• Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Year Ended December 31, 2021

    المصدر: Nasdaq GlobeNewswire / 27 يناير 2022 15:05:01   America/Chicago

    WAUWATOSA, Wis., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $12.6 million, or $0.53 per diluted share for the quarter ended December 31, 2021 compared to $27.8 million, or $1.17 per diluted share for the quarter ended December 31, 2020. Net income per diluted share was $2.96 for the year ended December 31, 2021 compared to net income per diluted share of $3.30 for the year ended December 31, 2020.

    “We achieved another quarter of strong financial results due to the continued dedication and efforts of our employees,” said Douglas Gordon, Chief Executive Officer of Waterstone Financial, Inc. “We continue to execute and build a stronger financial position. Given the performance over the past two years, we were excited to announce a new 3.5 million share repurchase program and declare a $0.50 special dividend during the quarter as we continue to deliver for our valued shareholders.”

    Highlights of the Quarter Ended December 31, 2021

    Waterstone Financial, Inc. (Consolidated)

    • Consolidated net income of Waterstone Financial, Inc. totaled $12.6 million for the quarter ended December 31, 2021, compared to $27.8 million for the quarter ended December 31, 2020.
    • Consolidated return on average assets was 2.22% for the quarter ended December 31, 2021 compared to 4.96% for the quarter ended December 31, 2020.
    • Consolidated return on average equity was 11.14% for the quarter ended December 31, 2021 and 27.11% for the quarter ended December 31, 2020.
    • Dividends declared during the quarter ended December 31, 2021 totaled $0.70 per common share.
    • We authorized a new share repurchase program, under which we will seek to repurchase up to 3.5 million shares, representing approximately 14.1% of outstanding shares.
    • We repurchased approximately 264,000 shares at a cost of $5.5 million during the quarter ended December 31, 2021.

    Community Banking Segment

    • Pre-tax income totaled $8.4 million for the quarter ended December 31, 2021, which represents a $338,000, or 3.9%, decrease compared to $8.7 million for the quarter ended December 31, 2020.
    • Net interest income totaled $13.2 million for the quarter ended December 31, 2021, which represents a $1.3 million, or 9.3%, decrease compared to $14.5 million for the quarter ended December 31, 2020.
    • Average loans held for investment totaled $1.21 billion during the quarter ended December 31, 2021, which represents a decrease of $191.8 million, or 13.7%, compared to $1.40 billion for the quarter ended December 31, 2020. Average loans held for investment decreased $44.4 million compared to $1.26 billion for the quarter ended September 30, 2021 as residential real estate loans continued to prepay at an accelerated rate.
    • Net interest margin decreased 26 basis points to 2.47% for the quarter ended December 31, 2021 compared to 2.73% for the quarter ended December 31, 2020, which was a result of lower rates and average balance on loans and a higher average interest earnings cash balance within the debt securities, federal funds sold and short term investments category. Net interest margin decreased 21 basis points compared to 2.68% for the quarter ended September 30, 2021, driven by a decrease in average loan balance and a higher average cash balance.
    • The segment had a negative provision for loan losses of $1.5M for the quarter ended December 31, 2021 compared to no provision for loan losses for the quarter ended December 31, 2020. Net recoveries totaled $458,000 for the quarter ended December 31, 2021, as one significant loan recovery payment was received during the quarter, compared to net charge-offs of $51,000 for the quarter ended December 31, 2020.
    • The efficiency ratio was 53.02% for the quarter ended December 31, 2021, compared to 46.15% for the quarter ended December 31, 2020.
    • Average deposits (excluding escrow accounts) totaled $1.25 billion during the quarter ended December 31, 2021, an increase of $65.5 million, or 5.6%, compared to $1.18 billion during the quarter ended December 31, 2020. Average deposits decreased $9.9 million, or 3.2% annualized compared to the $1.26 billion for the quarter ended September 30, 2021.
    • Nonperforming assets as percentage of total assets was 0.26% at December 31, 2021, 0.18% at September 30, 2021, and 0.27% at December 31, 2020.
    • Past due loans as percentage of total loans was 0.59% at December 31, 2021, 0.92% at September 30, 2021, and 0.57% at December 31, 2020.
    • PPP loans totaled $1.8 million as of December 31, 2021. The average balance for the quarter ended December 31, 2021 was $2.7 million. For the quarter ended December 31, 2021, PPP loan interest income recognized was approximately $7,000 and the amortization of fee income was approximately $101,000.
    • The Company held approximately $3.3 million in loans, representing 0.3% of the total loan portfolio as of December 31, 2021, which had been modified as either a deferment of principal or principal and interest since the beginning of the pandemic. Of the $3.3 million in loans, $405,000 qualify as modifications under the Coronavirus Aid, Relief and Economic Security (“CARES Act”). The remaining $2.9 million is composed of three loan relationships that are classified as troubled debt restructurings.

