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Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Twelve Months Ended December 31, 2025

Written by Customer Service on . Posted in Earnings Releases And Operating Results.

WAUWATOSA, Wisc., Jan. 28, 2026 (GLOBE NEWSWIRE) — Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $7.7 million, or $0.44 per diluted share, for the quarter ended December 31, 2025 compared to $5.2 million, or $0.28 per diluted share, for the quarter ended December 31, 2024. Net income totaled $7.9 million, or $0.45 per diluted share, for the quarter ended September 30, 2025. Net income per diluted share was $1.48 for the twelve months ended December 31, 2025 compared to net income per diluted share of $1.01 for the twelve months ended December 31, 2024.

“We ended 2025 on a high note as net interest margin, deposit growth, and strong asset quality metrics resulted in our best quarterly pretax income since June 2022,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “The Community Banking segment achieved growth in net interest income of $2.6 million, or 20.4%, compared to the quarter ended December 31, 2024 as net interest margin grew to 2.89% for the quarter. The increases were primarily due to growth in yield on our loans held for investment and a reduction of our cost of funds. Strong asset quality and another quarter of net recoveries resulted in a release from our allowance for credit losses. The Mortgage Banking segment recorded a third straight quarter of pre-tax income due to an increase in refinance activity as rates decreased periodically throughout the quarter. We increased our book value per share $0.53 during the quarter with continued strong earnings, share repurchase program, and improving valuations on our investment security portfolio, prior to declaring a quarterly dividend of $0.15 per share. In total, $5.3 million was returned to shareholders through buybacks and dividends in the quarter.”

Highlights of the Quarter Ended December 31, 2025

Waterstone Financial, Inc. (Consolidated)

  • Consolidated net income of Waterstone Financial, Inc. totaled $7.7 million for the quarter ended December 31, 2025 compared to net income of $5.2 million for the quarter ended December 31, 2024.
  • Consolidated return on average assets (annualized) was 1.35% for the quarter ended December 31, 2025 and 0.94% for the quarter ended December 31, 2024.
  • Consolidated return on average equity (annualized) was 8.74% for the quarter ended December 31, 2025 and 6.05% for the quarter ended December 31, 2024.
  • Dividends declared during the quarter ended December 31, 2025 totaled $0.15 per common share.
  • During the quarter ended December 31, 2025, we repurchased approximately 174,000 shares at a cost (including the federal excise tax) of $2.7 million, or $15.62 per share.
  • Nonperforming assets as a percentage of total assets was 0.29% at December 31, 2025, 0.27% at September 30, 2025, and 0.28% at December 31, 2024.
  • Past due loans as a percentage of total loans was 0.86% at December 31, 2025, 0.50% at September 30, 2025, and 0.90% at December 31, 2024.
  • Book value per share was $19.03 at December 31, 2025 and $17.53 at December 31, 2024.

Community Banking Segment

  • Pre-tax income totaled $9.1 million for the quarter ended December 31, 2025, which represents a $2.4 million, or 35.5%, increase compared to $6.7 million for the quarter ended December 31, 2024.
  • Net interest income totaled $15.5 million for the quarter ended December 31, 2025, which represents a $2.6 million, or 20.4%, increase compared to $12.9 million for the quarter ended December 31, 2024.
  • Average loans held for investment totaled $1.71 billion during the quarter ended December 31, 2025, which represents an increase of $30.3 million, or 1.8%, compared to the quarter ended December 31, 2024. The increase was primarily due to increases in multi-family and commercial real estate mortgages offset by a decrease in single-family mortgages. Average loans held for investment increased $30.1 million compared to $1.68 billion for the quarter ended September 30, 2025. The increase was primarily due to increases in multi-family and commercial real estate mortgages. The ending loan balance decreased $39.3 million from September 30, 2025 due to a few significant construction loan payoffs at year end.
  • Net interest margin increased 47 basis points to 2.89% for the quarter ended December 31, 2025 compared to 2.42% for the quarter ended December 31, 2024, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in the cost of borrowings and weighted average cost of deposits. Net interest margin increased 13 basis points compared to 2.76% for the quarter ended September 30, 2025, which was primarily driven by decreases in cost of borrowings and weighted average cost of deposits.
  • Past due loans at the community banking segment totaled $10.4 million at December 31, 2025, $6.8 million at September 30, 2025, and $12.8 million at December 31, 2024.
  • The segment had a negative provision for credit losses related to funded loans of $252,000 for the quarter ended December 31, 2025 compared to a provision for credit losses related to funded loans of $61,000 for the quarter ended December 31, 2024. The current quarter decrease was primarily due to decreases in multi-family and construction loan balances. The negative provision for credit losses related to unfunded loan commitments was $266,000 for the quarter ended December 31, 2025 compared to a provision for credit losses related to unfunded loan commitments of $270,000 for the quarter ended December 31, 2024. The negative provision for credit losses related to unfunded loan commitments for the quarter ended December 31, 2025 was due primarily to decreases in the construction loans waiting to be funded and the loan pipeline compared to the prior quarter end.
  • The efficiency ratio, a non-GAAP ratio, was 49.23% for the quarter ended December 31, 2025, compared to 51.54% for the quarter ended December 31, 2024.
  • Average core retail deposits (excluding brokered and escrow accounts) totaled $1.32 billion during the quarter ended December 31, 2025, an increase of $49.0 million, or 3.8%, compared to $1.27 billion during the quarter ended December 31, 2024 due primarily to increases in money market and certificate of deposits balances. Average deposits increased $11.9 million, or 3.6% annualized, compared to $1.31 billion for the quarter ended September 30, 2025. The segment had an average of $105.5 million in brokered certificate of deposits during the quarter ended December 31, 2025 compared to $59.3 million during the quarter ended December 31, 2024.

