Waterstone Financial, Inc 8-K, filed Jul 20, 2021

Waterstone Financial, Inc. (WSBF)

8-K 2021-07-20 For: 2021-07-20

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Added on April 12, 2026

About this 8-K

Waterstone Financial, Inc filed this 8-K on July 20, 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: July 20, 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 June 30,					For The Six Months Ended June 30,
	2021			2020		2021			2020
	(In Thousands, except per share amounts)
Interest income:
Loans	$	16,480		$	18,493	$	33,083		$	36,180
Mortgage-related securities		486			670		977			1,372
Debt securities, federal funds sold and short-term investments		858			698		1,733			1,761
Total interest income		17,824			19,861		35,793			39,313
Interest expense:
Deposits		1,078			3,947		2,595			8,265
Borrowings		2,469			2,665		4,969			5,273
Total interest expense		3,547			6,612		7,564			13,538
Net interest income		14,277			13,249		28,229			25,775
Provision for loan losses		(750	)		4,500		(1,820	)		5,285
Net interest income after provision for loan losses		15,027			8,749		30,049			20,490
Noninterest income:
Service charges on loans and deposits		657			2,231		1,347			2,712
Increase in cash surrender value of life insurance		684			520		985			873
Mortgage banking income		49,649			63,774		104,040			94,180
Other		1,054			379		1,871			603
Total noninterest income		52,044			66,904		108,243			98,368
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		33,926			36,889		68,049			61,290
Occupancy, office furniture, and equipment		2,293			2,534		4,858			5,275
Advertising		911			864		1,735			1,764
Data processing		914			1,095		1,885			2,101
Communications		326			317		657			655
Professional fees		569			1,077		254			2,909
Real estate owned		-			33		(12	)		44
Loan processing expense		1,200			1,208		2,535			2,284
Other		3,158			3,672		6,336			6,575
Total noninterest expenses		43,297			47,689		86,297			82,897
Income before income taxes		23,774			27,964		51,995			35,961
Income tax expense		5,880			7,016		12,757			8,944
Net income	$	17,894		$	20,948	$	39,238		$	27,017
Income per share:
Basic	$	0.75		$	0.86	$	1.65		$	1.08
Diluted	$	0.74		$	0.85	$	1.64		$	1.08
Weighted average shares outstanding:
Basic		23,848			24,464		23,792			24,934
Diluted		24,029			24,513		23,996			25,071

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	June 30,			December 31,
	2021			2020
	(Unaudited)
Assets	(In Thousands, except per share amounts)
Cash	$	197,981		$	56,190
Federal funds sold		11,531			18,847
Interest-earning deposits in other financial institutions and other short term investments		19,227			19,730
Cash and cash equivalents		228,739			94,767
Securities available for sale (at fair value)		172,224			159,619
Loans held for sale (at fair value)		352,627			402,003
Loans receivable		1,296,441			1,375,137
Less: Allowance for loan losses		17,410			18,823
Loans receivable, net		1,279,031			1,356,314

Office properties and equipment, net		23,186			23,722
Federal Home Loan Bank stock (at cost)		26,538			26,720
Cash surrender value of life insurance		64,738			63,573
Real estate owned, net		150			322
Prepaid expenses and other assets		54,720			57,547
Total assets	$	2,201,953		$	2,184,587

Liabilities and Shareholders' Equity
Liabilities:
Demand deposits	$	208,523		$	188,225
Money market and savings deposits		351,394			295,317
Time deposits		671,143			701,328
Total deposits		1,231,060			1,184,870

Borrowings		475,000			508,074
Advance payments by borrowers for taxes		17,657			3,522
Other liabilities		46,498			75,003
Total liabilities		1,770,215			1,771,469

Shareholders' equity:
Preferred stock		-			-
Common stock		252			251
Additional paid-in capital		182,346			180,684
Retained earnings		263,048			245,287
Unearned ESOP shares		(14,837	)		(15,430	)
Accumulated other comprehensive income, net of taxes		929			2,326
Total shareholders' equity		431,738			413,118
Total liabilities and shareholders' equity	$	2,201,953		$	2,184,587

