---

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.

 

 

 

 

 

 

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		For The Three Months Ended September 30,								For The Nine Months Ended September 30,
		2018				2017				2018				2017
		(In Thousands, except per share amounts)
Interest income:
Loans		$	17,340				15,855				49,498				45,078
Mortgage-related securities			643				647				1,925				2,021
Debt securities, federal funds sold and short-term investments			1,063				951				2,949				2,680
Total interest income			19,046				17,453				54,372				49,779
Interest expense:
Deposits			3,063				1,981				8,087				5,614
Borrowings			2,133				2,439				5,574				6,756
Total interest expense			5,196				4,420				13,661				12,370
Net interest income			13,850				13,033				40,711				37,409
Provision for loan losses			40				20				(1,060	)			(1,166	)
Net interest income after provision for loan losses			13,810				13,013				41,771				38,575
Noninterest income:
Service charges on loans and deposits			442				300				1,332				1,148
Increase in cash surrender value of life insurance			695				688				1,496				1,476
Loss on sale of available for sale securities			-				-				-				(107	)
Mortgage banking income			32,653				31,863				88,930				92,774
Other			272				203				805				941
Total noninterest income			34,062				33,054				92,563				96,232
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			27,453				26,153				74,670				73,732
Occupancy, office furniture, and equipment			2,751				2,533				7,995				7,587
Advertising			1,224				821				3,084				2,414
Data processing			809				623				2,057				1,854
Communications			412				394				1,229				1,170
Professional fees			583				629				1,930				1,953
Real estate owned			(128	)			(20	)			63				258
FDIC insurance premiums			131				129				361				366
Other			3,191				3,054				9,921				10,227
Total noninterest expenses			36,426				34,316				101,310				99,561
Income before income taxes			11,446				11,751				33,024				35,246
Income tax expense			2,743				4,362				7,948				12,397
Net income		$	8,703				7,389				25,076				22,849
Income per share:
Basic		$	0.32				0.27				0.91				0.83
Diluted		$	0.31				0.26				0.90				0.82
Weighted average shares outstanding:
Basic			27,451				27,532				27,488				27,449
Diluted			27,680				27,953				27,765				27,927

 

 

 

 

 

 

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		September 30,				December 31,
		2018				2017
		(Unaudited)
Assets		(In Thousands, except per share amounts)
Cash		$	32,966			$	22,306
Federal funds sold			18,352				17,034
Interest-earning deposits in other financial institutions and other short term investments			7,538				9,267
Cash and cash equivalents			58,856				48,607
Securities available for sale (at fair value)			179,076				199,707
Loans held for sale (at fair value)			192,674				149,896
Loans receivable			1,357,656				1,291,814
Less: Allowance for loan losses			13,226				14,077
Loans receivable, net			1,344,430				1,277,737
Office properties and equipment, net			22,417				22,941
Federal Home Loan Bank stock (at cost)			19,575				16,875
Cash surrender value of life insurance			67,198				65,996
Real estate owned, net			2,170				4,558
Prepaid expenses and other assets			33,007				20,084
Total assets		$	1,919,403			$	1,806,401
Liabilities and Shareholders' Equity
Liabilities:
Demand deposits		$	130,969			$	129,597
Money market and savings deposits			159,742				148,804
Time deposits			713,739				688,979
Total deposits			1,004,450				967,380
Borrowings			451,132				386,285
Advance payments by borrowers for taxes			30,460				4,876
Other liabilities			28,717				35,756
Total liabilities			1,514,759				1,394,297
Shareholders' equity:
Common stock			291				295
Additional paid-in capital			329,743				326,655
Retained earnings			184,697				183,358
Unearned ESOP shares			(18,101	)			(18,991	)
Accumulated other comprehensive loss, net of taxes			(3,808	)			(477	)
Cost of shares repurchased			(88,178	)			(78,736	)
Total shareholders' equity			404,644				412,104
Total liabilities and shareholders' equity		$	1,919,403			$	1,806,401
Share Information
Shares Outstanding			29,050				29,501
Book Value per share		$	13.93			$	13.97
Closing market price		$	17.15			$	17.05
Price to book ratio			123.12	%			122.05	%

 

 

 

 

 

 

 

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,
		2018				2018				2018				2017				2017
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	13,850			$	13,720				13,141				13,324				13,033
Provision for loan losses			40				(220	)			(880	)			-				20
Total noninterest income			34,062				33,318				25,183				28,181				33,054
Total noninterest expense			36,426				34,737				30,147				32,318				34,316
Income before income taxes			11,446				12,521				9,057				9,187				11,751
Income tax expense			2,743				3,101				2,104				6,072				4,362
Net income		$	8,703			$	9,420				6,953				3,115				7,389
Income per share – basic		$	0.32			$	0.34				0.25				0.11				0.27
Income per share – diluted		$	0.31			$	0.34				0.25				0.11				0.26
Dividends declared per share		$	0.12			$	0.12				0.62				0.12				0.12
Performance Ratios:
Return on average assets - QTD			1.80	%			2.02	%			1.57	%			0.67	%			1.56	%
Return on average equity - QTD			8.48	%			9.40	%			6.90	%			2.98	%			7.12	%
Net interest margin - QTD			3.07	%			3.14	%			3.18	%			3.08	%			2.95	%
Return on average assets - YTD			1.80	%			1.80	%			1.57	%			1.43	%			1.70	%
Return on average equity - YTD			8.25	%			8.13	%			6.90	%			6.32	%			7.42	%
Net interest margin - YTD			3.13	%			3.16	%			3.18	%			3.00	%			2.97	%
Asset Quality Ratios:
Past due loans to total loans			0.67	%			0.54	%			0.53	%			0.45	%			0.71	%
Non accrual loans to total loans			0.48	%			0.46	%			0.50	%			0.47	%			0.56	%
Non performing assets to total assets			0.45	%			0.45	%			0.54	%			0.59	%			0.62	%

 

 

 

 

 

 

 

 

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,
		2018				2018				2018				2017				2017
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	14,121			$	13,747				13,304				13,375				13,120
Provision for loan losses			-				(250	)			(900	)			-				-
Total noninterest income			1,312				1,137				939				974				1,161
Total noninterest expense			6,800				6,588				7,682				6,939				6,824
Income before income taxes			8,633				8,546				7,461				7,410				7,457
Income tax expense			2,003				1,970				1,668				5,570				2,597
Net income		$	6,630			$	6,576				5,793				1,840				4,860
Efficiency ratio - QTD			44.06	%			44.27	%			53.94	%			48.36	%			47.78	%
Efficiency ratio - YTD			47.28	%			49.00	%			53.94	%			49.98	%			50.56	%