    Mortgage Banking Segment

    • Pre-tax income totaled $7.3 million for the quarter ended December 31, 2021, compared to $28.3 million for the quarter ended December 31, 2020.
    • Loan originations decreased $289.2 million, or 22.6%, to $993.1 million during the quarter ended December 31, 2021, compared to $1.28 billion during the quarter ended December 31, 2020. Origination volume relative to purchase activity accounted for 73.8% of originations for the quarter ended December 31, 2021 compared to 59.2% of total originations for the quarter ended December 31, 2020.
    • Mortgage banking non-interest income decreased $27.8 million, or 40.6%, to $40.7 million for the quarter ended December 31, 2021, compared to $68.5 million for the quarter ended December 31, 2020. During the quarter ended December 31, 2020, the Company sold mortgage servicing rights related to $975.9 million in loans receivable and with a book value of $6.4 million for $7.0 million resulting in a gain on sale of $600,000. There was no comparable sale during the quarter ended December 31, 2021. As of December 31, 2021, the Company maintained servicing rights related to $160.8 million in loans previously sold to third parties.
    • Gross margin on loans sold decreased to 4.18% for the quarter ended December 31, 2021, compared to 5.40% for the quarter ended December 31, 2020.
    • Total compensation, payroll taxes and other employee benefits decreased $5.5 million, or 16.4%, to $27.9 million during the quarter ended December 31, 2021 compared to $33.3 million during the quarter ended December 31, 2020. The decrease primarily related to decreased commission expense and branch manager compensation driven by decreased loan origination volume and branch profitability as gross margins decreased.
    • Other noninterest expense decreased $665,000 to $1.4 million during the quarter ended December 31, 2021 compared to $2.1 million during the quarter ended December 31, 2020. The decrease related to a decrease in the amortization expense on mortgage servicing rights due to the bulk sale of mortgage servicing rights during 2021 and a reduced provision for loan sale losses as origination volumes decreased.

    Recent Developments:

    COVID-19 Pandemic and the CARES Act

    The CARES Act, signed into law at the end of March 2020, allowed for a temporary delay in the adoption of accounting guidance under Accounting Standards Codification Topic 326, “Financial Instruments – Credit Losses (“CECL”) until the earlier of December 31, 2020 or the 60th day after the end of the COVID-19 national emergency. During the quarter ended June 30, 2020, pursuant to the CARES Act and guidance from the Securities and Exchange Commission (“SEC”) and Financial Accounting Standards Board (“FASB”), we elected to delay adoption of CECL. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law. Among other provisions, this Act extended the temporary delay on the adoption of CECL until January 1, 2022. We have elected to continue to delay adoption of CECL. As a result, our financial statements for the quarter and year ended December 31, 2021 include an allowance for loan losses that was prepared under the existing incurred loss methodology.

    About Waterstone Financial, Inc.

    Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.

    Forward-Looking Statements

    This press release contains statements or information that may constitute 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.” Any such statements are based upon current expectations that involve a number of risks and uncertainties and are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. Factors that might cause such a difference include changes in interest rates; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies, including significant disruption to financial market and other economic activity caused by the outbreak of COVID-19; and other factors, including risk 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.


    WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES 
    CONSOLIDATED STATEMENTS OF INCOME 
    (Unaudited) 
     For The Three Months Ended December 31,For The Year Ended December 31, 
      2021  2020  2021  2020  
     (In Thousands, except per share amounts) 
    Interest income:     
    Loans$15,152 $18,229 $64,366 $72,633  
    Mortgage-related securities 506  528  1,954  2,488  
    Debt securities, federal funds sold and short-term investments 926  870  3,563  3,363  
    Total interest income 16,584  19,627  69,883  78,484  
    Interest expense:     
    Deposits 878  2,605  4,420  14,365  
    Borrowings 2,534  2,706  9,948  10,619  
    Total interest expense 3,412  5,311  14,368  24,984  
    Net interest income 13,172  14,316  55,515  53,500  
    Provision (credit) for loan losses (1,470) 30  (3,990) 6,340  
    Net interest income after provision (credit) for loan losses 14,642  14,286  59,505  47,160  
    Noninterest income:     
    Service charges on loans and deposits 842  1,078  3,325  4,462  
    Increase in cash surrender value of life insurance 318  318  1,615  1,905  
    Mortgage banking income 40,448  66,953  191,035  233,245  
    Other 408  1,537  7,220  4,405  
    Total noninterest income 42,016  69,886  203,195  244,017  
    Noninterest expenses:     
    Compensation, payroll taxes, and other employee benefits 32,837  38,351  135,115  139,046  
    Occupancy, office furniture, and equipment 2,266  2,479  9,612  10,223  
    Advertising 958  1,066  3,528  3,691  
    Data processing 1,079  918  3,950  3,941  
    Communications 321  335  1,309  1,329  
    Professional fees 471  471  1,275  8,118  
    Real estate owned 14  (63) 3  (8) 
    Loan processing expense 940  1,026  4,610  4,646  
    Other 2,088  2,580  11,192  12,075  
    Total noninterest expenses 40,974  47,163  170,594  183,061  
    Income before income taxes 15,684  37,009  92,106  108,116  
    Income tax expense 3,131  9,174  21,315  26,971  
    Net income$12,553 $27,835 $70,791 $81,145  
    Income per share:     
    Basic$0.53 $1.17 $2.98 $3.32  
    Diluted$0.53 $1.17 $2.96 $3.30  
    Weighted average shares outstanding:     
    Basic 23,598  23,703  23,741  24,464  
    Diluted 23,802  23,877  23,931  24,607  


    WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES 
    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 
     December 31,December 31, 
     20212020 
     (Unaudited)  
    Assets(In Thousands, except per share amounts) 
    Cash$343,016 $56,190  
    Federal funds sold 13,981  18,847  
    Interest-earning deposits in other financial institutions and other short term investments 19,725  19,730  
    Cash and cash equivalents 376,722  94,767  
    Securities available for sale (at fair value) 179,016  159,619  
    Loans held for sale (at fair value) 312,738  402,003  
    Loans receivable 1,205,785  1,375,137  
    Less: Allowance for loan losses 15,778  18,823  
    Loans receivable, net 1,190,007  1,356,314  
        
    Office properties and equipment, net 22,273  23,722  
    Federal Home Loan Bank stock (at cost) 24,438  26,720  
    Cash surrender value of life insurance 65,368  63,573  
    Real estate owned, net 148  322  
    Prepaid expenses and other assets 45,148  57,547  
    Total assets$2,215,858 $2,184,587  
        
    Liabilities and Shareholders' Equity   
    Liabilities:   
    Demand deposits$214,409 $188,225  
    Money market and savings deposits 392,314  295,317  
    Time deposits 626,663  701,328  
    Total deposits 1,233,386  1,184,870  
        
    Borrowings 477,127  508,074  
    Advance payments by borrowers for taxes 4,094  3,522  
    Other liabilities 68,478  75,003  
    Total liabilities 1,783,085  1,771,469  
        
    Shareholders' equity:   
    Preferred stock -  -  
    Common stock 248  251  
    Additional paid-in capital 174,505  180,684  
    Retained earnings 273,398  245,287  
    Unearned ESOP shares (14,243) (15,430) 
    Accumulated other comprehensive (loss) income, net of taxes (1,135) 2,326  
    Total shareholders' equity 432,773  413,118  
    Total liabilities and shareholders' equity$2,215,858 $2,184,587  
        
    Share Information    
    Shares outstanding 24,795  25,088  
    Book value per share$17.45 $16.47  
    Closing market price$21.86 $18.82  
    Price to book ratio 125.27% 114.27% 


    WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
    SUMMARY OF KEY QUARTERLY FINANCIAL DATA
    (Unaudited)
          
