Waterstone Financial, Inc 8-K, filed Jan 28, 2021

Waterstone Financial, Inc. (WSBF)

8-K 2021-01-28 For: 2021-01-28

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Added on April 12, 2026

About this 8-K

Waterstone Financial, Inc filed this 8-K on January 28, 2021.

Items reported

Item 2.02: Financial results

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Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.01 Par Value		WSBF		The NASDAQ Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

☐	Emerging growth company

☐	If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

	Waterstone Financial, Inc.

Date: January 28, 2021	/s/ Mark R. Gerke
	Name: Mark R. Gerke
	Title: Chief Financial Officer

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	For The Three Months Ended December 31,						For The Year Ended December 31,
	2020			2019			2020			2019
	(In Thousands, except per share amounts)
Interest income:
Loans	$	18,229		$	18,547		$	72,633		$	72,235
Mortgage-related securities		528			718			2,488			2,978
Debt securities, federal funds sold and short-term investments		870			1,013			3,363			4,528
Total interest income		19,627			20,278			78,484			79,741
Interest expense:
Deposits		2,605			4,465			14,365			17,278
Borrowings		2,706			2,687			10,619			10,266
Total interest expense		5,311			7,152			24,984			27,544
Net interest income		14,316			13,126			53,500			52,197
Provision for loan losses		30			(170	)		6,340			(900	)
Net interest income after provision for loan losses		14,286			13,296			47,160			53,097
Noninterest income:
Service charges on loans and deposits		1,078			1,091			4,462			2,363
Increase in cash surrender value of life insurance		318			356			1,905			1,935
Mortgage banking income		66,953			32,140			233,245			125,666
Other		1,537			222			4,405			786
Total noninterest income		69,886			33,809			244,017			130,750
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		38,351			26,491			139,046			101,718
Occupancy, office furniture, and equipment		2,479			2,521			10,223			10,606
Advertising		1,066			1,051			3,691			3,885
Data processing		918			989			3,941			3,630
Communications		335			320			1,329			1,359
Professional fees		471			1,167			8,118			3,605
Real estate owned		(63	)		(221	)		(8	)		(146	)
Loan processing expense		1,026			746			4,646			3,288
Other		2,580			2,273			12,075			8,328
Total noninterest expenses		47,163			35,337			183,061			136,273
Income before income taxes		37,009			11,768			108,116			47,574
Income tax expense		9,174			2,974			26,971			11,671
Net income	$	27,835		$	8,794		$	81,145		$	35,903
Income per share:
Basic	$	1.17		$	0.34		$	3.32		$	1.38
Diluted	$	1.17		$	0.34		$	3.30		$	1.37
Weighted average shares outstanding:
Basic		23,703			25,586			24,464			26,021
Diluted		23,877			25,852			24,607			26,247

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	December 31,			December 31,
	2020			2019
	(Unaudited)
Assets	(In Thousands, except per share amounts)
Cash	$	56,190		$	52,814
Federal funds sold		18,847			12,704
Interest-earning deposits in other financial institutions and other short term investments		19,730			8,782
Cash and cash equivalents		94,767			74,300
Securities available for sale (at fair value)		159,619			178,476
Loans held for sale (at fair value)		402,003			220,123
Loans receivable		1,375,137			1,388,031
Less: Allowance for loan losses		18,823			12,387
Loans receivable, net		1,356,314			1,375,644

Office properties and equipment, net		23,722			25,028
Federal Home Loan Bank stock (at cost)		26,720			21,150
Cash surrender value of life insurance		63,573			69,665
Real estate owned, net		322			748
Prepaid expenses and other assets		57,547			31,213
Total assets	$	2,184,587		$	1,996,347

Liabilities and Shareholders' Equity
Liabilities:
Demand deposits	$	188,225		$	130,063
Money market and savings deposits		295,317			197,942
Time deposits		701,328			739,771
Total deposits		1,184,870			1,067,776

Borrowings		508,074			483,562
Advance payments by borrowers for taxes		3,522			4,212
Other liabilities		75,003			47,111
Total liabilities		1,771,469			1,602,661

