Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Year Ended December 31, 2015

26 Feb, 2016, 16:05 ET from Waterstone Financial, Inc.

WAUWATOSA, Wis., Feb. 26, 2016 /PRNewswire/ -- Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $3.1 million for the quarter ended December 31, 2015, compared to $2.3 million for the quarter ended December 31, 2014 and $5.2 million for the quarter ended September 30, 2015. Net income totaled $16.6 million for the year ended December 31, 2015, compared to $12.7 million for the year ended December 31, 2014.

"We executed on our 2015 strategic plan by generating record pre-tax earnings; successfully opening two new bank branches in Greenfield and Fox Point; changing the mix of our assets and liabilities by growing commercial real estate loans, business banking loans and transaction deposits; launching our Investment Management division; reducing our non-performing assets; and, making progress on our capital initiatives repurchasing  approximately 5.6 million shares of Waterstone stock at less than book value on average," said Douglas Gordon, CEO of Waterstone Financial, Inc.  "We also expanded the reach of our mortgage subsidiary by opening locations in additional states while generating a record level of loan originations during the year."

Highlights of the Quarter and Year Ended December 31, 2015

  • For the quarter ended December 31, 2015, net income per diluted share was $0.11 as compared to $0.08 for the quarter ended December 31, 2014 and $0.19 for the quarter ended September 30, 2015. Net income per diluted share totaled $0.56 for the year ended December 31, 2015, compared to $0.38 for the year ended December 31, 2014.
  • Return on average assets totaled 0.94% for the year ended December 31, 2015 compared to 0.71% for the year ended December 31, 2014.
  • Total loans increased $19.9 million to $1.11 billion at December 31, 2015 compared to $1.09 billion at December 31, 2014.
  • Transaction deposits increased $32.0 million to $243.3 million at December 31, 2015 compared to $211.3 million at December 31, 2014. Demand deposits grew $10.5 million or 11.4% and money market and savings deposits grew $21.5 million or 18.0% at December 31, 2015 compared to December 31, 2014.
  • Total non-performing assets decreased $7.2 million, or 21.2%, to $26.8 million at December 31, 2015 from $34.0 million at September 30, 2015 and decreased $29.9 million, or 52.8%, from $56.7 million at December 31, 2014.
  • Loans past due less than 90 days decreased by $695,000, or 21.1%, to $2.6 million, or 0.2% of total loans at December 31, 2015 from $3.3 million at September 30, 2015 and decreased $6.4 million, or 71.2%, from $9.0 million at December 31, 2014. Total past due loans decreased by $4.1 million, or 26.4%, to $11.5 million at December 31, 2015 from $15.7 million at September 30, 2015 and decreased $22.6 million, or 66.2% from $34.1 million at December 31, 2014.
  • Loans originated by our mortgage banking subsidiary for the purpose of sale in the secondary market increased $325.0 million, or 19.6%, to $2.0 billion during 2015, compared to $1.7 billion during 2014. 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 84% and 87% of total originations during the years ended December 31, 2015 and 2014, respectively.
  • Continued a share repurchase program, under which 42,700 shares were repurchased at an average price of $13.31 per share on the open market during the quarter ended December 31, 2015. A total of 5,593,753 shares were repurchased at an average price of $12.94 per share during the year ended December 31, 2015.

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 Waterstone has eleven community bank branches in the metropolitan Milwaukee market, a loan production office in Minneapolis, Minnesota, and mortgage banking offices in eighteen 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.

 

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

For The Year Ended December 31,

2015

2014

(Unaudited)

(In Thousands, except per share amounts)

Interest income:

Loans

$

55,175

57,316

Mortgage-related securities

3,229

2,996

Debt securities, federal funds sold and short-term investments

3,559

3,322

Total interest income

61,963

63,634

Interest expense:

Deposits

5,879

4,926

Borrowings

17,240

17,401

Total interest expense

23,119

22,327

Net interest income

38,844

41,307

Provision for loan losses

1,965

1,150

Net interest income after provision for loan losses

36,879

40,157

Noninterest income:

Service charges on loans and deposits

1,648

1,486

Increase in cash surrender value of life insurance

1,417

1,290

Gain on other-than-temporary investment

-

44

Portion of gain recognized in other comprehensive income (before tax)

-

(61)

Net impairment losses recognized in earnings

-

(17)

Mortgage banking income

99,318

77,982

Gain on sale of available for sale securities

44

-

Other

2,047

3,827

Total noninterest income

104,474

84,568

Noninterest expenses:

Compensation, payroll taxes, and other employee benefits

81,753

69,172

Occupancy, office furniture, and equipment

9,287

10,369

Advertising

2,947

2,949

Data processing

2,354

2,245

Communications

1,416

1,690

Professional fees

2,354

2,393

Real estate owned

2,664

2,482

FDIC insurance premiums

1,058

1,395

Other

11,701

12,123

Total noninterest expenses

115,534

104,818

Income before income taxes

25,819

19,907

Income tax expense 

9,249

7,175

Net income 

$

16,570

12,732

Income per share:

Basic

$

0.57

0.38

Diluted

$

0.56

0.38

Weighted average shares outstanding:

Basic

29,161

33,406

Diluted

29,431

33,643

 

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 December 31, 

2015

2014

(Unaudited)

Assets

(In Thousands, except per share amounts)

Cash

$              57,419

145,846

Federal funds sold

20,297

21,268

Interest-earning deposits in other financial institutions and other short term investments

22,755

5,706

Cash and cash equivalents

100,471

172,820

Securities available for sale (at fair value)

269,658

273,443

Loans held for sale (at fair value)

166,516

125,073

Loans receivable

1,114,934

1,094,990

Less: Allowance for loan losses

16,185

18,706

Loans receivable, net

1,098,749

1,076,284

Office properties and equipment, net

25,328

25,562

Federal Home Loan Bank stock (at cost)

19,500

17,500

Cash surrender value of life insurance

49,562

50,848

Real estate owned, net

9,190

18,706

Prepaid expenses and other assets

23,755

23,144

Total assets

$         1,762,729

1,783,380

Liabilities and Shareholders' Equity

Liabilities:

Demand deposits

$            102,673

92,162

Money market and savings deposits

140,631

119,163

Time deposits

650,057

652,635

Total deposits

893,361

863,960

Borrowings

441,203

434,000

Advance payments by borrowers for taxes

3,661

4,991

Other liabilities

32,574

30,192

Total liabilities

1,370,799

1,333,143

Shareholders' equity:

Common stock

294

344

Additional paid-in capital

317,022

313,894

Retained earnings

168,089

157,304

Unearned ESOP shares

(21,365)

(22,552)

Accumulated other comprehensive income, net of taxes

582

1,247

Cost of shares repurchased

(72,692)

-

Total shareholders' equity

391,930

450,237

Total liabilities and shareholders' equity

$         1,762,729

1,783,380

Share Information 

Shares Outstanding - excluding unallocated ESOP shares

27,511

32,418

Shares Outstanding - including unallocated ESOP shares

29,407

34,420

Book Value per share - excluding unallocated ESOP shares

$                14.25

13.89

Book Value per share - including unallocated ESOP shares

$                13.33

13.08

Closing market price

$                14.10

13.15

Price to book ratio - excluding unallocated ESOP shares

98.97%

95.73%

Price to book ratio - including unallocated ESOP shares

105.79%

100.53%

Asset Quality Data

Total non accrual loans

$              17,604

38,011

Real estate owned

9,190

18,706

Total nonperforming assets

$              26,794

56,717

Total non accrual to total loans

1.58%

3.47%

Total nonperforming assets to total assets

1.52%

3.18%

Allowance for loan losses

$              16,185

18,706

Allowance for loan losses as a % to non-accrual loans

91.94%

49.21%

 

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,

2015

2015

2015

2015

2014

(Dollars in Thousands)

Condensed Results of Operations:

Net interest income

$          9,438

9,910

10,060

9,436

10,083

Provision for loan losses

245

580

805

335

300

Total noninterest income

22,850

28,551

31,040

22,033

20,403

Total noninterest expense

27,373

29,786

31,947

26,428

26,553

Income before income taxes

4,670

8,095

8,348

4,706

3,633

Income tax expense

1,599

2,896

3,064

1,690

1,319

Net income

$          3,071

5,199

5,284

3,016

2,314

Income per share – basic

$            0.11

0.19

0.17

0.09

0.08

Income per share – diluted 

$            0.11

0.19

0.17

0.09

0.08

Performance Ratios:

Return on average assets - QTD

0.69%

1.18%

1.21%

0.69%

0.51%

Return on average equity - QTD

3.10%

5.21%

5.04%

2.71%

2.04%

Net interest margin - QTD

2.26%

2.39%

2.46%

2.31%

2.36%

Efficiency ratio - QTD

84.78%

77.44%

77.73%

83.98%

87.10%

Return on average assets - YTD

0.94%

1.03%

0.95%

0.69%

0.71%

Return on average equity - YTD

3.99%

4.26%

3.83%

2.71%

2.89%

Net interest margin - YTD

2.36%

2.38%

2.38%

2.31%

2.44%

Efficiency ratio - YTD

80.61%

79.40%

80.44%

83.98%

83.27%

 

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

SUMMARY OF SHARES REPURCHASED

AS PART OF PUBLICLY ANNOUNCED PLANS

For the quarter ended December 31, 2015

Total shares repurchased

42,700

Total cost of shares (including commission)

$         568,155

Average cost per share

$             13.31

For the year ended December 31, 2015

Total shares repurchased

5,593,753

Total cost of shares (including commission)

$    72,355,935

Average cost per share

$             12.94

 

 

SOURCE Waterstone Financial, Inc.