     At or For the Three Months Ended
     December 31,September 30,June 30,March 31,December 31,
     20212021202120212020
     (Dollars in Thousands, except per share amounts)
    Condensed Results of Operations:     
    Net interest income$13,172 $14,114 $14,277 $13,952 $14,316 
    Provision (credit) for loan losses (1,470) (700) (750) (1,070) 30 
    Total noninterest income 42,016  52,936  52,044  56,199  69,886 
    Total noninterest expense 40,974  43,323  43,297  43,000  47,163 
    Income before income taxes 15,684  24,427  23,774  28,221  37,009 
    Income tax expense 3,131  5,427  5,880  6,877  9,174 
    Net income$12,553 $19,000 $17,894 $21,344 $27,835 
    Income per share - basic$0.53 $0.80 $0.75 $0.90 $1.17 
    Income per share - diluted$0.53 $0.79 $0.74 $0.89 $1.17 
    Dividends declared per share$0.70 $0.20 $0.70 $0.20 $0.50 
          
    Performance Ratios (annualized):     
    Return on average assets - QTD 2.22% 3.38% 3.25% 3.99% 4.96%
    Return on average equity - QTD 11.14% 17.25% 16.49% 20.49% 27.11%
    Net interest margin - QTD 2.47% 2.68% 2.78% 2.80% 2.73%
          
    Return on average assets - YTD 3.20% 3.54% 3.62% 3.99% 3.77%
    Return on average equity - YTD 16.38% 18.08% 18.49% 20.49% 20.18%
    Net interest margin - YTD 2.68% 2.75% 2.79% 2.80% 2.67%
          
    Asset Quality Ratios:     
    Past due loans to total loans 0.59% 0.92% 0.53% 0.52% 0.57%
    Nonaccrual loans to total loans 0.46% 0.32% 0.34% 0.31% 0.40%
    Nonperforming assets to total assets 0.26% 0.18% 0.20% 0.20% 0.27%
    Allowance for loan losses to loans receivable 1.31% 1.37% 1.34% 1.33% 1.37%


    WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
    SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
    (Unaudited)
          
     At or For the Three Months Ended
     December 31,September 30,June 30,March 31,December 31,
     20212021202120212020
    Average balances(Dollars in Thousands)
    Interest-earning assets     
    Loans receivable and held for sale$1,517,984 $1,573,194 $1,655,078 $1,657,260 $1,775,455 
    Mortgage related securities 119,709  108,743  100,056  90,457  91,199 
    Debt securities, federal funds sold and short term investments 475,574  409,559  308,105  273,929  217,356 
        Total interest-earning assets 2,113,267  2,091,496  2,063,239  2,021,646  2,084,010 
    Noninterest-earning assets 131,703  137,454  143,375  147,781  147,573 
        Total assets$2,244,970 $2,228,950 $2,206,614 $2,169,427 $2,231,583 
          
    Interest-bearing liabilities     
    Demand accounts$70,762 $68,478 $63,610 $55,552 $53,771 
    Money market, savings, and escrow accounts 398,210  391,599  350,270  314,418  304,467 
    Certificates of deposit 643,546  663,343  690,196  705,712  726,132 
        Total interest-bearing deposits 1,112,518  1,123,420  1,104,076  1,075,682  1,084,370 
    Borrowings 481,971  475,000  480,054  482,665  546,070 
        Total interest-bearing liabilities 1,594,489  1,598,420  1,584,130  1,558,347  1,630,440 
    Noninterest-bearing demand deposits 153,303  153,436  141,648  138,446  128,665 
    Noninterest-bearing liabilities 49,982  40,148  45,658  50,188  64,001 
        Total liabilities 1,797,774  1,792,004  1,771,436  1,746,981  1,823,106 
    Equity 447,196  436,946  435,178  422,446  408,477 
        Total liabilities and equity$2,244,970 $2,228,950 $2,206,614 $2,169,427 $2,231,583 
          
    Average Yield/Costs (annualized)     
    Loans receivable and held for sale 3.96% 4.07% 3.99% 4.06% 4.08%
    Mortgage related securities 1.68% 1.72% 1.95% 2.20% 2.30%
    Debt securities, federal funds sold and short term investments 0.77% 0.88% 1.12% 1.30% 1.59%
        Total interest-earning assets 3.11% 3.32% 3.47% 3.60% 3.75%
          
