Attached files
| file | filename |
|---|---|
| 8-K - Waterstone Financial, Inc. | form8k.htm |
Exhibit 99.1
WATERSTONE FINANCIAL, INC.
WATERSTONE BANK
11200 W. PLANK CT.
WAUWATOSA, WI 53226
Contact: Allan Hosack
Chief Financial Officer
414.459.4010
allanhosack@wsbonline.com
FOR IMMEDIATE RELEASE
WATERSTONE FINANCIAL, INC. ANNOUNCES RESULTS OF OPERATIONS FOR THE QUARTER AND THE YEAR ENDED DECEMBER 31, 2014.
WAUWATOSA, WI – 3/6/2015 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income for the year ended December 31, 2014 of $12.7 million, compared to $14.7 for the year ended December 31, 2013. For the year ended December 31, 2014, net income per diluted share was $0.38 as compared to $0.43 for the year ended December 31, 2013.
Waterstone Financial, Inc. reported net income of $2.3 million, or $0.08 per share, for the quarter ended December 31, 2014, compared to $4.7 million, or $0.14 per share, for the quarter ended September 30, 2014 and $1.9 million, or $0.06 per share, for the quarter ended December 31, 2013.
"Our banking segment net income increased $963,000 or 11% compared to 2013 due to higher net interest income and reduced provision expense from continued improving asset quality," said Douglas Gordon, President and Chief Executive Officer of the Company. "The net income results of our mortgage banking segment are up $1.2 million over the last two quarters of 2014 compared to the last two quarters of 2013, as well. This is related to stronger loan origination volumes and improved efficiency. We look forward to 2015 as we deploy our significant capital in expanding our service offerings with wealth management, growing our bank branch network, and increasing our mortgage origination footprint."
Fiscal 2014 Highlights
| · | Total non-performing assets decreased $16.9 million or 23.0% to $56.7 million from $73.6 million at December 31, 2013 |
| · | Net interest income increased $2.1 million or 5.4% to $41.3 million for the year ended December 31, 2014 compared to $39.2 million for the year ended December 31, 2013. |
| · | Past due loans decreased by $9.9 million, or 22.4%, to $34.1 million at December 31, 2014 from $44.0 million at December 31, 2013. Loans past due less than 90 days decreased by $4.2 million, or 31.8%, to $9.0 million at December 31, 2014 from $13.2 million at December 31, 2013. |
Community banking segment net income totaled $10.0 million for the current year compared to $9.0 million for the prior year. Community banking operations were positively impacted by a $1.4 million increase in net interest income to $39.6 million for the year ended December 31, 2014 compared to $38.1 million for the year ended December 31, 2013. Net income for the community banking segment was also positively impacted by a $3.7 million decline in provision for loan losses to $750,000 in 2014 due to the improving credit quality metrics. Expenses related to real estate owned increased $2.2 million, to $2.5 million for the year ended December 31, 2014, compared to the year ended December 31, 2013 due to significant gains recorded in 2013.
While the mortgage banking segment net income results over the last two quarters are up compared to the last two quarters in 2013, the mortgage banking segment net income decreased $3.0 million for the year ended December 31, 2014 compared to December 31, 2013. Net income was $2.4 million in the current year compared to $5.5 million in the prior year. Mortgage banking operations were negatively impacted by a lower volume of loans originated during the first two quarters of 2014 compared to the first two quarters of 2013 along with higher operating expenses prior to efficiency gains.
About Waterstone Financial, Inc.
Waterstone Financial, Inc. (NASDAQ: WSBF) is a single-bank, holding company headquartered in Wauwatosa, WI. With $1.8 billion in assets at December 31, 2014, Waterstone has nine community bank branches in the metropolitan Milwaukee market, a loan production office in Minneapolis, Minnesota, and mortgage banking offices in sixteen states around the country. Additional financial detail related to WaterStone Bank, SSB can be found on the FDIC web site (www.fdic.gov) under the "Industry Analysis" tab.
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.
