Exhibit 99.1
 
 
WATERSTONE FINANCIAL, INC.
WATERSTONE BANK
11200 W. PLANK CT.
WAUWATOSA, WI 53226
 
Contact:  Mark R. Gerke
Chief Financial Officer
414.459.4012
markgerke@wsbonline.com
 
 

Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Six Months Ended June 30, 2018.
WAUWATOSA, WI – 07/31/2018 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $9.4 million, or $0.34 per diluted share for the quarter ended June 30, 2018 compared to $8.9 million, or $0.32 per diluted share for the quarter ended June 30, 2017. Net income per diluted share was $0.59 for the six months ended June 30, 2018 compared to net income per diluted share of $0.55 for the six months ended June 30, 2017.
"We are pleased to report a record second quarter net income of $9.4 million and earnings per share of $0.34," said Douglas Gordon, CEO of Waterstone Financial, Inc. "The Community Banking segment continued its momentum by achieving a year over year 24.2% increase in pre-tax earnings.  Our success stemmed from continued strong loan growth, margin expansion and expense management.  The Mortgage Banking segment continued to be negatively impacted by margin compression during the second quarter of 2018, as market competition remains strong within the industry due to lower refinancing activity and diminished levels of housing inventory.  While the current mortgage banking environment presents challenges, we believe that it will also present opportunities to acquire talent, such as the addition of our New Mexico branch during the second quarter."

Highlights of the Quarter Ended June 30, 2018

Waterstone Financial, Inc. (Consolidated)
 
 
Consolidated net income of Waterstone Financial, Inc. totaled $9.4 million for the quarter ended June 30, 2018, compared to $8.9 million for the quarter ended June 30, 2017.
Consolidated return on average assets totaled 2.02% for the quarter ended June 30, 2018 compared to 1.99% for the quarter ended June 30, 2017.
Consolidated return on average equity increased 70 bps to 9.40% for the quarter ended June 30, 2018 compared to 8.70% for the quarter ended June 30, 2017.
The effective income tax rate amounted to 24.8% for the quarter ended June 30, 2018 compared to 34.3% for the quarter ended June 30, 2017 primarily as a result of the Tax Cuts and Jobs Act reducing the federal rate from 35% to 21%.
Dividends declared totaled $0.12 per share during the quarter ended June 30, 2018 amounting to a total of $0.74 in dividends declared per share during the six months ended June 30, 2018.
 
 

 
 
 
 
 
- 5 -

 
Community Banking Segment

·
Pre-tax income of the segment totaled $8.5 million for the quarter ended June 30, 2018, which represents a 24.2% increase compared to $6.9 million for the quarter ended June 30, 2017.
·
Net interest income of the segment totaled $13.7 million for the quarter ended June 30, 2018, which represents a 10.6% increase compared to $12.4 million for the quarter ended June 30, 2017. Our net interest margin increased 14 bps to 3.14% for the quarter ended June 30, 2018 compared to 3.00% for the quarter ended June 30, 2017, which was driven by loan growth along with a decrease in borrowing costs.
·
Continued improvement in the overall risk profile of our loan portfolio resulted in a negative provision for loan losses of $250,000 for the quarter ended June 30, 2018 compared to no provision for the quarter ended June 30, 2017. The negative provision reflects recoveries received along with continued sustained improvements in loan quality metrics including: non–accrual loans, loans classified as substandard or watch and loans past due.
·
Average loans held for investment totaled $1.33 billion during the quarter ended June 30, 2018, which represents an increase of $124.0 million, or 10.3% over the comparable quarter in the prior year.
·
Average deposits totaled $991.4 million during the quarter ended June 30, 2018, which represents an increase of $46.4 million, or 5.1%, over the comparable quarter in the prior year.
·
Driven by net interest margin expansion and continued cost control efforts, the efficiency ratio for the community banking segment improved to 44.3% for the quarter ended June 30, 2018, compared to 48.8% for the quarter ended June 30, 2017.
·
Nonperforming assets as percentage of total assets decreased to 0.47% as of June 30, 2018, compared to 0.54% at March 31, 2018 and 0.71% at June 30, 2017.

