Attached files
| file | filename |
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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: Douglas S. Gordon
President and CEO
414.459.4100
DouglasGordon@wsbonline.com
Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Year Ended December 31, 2015.
WAUWATOSA, WI – 02/26/2016 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $3.1 million for the quarter ended December 31, 2015, compared to $2.3 million for the quarter ended December 31, 2014 and $5.2 million for the quarter ended September 30, 2015. Net income totaled $16.6 million for the year ended December 31, 2015, compared to $12.7 million for the year ended December 31, 2014.
"We executed on our 2015 strategic plan by generating record pre-tax earnings; successfully opening two new bank branches in Greenfield and Fox Point; changing the mix of our assets and liabilities by growing commercial real estate loans, business banking loans and transaction deposits; launching our Investment Management division; reducing our non-performing assets; and, making progress on our capital initiatives repurchasing approximately 5.6 million shares of Waterstone stock at less than book value on average," said Douglas Gordon, CEO of Waterstone Financial, Inc. "We also expanded the reach of our mortgage subsidiary by opening locations in additional states while generating a record level of loan originations during the year."
Highlights of the Quarter and Year Ended December 31, 2015
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•
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For the quarter ended December 31, 2015, net income per diluted share was $0.11 as compared to $0.08 for the quarter ended December 31, 2014 and $0.19 for the quarter ended September 30, 2015. Net income per diluted share totaled $0.56 for the year ended December 31, 2015, compared to $0.38 for the year ended December 31, 2014.
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•
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Return on average assets totaled 0.94% for the year ended December 31, 2015 compared to 0.71% for the year ended December 31, 2014.
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•
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Total loans increased $19.9 million to $1.11 billion at December 31, 2015 compared to $1.09 billion at December 31, 2014.
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•
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Transaction deposits increased $32.0 million to $243.3 million at December 31, 2015 compared to $211.3 million at December 31, 2014. Demand deposits grew $10.5 million or 11.4% and money market and savings deposits grew $21.5 million or 18.0% at December 31, 2015 compared to December 31, 2014.
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•
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Total non-performing assets decreased $7.2 million, or 21.2%, to $26.8 million at December 31, 2015 from $34.0 million at September 30, 2015 and decreased $29.9 million, or 52.8%, from $56.7 million at December 31, 2014.
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•
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Loans past due less than 90 days decreased by $695,000, or 21.1%, to $2.6 million, or 0.2% of total loans at December 31, 2015 from $3.3 million at September 30, 2015 and decreased $6.4 million, or 71.2%, from $9.0 million at December 31, 2014. Total past due loans decreased by $4.1 million, or 26.4%, to $11.5 million at December 31, 2015 from $15.7 million at September 30, 2015 and decreased $22.6 million, or 66.2% from $34.1 million at December 31, 2014.
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•
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Loans originated by our mortgage banking subsidiary for the purpose of sale in the secondary market increased $325.0 million, or 19.6%, to $2.0 billion during 2015, compared to $1.7 billion during 2014. Our origination efforts continue to be focused on loans made for the purpose of residential purchases, as opposed to mortgage refinance. Origination volume relative to purchase activity accounted for 84% and 87% of total originations during the years ended December 31, 2015 and 2014, respectively.
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•
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Continued a share repurchase program, under which 42,700 shares were repurchased at an average price of $13.31 per share on the open market during the quarter ended December 31, 2015. A total of 5,593,753 shares were repurchased at an average price of $12.94 per share during the year ended December 31, 2015.
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About Waterstone Financial, Inc.
Waterstone Financial, Inc. (NASDAQ: WSBF) is a single-bank, holding company headquartered in Wauwatosa, WI. With $1.8 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.