- 5 -
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
For The Year Ended December 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
(In thousands, except per share amounts)
|
||||||||
|
Interest income:
|
||||||||
|
Loans
|
$
|
57,316
|
58,470
|
|||||
|
Mortgage-related securities
|
2,996
|
1,849
|
||||||
|
Debt securities, federal funds sold and short-term investments
|
3,322
|
2,545
|
||||||
|
Total interest income
|
63,634
|
62,864
|
||||||
|
Interest expense:
|
||||||||
|
Deposits
|
4,926
|
5,215
|
||||||
|
Borrowings
|
17,401
|
18,443
|
||||||
|
Total interest expense
|
22,327
|
23,658
|
||||||
|
Net interest income
|
41,307
|
39,206
|
||||||
|
Provision for loan losses
|
1,150
|
4,532
|
||||||
|
Net interest income after provision for loan losses
|
40,157
|
34,674
|
||||||
|
Noninterest income:
|
||||||||
|
Service charges on loans and deposits
|
1,486
|
1,337
|
||||||
|
Increase in cash surrender value of life insurance
|
1,290
|
1,076
|
||||||
|
Total gain (loss) on other-than-temporary impaired investment
|
44
|
-
|
||||||
|
Portion of (gain) loss recognized in other comprehensive income
(before tax)
|
(61
|
)
|
-
|
|||||
|
Net impairment losses recognized in earnings
|
(17
|
)
|
-
|
|||||
|
Mortgage banking income
|
77,982
|
80,260
|
||||||
|
(Loss) gain on sale of available for sale securities
|
-
|
(9
|
)
|
|||||
|
Other
|
3,827
|
5,135
|
||||||
|
Total noninterest income
|
84,568
|
87,799
|
||||||
|
Noninterest expenses:
|
||||||||
|
Compensation, payroll taxes, and other employee benefits
|
69,172
|
68,807
|
||||||
|
Occupancy, office furniture, and equipment
|
10,369
|
8,165
|
||||||
|
Advertising
|
2,949
|
3,085
|
||||||
|
Data processing
|
2,245
|
2,032
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||||||
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Communications
|
1,690
|
1,557
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||||||
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Professional fees
|
2,393
|
2,386
|
||||||
|
Real estate owned
|
2,482
|
255
|
||||||
|
FDIC insurance premiums
|
1,395
|
1,986
|
||||||
|
Other
|
12,123
|
10,871
|
||||||
|
Total noninterest expenses
|
104,818
|
99,144
|
||||||
|
Income before income taxes
|
19,907
|
23,329
|
||||||
|
Income tax expense
|
7,175
|
8,621
|
||||||
|
Net income
|
$
|
12,732
|
14,708
|
|||||
|
Income per share:
|
||||||||
|
Basic
|
$
|
0.38
|
0.43
|
|||||
|
Diluted
|
$
|
0.38
|
0.43
|
|||||
|
Performance Ratios:
|
||||||||
|
Return on average assets (1)
|
0.71
|
%
|
0.90
|
%
|
||||
|
Return on average equity (1)
|
2.89
|
%
|
7.01
|
%
|
||||
|
Net interest margin (1)
|
2.44
|
%
|
2.56
|
%
|
||||
|
(1)
|
These performance ratios are significantly impacted by our capital raise in 2014.
|
- 6 -
|
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
|
||||||||
|
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
||||||||
|
|
December 31,
|
December 31,
|
||||||
|
|
2014
|
2013
|
||||||
|
Assets
|
(In thousands, except per share amounts)
|
|||||||
|
Cash
|
$
|
145,846
|
428,832
|
|||||
|
Federal funds sold
|
21,268
|
93
|
||||||
|
Interest-earning deposits in other financial institutions and other short term investments
|
5,706
|
244
|
||||||
|
Cash and cash equivalents
|
172,820
|
429,169
|
||||||
|
Securities available for sale (at fair value)
|
273,443
|
213,418
|
||||||
|
Loans held for sale (at fair value)
|
125,073
|
97,021
|
||||||
|
Loans receivable
|
1,094,990
|
1,092,676
|
||||||
|
Less: Allowance for loan losses
|
18,706
|
24,264
|
||||||
|
Loans receivable, net
|
1,076,284
|
1,068,412
|
||||||
|
