Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Six Months Ended June 30, 2025

WAUWATOSA, Wis., July 22, 2025 (GLOBE NEWSWIRE) -- Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $7.7 million, or $0.43 per diluted share, for the quarter ended June 30, 2025 compared to $5.7 million, or $0.31 per diluted share, for the quarter ended June 30, 2024. Net income per diluted share was $0.59 for the six months ended June 30, 2025 compared to net income per diluted share of $0.47 for the six months ended June 30, 2024. “We are pleased with our performance during the quarter, which resulted in our highest quarterly earnings per share since the quarter ended December 31, 2021,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “The Community Banking segment achieved $2.4 million of growth in net interest income compared to the quarter ended June 30, 2024, primarily due to continued improvement in our cost of funds. We continue to maintain strong asset quality and experience minimal loan loss activity, resulting in releases from our allowance for credit losses. The Mortgage Banking segment recorded pre-tax income as seasonal loan origination volumes expanded during the quarter and professional fees normalized following the finalization of our legal settlement during the prior quarter. On a consolidated level, we continued to add to book value per share through strong earnings and an active share repurchase program.” Highlights of the Quarter Ended June 30, 2025 Waterstone Financial, Inc. (Consolidated) Consolidated net income of Waterstone Financial, Inc. totaled $7.7 million for the quarter ended June 30, 2025 compared to net income of $5.7 million for the quarter ended June 30, 2024.Consolidated return on average assets (annualized) was 1.39% for the quarter ended June 30, 2025 and 1.02% for the quarter ended June 30, 2024.Consolidated return on average equity (annualized) was 9.04% for the quarter ended June 30, 2025 and 6.84% for the quarter ended June 30, 2024.Dividends declared during the quarter ended June 30, 2025 totaled $0.15 per common share.During the quarter ended June 30, 2025, we repurchased approximately 508,000 shares at a cost (including the federal excise tax) of $6.5 million, or $12.80 per share. The share repurchases increased book value approximately $0.14 during the quarter ended June 30, 2025.Nonperforming assets as a percentage of total assets was 0.37% at June 30, 2025, 0.35% at March 31, 2025, and 0.25% at June 30, 2024.Past due loans as a percentage of total loans was 0.69% at June 30, 2025, 0.67% at March 31, 2025, and 0.76% at June 30, 2024.Book value per share was $18.19 at June 30, 2025 and $17.53 at December 31, 2024. Community Banking Segment Pre-tax income totaled $7.6 million for the quarter ended June 30, 2025, which represents a $2.6 million, or 50.4%, increase compared to $5.1 million for the quarter ended June 30, 2024.Net interest income totaled $13.6 million for the quarter ended June 30, 2025, which represents a $2.4 million, or 21.4%, increase compared to $11.2 million for the quarter ended June 30, 2024.Average loans held for investment totaled $1.67 billion during the quarter ended June 30, 2025, which represents a decrease of $1.5 million, or 0.1%, compared to the quarter ended June 30, 2024. The decrease was primarily due to a decrease in single-family mortgages offset by increases in commercial real estate and multi-family mortgages. Average loans held for investment decreased $8.1 million compared to $1.67 billion for the quarter ended March 31, 2025. The decrease was primarily due to decrease in single-family mortgages.Net interest margin increased 59 basis points to 2.60% for the quarter ended June 30, 2025 compared to 2.01% for the quarter ended June 30, 2024, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in the cost of borrowings and weighted average cost of deposits. Net interest margin increased 13 basis points compared to 2.47% for the quarter ended March 31, 2025, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in cost of borrowings and weighted average cost of deposits.Past due loans at the community banking segment totaled $8.9 million at June 30, 2025, $7.6 million at March 31, 2025, and $9.3 million at June 30, 2024.The segment had a negative provision for credit losses related to funded loans of $125,000 for the quarter ended June 30, 2025 compared to a negative provision for credit losses related to funded loans of $197,000 for the quarter ended June 30, 2024. The current quarter decrease was primarily due to decreases in multi-family qualitative risk factors, offset by an increase in