Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Nine Months Ended September 30, 2026

Rhea-AI Summary

Waterstone Financial (NASDAQ: WSBF) reported lower third-quarter earnings, with net income of $6.2 million for the quarter ended September 30, 2026. Diluted earnings per share fell to $0.36 from $0.45 a year earlier. Nine-month net income rose to $20.6 million from $18.7 million, while diluted earnings per share increased to $1.19 from $1.04.

Community Banking net interest income rose 9.6% to $16.0 million, but segment pre-tax income fell 2.1% to $8.3 million. Mortgage Banking posted a $754,000 pre-tax loss, versus $1.3 million in pre-tax income, as originations and sales margins declined. Nonperforming assets reached 0.55% of total assets, up from 0.27% a year earlier. Book value per share was $19.29, down approximately $0.24 during the quarter but above $19.03 at year-end 2025. The quarterly dividend was $0.17 per common share.

9 points · 0 major

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0 major · 18 points

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Positive

• Moderate pointNine-month net income rose to $20.6 million from $18.7 million; diluted EPS increased to $1.19 from $1.04.
• Moderate pointCommunity Banking quarterly net interest income increased 9.6% to $16.0 million year over year.
• Moderate pointAverage core retail deposits rose 3.0% year over year to $1.35 billion, increasing $14.5 million sequentially.
• Minor pointCommunity Banking net interest margin reached 3.06%, up 30 basis points year over year and three sequentially.
• Minor pointAverage investment loans rose $13.2 million year over year and $18.5 million sequentially to $1.70 billion.

4 minor points

• Minor pointMortgage servicing rights sale generated a $391,000 gain, with $1.4 million proceeds on $1.0 million book value.
• Minor pointMortgage Banking employee costs decreased 6.3% to $14.7 million in the third quarter year over year.
• Minor pointQuarterly dividend of $0.17 per common share exceeded $0.15 in the year-earlier quarter.
• Minor pointBorrowings declined to $391.343 million at September 30, 2026, from $412.258 million at year-end 2025.

Negative

• Moderate pointThird-quarter net income fell to $6.2 million from $7.9 million; diluted EPS declined to $0.36 from $0.45.
• Moderate pointMortgage Banking recorded a $754,000 quarterly pre-tax loss, versus $1.3 million pre-tax income a year earlier.
• Moderate pointMortgage originations decreased 5.5% to $509.7 million in the third quarter year over year.
• Moderate pointMortgage Banking quarterly noninterest income declined 13.4% to $18.2 million year over year.
• Moderate pointNonperforming assets reached 0.55% of assets, versus 0.30% in June 2026 and 0.27% in September 2025.
• Moderate pointPast-due loans reached 0.81% of loans, versus 0.63% in June 2026 and 0.50% in September 2025.
• Moderate pointAnnualized quarterly return on average assets declined to 1.09% from 1.42% a year earlier.
• Moderate pointAnnualized quarterly return on average equity declined to 6.93% from 9.14% a year earlier.
• Moderate pointCash and cash equivalents fell to $54.903 million from $71.107 million at year-end 2025.

9 minor points

• Minor pointGross margin on loans sold fell to 3.48% from 3.87% in the year-earlier quarter.
• Minor pointConsolidated quarterly credit-loss provision was $443,000, versus a $269,000 credit a year earlier.
• Minor pointNine-month credit-loss provision was $943,000, versus an $836,000 credit a year earlier.
• Minor pointCommunity Banking quarterly pre-tax income decreased 2.1% to $8.3 million year over year.
• Minor pointCommunity Banking employee costs increased 12.0% to $5.6 million in the third quarter year over year.
• Minor pointMortgage Banking other noninterest expense rose 42.3% to $1.8 million, primarily reflecting increased loan-sale-loss provisions.
• Minor pointCommunity Banking non-GAAP efficiency ratio worsened to 49.55% from 48.94% in the year-earlier quarter.
• Minor pointBook value fell approximately $0.24 during the quarter to $19.29, though above $19.03 at year-end 2025.
• Minor pointShareholders' equity declined to $346.936 million from $349.392 million at year-end 2025.

News Explained

Past-due loans rose to 0.81% of total loans at September 30, 2026, from 0.63% at June 30, 2026 and 0.50% a year earlier; the company says the increases in past-due loans and nonperforming assets related to one significant relationship previously identified as substandard.