Mortgage Banking Segment

·
Pre-tax income of the segment totaled $4.0 million for the quarter ended June 30, 2018, which represents a 40.2% decrease compared to $6.7 million for the quarter ended June 30, 2017.
·
Loan originations decreased $45.6 million, or 5.9%, to $721.2 million during the quarter ended June 30, 2018, compared to $766.8 million during the quarter ended June 30, 2017.  Origination volume relative to purchase activity accounted for 92.6% of originations for the quarter ended June 30, 2018 compared to 91.7% of total originations for the quarter ended June 30, 2017.
·
Gross margins on loans sold decreased approximately 10% during the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017.

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, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield, Oak Creek, Oconomowoc/Lake Country, Pewaukee, Waukesha/Brookfield, and West Allis, Wisconsin and a commercial lending office in Minneapolis, Minnesota. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 47 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.
 
 
- 6 -

 
 
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.
 
 
 
 
 
 
- 7 -

 
 
 
 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES            
CONSOLIDATED STATEMENTS OF INCOME            
(Unaudited)            
                         
   
For The Three Months Ended June 30,
   
For The Six Months Ended June 30,
 
   
2018
   
2017
   
2018
   
2017
 
   
(In Thousands, except per share amounts)
       
Interest income:
                       
Loans
 
$
16,700
     
14,985
     
32,158
     
29,223
 
Mortgage-related securities
   
644
     
678
     
1,282
     
1,374
 
Debt securities, federal funds sold and short-term investments
   
1,019
     
877
     
1,886
     
1,729
 
Total interest income
   
18,363
     
16,540
     
35,326
     
32,326
 
Interest expense:
                               
Deposits
   
2,710
     
1,838
     
5,024
     
3,633
 
Borrowings
   
1,933
     
2,221
     
3,441
     
4,317
 
Total interest expense
   
4,643
     
4,059
     
8,465
     
7,950
 
Net interest income
   
13,720
     
12,481
     
26,861
     
24,376
 
Provision for loan losses
   
(220
)
   
25
     
(1,100
)
   
(1,186
)
Net interest income after provision for loan losses
   
13,940
     
12,456
     
27,961
     
25,562
 
Noninterest income:
                               
Service charges on loans and deposits
   
491
     
481
     
890
     
848
 
Increase in cash surrender value of life insurance
   
473
     
470
     
801
     
788
 
Loss on sale of available for sale securities
   
-
     
(107
)
   
-
     
(107
)
Mortgage banking income
   
32,090
     
36,224
     
56,277
     
60,911
 
Other
   
264
     
173
     
533
     
738
 
Total noninterest income
   
33,318
     
37,241
     
58,501
     
63,178
 
Noninterest expenses:
                               
Compensation, payroll taxes, and other employee benefits
   
26,234
     
27,584
     
47,217
     
47,579
 
Occupancy, office furniture, and equipment
   
2,605
     
2,527
     
5,244
     
5,054
 
Advertising
   
1,000
     
869
     
1,860
     
1,593
 
Data processing
   
623
     
633
     
1,248
     
1,231
 
Communications
   
435
     
397
     
817
     
776
 
Professional fees
   
647
     
717
     
1,347
     
1,324
 
Real estate owned
   
(126
)
   
(133
)
   
191
     
278
 
FDIC insurance premiums
   
105
     
117
     
230
     
237
 
Other
   
3,214
     
3,476
     
6,730
     
7,173
 
Total noninterest expenses
   
34,737
     
36,187
     
64,884
     
65,245
 
Income before income taxes
   
12,521
     
13,510
     
21,578
     
23,495
 
Income tax expense
   
3,101
     
4,622
     
5,205
     
8,035
 
Net income
 
$
9,420
     
8,888
     
16,373
     
15,460
 
Income per share:
                               
Basic
 
$
0.34
     
0.32
     
0.60
     
0.56
 
Diluted
 
$
0.34
     
0.32
     
0.59
     
0.55
 
Weighted average shares outstanding:
                               