Mortgage Banking Segment

  • Pre-tax income totaled $900,000 for the quarter ended December 31, 2025, compared to a pretax loss of $625,000 for the quarter ended December 31, 2024.
  • Loan originations increased $64.0 million, or 13.6%, to $534.6 million during the quarter ended December 31, 2025, compared to $470.7 million during the quarter ended December 31, 2024. Origination volume relative to purchase activity accounted for 78.9% of originations for the quarter ended December 31, 2025 compared to 82.1% of total originations for the quarter ended December 31, 2024.
  • Mortgage banking non-interest income increased $2.7 million, or 15.6%, to $20.2 million for the quarter ended December 31, 2025, compared to $17.5 million for the quarter ended December 31, 2024.
  • Gross margin on loans sold totaled 3.80% for the quarter ended December 31, 2025, compared to 3.74% for the quarter ended December 31, 2024.
  • Total compensation, payroll taxes and other employee benefits increased $1.7 million or 12.4%, to $15.5 million during the quarter ended December 31, 2025 compared to $13.8 million during the quarter ended December 31, 2024. The increase primarily related to increased commission expense, manager pay expense, bonus expense, and health insurance expense.

About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank, a community-focused financial institution established in 1921. WaterStone Bank offers a comprehensive suite of personal and business banking products and operates 14 branch locations across southeastern Wisconsin. WaterStone Bank is also the parent company of WaterStone Mortgage Corporation, a national lender licensed in 48 states.

With a long-standing commitment to innovation, integrity, and community service, Waterstone Financial, Inc. supports the financial and homeownership goals of customers nationwide. For more information about WaterStone Bank, go to wsbonline.com.

Forward-Looking Statements
This press release contains statements or information that may constitute 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.” Any such statements are based upon current expectations that involve a number of risks and uncertainties and are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. Factors that might cause such a difference include changes in interest rates; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk 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.

Non-GAAP Financial Measures
Management uses non-GAAP financial information in its analysis of the Company’s performance. Management believes that this non-GAAP measure provides a greater understanding of ongoing operations and enhance comparability of results of operations with prior periods. The Company’s management believes that investors may use this non-GAAP measure to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in this measure and that different companies might calculate this measure differently.