the single-family loan qualitative factors primarily related to increases in internal asset quality risk factors and an increase in construction loan balances. The provision for credit losses related to unfunded loan commitments was $106,000 for the quarter ended June 30, 2025 compared to a negative provision for credit losses related to unfunded loan commitments of $82,000 for the quarter ended June 30, 2024. The provision for credit losses related to unfunded loan commitments for the quarter ended June 30, 2025 was due primarily to an increase in the loans approved that are currently waiting to close compared to the prior quarter end.The efficiency ratio, a non-GAAP ratio, was 50.40% for the quarter ended June 30, 2025, compared to 62.37% for the quarter ended June 30, 2024.Average core retail deposits (excluding brokered and escrow accounts) totaled $1.31 billion during the quarter ended June 30, 2025, an increase of $91.7 million, or 7.5%, compared to $1.22 billion during the quarter ended June 30, 2024. Average deposits increased $32.9 million, or 10.3% annualized, compared to $1.28 billion for the quarter ended March 31, 2025. The increases were primarily due to increases in checking, money market, and certificates of deposit balances. The segment had an average of $72.5 million in brokered certificate of deposits during the quarter ended June 30, 2025. Mortgage Banking Segment Pre-tax income totaled $2.0 million for the quarters ended June 30, 2025 and June 30, 2024.Loan originations decreased $45.3 million, or 7.1%, to $588.8 million during the quarter ended June 30, 2025, compared to $634.1 million during the quarter ended June 30, 2024. Origination volume relative to purchase activity accounted for 91.7% of originations for the quarter ended June 30, 2025 compared to 92.7% of total originations for the quarter ended June 30, 2024.Mortgage banking non-interest income decreased $2.4 million, or 9.7%, to $22.6 million for the quarter ended June 30, 2025, compared to $25.1 million for the quarter ended June 30, 2024.Gross margin on loans sold totaled 3.84% for the quarter ended June 30, 2025, compared to 3.93% for the quarter ended June 30, 2024.Total compensation, payroll taxes and other employee benefits decreased $574,000, or 3.4%, to $16.3 million during the quarter ended June 30, 2025 compared to $16.9 million during the quarter ended June 30, 2024. The decrease primarily related to decreased commission expense and salary expense offset by an increase in health insurance expense. About Waterstone Financial, Inc. Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank, a community-focused financial institution established in 1921. WaterStone Bank offers a comprehensive suite of personal and business banking products and operates 14 branch locations across southeastern Wisconsin. WaterStone Bank is also the parent company of WaterStone Mortgage Corporation, a national lender licensed in 48 states. With a long-standing commitment to innovation, integrity, and community service, Waterstone Financial, Inc. supports the financial and homeownership goals of customers nationwide. 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; 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. Non-GAAP Financial Measures Management uses non-GAAP financial information in its analysis of the Company's performance. Management believes that this non-GAAP measure provides a greater understanding of ongoing operations and enhances comparability of results of operations with prior periods. The Company’s management believes that investors may use this non-GAAP measure to analyze the Company's financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in this measure and that different companies might calculate this measure differently. WATERSTONE FINANCIAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Unaudited) For The Three Months Ended June 30, For The Six Months Ended June 30, 2025 2024 2025 2024 (In Thousands, except per share amounts) Interest income: Loans$25,875 $25,601 $50,953 $50,085 Mortgage-related securities 1,253 1,125 2,444 2,223 Debt securities, federal funds sold and short-term investments 1,557 1,294 3,043 2,617 Total interest income 28,685 28,020 56,440 54,925 Interest expense: Deposits 10,967 9,716 22,299 18,686 Borrowings 4,010 7,625 7,857 14,423 Total interest expense 14,977 17,341 30,156 33,109 Net interest income 13,708 10,679 26,284 21,816 Provision (credit) for credit losses (9) (225) (567) (158)Net interest income after provision (credit) for loan losses 13,717 10,904 26,851 21,974 Noninterest income: Service charges on loans and deposits 