey Koepke of West Allis was named the winner of WaterStone Bank’s New Mascot Contest. Koepke submitted the original concept of a blue hippo as the new WaterStone Bank mascot.

“I'm super excited that my design was chosen, and I look forward to how WaterStone will use this new mascot in the future,” said Aubrey Koepke.

In May, WaterStone Bank launched a contest in which members of the community could submit creative ideas for the bank’s new mascot. The bank received over 50 creative submissions during the one-month time period.

Mascot contest winner, Aubrey Koepke, with Blue the Hippo

“We would like to thank our community for the overwhelming response to our new mascot contest. Our new mascot, Blue, will be instrumental in the introduction of our children’s financial literacy app,” said Doug Gordon.

In tandem with the introduction of the bank’s new mascot, WaterStone Bank is launching its new WaterStone Savers app, which is specially geared for kids ages two through 12.

Kids learn life-long financial skills through age appropriate games and activities. Best of all, it introduces topics so that families can have conversations that build upon vital financial concepts. As an added bonus, Blue’s Jr. Bankers account holders can track their balance and set savings goals via the app (without any money movement) to introduce the concept of digital banking.

Blue, WaterStone Bank’s new mascot

Blue the Hippo will make its first public appearances later this year. WaterStone Bank encourages the public to watch for meet-and-greet opportunities that will be planned.

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/27^th 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.

WAUWATOSA, Wis. – 11/2/2021 – WaterStone Bank announced today the addition of two new community presidents at its Greenfield/Loomis Rd. branch and Wauwatosa/State St. branch.

Rebecca McCartney

Rebecca McCartney now serves as the Community President for the Bank’s Greenfield/Loomis Rd. branch. McCartney comes to WaterStone Bank with 12 years of previous banking experience, most recently at North Shore Bank. McCartney values community involvement and has spent several years volunteering with the Milwaukee Women’s Center, an emergency center for domestic violence survivors and their children. On the weekend, Rebecca enjoys frequenting local coffee shops and hiking by the lakefront and Kettle Moraine State Forest.

Dia Wesner

Dia Wesner now serves as the Community President of the Bank’s Wauwatosa/State St. branch. Wesner joins WaterStone Bank with over 20 years of finance and banking experience. She began her career as a mortgage broker at Chase Bank where she navigated her way through several positions including loan underwriting, foreclosure analysis/risk management, as well as quality control. Wesner has spent the last 9 years of her career in management roles. She is committed to the growth and success of her employees and is looking forward to developing and building relationships in the Wauwatosa community.

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/27^th 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.

WAUWATOSA, WI – 10/19/2021 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $19.0 million, or $0.79 per diluted share for the quarter ended September 30, 2021 compared to $26.3 million, or $1.08 per diluted share for the quarter ended September 30, 2020. Net income per diluted share was $2.43 for the nine months ended September 30, 2021 compared to net income per diluted share of $2.15 for the nine months ended September 30, 2020.

“We are pleased with the Company’s continued strong financial results during the third quarter,” said Douglas Gordon, Chief Executive Officer of Waterstone Financial, Inc. “We have the right team members to navigate market challenges, as we meet the ever changing demands for our customers. Our results validate the strategies we have implemented over the past years to grow our brands and deliver for our shareholders.”

Highlights of the Quarter Ended September 30, 2021

Waterstone Financial, Inc. (Consolidated)

• Consolidated net income of Waterstone Financial, Inc. totaled $19.0 million for the quarter ended September 30, 2021, compared to $26.3 million for the quarter ended September 30, 2020.
• Consolidated return on average assets was 3.38% for the quarter ended September 30, 2021 compared to 4.78% for the quarter ended September 30, 2020.
• Consolidated return on average equity was 17.25% for the quarter ended September 30, 2021 and 26.30% for the quarter ended September 30, 2020.
• Dividends declared during the quarter ended September 30, 2021 totaled $0.20 per common share.
• We repurchased approximately 178,000 shares at a cost of $3.5 million during the quarter ended September 30, 2021.

