Waterstone Financial, Inc. Announces Results Of Operations For The Quarter And The Nine Months Ended September 30, 2014

WAUWATOSA, Wis., Oct. 24, 2014 /PRNewswire/ -- Waterstone Financial, Inc. WSBF, holding company for WaterStone Bank, reported net income for the third quarter of 2014 of $4.8 million, compared to $3.8 million for the quarter ended June 30, 2014 and $3.2 million for the quarter ended September 30, 2013.  Net income per diluted share was $0.14 for the third quarter of 2014 as compared to $0.11 per diluted share for the second quarter of 2014 and $0.09 per diluted share for the third quarter of 2013. 

"The community banking and mortgage banking segments performed well during the quarter with revenue and net income up in both segments on a linked quarter and year-over-year basis, reflecting our balance sheet growth, improving credit quality, and focus on operating efficiency," said Doug Gordon, President and Chief Executive Officer of the Company.

The increase in net income compared to the previous quarter and the same quarter in the prior year was attributable to both the community banking and mortgage banking segments.  Community banking segment net income totaled $3.4 million for the quarter ended September 30, 2014 compared to $2.8 million for quarter ended June 30, 2014 and $2.5 million for the quarter ended September 30, 2013. Community banking operations were positively impacted by a $1.2 million increase in net interest income to $10.5 million during the third quarter of 2014 compared to $9.3 million during the third quarter of 2013. Net income for the community banking segment was also positively impacted by a $750,000 decline in provision for loan losses from $1.0 million during the third quarter of 2013 to $250,000 in the third quarter of 2014 due to the improving credit quality metrics set forth below. Expense related to real estate owned returned to a more normalized level during the quarter ended September 30, 2014, compared to the quarter ended September 30, 2013, which was positively impacted by property sales with significant gains. 

Mortgage banking segment net income totaled $1.2 million for the quarter ended September 30, 2014 compared to $1.0 million for quarter ended June 30, 2014 and $639,000 for the quarter ended September 30, 2013. Mortgage banking operations were positively impacted by a 13.3% increase in the volume of loans originated and sold as well as a 6.3% increase in the margins earned on loan sales during the quarter ended September 30, 2014 compared to the quarter ended September 30, 2013. 

Credit quality continued its steady pace of improvement during the third quarter of 2014.  Nonaccrual loans have declined by 6.3% to $43.1 million at September 30, 2014 from $46.0 million at June 30, 2014 and have declined 15.4% from $51.0 million at December 31, 2013.  Total past due loans declined 21.1% to $34.6 million at September 30, 2014 from $43.9 million at June 30, 2014 and have declined 21.3% from $44.0 million at December 31, 2013. Total loans past due less than 90 days have declined 69.6% to $5.3 million at September 30, 2014 from $17.3 million at June 30, 2014 and have declined 60.1% from $13.2 million from December 31, 2013. The level of loans past due less than 90 days, which represent an early stage indicator of future potential loan loss, is at its lowest level in approximately ten years. 

About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa, Brookfield, Franklin/Hales Corners, Germantown/Menomonee Falls, Oak Creek, Oconomowoc/Lake Country, Pewaukee, Waukesha/Brookfield, West Allis, Wisconsin and a commercial lending branch in Maple Grove, Minnesota. WaterStone Bank is the parent company to Waterstone Mortgage, which offers mortgage banking offices in 16 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.

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 Annual Report on Form 10-K for the year ended December 31, 2013 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.

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SOURCE Waterstone Financial, Inc.