Basic
   
27,504
     
27,487
     
27,506
     
27,406
 
Diluted
   
27,742
     
27,955
     
27,790
     
27,913
 
 
 
 
- 8 -

 
 
 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES     
 
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION   
 
   
June 30,
   
December 31,
 
   
2018
   
2017
 
   
(Unaudited)
       
Assets
 
(In Thousands, except per share amounts)
 
Cash
 
$
61,995
   
$
22,306
 
Federal funds sold
   
9,332
     
17,034
 
Interest-earning deposits in other financial institutions and other short term investments
   
6,789
     
9,267
 
Cash and cash equivalents
   
78,116
     
48,607
 
Securities available for sale (at fair value)
   
185,018
     
199,707
 
Loans held for sale (at fair value)
   
142,954
     
149,896
 
Loans receivable
   
1,342,136
     
1,291,814
 
Less: Allowance for loan losses
   
13,124
     
14,077
 
Loans receivable, net
   
1,329,012
     
1,277,737
 
                 
Office properties and equipment, net
   
22,770
     
22,941
 
Federal Home Loan Bank stock (at cost)
   
19,350
     
16,875
 
Cash surrender value of life insurance
   
66,977
     
65,996
 
Real estate owned, net
   
2,378
     
4,558
 
Prepaid expenses and other assets
   
30,655
     
20,084
 
Total assets
 
$
1,877,230
   
$
1,806,401
 
                 
Liabilities and Shareholders' Equity
               
Liabilities:
               
Demand deposits
 
$
135,370
   
$
129,597
 
Money market and savings deposits
   
153,484
     
148,804
 
Time deposits
   
706,586
     
688,979
 
Total deposits
   
995,440
     
967,380
 
                 
Borrowings
   
432,523
     
386,285
 
Advance payments by borrowers for taxes
   
22,721
     
4,876
 
Other liabilities
   
22,802
     
35,756
 
Total liabilities
   
1,473,486
     
1,394,297
 
                 
Shareholders' equity:
               
Common stock
   
293
     
295
 
Additional paid-in capital
   
328,450
     
326,655
 
Retained earnings
   
179,267
     
183,358
 
Unearned ESOP shares
   
(18,397
)
   
(18,991
)
Accumulated other comprehensive loss, net of taxes
   
(3,168
)
   
(477
)
Cost of shares repurchased
   
(82,701
)
   
(78,736
)
Total shareholders' equity
   
403,744
     
412,104
 
Total liabilities and shareholders' equity
 
$
1,877,230
   
$
1,806,401
 
                 
Share Information
               
Shares Outstanding
   
29,318
     
29,501
 
Book Value per share
 
$
13.77
   
$
13.97
 
Closing market price
 
$
17.05
   
$
17.05
 
Price to book ratio
   
123.82
%
   
122.05
%
 
 
- 9 -

 
 
 
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,
 
   
2018
   
2018
   
2017
   
2017
   
2017
 
   
(Dollars in Thousands)
                         
Condensed Results of Operations:
                             
Net interest income
 
$
13,720
     
13,141
     
13,324
     
13,033
     
12,481
 
Provision for loan losses
   
(220
)
   
(880
)
   
-
     
20
     
25
 
Total noninterest income
   
33,318
     
25,183
     
28,181
     
33,054
     
37,241
 
Total noninterest expense
   
34,737
     
30,147
     
32,318
     
34,316
     
36,187
 
Income before income taxes
   
12,521
     
9,057
     
9,187
     
11,751
     
13,510
 
Income tax expense
   
3,101
     
2,104
     
6,072
     
4,362
     
4,622
 
Net income
 
$
9,420
     
6,953
     
3,115
     
7,389
     
8,888
 
Income per share – basic
 
$
0.34
     
0.25
     
0.11
     
0.27
     
0.32
 
Income per share – diluted
 
$
0.34
     
0.25
     
0.11
     
0.26
     
0.32
 
Dividends declared per share
 
$
0.12
     
0.62
     
0.12
     
0.12
     
0.62
 
                                         
Performance Ratios:
                                       