Share Information
Shares outstanding		25,213			25,088
Book value per share	$	17.12		$	16.47
Closing market price	$	19.66		$	18.82
Price to book ratio		114.84	%		114.27	%

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,
	2021			2021			2020			2020			2020
	(Dollars in Thousands, except per share amounts)
Condensed Results of Operations:
Net interest income	$	14,277		$	13,952		$	14,316		$	13,409		$	13,249
Provision (credit) for loan losses		(750	)		(1,070	)		30			1,025			4,500
Total noninterest income		52,044			56,199			69,886			75,763			66,904
Total noninterest expense		43,297			43,000			47,163			53,001			47,689
Income before income taxes		23,774			28,221			37,009			35,146			27,964
Income tax expense		5,880			6,877			9,174			8,853			7,016
Net income	$	17,894		$	21,344		$	27,835		$	26,293		$	20,948
Income per share – basic	$	0.75		$	0.90		$	1.17		$	1.08		$	0.86
Income per share – diluted	$	0.74		$	0.89		$	1.17		$	1.08		$	0.85
Dividends declared per share	$	0.70		$	0.20		$	0.50		$	0.12		$	0.12

Performance Ratios (annualized):
Return on average assets - QTD		3.25	%		3.99	%		4.96	%		4.78	%		3.87	%
Return on average equity - QTD		16.49	%		20.49	%		27.11	%		26.30	%		22.39	%
Net interest margin - QTD		2.78	%		2.80	%		2.73	%		2.63	%		2.62	%

Return on average assets - YTD		3.62	%		3.99	%		3.77	%		3.35	%		2.59	%
Return on average equity - YTD		18.49	%		20.49	%		20.18	%		18.02	%		14.03	%
Net interest margin - YTD		2.79	%		2.80	%		2.67	%		2.64	%		2.65	%

Asset Quality Ratios:
Past due loans to total loans		0.53	%		0.52	%		0.57	%		0.39	%		0.45	%
Nonaccrual loans to total loans		0.34	%		0.31	%		0.40	%		0.42	%		0.39	%
Nonperforming assets to total assets		0.20	%		0.20	%		0.27	%		0.31	%		0.28	%
Allowance for loan losses to loans receivable		1.34	%		1.33	%		1.37	%		1.31	%		1.24	%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY 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,
	2021			2021			2020			2020			2020
Average balances	(Dollars in Thousands)
Interest-earning assets
Loans receivable and held for sale	$	1,655,078		$	1,657,260		$	1,775,455		$	1,766,715		$	1,759,970
Mortgage related securities		100,056			90,457			91,199			96,529			105,727
Debt securities, federal funds sold and short term investments		308,105			273,929			217,356			166,160			164,306
Total interest-earning assets		2,063,239			2,021,646			2,084,010			2,029,404			2,030,003
Noninterest-earning assets		143,375			147,781			147,573			160,526			147,342
Total assets	$	2,206,614		$	2,169,427		$	2,231,583		$	2,189,930		$	2,177,345

Interest-bearing liabilities
Demand accounts	$	63,610		$	55,552		$	53,771		$	50,590		$	45,289
Money market, savings, and escrow accounts		350,270			314,418			304,467			282,349			252,500
Certificates of deposit		690,196			705,712			726,132			741,265			730,573
Total interest-bearing deposits		1,104,076			1,075,682			1,084,370			1,074,204			1,028,362
Borrowings		480,054			482,665			546,070			531,588			609,863
Total interest-bearing liabilities		1,584,130			1,558,347			1,630,440			1,605,792			1,638,225
Noninterest-bearing demand deposits		141,648			138,446			128,665			129,911			115,605
Noninterest-bearing liabilities		45,658			50,188			64,001			56,451			47,140
Total liabilities		1,771,436			1,746,981			1,823,106			1,792,154			1,800,970
Equity		435,178			422,446			408,477			397,776			376,375
Total liabilities and equity	$	2,206,614		$	2,169,427		$	2,231,583		$	2,189,930		$	2,177,345