Community Banking Segment

• Pre-tax income totaled $8.9 million for the quarter ended September 30, 2021, which represents a $1.1 million, or 14.4%, increase compared to $7.7 million for the quarter ended September 30, 2020.
• Net interest income totaled $14.1 million for the quarter ended September 30, 2021, which represents a 4.7% increase compared to $13.5 million for the quarter ended September 30, 2020.
• Average loans held for investment totaled $1.26 billion during the quarter ended September 30, 2021, which represents a decrease of $174.0 million, or 12.2%, compared to $1.43 billion for the quarter ended September 30, 2020. Average loans held for investment decreased $63.8 million compared to $1.32 billion for the quarter ended June 30, 2021 as residential real estate loans continue to prepay at an accelerated rate.
• Net interest margin increased five basis points to 2.68% for the quarter ended September 30, 2021 compared to 2.63% for the quarter ended September 30, 2020, which was a result of lower average rates on deposits, as certificate of deposits repriced at lower rates. Net interest margin decreased 10 basis points compared to 2.78% for the quarter ended June 30, 2021, driven by a decrease in average loan balance and a higher average cash balance.
• The segment had a negative provision for loan losses of $750,000 for the quarter ended September 30, 2021 compared to a $1.0 million provision for loan losses for the quarter ended September 30, 2020. Net recoveries totaled $100,000 for the quarter ended September 30, 2021, as one significant loan recovery payment was received during the quarter, compared to net recoveries of $85,000 for the quarter ended September 30, 2020. 
• Noninterest income decreased $1.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020, due primarily to a decrease in gains from death benefit received on two bank owned life insurance policies during the three months ended September 30, 2020.
• Noninterest expense decreased $116,000 for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. Other noninterest expense decreased $396,000 as certain loan-related expenses decreased.  Compensation, payroll taxes and other employee benefits expense increased $360,000 primarily due to an increase in health insurance expense and Employee Stock Ownership Plan expense as the average stock price increased compared to the quarter ending September 30, 2020.
• The efficiency ratio was 48.74% for the quarter ended September 30, 2021, compared to 47.23% for the quarter ended September 30, 2020.
• Average deposits (excluding escrow accounts) totaled $1.25 billion during the quarter ended September 30, 2021, an increase of $74.9 million, or 6.3%, compared to $1.18 billion during the quarter ended September 30, 2020. Average deposits increased $24.3 million, or 7.9% annualized compared to the $1.23 billion for the quarter ended June 30, 2021.
• Nonperforming assets as percentage of total assets was 0.18% at September 30, 2021, 0.20% at June 30, 2021, and 0.31% at September 30, 2020.
• Past due loans as percentage of total loans was 0.92% at September 30, 2021, 0.53% at June 30, 2021, and 0.39% at September 30, 2020.
• PPP loans totaled $4.1 million as of September 30, 2021. The average balance for the quarter ended September 30, 2021 was $10.6 million. For the quarter ended September 30, 2021, PPP loan interest income recognized was approximately $26,000 and the amortization of fee income was approximately $464,000. Net interest margin, excluding the impact of the PPP loans, was 2.63%. Net interest margin for the quarter ended September 30, 2021, including the impact of the PPP loans, was 2.68%.
• The Company held approximately $3.5 million in loans, representing 0.3% of the total loan portfolio as of September 30, 2021, which had been modified as either a deferment of principal or principal and interest since the beginning of the pandemic. Of the $3.5 million in loans, $559,000 qualify as modifications under theCoronavirus Aid, Relief and Economic Security (“CARES Act”). The remaining $2.9 million is composed of three loan relationships that are classified as troubled debt restructurings. 