    Demand accounts 0.08% 0.08% 0.08% 0.07% 0.07%
    Money market and savings accounts 0.22% 0.24% 0.23% 0.32% 0.53%
    Certificates of deposit 0.40% 0.42% 0.50% 0.72% 1.20%
        Total interest-bearing deposits 0.31% 0.33% 0.39% 0.57% 0.96%
    Borrowings 2.09% 2.04% 2.06% 2.10% 1.97%
        Total interest-bearing liabilities 0.85% 0.84% 0.90% 1.05% 1.30%


    COMMUNITY BANKING SEGMENT
    SUMMARY OF KEY QUARTERLY FINANCIAL DATA
    (Unaudited)
          
     At or For the Three Months Ended
     December 31,September 30,June 30,March 31,December 31,
     20212021202120212020
     (Dollars in Thousands)
    Condensed Results of Operations:     
    Net interest income$13,197 $14,090 $14,517 $14,247 $14,546 
    Provision (credit) for loan losses (1,500) (750) (750) (1,100) - 
    Total noninterest income 1,459  1,726  1,630  1,243  1,655 
    Noninterest expenses:     
    Compensation, payroll taxes, and other employee benefits 5,085  5,360  4,874  4,975  5,159 
    Occupancy, office furniture and equipment 960  909  887  1,025  934 
    Advertising 278  233  260  209  244 
    Data processing 531  531  466  511  511 
    Communications 100  122  86  119  110 
    Professional fees 151  130  198  194  5 
    Real estate owned 14  1  -  (12) (63)
    Loan processing expense -  -  -  -  - 
    Other 651  422  461  440  577 
    Total noninterest expense 7,770  7,708  7,232  7,461  7,477 
    Income before income taxes 8,386  8,858  9,665  9,129  8,724 
    Income tax expense 1,690  2,092  2,128  1,786  1,926 
    Net income$6,696 $6,766 $7,537 $7,343 $6,798 
          
    Efficiency ratio - QTD 53.02% 48.74% 44.79% 48.17% 46.15%
    Efficiency ratio - YTD 48.58% 47.21% 46.44% 48.17% 48.71%

            

    MORTGAGE BANKING SEGMENT
    SUMMARY OF KEY QUARTERLY FINANCIAL DATA
    (Unaudited)
          
     At or For the Three Months Ended
     December 31,September 30,June 30,March 31,December 31,
     20212021202120212020
     (Dollars in Thousands)
    Condensed Results of Operations:     
    Net interest income (loss)$(49)$(2)$(251)$(350)$(223)
    Provision for loan losses 30  50  -  30  30 
    Total noninterest income 40,692  51,290  50,556  55,035  68,500 
    Noninterest expenses:     
    Compensation, payroll taxes, and other employee benefits 27,866  28,981  29,170  29,262  33,347 
    Occupancy, office furniture and equipment 1,306  1,579  1,406  1,540  1,545 
    Advertising 680  602  651  615  822 
    Data processing 542  450  443  454  402 
    Communications 221  209  240  212  225 
    Professional fees 306  421  361  (524) 441 
    Real estate owned -  -  -  -  - 
    Loan processing expense 940  1,135  1,200  1,335  1,026 
    Other 1,445  2,270  2,678  2,681  2,110 
    Total noninterest expense 33,306  35,647  36,149  35,575  39,918 
    Income before income taxes 7,307  15,591  14,156  19,080  28,329 
    Income tax expense 1,443  3,341  3,761  5,096  7,252 
    Net income$5,864 $12,250 $10,395 $13,984 $21,077 
          
    Efficiency ratio - QTD 81.95% 69.50% 71.86% 65.05% 58.46%
    Efficiency ratio - YTD 71.44% 68.71% 68.32% 65.05% 65.20%
          
    Loan originations$993,113 $1,055,500 $1,065,161 $1,115,091 $1,282,321 
    Purchase 73.8% 73.8% 75.4% 56.1% 59.2%
    Refinance 26.2% 26.2% 24.6% 43.9% 40.8%
    Gross margin on loans sold(1) 4.18% 4.54% 4.81% 4.86% 5.40%
    (1) - Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations
          

    Contact: Mark R. Gerke
    Chief Financial Officer
    414-459-4012
    markgerke@wsbonline.com


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