Average Yield/Costs (annualized)
Loans receivable and held for sale		3.99	%		4.06	%		4.08	%		4.10	%		4.23	%
Mortgage related securities		1.95	%		2.20	%		2.30	%		2.42	%		2.55	%
Debt securities, federal funds sold and short term investments		1.12	%		1.30	%		1.59	%		1.75	%		1.71	%
Total interest-earning assets		3.47	%		3.60	%		3.75	%		3.83	%		3.93	%

Demand accounts		0.08	%		0.07	%		0.07	%		0.09	%		0.08	%
Money market and savings accounts		0.23	%		0.32	%		0.53	%		0.67	%		0.74	%
Certificates of deposit		0.50	%		0.72	%		1.20	%		1.62	%		1.91	%
Total interest-bearing deposits		0.39	%		0.57	%		0.96	%		1.29	%		1.54	%
Borrowings		2.06	%		2.10	%		1.97	%		1.98	%		1.76	%
Total interest-bearing liabilities		0.90	%		1.05	%		1.30	%		1.52	%		1.62	%

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,
	2021			2021			2020			2020			2020
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	14,517		$	14,247		$	14,546		$	13,461		$	13,701
Provision for loan losses		(750	)		(1,100	)		-			1,000			4,325
Total noninterest income		1,630			1,243			1,655			3,104			2,936
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		4,874			4,975			5,159			5,000			4,906
Occupancy, office furniture and equipment		887			1,025			934			874			866
Advertising		260			209			244			252			297
Data processing		466			511			511			490			678
Communications		86			119			110			113			91
Professional fees		198			194			5			266			226
Real estate owned		-			(12	)		(63	)		11			33
Loan processing expense		-			-			-			-			-
Other		461			440			577			818			532
Total noninterest expense		7,232			7,461			7,477			7,824			7,629
Income before income taxes		9,665			9,129			8,724			7,741			4,683
Income tax expense		2,128			1,786			1,926			1,565			574
Net income	$	7,537		$	7,343		$	6,798		$	6,176		$	4,109

Efficiency ratio - QTD		44.79	%		48.17	%		46.15	%		47.23	%		45.86	%
Efficiency ratio - YTD		46.44	%		48.17	%		48.71	%		49.59	%		50.86	%

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,
	2021			2021			2020			2020			2020
	(Dollars in Thousands)
Condensed Results of Operations:
Net interest income	$	(251	)	$	(350	)	$	(223	)	$	(58	)	$	(511	)
Provision for loan losses		-			30			30			25			175
Total noninterest income		50,556			55,035			68,500			73,143			64,218
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits		29,170			29,262			33,347			34,559			32,139
Occupancy, office furniture and equipment		1,406			1,540			1,545			1,595			1,668
Advertising		651			615			822			609			567
Data processing		443			454			402			426			413
Communications		240			212			225			226			226
Professional fees		361			(524	)		441			4,465			850
Real estate owned		-			-			-			-			-
Loan processing expense		1,200			1,335			1,026			1,336			1,208
Other		2,678			2,681			2,110			2,444			3,239
Total noninterest expense		36,149			35,575			39,918			45,660			40,310
Income before income taxes		14,156			19,080			28,329			27,400			23,222
Income tax expense		3,761			5,096			7,252			7,284			6,440
Net income	$	10,395		$	13,984		$	21,077		$	20,116		$	16,782

Efficiency ratio - QTD		71.86	%		65.05	%		58.46	%		62.48	%		63.27	%
Efficiency ratio - YTD		68.32	%		65.05	%		65.20	%		67.95	%		72.70	%

Loan originations	$	1,065,161		$	1,115,091		$	1,282,321		$	1,296,725		$	1,142,683
Purchase		75.4	%		56.1	%		59.2	%		64.1	%		55.5	%
Refinance		24.6	%		43.9	%		40.8	%		35.9	%		44.5	%
Gross margin on loans sold⁽¹⁾		4.81	%		4.86	%		5.40	%		5.44	%		5.45	%
(1) - Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations