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

1. WSBF's net income rose to $7.7 million from $5.7 million YoY. 2. Return on average assets increased to 1.39% from 1.02% YoY. 3. Average core retail deposits grew by 7.5% compared to last year. 4. Net interest margin increased to 2.60%, driven by lower borrowing costs. 5. Share buybacks raised book value by $0.14 in the quarter.

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Why Bullish?

The substantial rise in net income and improved margins typically induce positive market sentiment. Historical trends show that such earnings growth often leads to stock price increases, evidenced by peers in similar financial sectors benefiting significantly post-earnings reports.

How important is it?

Strong earnings reports influence investor actions significantly, indicating growth potential for WSBF, which enhances overall confidence in the stock. The data could attract potential investors looking for growth in the bank sector.

Why Short Term?

Immediate market reactions are likely due to positive earnings and financial metrics. This forecast remains supported by upcoming quarterly earnings cycles, where consistent performance may drive sustained investor confidence.

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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

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