|
||||||||
|
Office properties and equipment, net
|
25,562
|
27,090
|
||||||
|
Federal Home Loan Bank stock (at cost)
|
17,500
|
17,500
|
||||||
|
Cash surrender value of life insurance
|
50,848
|
39,378
|
||||||
|
Real estate owned, net
|
18,706
|
22,663
|
||||||
|
Prepaid expenses and other assets
|
23,144
|
32,388
|
||||||
|
Total assets
|
1,783,380
|
1,947,039
|
||||||
|
|
||||||||
|
Liabilities and Shareholders' Equity
|
||||||||
|
Liabilities:
|
||||||||
|
Demand deposits
|
92,162
|
93,275
|
||||||
|
Money market and savings deposits
|
119,163
|
513,716
|
||||||
|
Time deposits
|
652,635
|
637,750
|
||||||
|
Total deposits
|
863,960
|
1,244,741
|
||||||
|
|
||||||||
|
Short-term borrowings
|
-
|
21,197
|
||||||
|
Long-term borrowings
|
434,000
|
434,000
|
||||||
|
Advance payments by borrowers for taxes
|
4,991
|
2,482
|
||||||
|
Other liabilities
|
30,192
|
30,147
|
||||||
|
Total liabilities
|
1,333,143
|
1,732,567
|
||||||
|
|
||||||||
|
Shareholders' equity:
|
||||||||
|
Common stock
|
344
|
341
|
||||||
|
Additional paid-in capital
|
313,894
|
110,480
|
||||||
|
Retained earnings
|
157,304
|
151,195
|
||||||
|
Unearned ESOP shares
|
(22,552
|
)
|
(854
|
)
|
||||
|
Accumulated other comprehensive income, net of taxes
|
1,247
|
(1,429
|
)
|
|||||
|
Treasury shares (0 and 2,724,353 shares), at cost
|
-
|
(45,261
|
)
|
|||||
|
Total shareholders' equity
|
450,237
|
214,472
|
||||||
|
Total liabilities and shareholders' equity
|
$
|
1,783,380
|
1,947,039
|
|||||
|
|
||||||||
|
Share Information
|
||||||||
|
Shares outstanding
|
34,420
|
31,349
|
||||||
|
Book value per share - excluding unallocated ESOP shares
|
$
|
13.89
|
$
|
6.86
|
||||
|
Book value per share - including unallocated ESOP shares
|
$
|
13.08
|
$
|
6.84
|
||||
|
Closing market price
|
$
|
13.15
|
$
|
10.11
|
||||
|
Price to book ratio - excluding unallocated ESOP shares
|
95.73
|
%
|
147.19
|
%
|
||||
|
Price to book ratio - including unallocated ESOP shares
|
100.53
|
%
|
147.78
|
%
|
||||
|
Asset Quality Data
|
||||||||
|
Total non accrual loans
|
$ |
38,011
|
50,961
|
|||||
|
Real estate owned
|
18,706
|
22,663
|
||||||
|
Total nonperforming assets
|
$ |
56,717
|
73,624
|
|||||
|
|
||||||||
|
Total non accrual to total loans
|
3.47
|
%
|
4.66
|
%
|
||||
|
Total nonperforming assets to total assets
|
3.18
|
%
|
3.78
|
%
|
||||
|
|
||||||||
|
Allowance for loan losses
|
18,706
|
24,264
|
||||||
|
Net charge-offs
|
6,708
|
11,311
|
||||||
|
Allowance for loan losses as a % to non-accrual loans
|
49.21
|
%
|
47.61
|
%
|
||||
- 7 -
|
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,
|
|||||||||||||||
|
|
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||||
|
|
(In thousands, except per share amounts)
|
|||||||||||||||||||
|
Condensed Results of Operations:
|
||||||||||||||||||||
|
Net interest income
|
$
|
10,083
|
|
10,914
|
|
10,610
|
|
9,700
|
|
9,561
|
||||||||||
|
Provision for loan losses
|
300
|
315
|
285
|
250
|
572
|
|||||||||||||||
|
Total noninterest income
|
20,403
|
23,911
|
23,196
|
17,058
|
17,029
|
|||||||||||||||
|
Total noninterest expense
|
26,553
|
27,030
|
27,603
|
23,632
|
23,410
|
|||||||||||||||
|
Income before income taxes
|
3,633
|
7,480
|
5,918
|
2,876
|
2,608
|
|||||||||||||||
|
Income tax expense
|
1,319
|
2,715
|
2,148
|
993
|
671
|
|||||||||||||||
|
Net income
|
$
|
2,314
|
|
4,765
|
|
3,770
|
|
1,883
|
|
1,937
|
||||||||||
|
Income per share – basic
|
$
|
0.08
|
|
0.14
|
|
0.11
|
|
0.05
|
|
0.06
|
||||||||||
|
Income per share – diluted
|
$
|
0.08
|
|
0.14
|
|
0.11
|
|
0.05
|
|
0.06
|
||||||||||
- 8 -