 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
  For The Three Months
Ended December 31,		  For The Twelve Months
Ended December 31,		 
  2025  2024  2025  2024 
  (In Thousands, except per share amounts) 
Interest income:                
Loans $27,175  $26,391  $104,753  $103,066 
Mortgage-related securities  1,406   1,136   5,215   4,496 
Debt securities, federal funds sold and short-term investments  1,531   1,525   6,140   5,606 
Total interest income  30,112   29,052   116,108   113,168 
Interest expense:                
Deposits  10,693   11,410   43,519   40,573 
Borrowings  3,708   4,807   15,855   26,427 
Total interest expense  14,401   16,217   59,374   67,000 
Net interest income  15,711   12,835   56,734   46,168 
Provision (credit) for credit losses  (558)  367   (1,394)  (168)
Net interest income after provision (credit) for loan losses  16,269   12,468   58,128   46,336 
Noninterest income:                
Service charges on loans and deposits  461   626   2,085   2,060 
Increase in cash surrender value of life insurance  540   407   2,561   1,969 
Mortgage banking income  20,063   17,365   79,225   83,565 
Other  395   607   1,316   1,708 
Total noninterest income  21,459   19,005   85,187   89,302 
Noninterest expenses:                
Compensation, payroll taxes, and other employee benefits  20,917   18,423   79,619   81,078 
Occupancy, office furniture, and equipment  1,824   1,579   7,194   7,573 
Advertising  696   727   2,877   3,554 
Data processing  1,206   1,233   4,941   4,978 
Communications  232   224   973   922 
Professional fees  219   1,114   2,835   3,184 
Real estate owned  (298)  12   (312)  26 
Loan processing expense  571   486   2,996   3,090 
Other  2,310   1,469   8,747   7,231 
Total noninterest expenses  27,677   25,267   109,870   111,636 
Income before income taxes  10,051   6,206   33,445   24,002 
Income tax expense  2,338   996   7,043   5,314 
Net income $7,713  $5,210  $26,402  $18,688 
Income per share:                
Basic $0.44  $0.28  $1.48  $1.01 
Diluted $0.44  $0.28  $1.48  $1.01 
Weighted average shares outstanding:                
Basic  17,466   18,335   17,837   18,556 
Diluted  17,507   18,396   17,867   18,589 

 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
  December 31,  December 31,
 
  2025  2024
 
  (Unaudited)    
Assets (In Thousands, except per share amounts)
Cash $63,560  $35,182 
Federal funds sold  7,255   4,302 
Interest-earning deposits in other financial institutions and other short-term investments  292   277 
Cash and cash equivalents  71,107   39,761 
Securities available for sale (at fair value)  230,848   208,549 
Loans held for sale (at fair value)  145,057   135,909 
Loans receivable  1,675,552   1,680,576 
Less: Allowance for credit losses (“ACL”) – loans  17,478   18,247 
Loans receivable, net  1,658,074   1,662,329 
        
Office properties and equipment, net  18,855   19,389 
Federal Home Loan Bank stock (at cost)  19,804   20,295 
Cash surrender value of life insurance  77,353   74,612 
Real estate owned, net  424   505 
Prepaid expenses and other assets  37,985   48,259 
Total assets $2,259,507  $2,209,608 
        
Liabilities and Shareholders’ Equity       
Liabilities:       
Demand deposits $175,595  $171,115 
Money market and savings deposits  329,031   283,243 
Time deposits  932,646   905,539 
Total deposits  1,437,272   1,359,897 
        
Borrowings  412,258   446,519 
Advance payments by borrowers for taxes  2,996   5,630 
Other liabilities  57,589   58,427 
Total liabilities  1,910,115   1,870,473 
        
Shareholders’ equity:       
Preferred stock  –   – 
Common stock  184   193 
Additional paid-in capital  78,014   91,214 
Retained earnings  292,957   277,196 
Unearned ESOP shares  (9,496)  (10,682)
Accumulated other comprehensive loss, net of taxes  (12,267)  (18,786)
Total shareholders’ equity  349,392   339,135 
Total liabilities and shareholders’ equity $2,259,507  $2,209,608 
        
Share Information       
Shares outstanding  18,360   19,343 
Book value per share $19.03  $17.53 

 
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, 
  2025  2025  2025  2025  2024 
  (Dollars in Thousands, except per share amounts) 
Condensed Results of Operations:                    
Net interest income $15,711  $14,739  $13,708  $12,576  $12,835 
Provision (credit) for credit losses  (558)  (269)  (9)  (558)  367 
Total noninterest income  21,459   22,302   24,329   17,097   19,005 
Total noninterest expense  27,677   27,466   28,377   26,350   25,267 
Income before income taxes  10,051   9,844   9,669   3,881   6,206 
Income tax expense  2,338   1,918   1,942   845   996 
Net income $7,713  $7,926  $7,727  $3,036  $5,210 
Income per share – basic $0.44  $0.45  $0.43  $0.17  $0.28 
Income per share – diluted $0.44  $0.45  $0.43  $0.17  $0.28 
Dividends declared per common share $0.15  $0.15  $0.15  $0.15  $0.15 
                     