Key Figures

Quarterly net income: $6.2 million vs. $7.9 million Quarterly diluted EPS: $0.36 vs. $0.45 Nine-month net income: $20.6 million vs. $18.7 million +5 more

Quarterly net income

$6.2 million vs. $7.9 million

Quarter ended September 30, 2026 vs. 2025

Quarterly diluted EPS

$0.36 vs. $0.45

Quarter ended September 30, 2026 vs. 2025

Nine-month net income

$20.6 million vs. $18.7 million

Nine months ended September 30, 2026 vs. 2025

Nine-month diluted EPS

$1.19 vs. $1.04

Nine months ended September 30, 2026 vs. 2025

Net interest margin

3.06% vs. 2.76%

Quarter ended September 30, 2026 vs. 2025

Mortgage Banking pre-tax result

$754,000 loss vs. $1.3 million income

Quarter ended September 30, 2026 vs. 2025

Nonperforming assets / total assets

0.55% vs. 0.27%

At September 30, 2026 vs. September 30, 2025

Past-due loans / total loans

0.81% vs. 0.50%

At September 30, 2026 vs. September 30, 2025

Historical Context

1 past event · Latest: Jul 23

1 event

1. Jul 23

   Q2 earnings report

   24h Move

   +3.1%

   Q2 earnings showed year-over-year net income growth and improved margin, including Mortgage Banking income.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

net interest margin, non-gaap ratio, accumulated other comprehensive losses, nonperforming assets

4 terms

net interest margin financial

"Net interest margin increased 30 basis points"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

non-gaap ratio financial

"The efficiency ratio, a non-GAAP ratio"

A non-GAAP ratio is a financial metric that adjusts standard accounting figures to show a company’s performance using criteria management thinks better reflect ongoing operations—for example excluding one-time charges or stock-based pay. Investors use these ratios like a customized lens to see trends or cash generation that headline numbers might hide, but they should be compared carefully because different companies can adjust items in different ways.

accumulated other comprehensive losses financial

"impacting the value of accumulated other comprehensive losses"

The cumulative negative balance within shareholders’ equity that records items of other comprehensive income (OCI) that have reduced equity but have not passed through the income statement. It arises from sources like unrealized gains or losses on certain investments and derivatives, foreign‑currency translation adjustments, and pension plan adjustments; those items are held in OCI until they are realized or reclassified into net income, at which point the accumulated amount is adjusted. As a balance‑sheet account, accumulated other comprehensive losses lower equity immediately but do not affect reported net income until the triggering event causes reclassification.

nonperforming assets financial

"Nonperforming assets as a percentage of total assets"

Nonperforming assets are loans or investments that are not generating expected payments or returns because the borrower has fallen behind on payments or the investment has lost value. They matter to investors because a high level of nonperforming assets can indicate financial trouble for a bank or institution, potentially affecting its stability and profitability.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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WAUWATOSA, Wis., Nov. 13, 2026 (GLOBE NEWSWIRE) -- Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $6.2 million, or $0.36 per diluted share, for the quarter ended September 30, 2026 compared to $7.9 million, or $0.45 per diluted share, for the quarter ended September 30, 2025. Net income totaled $20.6 million for the nine months ended September 30, 2026 compared to net income of $18.7 million for the nine months ended September 30, 2025. Net income per diluted share was $1.19 for the nine months ended September 30, 2026 compared to net income per diluted share of $1.04 for the nine months ended September 30, 2025.

“We are pleased with the hard work to reach another strong quarter with increased challenges from rising short-term and long-term treasury rates,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “The Community Banking segment realized another record quarterly net interest income of $16.0 million, which represented a $1.4 million increase compared to the quarter ended September 30, 2025. The increase was primarily due to a reduction of our average cost of funds, driven in part by continued growth in average transaction deposits. The Mortgage Banking segment realized a pre-tax loss of $754,000 which represents a decrease of $2.1 million compared to the quarter ended September 30, 2025. Sales margins continue to remain under pressure, following the trend from the second quarter and remaining lower than recent averages. The Mortgage Banking segment loan origination volume was hindered by a significant jump in mortgage rates. Book value per share decreased $0.24 during the quarter primarily due to treasury rates increasing negatively, impacting the value of accumulated other comprehensive losses along with declaring our quarterly dividend of $0.17 per share. We still remain in a strong capital position.”

Highlights of the Quarter Ended September 30, 2026

Waterstone Financial, Inc. (Consolidated)

• Consolidated net income of Waterstone Financial, Inc. totaled $6.2 million for the quarter ended September 30, 2026 compared to net income of $7.9 million for the quarter ended September 30, 2025.
• Consolidated return on average assets (annualized) was 1.09% for the quarter ended September 30, 2026 and 1.42% for the quarter ended September 30, 2025.
• Consolidated return on average equity (annualized) was 6.93% for the quarter ended September 30, 2026 and 9.14% for the quarter ended September 30, 2025.
• Dividends declared during the quarter ended September 30, 2026 totaled $0.17 per common share.
• Nonperforming assets as a percentage of total assets was 0.55% at September 30, 2026, 0.30% at June 30, 2026, and 0.27% at September 30, 2025.
• Past due loans as a percentage of total loans was 0.81% at September 30, 2026, 0.63% at June 30, 2026, and 0.50% at September 30, 2025.
• Book value per share was $19.29 at September 30, 2026 and $19.03 at December 31, 2025. Book value decreased approximately $0.24 during the quarter ended September 30, 2026. Of the $0.24 overall decrease, approximately $0.46 was due to the additional available for sale losses as treasury rate increases.
  
