Waterstone Financial, Inc. Announces Expansion of Share Repurchase Program

Rhea-AI Summary

• English
• French
• German
• Italian
• Korean
• Spanish

Waterstone Financial, Inc. (NASDAQ: WSBF) announced an expansion of its share repurchase program, authorizing the repurchase of up to an additional 2,000,000 shares of common stock. The total shares available for repurchase now stand at 2,224,852, representing approximately 11.2% of the company's issued and outstanding shares as of April 23, 2024. The timing and method of repurchases will depend on various factors, with the program subject to suspension, termination, or modification at any time.

Positive

• Expansion of share repurchase program by authorizing the repurchase of up to 2,000,000 additional shares of common stock.
• Total shares available for repurchase now at 2,224,852, equivalent to 11.2% of issued and outstanding shares as of April 23, 2024.
• Repurchase program may utilize open-market repurchases, block trades, negotiated private transactions, and trading plan under Rule 10b5-1.
• Repurchased shares will be considered authorized but unissued by the Company.
• Program subject to suspension, termination, or modification based on various factors including market conditions and alternative investment opportunities.

Negative

• None.

Financial Analyst

An expansion of a share repurchase program can signify several aspects of a company's financial health and strategic focus. Waterstone Financial, Inc.'s decision to enlarge its buyback program is a clear signal to the market that management believes the stock is undervalued or that it’s a good use of excess cash. Historically, share repurchases have been used to return value to shareholders, as they can increase earnings per share by reducing the number of outstanding shares, potentially driving up the share price.

In the case of Waterstone Financial, repurchasing 11.2% of its outstanding common stock could have a considerable impact on the stock's liquidity and may even result in a short-term price increase. However, investors should be wary of the opportunity cost; the capital deployed in repurchasing shares could alternatively be used for investment in growth opportunities or dividend payments. It’s also important to note that while buybacks can be a sign of confidence from management, they do not guarantee better financial performance and can be viewed critically if they are used to artificially inflate stock price metrics.

Market Research Analyst

Understanding the broader market implications of buyback programs requires a keen eye on industry trends and investor sentiment. In the financial industry and particular within smaller financial institutions like Waterstone Financial, buybacks can be a strategic move to adjust the capital structure, especially in a low-interest rate environment where internal investment opportunities do not provide a high return. Additionally, the decision to enact a share repurchase under Rule 10b5-1 allows for repurchases at pre-determined times and prices, which can mitigate accusations of insider trading and provides a systematic approach to buying back shares.

However, investors should consider that buybacks reduce the company's cash reserves, which could be a concern if the financial industry faces a downturn, requiring companies to have robust liquidity buffers. With this in mind, the impact of this buyback on Waterstone Financial's balance sheet and future financial flexibility should be carefully monitored.

WAUWATOSA, Wis., April 23, 2024 (GLOBE NEWSWIRE) -- Waterstone Financial, Inc. (NASDAQ: WSBF) (the "Company") announced that on April 23, 2024, its Board of Directors authorized the repurchase of up to an additional 2,000,000 shares of the Company’s outstanding shares of common stock under its existing repurchase program. Prior to this authorization, 224,852 shares remained available to repurchase under the existing program.  Combined with the shares authorized today, the total 2,224,852 shares available for repurchase represent approximately 11.2% of the Company’s issued and outstanding shares of common stock as of April 23, 2024.  The timing of the repurchases will depend on certain factors, including but not limited to market conditions and prices, available funds and alternative uses of capital. The stock repurchase program may be carried out through open-market repurchases, block trades, negotiated private transactions and pursuant to a trading plan that will be adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Any repurchased shares will be treated as authorized but unissued by the Company. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. The repurchase program does not obligate the Company to repurchase any particular number of shares.

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/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information, please visit our website at wsbonline.com.

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

FAQ

What did Waterstone Financial, Inc. announce regarding their share repurchase program on April 23, 2024?

Waterstone Financial, Inc. announced an expansion of its share repurchase program, authorizing the repurchase of up to an additional 2,000,000 shares of common stock.

How many shares were available for repurchase under the existing program before the recent authorization?

Before the recent authorization, 224,852 shares remained available for repurchase under the existing program.

What percentage of the company's issued and outstanding shares do the total available for repurchase represent as of April 23, 2024?

The total 2,224,852 shares available for repurchase represent approximately 11.2% of Waterstone Financial, Inc.'s issued and outstanding shares as of April 23, 2024.

What factors will determine the timing of the repurchases under the stock repurchase program?

The timing of the repurchases will depend on factors such as market conditions, prices, available funds, and alternative uses of capital.

Under what circumstances can the repurchase program be suspended, terminated, or modified?

The repurchase program may be suspended, terminated, or modified at any time for reasons including market conditions, cost of repurchasing shares, availability of alternative investment opportunities, liquidity, and other appropriate factors.