Performance Ratios (annualized):                    
Return on average assets – QTD  1.35%  1.42%  1.39%  0.57%  0.94%
Return on average equity – QTD  8.74%  9.14%  9.04%  3.61%  6.05%
Net interest margin – QTD  2.89%  2.76%  2.60%  2.47%  2.42%
                     
Return on average assets – YTD  1.19%  1.13%  0.99%  0.57%  0.84%
Return on average equity – YTD  7.62%  7.23%  6.32%  3.61%  5.48%
Net interest margin – YTD  2.68%  2.61%  2.54%  2.47%  2.17%
                     
Asset Quality Ratios:                    
Past due loans to total loans  0.86%  0.50%  0.69%  0.67%  0.90%
Nonaccrual loans to total loans  0.37%  0.35%  0.49%  0.45%  0.34%
Nonperforming assets to total assets  0.29%  0.27%  0.37%  0.35%  0.28%
Allowance for credit losses – loans to loans receivable  1.04%  1.03%  1.07%  1.08%  1.09%

 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
(Unaudited)
 
  At or For the Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2025  2025  2025  2025  2024 
Average balances (Dollars in Thousands) 
Interest-earning assets                    
Loans receivable and held for sale $1,842,908  $1,809,600  $1,812,065  $1,768,617  $1,819,574 
Mortgage related securities  180,434   178,063   173,220   170,947   168,521 
Debt securities, federal funds sold and short-term investments  133,781   131,165   131,710   123,004   124,658 
Total interest-earning assets  2,157,123   2,118,828   2,116,995   2,062,568   2,112,753 
Noninterest-earning assets  107,462   103,434   105,382   105,030   100,627 
Total assets $2,264,585  $2,222,262  $2,222,377  $2,167,598  $2,213,380 
                     
Interest-bearing liabilities                    
Demand accounts $92,292  $90,015  $89,548  $87,393  $92,247 
Money market, savings, and escrow accounts  339,368   334,300   320,908   300,686   306,478 
Certificates of deposit – retail  823,586   823,274   830,550   818,612   810,340 
Certificates of deposit – brokered  105,496   61,814   72,533   97,101   59,254 
Total interest-bearing deposits  1,360,742   1,309,403   1,313,539   1,303,792   1,268,319 
Borrowings  419,541   440,968   437,784   397,053   464,964 
Total interest-bearing liabilities  1,780,283   1,750,371   1,751,323   1,700,845   1,733,283 
Noninterest-bearing demand deposits  89,673   88,799   85,665   80,372   87,889 
Noninterest-bearing liabilities  44,688   39,136   42,669   44,905   49,645 
Total liabilities  1,914,644   1,878,306   1,879,657   1,826,122   1,870,817 
Equity  349,941   343,956   342,720   341,476   342,563 
Total liabilities and equity $2,264,585  $2,222,262  $2,222,377  $2,167,598  $2,213,380 
                     
Average Yield/Costs (annualized)                    
Loans receivable and held for sale  5.85%  5.84%  5.73%  5.75%  5.75%
Mortgage related securities  3.09%  3.04%  2.90%  2.83%  2.67%
Debt securities, federal funds sold and short-term investments  4.54%  4.74%  4.74%  4.90%  4.85%
Total interest-earning assets  5.54%  5.53%  5.43%  5.46%  5.46%
                     
Demand accounts  0.11%  0.11%  0.11%  0.11%  0.11%
Money market and savings accounts  2.09%  2.04%  2.07%  2.10%  2.00%
Certificates of deposit – retail  3.78%  3.92%  4.11%  4.33%  4.53%
Certificates of deposit – brokered  3.89%  4.11%  4.35%  4.18%  4.18%
Total interest-bearing deposits  3.12%  3.19%  3.35%  3.52%  3.58%
Borrowings  3.51%  3.86%  3.67%  3.93%  4.11%
Total interest-bearing liabilities  3.21%  3.36%  3.43%  3.62%  3.72%