- 5 -
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WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF INCOME
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For The Year Ended December 31,
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2015
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2014
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(In Thousands, except per share amounts)
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Interest income:
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||||||||
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Loans
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$
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55,175
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57,316
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|||||
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Mortgage-related securities
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3,229
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2,996
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Debt securities, federal funds sold and short-term investments
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3,559
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3,322
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||||||
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Total interest income
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61,963
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63,634
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Interest expense:
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||||||||
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Deposits
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5,879
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4,926
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||||||
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Borrowings
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17,240
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17,401
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Total interest expense
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23,119
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22,327
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||||||
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Net interest income
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38,844
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41,307
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||||||
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Provision for loan losses
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1,965
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1,150
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Net interest income after provision for loan losses
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36,879
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40,157
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Noninterest income:
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Service charges on loans and deposits
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1,648
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1,486
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Increase in cash surrender value of life insurance
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1,417
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1,290
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Gain on other-than-temporary investment
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-
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44
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||||||
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Portion of gain recognized in other comprehensive income (before tax)
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-
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(61
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)
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Net impairment losses recognized in earnings
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-
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(17
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)
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Mortgage banking income
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99,318
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77,982
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Gain on sale of available for sale securities
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44
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-
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Other
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2,047
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3,827
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Total noninterest income
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104,474
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84,568
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Noninterest expenses:
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Compensation, payroll taxes, and other employee benefits
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81,753
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69,172
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Occupancy, office furniture, and equipment
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9,287
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10,369
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Advertising
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2,947
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2,949
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Data processing
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2,354
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2,245
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Communications
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1,416
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1,690
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Professional fees
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2,354
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2,393
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Real estate owned
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2,664
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2,482
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FDIC insurance premiums
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1,058
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1,395
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Other
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11,701
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12,123
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Total noninterest expenses
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115,534
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104,818
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Income before income taxes
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25,819
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19,907
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Income tax expense
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9,249
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7,175
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Net income
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$
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16,570
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12,732
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Income per share:
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Basic
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$
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0.57
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0.38
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Diluted
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$
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0.56
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0.38
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Weighted average shares outstanding:
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Basic
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29,161
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33,406
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Diluted
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29,431
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33,643
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- 6 -
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WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
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December 31,
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2015
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2014
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(Unaudited)
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Assets
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(In Thousands, except per share amounts)
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Cash
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$
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57,419
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145,846
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Federal funds sold
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20,297
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21,268
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Interest-earning deposits in other financial institutions and other short term investments
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22,755
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5,706
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Cash and cash equivalents
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100,471
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172,820
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Securities available for sale (at fair value)
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269,658
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273,443
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Loans held for sale (at fair value)
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166,516
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125,073
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Loans receivable
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1,114,934
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1,094,990
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Less: Allowance for loan losses
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16,185
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18,706
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Loans receivable, net
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1,098,749
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1,076,284
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Office properties and equipment, net
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25,328
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25,562
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Federal Home Loan Bank stock (at cost)
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19,500
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17,500
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Cash surrender value of life insurance
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49,562
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50,848
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Real estate owned, net
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9,190
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18,706
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Prepaid expenses and other assets
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23,755
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23,144
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Total assets
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$
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1,762,729
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1,783,380
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Liabilities and Shareholders' Equity
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Liabilities:
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Demand deposits
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$
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102,673
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92,162
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Money market and savings deposits