Shareholders' equity:
Preferred stock		-			-
Common stock		251			271
Additional paid-in capital		180,684			211,997
Retained earnings		245,287			197,393
Unearned ESOP shares		(15,430	)		(16,617	)
Accumulated other comprehensive income, net of taxes		2,326			642
Total shareholders' equity		413,118			393,686
Total liabilities and shareholders' equity	$	2,184,587		$	1,996,347

Share Information
Shares outstanding		25,088			27,148
Book value per share	$	16.47		$	14.50
Closing market price	$	18.82		$	19.03
Price to book ratio		114.27	%		131.24	%

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,
	2020			2020			2020			2020			2019
	(Dollars in Thousands, except per share amounts)
Condensed Results of Operations:
Net interest income	$	14,316		$	13,409		$	13,249		$	12,526		$	13,126
Provision for loan losses		30			1,025			4,500			785			(170	)
Total noninterest income		69,886			75,763			66,904			31,464			33,809
Total noninterest expense		47,163			53,001			47,689			35,208			35,337
Income before income taxes		37,009			35,146			27,964			7,997			11,768
Income tax expense		9,174			8,853			7,016			1,928			2,974
Net income	$	27,835		$	26,293		$	20,948		$	6,069		$	8,794
Income per share – basic	$	1.17		$	1.08		$	0.86		$	0.24		$	0.34
Income per share – diluted	$	1.17		$	1.08		$	0.85		$	0.24		$	0.34
Dividends declared per share	$	0.50		$	0.12		$	0.12		$	0.62		$	0.12

Performance Ratios (annualized):
Return on average assets - QTD		4.96	%		4.78	%		3.87	%		1.21	%		1.75	%
Return on average equity - QTD		27.11	%		26.30	%		22.39	%		6.24	%		8.91	%
Net interest margin - QTD		2.73	%		2.63	%		2.62	%		2.68	%		2.79	%

Return on average assets - YTD		3.77	%		3.35	%		2.59	%		1.21	%		1.82	%
Return on average equity - YTD		20.18	%		18.02	%		14.03	%		6.24	%		9.14	%
Net interest margin - YTD		2.67	%		2.64	%		2.65	%		2.68	%		2.83	%

Asset Quality Ratios:
Past due loans to total loans		0.57	%		0.39	%		0.45	%		0.78	%		0.47	%
Nonaccrual loans to total loans		0.40	%		0.42	%		0.39	%		0.48	%		0.51	%
Nonperforming assets to total assets		0.27	%		0.31	%		0.28	%		0.36	%		0.39	%
Allowance for loan losses to loans receivable		1.37	%		1.31	%		1.24	%		0.94	%		0.89	%

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,
	2020			2020			2020			2020			2019
Average balances	(Dollars in Thousands)
Interest-earning assets
Loans receivable and held for sale	$	1,775,455		$	1,766,715		$	1,759,970		$	1,562,097		$	1,573,190
Mortgage related securities		91,199			96,529			105,727			112,089			110,426
Debt securities, federal funds sold and short term investments		217,356			166,160			164,306			206,485			183,447
Total interest-earning assets		2,084,010			2,029,404			2,030,003			1,880,671			1,867,063
Noninterest-earning assets		147,573			160,526			147,342			132,283			125,904
Total assets	$	2,231,583		$	2,189,930		$	2,177,345		$	2,012,954		$	1,992,967

Interest-bearing liabilities
Demand accounts	$	53,771		$	50,590		$	45,289		$	39,886		$	38,650
Money market, savings, and escrow accounts		304,467			282,349			252,500			218,942			215,332
Certificates of deposit		726,132			741,265			730,573			734,147			737,726
Total interest-bearing deposits		1,084,370			1,074,204			1,028,362			992,975			991,708
Borrowings		546,070			531,588			609,863			495,595			485,482
Total interest-bearing liabilities		1,630,440			1,605,792			1,638,225			1,488,570			1,477,190
Noninterest-bearing demand deposits		128,665			115,605			92,627			85,815			86,849
Noninterest-bearing liabilities		64,001			56,451			47,140			40,609			38,580
Total liabilities		1,823,106			1,777,848			1,777,992			1,614,994			1,602,619
Equity		408,477			397,776			376,375			391,148			391,382
Total liabilities and equity	$	2,231,583		$	2,175,624		$	2,154,367		$	2,006,142		$	1,994,001