 
COMMUNITY BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
 
  At or For the Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2025  2025  2025  2025  2024 
  (Dollars in Thousands) 
Condensed Results of Operations:                    
Net interest income $15,521  $14,617  $13,640  $12,403  $12,886 
Provision (credit) for credit losses  (518)  (276)  (19)  (518)  331 
Total noninterest income  1,305   1,359   1,686   1,348   1,595 
Noninterest expenses:                    
Compensation, payroll taxes, and other employee benefits  5,646   5,036   5,027   5,212   4,883 
Occupancy, office furniture and equipment  1,026   907   920   1,076   825 
Advertising  250   213   219   171   204 
Data processing  741   733   806   712   691 
Communications  103   108   99   100   89 
Professional fees  185   200   196   347   196 
Real estate owned  (298)  4   (8)  (10)  12 
Loan processing expense  –   –   –   –   – 
Other  630   617   466   596   563 
Total noninterest expense  8,283   7,818   7,725   8,204   7,463 
Income before income taxes  9,061   8,434   7,620   6,065   6,687 
Income tax expense  2,063   1,518   1,400   1,427   1,399 
Net income $6,998  $6,916  $6,220  $4,638  $5,288 
                     
Efficiency ratio – QTD (non-GAAP)  49.23%  48.94%  50.40%  59.66%  51.54%
Efficiency ratio – YTD (non-GAAP)  51.76%  52.71%  54.78%  59.66%  59.58%

 
MORTGAGE BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
 
  At or For the Three Months Ended 
  December 31,  September 30,  June 30,  March 31,  December 31, 
  2025  2025  2025  2025  2024 
  (Dollars in Thousands) 
Condensed Results of Operations:                    
Net interest income (loss) $205  $103  $53  $152  $(92)
Provision (credit) for credit losses  (40)  7   10   (40)  36 
Total noninterest income  20,172   20,985   22,643   15,731   17,455 
Noninterest expenses:                    
Compensation, payroll taxes, and other employee benefits  15,489   15,716   16,312   12,054   13,781 
Occupancy, office furniture and equipment  798   781   833   853   754 
Advertising  446   499   527   552   523 
Data processing  465   475   507   498   542 
Communications  129   141   158   135   135 
Professional fees  33   180   303   1,373   917 
Real estate owned  –   –   –   –   – 
Loan processing expense  571   688   817   920   486 
Other  1,586   1,271   1,230   1,751   814 
Total noninterest expense  19,517   19,751   20,687   18,136   17,952 
Income (loss) before income taxes expense (benefit)  900   1,330   1,999   (2,213)  (625)
Income tax expense (benefit)  244   382   531   (588)  (428)
Net income (loss) $656  $948  $1,468  $(1,625) $(197)
                     
Efficiency ratio – QTD (non-GAAP)  95.78%  93.66%  91.15%  114.18%  103.39%
Efficiency ratio – YTD (non-GAAP)  97.56%  98.17%  100.63%  114.18%  97.74%
                     
Loan originations $534,646  $539,404  $588,838  $387,729  $470,650 
Purchase  78.9%  90.1%  91.7%  87.5%  82.1%
Refinance  21.1%  9.9%  8.3%  12.5%  17.9%
Gross margin on loans sold(1)  3.80%  3.87%  3.84%  3.98%  3.74%
                     

(1) Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations.

Contact: Mark R. Gerke
Chief Financial Officer
414-459-4012
markgerke@wsbonline.com

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The information, analyses, and market data provided are for general information purposes only and do not constitute individual investment advice. They should not be construed as a basis for investment decisions and do not take into account the specific investment objectives, financial situation, or individual needs of any recipient.

High Risks:

Trading in financial instruments is associated with significant risks and may result in the complete loss of the invested capital. Goldalea Capital Ltd. accepts no liability for losses incurred as a result of the use of the information provided or the execution of transactions.

Sole Responsibility:

The decision to invest or not to invest is solely the responsibility of the investor. Investors should obtain comprehensive information about the risks involved before making any investment decision and, if necessary, seek independent advice.

No Guarantees:

Goldalea Capital Ltd. makes no warranties or representations as to the accuracy, completeness, or timeliness of the information provided. Markets are subject to constant change, and past performance is not a reliable indicator of future results.

Regional Restrictions:

The services offered by Goldalea Capital Ltd. may not be available to all persons or in all countries. It is the responsibility of the investor to ensure that they are authorized to use the services offered.

Please note: This disclaimer is for general information purposes only and does not replace individual legal or tax advice.