Waterstone Financial, Inc. Announces Results of Operations for the Quarter Ended March 31, 2016

WAUWATOSA, Wis., April 22, 2016 /PRNewswire/ -- Waterstone Financial, Inc. WSBF, holding company for WaterStone Bank, reported net income per diluted share of $0.14 for the quarter ended March 31, 2016, which represents a 55.6% increase compared to net income per diluted share of $0.09 for the quarter ended March 31, 2015 and a 27.3% increase compared to net income per diluted share of $0.11 for the quarter ended December 31, 2015.

"Our Community Banking segment highlighted the positive results we achieved during the first quarter of 2016," said Doug Gordon, CEO of Waterstone Financial, Inc. "With significant increases in our net interest margin, and continued improvement in our asset quality, Community Banking net income increased 54% as compared to the first quarter of 2015."

Highlights of the Quarter Ended March 31, 2016

• Consolidated net income of Waterstone Financial, Inc. totaled $3.9 million for the quarter ended March 31, 2016, compared to $3.0 million for the quarter ended March 31, 2015 and $3.1 million for the quarter ended December 31, 2015.
• Return on average assets totaled 0.90% for the three months ended March 31, 2016 compared to 0.69% for the three months ended March 31, 2015.
• Continued a share repurchase program, under which 242,700 shares were repurchased at an average price of $13.54 per share on the open market during the quarter ended March 31, 2016. Since the inception of the share repurchase plan in March of 2015, the Company has repurchased a total of 5,836,453 shares at an average cost of $12.96 per share.

Community Banking Segment Highlights

• Net income of the Community Banking segment totaled $2.5 million for the quarter ended March 31, 2016, which represents a 53.5% increase compared to net income of $1.6 million for the quarter ended March 31, 2015 and a 40.0% increase compared to net income of $1.8 million for the quarter ended December 31, 2015.
• Net interest margin increased 17 bps to 2.48% for the three months ended March 31, 2016 compared to 2.31% for the three month period ended March 31, 2015.
• Total loans increased $47.5 million, or 4.5%, to $1.11 billion at March 31, 2016 compared to $1.06 billion at March 31, 2015.
• Total deposits increased $63.6 million, or 7.4%, to $918.3 million at March 31, 2016 compared to $854.7 million at March 31, 2015. Total core deposits increased $33.5 million, or 15.5%, to $249.0 million at March 31, 2016 compared to $215.5 million at March 31, 2015. The increase in core deposits was comprised of growth in demand deposits of $5.1 million or 5.3% and growth of money market and savings deposits of $28.3 million, or 23.9%.
• Borrowings decreased $37.8 million to $396.2 million at March 31, 2016 from $434.0 million at March 31, 2015. A total of $50.0 million of fixed rate borrowings were paid off during the quarter with funds raised through our retail delivery channels.
• Total non-performing assets decreased $3.0 million, or 11.3%, to $23.8 million at March 31, 2016 from $26.8 million at December 31, 2015 and decreased $28.8 million, or 54.8%, from $52.6 million at March 31, 2015.
• Total past due loans decreased by $1.8 million, or 15.6%, to $9.7 million at March 31, 2016 from $11.5 million at December 31, 2015 and decreased $17.0 million, or 63.6% from $26.7 million at March 31, 2015.

Mortgage Banking Segment Highlights

• Net income of the Mortgage Banking segment totaled $1.4 million for the quarter ended March 31, 2016, which was relatively flat compared to $1.4 million for the quarter ended March 31, 2015 and $1.2 million for the quarter ended December 31, 2015.
• Loans originated by our mortgage banking subsidiary for the purpose of sale in the secondary market decreased $27.8 million, or 7.0%, to $371.2 million during the three months ended March 31, 2016, compared to $399.0 million for the three months ended March 31, 2015. The decrease in originations was driven by a decrease in the origination of mortgage refinance products, partially offset by an increase in the origination of loans made for the purpose of residential purchases, which yield a higher margin that refinance loans. Our origination efforts continue to be focused on loans made for the purpose of residential purchases, as opposed to mortgage refinance. Origination volume relative to purchase activity accounted for 85% and 75% of total originations for the three months ended March 31, 2016 and 2015, respectively. Offsetting the overall decrease in origination volumes, margin increased during the three months ended March 31, 2016, compared to the three months ended March 31, 2015.

About Waterstone Financial, Inc.

Waterstone Financial, Inc. WSBF is a single-bank, holding company headquartered in Wauwatosa, WI.  With $1.7 billion in assets Waterstone has eleven community bank branches in the metropolitan Milwaukee market, a loan production office in Minneapolis, Minnesota, and mortgage banking offices in 20 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.

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SOURCE Waterstone Financial, Inc.