Average Yield/Costs (annualized)
Loans receivable and held for sale		4.08	%		4.10	%		4.23	%		4.55	%		4.68	%
Mortgage related securities		2.30	%		2.42	%		2.55	%		2.52	%		2.58	%
Debt securities, federal funds sold and short term investments		1.59	%		1.75	%		1.71	%		2.07	%		2.19	%
Total interest-earning assets		3.75	%		3.83	%		3.93	%		4.16	%		4.31	%

Demand accounts		0.07	%		0.09	%		0.08	%		0.08	%		0.10	%
Money market and savings accounts		0.53	%		0.67	%		0.74	%		0.78	%		0.66	%
Certificates of deposit		1.20	%		1.62	%		1.91	%		2.13	%		2.20	%
Total interest-bearing deposits		0.96	%		1.29	%		1.54	%		1.75	%		1.79	%
Borrowings		1.97	%		1.98	%		1.76	%		2.12	%		2.20	%
Total interest-bearing liabilities		1.30	%		1.52	%		1.62	%		1.87	%		1.92	%

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,
	2020			2020			2020			2020			2019
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	14,546		$	13,461		$	13,701		$	12,908		$	13,472
Provision for loan losses		-			1,000			4,325			750			(200	)
Total noninterest income		1,655			3,104			2,936			1,028			1,645
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		5,159			5,000			4,906			5,168			4,693
Occupancy, office furniture and equipment		934			874			866			1,014			894
Advertising		244			252			297			248			317
Data processing		511			490			678			605			583
Communications		110			113			91			97			93
Professional fees		5			266			226			198			162
Real estate owned		(63	)		11			33			11			(251	)
Loan processing expense		-			-			-			-			-
Other		577			818			532			580			498
Total noninterest expense		7,477			7,824			7,629			7,921			6,989
Income before income taxes		8,724			7,741			4,683			5,265			8,328
Income tax expense		1,926			1,565			574			1,154			2,033
Net income	$	6,798		$	6,176		$	4,109		$	4,111		$	6,295

Efficiency ratio - QTD		46.15	%		47.23	%		45.86	%		56.84	%		46.23	%
Efficiency ratio - YTD		48.71	%		49.59	%		50.86	%		56.84	%		47.74	%

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,
	2020			2020			2020			2020			2019
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	(223	)	$	(58	)	$	(511	)	$	(379	)	$	(399	)
Provision for loan losses		30			25			175			35			30
Total noninterest income		68,500			73,143			64,218			30,798			32,440
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		33,347			34,559			32,139			19,387			21,975
Occupancy, office furniture and equipment		1,545			1,595			1,668			1,727			1,627
Advertising		822			609			567			652			734
Data processing		402			426			413			395			402
Communications		225			226			226			241			227
Professional fees		441			4,465			850			1,620			1,000
Real estate owned		-			-			-			-			30
Loan processing expense		1,026			1,336			1,208			1,076			746
Other		2,110			2,444			3,239			2,552			1,918
Total noninterest expense		39,918			45,660			40,310			27,650			28,659
Income (loss) before income taxes		28,329			27,400			23,222			2,734			3,352
Income tax expense (benefit)		7,252			7,284			6,440			768			921
Net income (loss)	$	21,077		$	20,116		$	16,782		$	1,966		$	2,431

Efficiency ratio - QTD		58.46	%		62.48	%		63.27	%		90.90	%		89.44	%
Efficiency ratio - YTD		65.20	%		67.95	%		72.70	%		90.90	%		87.47	%

Loan originations	$	1,282,321		$	1,296,725		$	1,142,683		$	708,840		$	777,073
Purchase		59.2	%		64.1	%		55.5	%		68.3	%		72.1	%
Refinance		40.8	%		35.9	%		44.5	%		31.7	%		27.9	%
Gross margin on loans sold⁽¹⁾		5.40	%		5.44	%		5.45	%		4.08	%		4.27	%
(1) - Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations