Waterstone Financial, Inc 8-K, filed Oct 19, 2021

Waterstone Financial, Inc. (WSBF)

8-K 2021-10-19 For: 2021-10-19

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Added on April 12, 2026

About this 8-K

Waterstone Financial, Inc filed this 8-K on October 19, 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: October 19, 2021	/s/ Mark R. Gerke
	Name: Mark R. Gerke
	Title: Chief Financial Officer

	For The Three Months Ended September 30,					For The Nine Months Ended September 30,
	2021			2020		2021			2020
	(In Thousands, except per share amounts)
Interest income:
Loans	$	16,131		$	18,224	$	49,214		$	54,404
Mortgage-related securities		471			588		1,448			1,960
Debt securities, federal funds sold and short-term investments		904			732		2,637			2,493
Total interest income		17,506			19,544		53,299			58,857
Interest expense:
Deposits		947			3,495		3,542			11,760
Borrowings		2,445			2,640		7,414			7,913
Total interest expense		3,392			6,135		10,956			19,673
Net interest income		14,114			13,409		42,343			39,184
Provision for loan losses		(700	)		1,025		(2,520	)		6,310
Net interest income after provision for loan losses		14,814			12,384		44,863			32,874
Noninterest income:
Service charges on loans and deposits		1,136			672		2,483			3,384
Increase in cash surrender value of life insurance		312			714		1,297			1,587
Mortgage banking income		46,547			72,112		150,587			166,292
Other		4,941			2,265		6,812			2,868
Total noninterest income		52,936			75,763		161,179			174,131
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		34,229			39,405		102,278			100,695
Occupancy, office furniture, and equipment		2,488			2,469		7,346			7,744
Advertising		835			861		2,570			2,625
Data processing		986			922		2,871			3,023
Communications		331			339		988			994
Professional fees		550			4,738		804			7,647
Real estate owned		1			11		(11	)		55
Loan processing expense		1,135			1,336		3,670			3,620
Other		2,768			2,920		9,104			9,495
Total noninterest expenses		43,323			53,001		129,620			135,898
Income before income taxes		24,427			35,146		76,422			71,107
Income tax expense		5,427			8,853		18,184			17,797
Net income	$	19,000		$	26,293	$	58,238		$	53,310
Income per share:
Basic	$	0.80		$	1.08	$	2.45		$	2.16
Diluted	$	0.79		$	1.08	$	2.43		$	2.15
Weighted average shares outstanding:
Basic		23,785			24,297		23,790			24,720
Diluted		23,960			24,380		23,987			24,842

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	September 30,			December 31,
	2021			2020
	(Unaudited)
Assets	(In Thousands, except per share amounts)
Cash	$	327,288		$	56,190
Federal funds sold		12,097			18,847
Interest-earning deposits in other financial institutions and other short term investments		19,229			19,730
Cash and cash equivalents		358,614			94,767
Securities available for sale (at fair value)		174,830			159,619
Loans held for sale (at fair value)		325,958			402,003
Loans receivable		1,226,834			1,375,137
Less: Allowance for loan losses		16,790			18,823
Loans receivable, net		1,210,044			1,356,314

Office properties and equipment, net		22,676			23,722
Federal Home Loan Bank stock (at cost)		24,438			26,720
Cash surrender value of life insurance		65,050			63,573
Real estate owned, net		148			322
Prepaid expenses and other assets		52,353			57,547
Total assets	$	2,234,111		$	2,184,587

Liabilities and Shareholders' Equity
Liabilities:
Demand deposits	$	217,078		$	188,225
Money market and savings deposits		371,719			295,317
Time deposits		657,767			701,328
Total deposits		1,246,564			1,184,870

Borrowings		475,000			508,074
Advance payments by borrowers for taxes		25,298			3,522
Other liabilities		44,678			75,003
Total liabilities		1,791,540			1,771,469

Shareholders' equity:
Preferred stock		-			-
Common stock		250			251
Additional paid-in capital		179,312			180,684
Retained earnings		277,316			245,287
Unearned ESOP shares		(14,540	)		(15,430	)
Accumulated other comprehensive income, net of taxes		233			2,326
Total shareholders' equity		442,571			413,118
Total liabilities and shareholders' equity	$	2,234,111		$	2,184,587

Share Information
Shares outstanding		25,038			25,088
Book value per share	$	17.68		$	16.47
Closing market price	$	20.49		$	18.82
Price to book ratio		115.89	%		114.27	%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)

	At or For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
	(Dollars in Thousands, except per share amounts)
Condensed Results of Operations:
Net interest income	$	14,114		$	14,277		$	13,952		$	14,316		$	13,409
Provision for loan losses		(700	)		(750	)		(1,070	)		30			1,025
Total noninterest income		52,936			52,044			56,199			69,886			75,763
Total noninterest expense		43,323			43,297			43,000			47,163			53,001
Income before income taxes		24,427			23,774			28,221			37,009			35,146
Income tax expense		5,427			5,880			6,877			9,174			8,853
Net income	$	19,000		$	17,894		$	21,344		$	27,835		$	26,293
Income per share – basic	$	0.80		$	0.75		$	0.90		$	1.17		$	1.08
Income per share – diluted	$	0.79		$	0.74		$	0.89		$	1.17		$	1.08
Dividends declared per share	$	0.20		$	0.70		$	0.20		$	0.50		$	0.12

Performance Ratios (annualized):
Return on average assets - QTD		3.38	%		3.25	%		3.99	%		4.96	%		4.78	%
Return on average equity - QTD		17.25	%		16.49	%		20.49	%		27.11	%		26.30	%
Net interest margin - QTD		2.68	%		2.78	%		2.80	%		2.73	%		2.63	%

Return on average assets - YTD		3.54	%		3.62	%		3.99	%		3.77	%		3.35	%
Return on average equity - YTD		18.08	%		18.49	%		20.49	%		20.18	%		18.02	%
Net interest margin - YTD		2.75	%		2.79	%		2.80	%		2.67	%		2.64	%

Asset Quality Ratios:
Past due loans to total loans		0.92	%		0.53	%		0.52	%		0.57	%		0.39	%
Nonaccrual loans to total loans		0.32	%		0.34	%		0.31	%		0.40	%		0.42	%
Nonperforming assets to total assets		0.18	%		0.20	%		0.20	%		0.27	%		0.31	%
Allowance for loan losses to loans receivable		1.37	%		1.34	%		1.33	%		1.37	%		1.31	%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
(Unaudited)

	At or For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
Average balances	(Dollars in Thousands)
Interest-earning assets
Loans receivable and held for sale	$	1,573,194		$	1,655,078		$	1,657,260		$	1,775,455		$	1,766,715
Mortgage related securities		108,743			100,056			90,457			91,199			96,529
Debt securities, federal funds sold and short term investments		409,559			308,105			273,929			217,356			166,160
Total interest-earning assets		2,091,496			2,063,239			2,021,646			2,084,010			2,029,404
Noninterest-earning assets		137,454			143,375			147,781			147,573			160,526
Total assets	$	2,228,950		$	2,206,614		$	2,169,427		$	2,231,583		$	2,189,930

Interest-bearing liabilities
Demand accounts	$	68,478		$	63,610		$	55,552		$	53,771		$	50,590
Money market, savings, and escrow accounts		391,599			350,270			314,418			304,467			282,349
Certificates of deposit		663,343			690,196			705,712			726,132			741,265
Total interest-bearing deposits		1,123,420			1,104,076			1,075,682			1,084,370			1,074,204
Borrowings		475,000			480,054			482,665			546,070			531,588
Total interest-bearing liabilities		1,598,420			1,584,130			1,558,347			1,630,440			1,605,792
Noninterest-bearing demand deposits		153,436			141,648			138,446			128,665			129,911
Noninterest-bearing liabilities		40,148			45,658			50,188			64,001			56,451
Total liabilities		1,792,004			1,771,436			1,746,981			1,823,106			1,792,154
Equity		436,946			435,178			422,446			408,477			397,776
Total liabilities and equity	$	2,228,950		$	2,206,614		$	2,169,427		$	2,231,583		$	2,189,930

