•	Consolidated net income of Waterstone Financial, Inc. totaled $7.5 million for the quarter ended September 30, 2016, compared to $5.2 million for the quarter ended September 30, 2015.

•	Consolidated net income of Waterstone Financial, Inc. totaled $19.1 million for the nine months ended September 30, 2016, compared to $13.5 million for the nine months ended September 30, 2015.

•	Return on average assets totaled 1.66% for the three months ended September 30, 2016 compared to 1.18% for the three months ended September 30, 2015.

•	Return on average assets totaled 1.45% for the nine months ended September 30, 2016 compared to 1.03% for the nine months ended September 30, 2015.

•	Pre-tax income of the Community Banking segment totaled $6.2 million for the quarter ended September 30, 2016, which represents an 82.2% increase compared to pre-tax income of $3.4 million for the quarter ended September 30, 2015.

•	Net interest margin increased 31 bps to 2.70% for the three months ended September 30, 2016 compared to 2.39% for the three month period ended September 30, 2015.

•	Total loans increased $51.1 million, or 4.6%, to $1.15 billion at September 30, 2016 compared to $1.10 billion at September 30, 2015 and increased $21.7 million, or 1.9%, compared to June 30, 2016.

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Total deposits increased $82.5 million, or 9.4%, to $955.6 million at September 30, 2016 compared to $873.2 million at September 30, 2015.  Total transaction deposits increased $35.5 million, or 15.3%, to $268.3 million at September 30, 2016 compared to $232.8 million at September 30, 2015.  The increase in transaction deposits was composed of growth in demand deposits of $14.5 million or 15.1% and growth of money market and savings deposits of $21.0 million, or 15.4%.

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Total deposits increased $12.9 million, or 1.4%, compared to June 30, 2016.  Total transaction deposits increased $7.7 million, or 3.0%, compared to June 30, 2016.  The $7.7 million increase in transaction deposits was composed of growth in demand deposits of $4.8 million, or 4.5%, and growth of money market and savings deposits of $2.9 million, or 1.9%.

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Borrowings decreased $56.0 million to $378.0 million at September 30, 2016 from $434.0 million at September 30, 2015.  A total of $50.0 million of fixed rate borrowings were paid off during the 1st quarter with funds raised through retail delivery channels.  During the 2nd quarter, a total of $20.0 million of fixed rate borrowings, at a weighted average rate of 4.49%, matured.  During the 3rd quarter, $150.0 million in advances at a weighted average rate of 4.44% matured and paid off.  A total of $100.0 million of new long-term borrowings were added during the year at a combined rate of 0.78%.  Additionally, a $50.0 million short-term advance was added during the 3rd quarter at a rate of 0.29%.

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Total non-performing assets decreased $8.7 million, or 32.4%, to $18.1 million at September 30, 2016 from $26.8 million at December 31, 2015 and decreased $15.9 million, or 46.7%, from $34.0 million at September 30, 2015.  Non-performing assets represent 1.01% of total assets as of September 30, 2016.

•	Total past due loans decreased by $2.8 million, or 24.1%, to $8.8 million at September 30, 2016 from $11.5 million at December 31, 2015 and decreased $6.9 million, or 44.1% from $15.7 million at September 30, 2015.  Past due loans represent 0.8% of total loans as of September 30, 2016.

•	Pre-tax income of the Mortgage Banking segment totaled $6.8 million for the quarter ended September 30, 2016, which represents an increase of $2.1 million, or 44.6%, compared to $4.7 million for the quarter ended September 30, 2015.

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Loans originated by the Mortgage Banking segment for the purpose of sale in the secondary market increased $160.1 million, or 29.1%, to $710.1 million during the three months ended September 30, 2016, compared to $550.0 million for the three months ended September 30, 2015.  The increase in originations was driven by an increase in the origination of loans made for the purpose of residential purchases, which yield a higher margin than refinance loans, partially offset by a decrease in the origination of mortgage refinance products.  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 82% and 88% of total originations for the three months ended September 30, 2016 and 2015, respectively.  Year to date origination volume totaled $1.76 billion during 2016, compared to $1.55 billion during 2015.

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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.