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140,631
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119,163
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Time deposits
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650,057
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652,635
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Total deposits
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893,361
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863,960
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Borrowings
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441,203
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434,000
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Advance payments by borrowers for taxes
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3,661
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4,991
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Other liabilities
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32,574
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30,192
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Total liabilities
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1,370,799
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1,333,143
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Shareholders' equity:
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||||||||
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Common stock
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294
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344
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Additional paid-in capital
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317,022
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313,894
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Retained earnings
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168,089
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157,304
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Unearned ESOP shares
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(21,365
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)
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(22,552
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)
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Accumulated other comprehensive income, net of taxes
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582
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1,247
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Cost of shares repurchased
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(72,692
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)
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-
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|||||
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Total shareholders' equity
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391,930
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450,237
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Total liabilities and shareholders' equity
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$
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1,762,729
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1,783,380
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Share Information
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Shares Outstanding - excluding unallocated ESOP shares
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27,511
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32,418
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Shares Outstanding - including unallocated ESOP shares
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29,407
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34,420
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Book Value per share - excluding unallocated ESOP shares
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$
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14.25
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13.89
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Book Value per share - including unallocated ESOP shares
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$
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13.33
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13.08
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Closing market price
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$
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14.10
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13.15
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|||||
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Price to book ratio - excluding unallocated ESOP shares
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98.97
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%
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95.73
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%
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||||
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Price to book ratio - including unallocated ESOP shares
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105.79
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%
|
100.53
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%
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Asset Quality Data
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||||||||
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Total non accrual loans
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$
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17,604
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38,011
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Real estate owned
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9,190
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18,706
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Total nonperforming assets
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$
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26,794
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56,717
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|||||
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||||||||
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Total non accrual to total loans
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1.58
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%
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3.47
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%
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Total nonperforming assets to total assets
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1.52
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%
|
3.18
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%
|
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||||||||
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Allowance for loan losses
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$
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16,185
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18,706
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Allowance for loan losses as a % to non-accrual loans
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91.94
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%
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49.21
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%
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- 7 -
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WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
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SUMMARY OF KEY QUARTERLY FINANCIAL DATA
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(Unaudited)
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||||||||||||||||||||
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At or For the Three Months Ended
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|||||||||||||||||||
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December 31,
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September 30,
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June 30,
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March 31,
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December 31,
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|||||||||||||||
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2015
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2015
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2015
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2015
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2014
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(Dollars in Thousands)
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Condensed Results of Operations:
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Net interest income
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$
|
9,438
|
9,910
|
10,060
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9,436
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10,083
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||||||||||||||
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Provision for loan losses
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245
|
580
|
805
|
335
|
300
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|||||||||||||||
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Total noninterest income
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22,850
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28,551
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31,040
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22,033
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20,403
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|||||||||||||||
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Total noninterest expense
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27,373
|
29,786
|
31,947
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26,428
|
26,553
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|||||||||||||||
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Income before income taxes
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4,670
|
8,095
|
8,348
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4,706
|
3,633
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|||||||||||||||
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Income tax expense
|
1,599
|
2,896
|
3,064
|
1,690
|
1,319
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|||||||||||||||
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Net income
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$
|
3,071
|
5,199
|
5,284
|
3,016
|
2,314
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||||||||||||||
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Income per share – basic
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$
|
0.11
|
0.19
|
0.17
|
0.09
|
0.08
|
||||||||||||||
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Income per share – diluted
|
$
|
0.11
|
0.19
|
0.17
|
0.09
|
0.08
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||||||||||||||
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Performance Ratios:
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Return on average assets - QTD
|
0.69
|
%
|
1.18
|
%
|
1.21
|
%
|
0.69
|
%
|
0.51
|
%
|
||||||||||
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Return on average equity - QTD
|
3.10
|
%
|
5.21
|
%
|
5.04
|
%
|
2.71
|
%
|
2.04
|
%
|
||||||||||
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Net interest margin - QTD
|
2.26
|
%
|
2.39
|
%
|
2.46
|
%
|
2.31
|
%
|
2.36
|
%
|
||||||||||
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Efficiency ratio - QTD
|
84.78
|
%
|
77.44
|
%
|
77.73
|
%
|
83.98
|
%
|
87.10
|
%
|
||||||||||
|
Return on average assets - YTD
|
0.94
|
%
|
1.03
|
%
|
0.95
|
%
|
0.69
|
%
|
0.71
|
%
|
||||||||||
|
Return on average equity - YTD
|
3.99
|
%
|
4.26
|
%
|
3.83
|
%
|
2.71
|
%
|
2.89
|
%
|
||||||||||
|
Net interest margin - YTD
|
2.36
|
%
|
2.38
|
%
|
2.38
|
%
|
2.31
|
%
|
2.44
|
%
|
||||||||||
|
Efficiency ratio - YTD
|
80.61
|
%
|
79.40
|
%
|
80.44
|
%
|
83.98
|
%
|
83.27
|
%
|
||||||||||
|
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
|
||||
|
SUMMARY OF SHARES REPURCHASED
|
||||
|
AS PART OF PUBLICLY ANNOUNCED PLANS
|
||||
|
|
||||
|
For the quarter ended December 31, 2015
|
||||
|
Total shares repurchased
|
42,700
|
|||
|
Total cost of shares (including commission)
|
$
|
568,155
|
||
|
Average cost per share
|
$
|
13.31
|
||
|
|
||||
|
For the year ended December 31, 2015
|
||||
|
Total shares repurchased
|
5,593,753
|
|||
|
Total cost of shares (including commission)
|
$
|
72,355,935
|
||
|
Average cost per share
|
$
|
12.94
|
||
- 8 -