Mortgage Banking Segment

• Pre-tax income totaled $15.6 million for the quarter ended September 30, 2021, compared to $27.4 million for the quarter ended September 30, 2020.
• Loan originations decreased $241.2 million, or 18.6%, to $1.06 billion during the quarter ended September 30, 2021, compared to $1.30 billion during the quarter ended September 30, 2020. Origination volume relative to purchase activity accounted for 73.8% oforiginations for the quarter ended September 30, 2021 compared to 64.1% of total originations for the quarter ended September 30, 2020.
• Mortgage banking non-interest income decreased $21.9 million, or 29.9%, to $51.3 million for the quarter ended September 30, 2021, compared to $73.1 million for the quarter ended September 30, 2020. During the quarter ended September 30, 2021, the Company sold mortgage servicing rights related to $1.24 billion in loans serviced for third parties. The sale generated $12.4 million in net proceeds and a $4.0 million gain. There was no comparable sale during the quarter ended September 30, 2020. As of September 30, 2021, the Company maintained servicing rights related to $160.8 million in loans previously sold to third parties.
• Gross margin on loans sold decreased to 4.54% for the quarter ended September 30, 2021, compared to 5.44% for the quarter ended September 30, 2020. 
• Total compensation, payroll taxes and other employee benefits decreased $5.6 million, or 16.1%, to $29.0 million during the quarter ended September 30, 2021 compared to $34.6 million during the quarter ended September 30, 2020. 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.
• Professional fees decreased $4.0 million to $421,000 during the quarter ended September 30, 2021 compared to $4.5 million of expense during the quarter ended September 30, 2020.  The decrease related to a decrease in litigation costs compared to the prior year, as the Herrington settlement was resolved during the quarter ended September 30, 2020.
• Other noninterest expense decreased $174,000 to $2.3 million during the quarter ended September 30, 2021 compared to $2.4 million during the quarter ended September 30, 2020. The decrease related to a decrease in the servicing fees on mortgage servicing rights due to the sale during the quarter ended September 30, 2021.

Recent Developments:

COVID-19 Pandemic and the CARES Act

The CARES Act, signed into law at the end of March 2020, allowed for a temporary delay in the adoption of accounting guidance under Accounting Standards Codification Topic 326, “Financial Instruments – Credit Losses (“CECL”) until the earlier of December 31, 2020 or the 60th day after the end of the COVID-19 national emergency.  During the quarter ended June 30, 2020, pursuant to the CARES Act and guidance from the Securities and Exchange Commission (“SEC”) and Financial Accounting Standards Board (“FASB”), we elected to delay adoption of CECL.  On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law.  Among other provisions, this Act extended the temporary delay on the adoption of CECL until January 1, 2022.  We have elected to continue to delay adoption of CECL.  As a result, our financial statements for the quarter and year ended September 30, 2021 include an allowance for loan losses that was prepared under the existing incurred loss methodology.

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.

Wauwatosa, Wis. - 09/21/2021 - On September 21, 2021, the Board of Directors of Waterstone Financial, Inc. (NASDAQ: WSBF) declared a regular quarterly dividend of $0.20 per common share, payable on November 2, 2021, to shareholders of record at the close of business on October 11, 2021.

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.

WAUWATOSA, Wis. – 8/2/2021 – Waterstone Financial, Inc. today announced that it received the number one ranking in Bank Director’s 2021 Bank Performance Scorecard.

Bank Director’s Scorecard annually ranks the 300 largest exchange-traded banks in the United States based on the previous year’s performance. It uses five metrics that speak to profitability, asset quality and capital adequacy to score a bank’s performance. This year, the top 25 list of banks was dominated by community banks.

“Receiving the top ranking out of 300 banks is an honor that can only be achieved from the work each and every one of our dedicated employees does to create value for our customers, investors, and our community,” said Doug Gordon, President/CEO of WaterStone Bank. “2021 marks the 100th Anniversary of WaterStone Bank, and this recognition demonstrates that we continue to stand strong as a community bank.”

Despite the pandemic in 2020, Waterstone Financial, Inc. had record financial results, led by its mortgage banking segment originating a record $4.5 billion in residential home loans. The bank’s community banking segment also added excellent operating results with 47% growth in transactional core deposits. The bank launched a new robust and innovative digital banking platform for businesses and customers in 2020, and opened its first branch office in the City of Milwaukee – its 14th branch overall.

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.