  

Community Banking Segment

• Pre-tax income totaled $8.3 million for the quarter ended September 30, 2026, which represents a $176,000, or 2.1%, decrease compared to $8.4 million for the quarter ended September 30, 2025.
• Net interest income totaled $16.0 million for the quarter ended September 30, 2026, which represents a $1.4 million, or 9.6%, increase compared to $14.6 million for the quarter ended September 30, 2025.
• Average loans held for investment totaled $1.70 billion during the quarter ended September 30, 2026, which represents an increase of $13.2 million, or 0.8%, compared to $1.68 billion for the quarter ended September 30, 2025. The increase was primarily due to increases in multi-family mortgages offset by a decrease in single-family mortgages. Average loans held for investment increased $18.5 million compared to $1.68 billion for the quarter ended June 30, 2026. The increase was primarily due to increases in multi-family mortgages offset by a decrease in single-family mortgages. See details on average loans by category in the table below.
• Net interest margin increased 30 basis points to 3.06% for the quarter ended September 30, 2026 compared to 2.76% for the quarter ended September 30, 2025, 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 three basis points compared to 3.03% for the quarter ended June 30, 2026, which was primarily driven by a decrease in the weighted average cost of deposits and increases in mortgage related securities and debt securities yields.
• Past due loans at the community banking segment totaled $11.7 million at September 30, 2026, $8.5 million at June 30, 2026, and $6.8 million at September 30, 2025. The increase in past due loans and non-performing assets was related to one significant relationship which was previously identified as substandard.
• The segment had a negative provision for credit losses related to funded loans of $83,000 for the quarter ended September 30, 2026 compared to a negative provision for credit losses related to funded loans of $137,000 for the quarter ended September 30, 2025. The current quarter decrease was primarily due to a decrease in commercial real estate external qualitative risk factors offset by a $305,000 collateral dependent reserve for a loan that was previously classified as substandard. The provision for credit losses related to unfunded loan commitments was $571,000 for the quarter ended September 30, 2026 compared to a negative provision for credit losses related to unfunded loan commitments of $139,000 for the quarter ended September 30, 2025. The provision for credit losses related to unfunded loan commitments for the quarter ended September 30, 2026 was due primarily to an increase of construction and commercial real estate loans in the loan pipeline and unfunded construction balance at quarter end.
• The efficiency ratio, a non-GAAP ratio, was 49.55% for the quarter ended September 30, 2026, compared to 48.94% for the quarter ended September 30, 2025.
• Average core retail deposits (excluding brokered and escrow accounts) totaled $1.35 billion during the quarter ended September 30, 2026, an increase of $39.5 million, or 3.0%, compared to $1.31 billion during the quarter ended September 30, 2025 due primarily to increases in money market and demand deposits balances. Average core retail deposits increased $14.5 million, or 4.3% annualized, compared to $1.34 billion for the quarter ended June 30, 2026 due primarily to an increase in money market balances. The segment had an average of $80.4 million in brokered certificate of deposits during the quarter ended September 30, 2026 compared to $61.8 million during the quarter ended September 30, 2025.
• Total compensation, payroll taxes and other employee benefits increased $603,000 or 12.0%, to $5.6 million during the quarter ended September 30, 2026 compared to $5.0 million during the quarter ended September 30, 2025. The increase primarily related to increased salary expense, health insurance expense and ESOP expense as the average market price per share increased compared to the prior year.
  
  