Average Yield/Costs (annualized)
Loans receivable and held for sale		4.07	%		3.99	%		4.06	%		4.08	%		4.10	%
Mortgage related securities		1.72	%		1.95	%		2.20	%		2.30	%		2.42	%
Debt securities, federal funds sold and short term investments		0.88	%		1.12	%		1.30	%		1.59	%		1.75	%
Total interest-earning assets		3.32	%		3.47	%		3.60	%		3.75	%		3.83	%

Demand accounts		0.08	%		0.08	%		0.07	%		0.07	%		0.09	%
Money market and savings accounts		0.24	%		0.23	%		0.32	%		0.53	%		0.67	%
Certificates of deposit		0.42	%		0.50	%		0.72	%		1.20	%		1.62	%
Total interest-bearing deposits		0.33	%		0.39	%		0.57	%		0.96	%		1.29	%
Borrowings		2.04	%		2.06	%		2.10	%		1.97	%		1.98	%
Total interest-bearing liabilities		0.84	%		0.90	%		1.05	%		1.30	%		1.52	%

COMMUNITY BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)

	At or For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	14,090		$	14,517		$	14,247		$	14,546		$	13,461
Provision for loan losses		(750	)		(750	)		(1,100	)		-			1,000
Total noninterest income		1,726			1,630			1,243			1,655			3,104
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		5,360			4,874			4,975			5,159			5,000
Occupancy, office furniture and equipment		909			887			1,025			934			874
Advertising		233			260			209			244			252
Data processing		531			466			511			511			490
Communications		122			86			119			110			113
Professional fees		130			198			194			5			266
Real estate owned		1			-			(12	)		(63	)		11
Loan processing expense		-			-			-			-			-
Other		422			461			440			577			818
Total noninterest expense		7,708			7,232			7,461			7,477			7,824
Income before income taxes		8,858			9,665			9,129			8,724			7,741
Income tax expense		2,092			2,128			1,786			1,926			1,565
Net income	$	6,766		$	7,537		$	7,343		$	6,798		$	6,176

Efficiency ratio - QTD		48.74	%		44.79	%		48.17	%		46.15	%		47.23	%
Efficiency ratio - YTD		47.21	%		46.44	%		48.17	%		48.71	%		49.59	%

MORTGAGE BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)

	At or For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	(2	)	$	(251	)	$	(350	)	$	(223	)	$	(58	)
Provision for loan losses		50			-			30			30			25
Total noninterest income		51,290			50,556			55,035			68,500			73,143
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		28,981			29,170			29,262			33,347			34,559
Occupancy, office furniture and equipment		1,579			1,406			1,540			1,545			1,595
Advertising		602			651			615			822			609
Data processing		450			443			454			402			426
Communications		209			240			212			225			226
Professional fees		421			361			(524	)		441			4,465
Real estate owned		-			-			-			-			-
Loan processing expense		1,135			1,200			1,335			1,026			1,336
Other		2,270			2,678			2,681			2,110			2,444
Total noninterest expense		35,647			36,149			35,575			39,918			45,660
Income (loss) before income taxes		15,591			14,156			19,080			28,329			27,400
Income tax expense (benefit)		3,341			3,761			5,096			7,252			7,284
Net income (loss)	$	12,250		$	10,395		$	13,984		$	21,077		$	20,116

Efficiency ratio - QTD		69.50	%		71.86	%		65.05	%		58.46	%		62.48	%
Efficiency ratio - YTD		68.71	%		68.32	%		65.05	%		65.20	%		67.95	%

Loan originations	$	1,055,500		$	1,065,161		$	1,115,091		$	1,282,321		$	1,296,725
Purchase		73.8	%		75.4	%		56.1	%		59.2	%		64.1	%
Refinance		26.2	%		24.6	%		43.9	%		40.8	%		35.9	%
Gross margin on loans sold⁽¹⁾		4.54	%		4.81	%		4.86	%		5.40	%		5.44	%
(1) - Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations