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

WAUWATOSA, WI – 10/23/2015 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $5.2 million for the quarter ended September 30, 2015, compared to $4.8 million for the quarter ended September 30, 2014 and $5.3 million for the quarter ended June 30, 2015. Net income totaled $13.5 million for the nine months ended September 30, 2015, compared to $10.4 million for the nine months ended September 30, 2014.

"The execution of our strategic plan continues with strong quarterly earnings, the expansion of our bank branch network with new locations in Greenfield and Fox Point, technology enhancements in the form of mobile check deposit, capital management initiatives such as our stock repurchase program, and strengthening asset quality, all of which are designed to enhance and grow long term shareholder value,' said Douglas Gordon, President and Chief Executive Officer of the Company.

3rd Quarter 2015 Highlights and Net Income for the Nine Months Ended September 30, 2015

 

	•	For the quarter ended September 30, 2015, net income per diluted share was $0.19 as compared to $0.14 for the quarter ended September 30, 2014 and $0.17 for the quarter ended June 30, 2015.  Net income per diluted share totaled $0.45 for the nine months ended September 30, 2015, compared to $0.31 for the nine months ended September 30, 2014.
	•	Annualized return on average assets totaled 1.18% for the quarter ended September 30, 2015 compared to 1.05% for the quarter ended September 30, 2014 and 1.21% for the quarter ended June 30, 2015.  Annualized return on average assets totaled 1.03% for the nine months ended September 30, 2015 compared to 0.78% for the nine months ended September 30, 2014.
	•	Mortgage banking segment net income totaled $2.8 million for the quarter ended September 30, 2015 compared to $1.2 million for the quarter ended September 30, 2014.  The quarter ended September 30, 2015 represents the fifth 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 third quarter of 2015 compared to the third quarter of 2014.  Loans originated for sale on the secondary market increased 12.3% to $550 million during the quarter ended September 30, 2015, compared to $490 million during the quarter ended September 30, 2014.  Mortgage banking segment net income totaled $7.1 million for the nine months ended September 30, 2015, compared to $2.3 million for the nine months ended September 30, 2014, driven by higher volumes and margin.  Loan origination volume continues to be focused in the purchase market, as opposed to loan refinance, as loans originated for the purpose of a residential purchase represented approximately 84% of total current year loan originations.
	•	Community banking segment net income totaled $2.5 million for the quarter ended September 30, 2015 compared to $3.4 million for the quarter ended September 30, 2014.  Community banking segment net income totaled $6.5 million for the nine months ended September 30, 2015, compared to $8.0 million for the nine months ended September 30, 2014.
	•	Total non-performing assets decreased $9.0 million, or 21.0%, to $34.0 million at September 30, 2015 from $43.0 million at June 30, 2015 and decreased $35.0 million, or 50.7%, from $69.0 million at September 30, 2014.
	•	As a result of management's focus to clear the remaining nonperforming assets from the balance sheet, the nine months ended September 30, 2015 included $1.5 million in provision for loan losses, compared to $750,000 during the nine months ended September 30, 2014 in the community banking segment.  In addition, the nine months ended September 30, 2015 included $1.5 million in writedowns to the carrying value of real estate owned in the community banking segment, reflecting a plan to facilitate the liquidation of aged properties.  The nine months ended September 30, 2014 included writedowns totaling $1.0 million.
	•	Loans past due less than 90 days decreased by $2.3 million, or 41.1%, to $3.3 million, or 0.3% of total loans at September 30, 2015 from $5.6 million at June 30, 2015 and decreased $2.0 million, or 37.6%, from $5.3 million at September 30, 2014.  Total past due loans decreased by $8.1 million, or 34.0%, to $15.7 million at September 30, 2015 from $23.7 million at June 30, 2015 and decreased $19.0 million, or 54.8% from $34.6 million at September 30, 2014.
	•	Total deposits increased $22.8 million compared to June 30, 2015, primarily driven by a $14.9 million increase in money market and savings deposits.  The growth in deposits reflects management's plan to use retail funds to replace the $50.0 million FHLB advance (at 4.01%) which matures in January 2016.
	•	Continued a share repurchase program, under which 1,274,238 shares were repurchased at an average price of $13.04 per share on the open market during the quarter ended September 30, 2015.

 

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 Waterstone has eleven community bank branches in the metropolitan Milwaukee market, a loan production office in Minneapolis, Minnesota, and mortgage banking offices in eighteen 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.