413 465 1,006 889 Increase in cash surrender value of life insurance 1,014 804 1,495 1,152 Mortgage banking income 22,559 24,838 38,287 44,906 Other 343 390 638 798 Total noninterest income 24,329 26,497 41,426 47,745 Noninterest expenses: Compensation, payroll taxes, and other employee benefits 21,121 21,762 38,168 41,638 Occupancy, office furniture, and equipment 1,753 2,029 3,682 4,137 Advertising 746 987 1,469 1,901 Data processing 1,313 1,242 2,525 2,448 Communications 257 240 492 466 Professional fees 500 758 2,236 1,501 Real estate owned (8) 1 (18) 14 Loan processing expense 817 861 1,737 1,907 Other 1,878 2,379 4,436 3,797 Total noninterest expenses 28,377 30,259 54,727 57,809 Income before income taxes 9,669 7,142 13,550 11,910 Income tax expense 1,942 1,430 2,787 3,160 Net income$7,727 $5,712 $10,763 $8,750 Income per share: Basic$0.43 $0.31 $0.59 $0.47 Diluted$0.43 $0.31 $0.59 $0.47 Weighted average shares outstanding: Basic 17,989 18,524 18,127 18,772 Diluted 18,004 18,568 18,143 18,802 WATERSTONE FINANCIAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION June 30, December 31, 2025 2024 (Unaudited) Assets(In Thousands, except per share amounts) Cash$63,178 $35,182 Federal funds sold 7,465 4,302 Interest-earning deposits in other financial institutions and other short-term investments 280 277 Cash and cash equivalents 70,923 39,761 Securities available for sale (at fair value) 218,757 208,549 Loans held for sale (at fair value) 161,826 135,909 Loans receivable 1,664,273 1,680,576 Less: Allowance for credit losses ("ACL") - loans 17,800 18,247 Loans receivable, net 1,646,473 1,662,329 Office properties and equipment, net 18,874 19,389 Federal Home Loan Bank stock (at cost) 20,349 20,295 Cash surrender value of life insurance 76,287 74,612 Real estate owned, net 85 505 Prepaid expenses and other assets 42,986 48,259 Total assets$2,256,560 $2,209,608 Liabilities and Shareholders' Equity Liabilities: Demand deposits$174,506 $171,115 Money market and savings deposits 320,881 283,243 Time deposits 889,320 905,539 Total deposits 1,384,707 1,359,897 Borrowings 465,726 446,519 Advance payments by borrowers for taxes 21,083 5,630 Other liabilities 43,553 58,427 Total liabilities 1,915,069 1,870,473 Shareholders' equity: Preferred stock - - Common stock 188 193 Additional paid-in capital 84,106 91,214 Retained earnings 282,578 277,196 Unearned ESOP shares (10,089) (10,682) Accumulated other comprehensive loss, net of taxes (15,292) (18,786) Total shareholders' equity 341,491 339,135 Total liabilities and shareholders' equity$2,256,560 $2,209,608 Share Information Shares outstanding 18,776 19,343 Book value per share$18.19 $17.53 WATERSTONE FINANCIAL, INC. AND SUBSIDIARIESSUMMARY OF KEY QUARTERLY FINANCIAL DATA(Unaudited) At or For the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2025 2025 2024 2024 2024 (Dollars in Thousands, except per share amounts) Condensed Results of Operations: Net interest income$13,708 $12,576 $12,835 $11,517 $10,679 Provision (credit) for credit losses (9) (558) 367 (377) (225)Total noninterest income 24,329 17,097 19,005 22,552 26,497 Total noninterest expense 28,377 26,350 25,267 28,560 30,259 Income before income taxes 9,669 3,881 6,206 5,886 7,142 Income tax expense 1,942 845 996 1,158 1,430 Net income$7,727 $3,036 $5,210 $4,728 $5,712 Income per share – basic$0.43 $0.17 $0.28 $0.26 $0.31 Income per share – diluted$0.43 $0.17 $0.28 $0.26 $0.31 Dividends declared per common share$0.15 $0.15 $0.15 $0.15 $0.15 Performance Ratios (annualized): Return on average assets - QTD 1.39% 0.57% 0.94% 0.83% 1.02%Return on average equity - QTD 9.04% 3.61% 6.05% 5.55% 6.84%Net interest margin - QTD 2.60% 2.47% 2.42% 2.13% 2.01% Return on average assets - YTD 0.99% 0.57% 0.84% 0.81% 0.79%Return on average equity - YTD 6.32% 3.61% 5.48% 5.30% 5.17%Net interest margin - YTD 2.54% 2.47% 2.17% 2.09% 2.08% Asset Quality Ratios: Past due loans to total loans 0.69% 0.67% 0.95% 0.63% 0.76%Nonaccrual loans to total loans 0.49% 0.45% 0.34% 0.32% 0.33%Nonperforming assets to total assets 0.37% 0.35% 0.28% 0.25% 0.25%Allowance for credit losses - loans to loans receivable 1.07% 1.08% 1.09% 1.07% 1.10% WATERSTONE FINANCIAL, INC. AND SUBSIDIARIESSUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS(Unaudited) At or For the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2025 2025 2024 2024 2024 Average balances(Dollars in Thousands) Interest-earning assets Loans receivable and held for sale$1,812,065 $1,768,617 $1,819,574 $1,870,627 $1,859,608 Mortgage related securities 173,220 170,947 168,521 170,221 171,895 Debt securities, federal