Waterstone Financial, Inc. - FORM 8-K - EX-99.1

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8-K - Waterstone Financial, Inc.	form8k.htm

Exhibit 99.1

WATERSTONE FINANCIAL, INC.

WATERSTONE BANK

11200 W. PLANK CT.

WAUWATOSA, WI 53226

Contact: Allan Hosack

Chief Financial Officer

414.459.4010

allanhosack@wsbonline.com

Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Six Months Ended June 30, 2015.

WAUWATOSA, WI – 7/24/2015 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $5.3 million for the quarter ended June 30, 2015, compared to $3.0 million for the quarter ended March 31, 2015 and $3.8 million for the quarter ended June 30, 2014. For the quarter ended June 30, 2015, net income per diluted share was $0.17 as compared to $0.09 for the quarter ended March 31, 2015 and $0.11 for the quarter ended June 30, 2014. Net income totaled $8.3 million, or $0.26 per diluted share for the six months ended June 30, 2015, compared to $5.7 million, or $0.16 per diluted share for the six months ended June 30, 2014.

2nd Quarter 2015 Highlights and Net Income for the Six Months Ended June 30, 2015

·	Mortgage banking segment net income totaled $2.9 million for the quarter ended June 30, 2015 compared to $1.0 million for the quarter ended June 30, 2014. The quarter ended June 30, 2015 represents the fourth consecutive quarter in which the mortgage banking segment has outperformed the prior year comparative quarter. Mortgage banking operations were positively impacted by a higher volume of loans originated during the second quarter of 2015 compared to the second quarter of 2014. Loans originated for sale on the secondary market increased 26.3% to $596 million during the quarter ended June 30, 2015, compared to $472 million during the quarter ended June 30, 2014. Mortgage banking segment net income totaled $4.3 million for the six months ended June 30, 2015, compared to $1.0 million for the six months ended June 30, 2014.
·	Community banking segment net income totaled $2.4 million for the quarter ended June 30, 2015 compared to $2.8 million for the quarter ended June 30, 2014. The quarter ended June 30, 2015 included $1.1 million in writedowns to the carrying value of real estate owned, reflecting a plan to facilitate the liquidation of aged properties. The quarter ended June 30, 2014 included $440,000 in writedowns to real estate owned. Community banking segment net income totaled $4.0 million for the six months ended June 30, 2015, compared to $4.6 million for the six months ended June 30, 2014.
·	Total non-performing assets decreased $9.5 million, or 18.1%, to $43.0 million at June 30, 2015 from $52.6 million at March 31, 2015 and decreased $25.1 million, or 36.8%, from $68.1 million at June 30, 2014.
·	Past due loans decreased by $3.0 million, or 11.2%, to $23.7 million at June 30, 2015 from $26.7 million at March 31, 2015 and decreased $20.1 million, or 45.9% from $43.9 million at June 30, 2014. Loans past due less than 90 days decreased by $1.1 million, or 16.1%, to $5.6 million at June 30, 2015 from $6.7 million at March 31, 2015 and decreased $11.7 million, or 67.7%, from $17.4 million at June 30, 2014.
·	Total loans receivable increased $29.8 million, or 2.8%, to $1.09 billion at June 30, 2015 from $1.06 billion at March 31, 2015.
·	Continued a share purchase program, under which 3,895,015 shares were repurchased at an average price of $12.89 per share on the open market during the quarter ended June 30, 2015.

"The momentum of our Mortgage Banking growth continued into the second quarter wherein the division originated a record number of new purchase loans," said Douglas Gordon, President and Chief Executive Officer of the Company. "Loan growth in our Banking segment was also very strong and nonperforming assets continue to decline, strengthening our balance sheet."

About Waterstone Financial, Inc.

Waterstone Financial, Inc. (NASDAQ: WSBF) is a single-bank, holding company headquartered in Wauwatosa, WI. With $1.7 billion in assets at June 30, 2015, Waterstone has nine community bank branches in the metropolitan Milwaukee market, a loan production office in Minneapolis, Minnesota, and mortgage banking offices in seventeen states around the country. Additional financial detail related to WaterStone Bank, SSB can be found on the FDIC web site (www.fdic.gov) under the "Industry Analysis" tab.

