Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Six Months Ended June 30, 2026 

Wauwatosa, WI – July 23, 2026 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $8.5 million, or $0.49 per diluted share, for the quarter ended June 30, 2026 compared to $7.7 million, or $0.43 per diluted share, for the quarter ended June 30, 2025. Net income totaled $14.5 million for the six months ended June 30, 2026 compared to net income of $10.8 million for the six months ended June 30, 2025. Net income per diluted share was $0.84 for the six months ended June 30, 2026 compared to net income per diluted share of $0.59 for the six months ended June 30, 2025.

“We achieved another quarter of strong financial results, as quarterly net interest margin hit 3.03%, its highest level since the quarter ended December 31, 2022,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “The Community Banking segment realized a record quarterly net interest income of $15.8 million, which represented a $2.2 million, or 16.1%, increase compared to the quarter ended June 30, 2025. The increases were primarily due to continued growth in yields on our loans held for investment and a reduction of our cost of funds, driven in part by continued growth in average transaction deposits. The Mortgage Banking segment generated pre-tax income of $1.6 million which represents a decrease of $403,000, or 20.2%, compared to the quarter ended June 30, 2025. The Mortgage Banking segment achieved solid growth in loan origination volumes compared to the prior year, but this growth was offset by softer sales margins. We increased our book value per share $0.51 during the quarter with continued strong earnings and the share repurchase program, prior to declaring our quarterly dividend of $0.17 per share. In total, $6.5 million was returned to shareholders through buybacks and dividends during the quarter.”

Highlights of the Quarter Ended June 30, 2026
Waterstone Financial, Inc. (Consolidated)
• Consolidated net income of Waterstone Financial, Inc. totaled $8.5 million for the quarter ended June 30, 2026 compared to net income of $7.7 million for the quarter ended June 30, 2025.
• Consolidated return on average assets (annualized) was 1.52% for the quarter ended June 30, 2026 and 1.39% for the quarter ended June 30, 2025.
• Consolidated return on average equity (annualized) was 9.65% for the quarter ended June 30, 2026 and 9.04% for the quarter ended June 30, 2025.
• Dividends declared during the quarter ended June 30, 2026 totaled $0.17 per common share.
• During the quarter ended June 30, 2026, we repurchased approximately 200,000 shares at a cost (including the federal excise tax) of $3.7 million, or $18.40 per share.
• Nonperforming assets as a percentage of total assets was 0.30% at June 30, 2026, 0.35% at March 31, 2026, and 0.37% at June 30, 2025.
• Past due loans as a percentage of total loans was 0.63% at June 30, 2026, 0.58% at March 31, 2026, and 0.69% at June 30, 2025.
• Book value per share was $19.53 at June 30, 2026 and $19.03 at December 31, 2025.

Community Banking Segment
• Pre-tax income totaled $9.0 million for the quarter ended June 30, 2026, which represents a $1.4 million, or 18.2%, increase compared to $7.6 million for the quarter ended June 30, 2025.
• Net interest income totaled $15.8 million for the quarter ended June 30, 2026, which represents a $2.2 million, or 16.1%, increase compared to $13.6 million for the quarter ended June 30, 2025.
• Average loans held for investment totaled $1.68 billion during the quarter ended June 30, 2026, which represents an increase of $9.7 million, or 0.6%, compared to $1.67 billion for the quarter ended June 30, 2025. The increase was primarily due to increases in multi-family mortgages offset by a decrease in single-family mortgages. Average loans held for investment decreased $2.1 million compared to $1.68 billion for the quarter ended March 31, 2026. The decrease was primarily due to a decrease in single-family real estate mortgages offset by an increase in multi-family mortgages. See details on average loans by category in the table below.
• Net interest margin increased 43 basis points to 3.03% for the quarter ended June 30, 2026 compared to 2.60% for the quarter ended June 30, 2025, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in the cost of borrowings and weighted average cost of deposits. Net interest margin increased six basis points compared to 2.97% for the quarter ended March 31, 2026, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in the weighted average cost of deposits.
• Past due loans at the community banking segment totaled $8.5 million at June 30, 2026, $6.9 million at March 31, 2026, and $8.9 million at June 30, 2025.
• The segment had a provision for credit losses related to funded loans of $171,000 for the quarter ended June 30, 2026 compared to a negative provision for credit losses related to funded loans of $125,000 for the quarter ended June 30, 2025. The current quarter increase was primarily due to increases in commercial real estate external qualitative factors. The provision for credit losses related to unfunded loan commitments was $77,000 for the quarter ended June 30, 2026 compared to a provision for credit losses related to unfunded loan commitments of $106,000 for the quarter ended June 30, 2025. The provision for credit losses related to unfunded loan commitments for the quarter ended June 30, 2026 was due primarily to an increase of business and commercial real estate loans in the loan pipeline balance at quarter end.
• The efficiency ratio, a non-GAAP ratio, was 48.16% for the quarter ended June 30, 2026, compared to 50.40% for the quarter ended June 30, 2025.
• Average core retail deposits (excluding brokered and escrow accounts) totaled $1.34 billion during the quarter ended June 30, 2026, an increase of $26.3 million, or 2.0%, compared to $1.31 billion during the quarter ended June 30, 2025 due primarily to increases in money market and demand deposits balances. Average core retail deposits increased $4.4 million, or 1.3% annualized, compared to $1.33 billion for the quarter ended March 31, 2026. The segment had an average of $86.4 million in brokered certificates of deposit during the quarter ended June 30, 2026 compared to $72.5 million during the quarter ended June 30, 2025.
• Total compensation, payroll taxes, and other employee benefits increased $585,000 or 11.6%, to $5.6 million during the quarter ended June 30, 2026 compared to $5.0 million during the quarter ended June 30, 2025. The increase primarily related to increased health insurance expense and ESOP expense as the average market price per share increased compared to the prior year.

Mortgage Banking Segment
• Pre-tax income totaled $1.6 million for the quarter ended June 30, 2026, compared to a pre-tax income of $2.0 million for the quarter ended June 30, 2025.                                                                                                                              
• Loan originations increased $33.0 million, or 5.6%, to $621.8 million during the quarter ended June 30, 2026, compared to $588.8 million during the quarter ended June 30, 2025. Origination volume relative to purchase activity accounted for 88.6% of originations for the quarter ended June 30, 2026 compared to 91.7% of total originations for the quarter ended June 30, 2025.                                                                                                                              
• Mortgage banking non-interest income decreased $280,000, or 1.2%, to $22.4 million for the quarter ended June 30, 2026, compared to $22.6 million for the quarter ended June 30, 2025.                                                                                                                              
• Gross margin on loans sold totaled 3.60% for the quarter ended June 30, 2026, compared to 3.84% for the quarter ended June 30, 2025. This decrease was driven by lower sales margins, as secondary market investors remained concerned about elevated long-term rates.
• Total compensation, payroll taxes, and other employee benefits increased $253,000 or 1.6%, to $16.6 million during the quarter ended June 30, 2026 compared to $16.3 million during the quarter ended June 30, 2025. The increase primarily related to increased commission expense, manager pay expense, production incentive expense, and salary expense offset by a decrease in health insurance expense.

About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank, a community-focused financial institution established in 1921. WaterStone Bank offers a comprehensive suite of personal and business banking products and operates 14 branch locations across southeastern Wisconsin. WaterStone Bank is also the parent company of WaterStone Mortgage Corporation, a national lender licensed in 48 states.
With a long-standing commitment to innovation, integrity, and community service, Waterstone Financial, Inc. supports the financial and homeownership goals of customers nationwide. For more information about WaterStone Bank, go to wsbonline.com.

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

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