Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Twelve Months Ended December 31, 2025 

Wauwatosa, WI – 1/28/2026 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $7.7 million, or $0.44 per diluted share, for the quarter ended December 31, 2025 compared to $5.2 million, or $0.28 per diluted share, for the quarter ended December 31, 2024. Net income totaled $7.9 million, or $0.45 per diluted share, for the quarter ended September 30, 2025. Net income per diluted share was $1.48 for the twelve months ended December 31, 2025 compared to net income per diluted share of $1.01 for the twelve months ended December 31, 2024.

“We ended 2025 on a high note as net interest margin, deposit growth, and strong asset quality metrics resulted in our best quarterly pretax income since June 2022,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “The Community Banking segment achieved growth in net interest income of $2.6 million, or 20.4%, compared to the quarter ended December 31, 2024 as net interest margin grew to 2.89% for the quarter. The increases were primarily due to growth in yield on our loans held for investment and a reduction of our cost of funds. Strong asset quality and another quarter of net recoveries resulted in a release from our allowance for credit losses. The Mortgage Banking segment recorded a third straight quarter of pre-tax income due to an increase in refinance activity as rates decreased periodically throughout the quarter. We increased our book value per share $0.53 during the quarter with continued strong earnings, share repurchase program, and improving valuations on our investment security portfolio, prior to declaring a quarterly dividend of $0.15 per share. In total, $5.3 million was returned to shareholders through buybacks and dividends in the quarter.”

Highlights of the Quarter Ended December 31, 2025
Waterstone Financial, Inc. (Consolidated)
• Consolidated net income of Waterstone Financial, Inc. totaled $7.7 million for the quarter ended December 31, 2025 compared to net income of $5.2 million for the quarter ended December 31, 2024.
• Consolidated return on average assets (annualized) was 1.35% for the quarter ended December 31, 2025 and 0.94% for the quarter ended December 31, 2024.
• Consolidated return on average equity (annualized) was 8.74% for the quarter ended December 31, 2025 and 6.05% for the quarter ended December 31, 2024.
• Dividends declared during the quarter ended December 31, 2025 totaled $0.15 per common share.
• During the quarter ended December 31, 2025, we repurchased approximately 174,000 shares at a cost (including the federal excise tax) of $2.7 million, or $15.62 per share.
• Nonperforming assets as a percentage of total assets was 0.29% at December 31, 2025, 0.27% at September 30, 2025, and 0.28% at December 31, 2024.
• Past due loans as a percentage of total loans was 0.86% at December 31, 2025, 0.50% at September 30, 2025, and 0.90% at December 31, 2024.
• Book value per share was $19.03 at December 31, 2025 and $17.53 at December 31, 2024.

Community Banking Segment
• Pre-tax income totaled $9.1 million for the quarter ended December 31, 2025, which represents a $2.4 million, or 35.5%, increase compared to $6.7 million for the quarter ended December 31, 2024.
• Net interest income totaled $15.5 million for the quarter ended December 31, 2025, which represents a $2.6 million, or 20.4%, increase compared to $12.9 million for the quarter ended December 31, 2024.
• Average loans held for investment totaled $1.71 billion during the quarter ended December 31, 2025, which represents an increase of $30.3 million, or 1.8%, compared to the quarter ended December 31, 2024. The increase was primarily due to increases in multi-family and commercial real estate mortgages offset by a decrease in single-family mortgages. Average loans held for investment increased $30.1 million compared to $1.68 billion for the quarter ended September 30, 2025. The increase was primarily due to increases in multi-family and commercial real estate mortgages. The ending loan balance decreased $39.3 million from September 30, 2025 due to a few significant construction loan payoffs at year end.
• Net interest margin increased 47 basis points to 2.89% for the quarter ended December 31, 2025 compared to 2.42% for the quarter ended December 31, 2024, 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 13 basis points compared to 2.76% for the quarter ended September 30, 2025, which was primarily driven by decreases in cost of borrowings and weighted average cost of deposits.
• Past due loans at the community banking segment totaled $10.4 million at December 31, 2025, $6.8 million at September 30, 2025, and $12.8 million at December 31, 2024.
• The segment had a negative provision for credit losses related to funded loans of $252,000 for the quarter ended December 31, 2025 compared to a provision for credit losses related to funded loans of $61,000 for the quarter ended December 31, 2024. The current quarter decrease was primarily due to decreases in multi-family and construction loan balances. The negative provision for credit losses related to unfunded loan commitments was $266,000 for the quarter ended December 31, 2025 compared to a provision for credit losses related to unfunded loan commitments of $270,000 for the quarter ended December 31, 2024. The negative provision for credit losses related to unfunded loan commitments for the quarter ended December 31, 2025 was due primarily to decreases in the construction loans waiting to be funded and the loan pipeline compared to the prior quarter end.
• The efficiency ratio, a non-GAAP ratio, was 49.23% for the quarter ended December 31, 2025, compared to 51.54% for the quarter ended December 31, 2024.
• Average core retail deposits (excluding brokered and escrow accounts) totaled $1.32 billion during the quarter ended December 31, 2025, an increase of $49.0 million, or 3.8%, compared to $1.27 billion during the quarter ended December 31, 2024 due primarily to increases in money market and certificate of deposits balances. Average deposits increased $11.9 million, or 3.6% annualized, compared to $1.31 billion for the quarter ended September 30, 2025. The segment had an average of $105.5 million in brokered certificate of deposits during the quarter ended December 31, 2025 compared to $59.3 million during the quarter ended December 31, 2024.

Mortgage Banking Segment
• Pre-tax income totaled $900,000 for the quarter ended December 31, 2025, compared to a pretax loss of $625,000 for the quarter ended December 31, 2024.
• Loan originations increased $64.0 million, or 13.6%, to $534.6 million during the quarter ended December 31, 2025, compared to $470.7 million during the quarter ended December 31, 2024. Origination volume relative to purchase activity accounted for 78.9% of originations for the quarter ended December 31, 2025 compared to 82.1% of total originations for the quarter ended December 31, 2024.
• Mortgage banking non-interest income increased $2.7 million, or 15.6%, to $20.2 million for the quarter ended December 31, 2025, compared to $17.5 million for the quarter ended December 31, 2024.
• Gross margin on loans sold totaled 3.80% for the quarter ended December 31, 2025, compared to 3.74% for the quarter ended December 31, 2024.
• Total compensation, payroll taxes and other employee benefits increased $1.7 million or 12.4%, to $15.5 million during the quarter ended December 31, 2025 compared to $13.8 million during the quarter ended December 31, 2024. The increase primarily related to increased commission expense, manager pay expense, bonus expense, and 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.