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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.

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		For The Three Months Ended June 30,								For The Six Months Ended June 30,
		2017				2016				2017				2016
		(In Thousands, except per share amounts)
Interest income:
Loans		$	14,985				14,073				29,223				27,857
Mortgage-related securities			678				790				1,374				1,628
Debt securities, federal funds sold and short-term investments			877				885				1,729				1,859
Total interest income			16,540				15,748				32,326				31,344
Interest expense:
Deposits			1,838				1,835				3,633				3,554
Borrowings			2,221				3,748				4,317				7,642
Total interest expense			4,059				5,583				7,950				11,196
Net interest income			12,481				10,165				24,376				20,148
Provision for loan losses			25				-				(1,186	)			205
Net interest income after provision for loan losses			12,456				10,165				25,562				19,943
Noninterest income:
Service charges on loans and deposits			481				616				848				953
Increase in cash surrender value of life insurance			470				471				788				712
Loss on sale of available for sale securities			(107	)			-				(107	)			-
Mortgage banking income			36,224				34,980				60,911				55,594
Other			173				284				738				537
Total noninterest income			37,241				36,351				63,178				57,796
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			27,584				25,709				47,579				43,395
Occupancy, office furniture, and equipment			2,527				2,419				5,054				4,755
Advertising			869				655				1,593				1,313
Data processing			633				638				1,231				1,281
Communications			397				372				776				714
Professional fees			717				489				1,324				1,012
Real estate owned			(133	)			163				278				307
FDIC insurance premiums			117				155				237				360
Other			3,476				3,631				7,173				6,316
Total noninterest expenses			36,187				34,231				65,245				59,453
Income before income taxes			13,510				12,285				23,495				18,286
Income tax expense			4,622				4,518				8,035				6,658
Net income		$	8,888				7,767				15,460				11,628
Income per share:
Basic		$	0.32				0.29				0.56				0.43
Diluted		$	0.32				0.29				0.55				0.43
Weighted average shares outstanding:
Basic			27,487				26,919				27,406				26,942
Diluted			27,955				27,204				27,913				27,243

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		June 30,				December 31,
		2017				2016
		(Unaudited)
Assets		(In Thousands, except per share amounts)
Cash		$	84,013			$	7,878
Federal funds sold			29,382				26,828
Interest-earning deposits in other financial institutions and other short term investments			16,165				12,511
Cash and cash equivalents			129,560				47,217
Securities available for sale (at fair value)			209,079				226,795
Loans held for sale (at fair value)			196,644				225,248
Loans receivable			1,225,762				1,177,884
Less: Allowance for loan losses			14,612				16,029
Loans receivable, net			1,211,150				1,161,855
Office properties and equipment, net			23,170				23,655
Federal Home Loan Bank stock (at cost)			18,675				13,275
Cash surrender value of life insurance			64,978				61,509
Real estate owned, net			4,784				6,118
Prepaid expenses and other assets			28,270				24,947
Total assets		$	1,886,310			$	1,790,619
Liabilities and Shareholders' Equity
Liabilities:
Demand deposits		$	119,585			$	120,371
Money market and savings deposits			153,743				162,456
Time deposits			664,065				666,584
Total deposits			937,393				949,411
Borrowings			498,103				387,155
Advance payments by borrowers for taxes			18,842				4,716
Other liabilities			23,965				38,647
Total liabilities			1,478,303				1,379,929
Shareholders' equity:
Common stock			296				294
Additional paid-in capital			325,003				322,934
Retained earnings			179,512				184,565
Unearned ESOP shares			(19,584	)			(20,178	)
Accumulated other comprehensive income (loss), net of taxes			237				(378	)
Cost of shares repurchased			(77,457	)			(76,547	)
Total shareholders' equity			408,007				410,690
Total liabilities and shareholders' equity		$	1,886,310			$	1,790,619
Share Information
Shares Outstanding			29,554				29,430
Book Value per share		$	13.81			$	13.95
Closing market price		$	18.85			$	18.40
Price to book ratio			136.50	%			131.85	%

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,
		2017				2017				2016				2016				2016
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	12,481				11,895				11,971				11,325				10,165
Provision for loan losses			25				(1,211	)			40				135				-
Total noninterest income			37,241				25,937				31,157				37,412				36,351
Total noninterest expense			36,187				29,058				32,441				35,541				34,231
Income before income taxes			13,510				9,985				10,647				13,061				12,285
Income tax expense			4,622				3,413				4,248				5,556				4,518
Net income		$	8,888				6,572				6,399				7,505				7,767
Income per share – basic		$	0.32				0.24				0.23				0.28				0.29
Income per share – diluted		$	0.32				0.24				0.23				0.27				0.29
Dividends declared per share		$	0.62				0.12				0.12				0.08				0.08
Performance Ratios:
Return on average assets - QTD			1.99	%			1.54	%			1.44	%			1.66	%			1.78	%
Return on average equity - QTD			8.70	%			6.44	%			6.19	%			7.36	%			7.86	%
Net interest margin - QTD			3.00	%			2.97	%			2.88	%			2.70	%			2.50	%
Community Banking Segment
Efficiency ratio - QTD			48.76	%			55.69	%			51.00	%			50.85	%			57.64	%
Return on average assets - YTD			1.77	%			1.54	%			1.45	%			1.45	%			1.34	%
Return on average equity - YTD			7.56	%			6.44	%			6.33	%			6.38	%			5.89	%
Net interest margin - YTD			2.98	%			2.97	%			2.64	%			2.56	%			2.49	%
Community Banking Segment
Efficiency ratio - YTD			52.09	%			55.69	%			55.40	%			57.06	%			60.76	%
Asset Quality Ratios:
Past due loans to total loans			0.74	%			0.71	%			0.70	%			0.76	%			0.71	%
Non accrual loans to total loans			0.70	%			0.67	%			0.84	%			0.93	%			1.01	%
Non performing assets to total assets			0.71	%			0.76	%			0.89	%			1.01	%			1.11	%