funds sold and short-term investments 131,710 123,004 124,658 115,270 107,992 Total interest-earning assets 2,116,995 2,062,568 2,112,753 2,156,118 2,139,495 Noninterest-earning assets 105,382 105,030 100,627 104,600 104,019 Total assets$2,222,377 $2,167,598 $2,213,380 $2,260,718 $2,243,514 Interest-bearing liabilities Demand accounts$89,548 $87,393 $92,247 $89,334 $91,300 Money market, savings, and escrow accounts 320,908 300,686 306,478 304,116 293,483 Certificates of deposit - retail 830,550 818,612 810,340 786,228 758,252 Certificates of deposit - brokered 72,533 97,101 59,254 - - Total interest-bearing deposits 1,313,539 1,303,792 1,268,319 1,179,678 1,143,035 Borrowings 437,784 397,053 464,964 600,570 622,771 Total interest-bearing liabilities 1,751,323 1,700,845 1,733,283 1,780,248 1,765,806 Noninterest-bearing demand deposits 85,665 80,372 87,889 91,532 93,637 Noninterest-bearing liabilities 42,669 44,905 49,645 49,787 48,315 Total liabilities 1,879,657 1,826,122 1,870,817 1,921,567 1,907,758 Equity 342,720 341,476 342,563 339,151 335,756 Total liabilities and equity$2,222,377 $2,167,598 $2,213,380 $2,260,718 $2,243,514 Average Yield/Costs (annualized) Loans receivable and held for sale 5.73% 5.75% 5.75% 5.65% 5.54%Mortgage related securities 2.90% 2.83% 2.67% 2.66% 2.63%Debt securities, federal funds sold and short-term investments 4.74% 4.90% 4.85% 5.05% 4.82%Total interest-earning assets 5.43% 5.46% 5.46% 5.39% 5.27% Demand accounts 0.11% 0.11% 0.11% 0.11% 0.11%Money market and savings accounts 2.07% 2.10% 2.00% 1.94% 1.89%Certificates of deposit – retail 4.11% 4.33% 4.53% 4.54% 4.41%Certificates of deposit - brokered 4.35% 4.18% 4.18% 0.00% 0.00%Total interest-bearing deposits 3.35% 3.52% 3.58% 3.53% 3.42%Borrowings 3.67% 3.93% 4.11% 4.77% 4.92%Total interest-bearing liabilities 3.43% 3.62% 3.72% 3.95% 3.95% COMMUNITY BANKING SEGMENTSUMMARY OF KEY QUARTERLY FINANCIAL DATA(Unaudited) At or For the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2025 2025 2024 2024 2024 (Dollars in Thousands) Condensed Results of Operations: Net interest income$13,640 $12,403 $12,886 $12,250 $11,234 Provision (credit) for credit losses (19) (518) 331 (302) (279)Total noninterest income 1,686 1,348 1,595 1,227 1,491 Noninterest expenses: Compensation, payroll taxes, and other employee benefits 5,027 5,212 4,883 5,326 5,116 Occupancy, office furniture and equipment 920 1,076 825 904 983 Advertising 219 171 204 311 229 Data processing 806 712 691 720 687 Communications 99 100 89 80 72 Professional fees 196 347 196 190 177 Real estate owned (8) (10) 12 - 1 Loan processing expense - - - - - Other 466 596 563 602 672 Total noninterest expense 7,725 8,204 7,463 8,133 7,937 Income before income taxes 7,620 6,065 6,687 5,646 5,067 Income tax expense 1,400 1,427 1,399 941 718 Net income$6,220 $4,638 $5,288 $4,705 $4,349 Efficiency ratio - QTD (non-GAAP) 50.40% 59.66% 51.54% 60.35% 62.37%Efficiency ratio - YTD (non-GAAP) 54.78% 59.66% 59.58% 62.58% 63.77% MORTGAGE BANKING SEGMENTSUMMARY OF KEY QUARTERLY FINANCIAL DATA(Unaudited) At or For the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2025 2025 2024 2024 2024 (Dollars in Thousands) Condensed Results of Operations: Net interest loss$53 $152 $(92) $(760) $(552)Provision for credit losses 10 (40) 36 (75) 54 Total noninterest income 22,643 15,731 17,455 21,386 25,081 Noninterest expenses: Compensation, payroll taxes, and other employee benefits 16,312 12,054 13,781 15,930 16,886 Occupancy, office furniture and equipment 833 853 754 953 1,046 Advertising 527 552 523 615 758 Data processing 507 498 542 570 549 Communications 158 135 135 152 168 Professional fees 303 1,373 917 379 569 Real estate owned - - - - - Loan processing expense 817 920 486 697 861 Other 1,230 1,751 814 1,261 1,641 Total noninterest expense 20,687 18,136 17,952 20,557 22,478 (Loss) income before income taxes (benefit) expense 1,999 (2,213) (625) 144 1,997 Income tax (benefit) expense) 531 (588) (428) 194 684 Net (loss) income$1,468 $(1,625) $(197) $(50) $1,313 Efficiency ratio - QTD (non-GAAP) 91.15% 114.18% 103.39% 99.67% 91.64%Efficiency ratio - YTD (non-GAAP) 100.63% 114.18% 97.74% 96.23% 94.62% Loan originations$588,838 $387,729 $470,650 $558,729 $634,109 Purchase 91.7% 87.5% 82.1% 88.9% 92.7%Refinance 8.3% 12.5% 17.9% 11.1% 7.3%Gross margin on loans sold(1) 3.84% 3.98% 3.74% 3.83% 3.93% (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. GerkeChief Financial Officer414-459-4012markgerke@wsbonline.com

Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Six Months Ended June 30, 2025

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