Forward-Looking Statements

This press release contains 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." Such statements are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. These factors include (i) exposure to the deterioration in the commercial and residential real estate markets which could result in increased charge-offs and increases in the allowance for loan losses, (ii) various other factors, including changes in economic conditions affecting borrowers, new information regarding outstanding loans and identification of additional problem loans, which could require an increase in the allowance for loan losses, (iii) Waterstone's ability to maintain required levels of capital and other current and future regulatory requirements, (iv) the impact of recent and future legislative initiatives on the financial markets, and (v) those 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, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
	(In Thousands, except per share amounts)
Interest income:
Loans	$	14,065			14,568			27,378			28,236
Mortgage-related securities		820			748			1,659			1,307
Debt securities, federal funds sold and short-term investments		857			825			1,723			1,651
Total interest income		15,742			16,141			30,760			31,194
Interest expense:
Deposits		1,358			1,125			2,711			2,185
Borrowings		4,324			4,406			8,553			8,699
Total interest expense		5,682			5,531			11,264			10,884
Net interest income		10,060			10,610			19,496			20,310
Provision for loan losses		805			285			1,140			535
Net interest income after provision for loan losses		9,255			10,325			18,356			19,775
Noninterest income:
Service charges on loans and deposits		443			333			849			587
Increase in cash surrender value of life insurance		352			305			559			452
Mortgage banking income		29,577			22,188			50,616			36,690
Gain on sale of available for sale securities		-			-			44			-
Other		668			370			1,005			2,526
Total noninterest income		31,040			23,196			53,073			40,255
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		23,272			18,190			41,350			33,249
Occupancy, office furniture, and equipment		2,269			2,621			4,712			5,306
Advertising		712			838			1,365			1,574
Data processing		630			559			1,205			1,118
Communications		351			398			721			820
Professional fees		632			522			1,129			1,030
Real estate owned		686			705			1,229			1,253
FDIC insurance premiums		271			304			607			710
Other		3,124			3,466			6,057			6,174
Total noninterest expenses		31,947			27,603			58,375			51,234
Income before income taxes		8,348			5,918			13,054			8,796
Income tax expense		3,064			2,148			4,754			3,142
Net income	$	5,284			3,770			8,300			5,654
Income per share:
Basic	$	0.17			0.11			0.26			0.17
Diluted	$	0.17			0.11			0.26			0.16
Weighted average shares outstanding:
Basic		29,841			34,021			31,098			34,143
Diluted		31,190			34,252			31,413			34,385
Performance Ratios:
Return on average assets		1.21	%		0.85	%		0.95	%		0.63
Return on average equity		5.04	%		3.27	%		3.83	%		2.62
Net interest margin		2.46	%		2.53	%		2.38	%		2.42

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WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	June 30,			December 31,
	2015			2014
	(Unaudited)
Assets	(In Thousands, except share data)
Cash	$	28,631			145,846
Federal funds sold		11,623			21,268
Interest-earning deposits in other financial institutions and other short term investments		7,857			5,706
Cash and cash equivalents		48,111			172,820
Securities available for sale (at fair value)		269,495			273,443
Loans held for sale (at fair value)		207,920			125,073
Loans receivable		1,094,589			1,094,990
Less: Allowance for loan losses		18,360			18,706
Loans receivable, net		1,076,229			1,076,284

Office properties and equipment, net		24,859			25,562
Federal Home Loan Bank stock (at cost)		19,500			17,500
Cash surrender value of life insurance		51,587			50,848
Real estate owned, net		14,326			18,706
Prepaid expenses and other assets		25,196			23,144
Total assets	$	1,737,223			1,783,380

Liabilities and Shareholders' Equity
Liabilities:
Demand deposits	$	96,969			92,162
Money market and savings deposits		121,549			119,163
Time deposits		631,796			652,635
Total deposits		850,314			863,960

Borrowings		444,000			434,000
Advance payments by borrowers for taxes		16,634			4,991
Other liabilities		24,837			30,192
Total liabilities		1,335,785			1,333,143

Shareholders' equity:
Common stock		307			344
Additional paid-in capital		315,922			313,894
Retained earnings		162,575			157,304
Unearned ESOP shares		(21,958	)		(22,552
Accumulated other comprehensive income, net of taxes		114			1,247
Cost of shares repurchased		(55,522	)		-
Total shareholders' equity		401,438			450,237
Total liabilities and shareholders' equity	$	1,737,223			1,783,380

Share Information
Shares Outstanding - excluding unallocated ESOP shares		28,705			32,418
Shares Outstanding - including unallocated ESOP shares		30,707			34,420
Book Value per share - excluding unallocated ESOP shares	$	13.98			13.89
Book Value per share - including unallocated ESOP shares	$	13.07			13.08
Closing market price	$	13.20			13.15
Price to book ratio - excluding unallocated ESOP shares		94.39	%		95.73
Price to book ratio - including unallocated ESOP shares		100.97	%		100.53
Asset Quality Data
Total non accrual loans	$	28,715			38,011
Real estate owned		14,326			18,706
Total nonperforming assets	$	43,041			56,717

Total non accrual to total loans		2.62	%		3.47
Total nonperforming assets to total assets		2.48	%		3.18
Allowance for loan losses	$	18,360			18,706
Allowance for loan losses as a % to non-accrual loans		63.94	%		49.21

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WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
			(Unaudited)

	At or For the Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
	2015		2015		2014		2014		2014
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	10,060		9,436		10,083		10,914		10,610
Provision for loan losses		805		335		300		315		285
Total noninterest income		31,040		22,033		20,403		23,911		23,196
Total noninterest expense		31,947		26,428		26,553		27,030		27,603
Income before income taxes		8,348		4,706		3,633		7,480		5,918
Income tax expense		3,064		1,690		1,319		2,715		2,148
Net income	$	5,284		3,016		2,314		4,765		3,770
Income per share – basic	$	0.17		0.09		0.08		0.14		0.11
Income per share – diluted	$	0.17		0.09		0.08		0.14		0.11

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF SHARES REPURCHASED

For the quarter ended June 30, 2015
Total shares repurchased		3,895,015
Total cost of shares (including commission)	$	50,219,805
Average cost per share	$	12.89

For the six months ended June 30, 2015
Total shares repurchased		4,276,815
Total cost of shares (including commission)	$	55,172,608
Average cost per share	$	12.90

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Waterstone Financial, Inc. - FORM 8-K - EX-99.1 - July 24, 2015

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Waterstone Financial, Inc. Reports