Return on average assets - QTD
   
2.02
%
   
1.57
%
   
0.67
%
   
1.56
%
   
1.99
%
Return on average equity - QTD
   
9.40
%
   
6.90
%
   
2.98
%
   
7.12
%
   
8.70
%
Net interest margin - QTD
   
3.14
%
   
3.18
%
   
3.08
%
   
2.95
%
   
3.00
%
                                         
Return on average assets - YTD
   
1.80
%
   
1.57
%
   
1.43
%
   
1.70
%
   
1.77
%
Return on average equity - YTD
   
8.13
%
   
6.90
%
   
6.32
%
   
7.42
%
   
7.56
%
Net interest margin - YTD
   
3.16
%
   
3.18
%
   
3.00
%
   
2.97
%
   
2.98
%
                                         
Asset Quality Ratios:
                                       
Past due loans to total loans
   
0.54
%
   
0.53
%
   
0.45
%
   
0.71
%
   
0.74
%
Non accrual loans to total loans
   
0.46
%
   
0.50
%
   
0.47
%
   
0.56
%
   
0.70
%
Non performing assets to total assets
   
0.45
%
   
0.54
%
   
0.59
%
   
0.62
%
   
0.71
%
 
 
 
 
- 10 -

 
 
 
 
COMMUNITY BANKING SEGMENT               
SUMMARY OF KEY QUARTERLY FINANCIAL DATA             
(Unaudited)               
                               
   
At or For the Three Months Ended
                   
   
June 30,
   
March 31,
   
December 31,
   
September 30,
   
June 30,
 
   
2018
   
2018
   
2017
   
2017
   
2017
 
   
(Dollars in Thousands)
                   
Condensed Results of Operations:
                             
Net interest income
 
$
13,747
     
13,304
     
13,375
     
13,120
     
12,433
 
Provision for loan losses
   
(250
)
   
(900
)
   
-
     
-
     
-
 
Total noninterest income
   
1,137
     
939
     
974
     
1,161
     
995
 
Total noninterest expense
   
6,588
     
7,682
     
6,939
     
6,824
     
6,547
 
Income before income taxes
   
8,546
     
7,461
     
7,410
     
7,457
     
6,881
 
Income tax expense
   
1,970
     
1,668
     
5,570
     
2,597
     
1,902
 
Net income
 
$
6,576
     
5,793
     
1,840
     
4,860
     
4,979
 
                                         
Efficiency ratio - QTD
   
44.27
%
   
53.94
%
   
48.36
%
   
47.78
%
   
48.76
%
Efficiency ratio - YTD
   
49.00
%
   
53.94
%
   
49.98
%
   
50.56
%
   
52.09
%
 
 
 
 
 
MORTGAGE BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
                               
   
At or For the Three Months Ended
                   
   
June 30,
   
March 31,
   
December 31,
   
September 30,
   
June 30,
 
   
2018
   
2018
   
2017
   
2017
   
2017
 
   
(Dollars in Thousands)
                   
Condensed Results of Operations:
                             
Net interest income
 
$
(40
)
   
(192
)
   
(72
)
   
(102
)
   
(1
)
Provision for loan losses
   
30
     
20
     
-
     
20
     
-
 
Total noninterest income
   
32,547
     
24,731
     
27,645
     
32,318
     
36,743
 
Total noninterest expense
   
28,493
     
22,941
     
25,791
     
27,882
     
30,080
 
Income before income taxes
   
3,984
     
1,578
     
1,782
     
4,314
     
6,662
 
Income tax expense
   
1,133
     
435
     
509
     
1,767
     
2,715
 
Net income
 
$
2,851
     
1,143
     
1,273
     
2,547
     
3,947
 
                                         
Efficiency ratio - QTD
   
87.65
%
   
93.49
%
   
93.54
%
   
86.55
%
   
81.87
%
Efficiency ratio - YTD
   
90.16
%
   
93.49
%
   
86.93
%
   
85.00
%
   
84.20
%
                                         
Loan Originations
   
721,184
     
516,020
     
600,265
     
684,500
     
766,759
 
 
 
 
 
 
 
- 11 -

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Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

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Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

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Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

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