Mortgage Banking Segment

• Pre-tax loss totaled $754,000 for the quarter ended September 30, 2026, compared to a pre-tax income of $1.3 million for the quarter ended September 30, 2025.
• Loan originations decreased $29.7 million, or 5.5%, to $509.7 million during the quarter ended September 30, 2026, compared to $539.4 million during the quarter ended September 30, 2025. Origination volume relative to purchase activity accounted for 90.4% of originations for the quarter ended September 30, 2026 compared to 90.1% of total originations for the quarter ended September 30, 2025.
• Mortgage banking non-interest income decreased $2.8 million, or 13.4%, to $18.2 million for the quarter ended September 30, 2026, compared to $21.0 million for the quarter ended September 30, 2025.
• Gross margin on loans sold totaled 3.48% for the quarter ended September 30, 2026, compared to 3.87% for the quarter ended September 30, 2025. The 10.3% decrease was driven by lower sales margins, as secondary market investors remained concerned about elevated long-term rates.
• During the quarter ended September 30, 2026, the Company sold mortgage servicing rights related to $121.9 million in loans receivable and with a book value of $1.0 million for $1.4 million resulting in a gain on sale of $391,000. There was no comparable sale during the quarter ended September 30, 2025.
• Total compensation, payroll taxes and other employee benefits decreased $993,000 or 6.3%, to $14.7 million during the quarter ended September 30, 2026 compared to $15.7 million during the quarter ended September 30, 2025. The decrease primarily related to decreased commission expense, health insurance expense, and bonus accrual.
• Total other noninterest expense increased $537,000, or 42.3%, to $1.8 million during the quarter ended September 30, 2026 compared to $1.3 million during the quarter ended September 30, 2025. The increase primarily related to an increase in provision for loan sale losses due to a pool of loans identified with additional risks to buy them back.
  
  

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 enhances 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 September 30,								For The Nine Months Ended September 30,
		2026				2025				2026				2025
		(In Thousands, except per share amounts)
Interest income:
Loans		$	26,955			$	26,625			$	79,516			$	77,578
Mortgage-related securities			1,506				1,365				4,439				3,809
Debt securities, federal funds sold and short-term investments			1,582				1,566				4,689				4,609
Total interest income			30,043				29,556				88,644				85,996
Interest expense:
Deposits			10,183				10,527				30,591				32,826
Borrowings			3,444				4,290				10,164				12,147
Total interest expense			13,627				14,817				40,755				44,973
Net interest income			16,416				14,739				47,889				41,023
Provision (credit) for credit losses			443				(269	)			943				(836	)
Net interest income after provision (credit) for credit losses			15,973				15,008				46,946				41,859
Noninterest income:
Service charges on loans and deposits			473				618				1,310				1,624
Increase in cash surrender value of life insurance			597				526				2,281				2,021
Mortgage banking income			17,493				20,875				58,587				59,162
Other			727				283				1,580				921
Total noninterest income			19,290				22,302				63,758				63,728
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			20,159				20,534				61,975				58,702
Occupancy, office furniture, and equipment			1,751				1,688				5,287				5,370
Advertising			605				712				1,949				2,181
Data processing			1,318				1,210				3,855				3,735
Communications			281				249				765				741
Professional fees			354				380				1,037				2,616
Real estate owned			(31	)			4				(2	)			(14	)
Loan processing expense			696				688				2,542				2,425
Other			2,529				2,001				7,508				6,437
Total noninterest expenses			27,662				27,466				84,916				82,193
Income before income taxes			7,601				9,844				25,788				23,394
Income tax expense			1,427				1,918				5,155				4,705
Net income		$	6,174			$	7,926			$	20,633			$	18,689
Income per share:
Basic		$	0.36			$	0.45			$	1.20			$	1.04
Diluted		$	0.36			$	0.45			$	1.19			$	1.04
Weighted average shares outstanding:
Basic			17,104				17,639				17,196				17,962
Diluted			17,189				17,671				17,270				17,985

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		September 30,				December 31,
		2026				2025
		(Unaudited)
Assets		(In Thousands, except per share amounts)
Cash		$	48,769			$	63,560
Federal funds sold			5,843				7,255
Interest-earning deposits in other financial institutions and other short term investments			291				292
Cash and cash equivalents			54,903				71,107
Securities available for sale (at fair value)			238,139				230,848
Loans held for sale (at fair value)			111,014				145,057
Loans receivable			1,698,019				1,675,552
Less: Allowance for credit losses ("ACL") - loans			17,762				17,478
Loans receivable, net			1,680,257				1,658,074
Office properties and equipment, net			18,804				18,855
Federal Home Loan Bank stock (at cost)			17,161				19,804
Cash surrender value of life insurance			79,814				77,353
Real estate owned, net			934				424
Prepaid expenses and other assets			52,006				37,985
Total assets		$	2,253,032			$	2,259,507
Liabilities and Shareholders' Equity
Liabilities:
Demand deposits		$	179,705			$	175,595
Money market and savings deposits			344,187				329,031
Time deposits			915,574				932,646
Total deposits			1,439,466				1,437,272
Borrowings			391,343				412,258
Advance payments by borrowers for taxes			25,608				2,996
Other liabilities			49,679				57,589
Total liabilities			1,906,096				1,910,115
Shareholders' equity:
Preferred stock			-				-
Common stock			180				184
Additional paid-in capital			72,232				78,014
Retained earnings			304,881				292,957
Unearned ESOP shares			(8,605	)			(9,496	)
Accumulated other comprehensive loss, net of taxes			(21,752	)			(12,267	)
Total shareholders' equity			346,936				349,392
Total liabilities and shareholders' equity		$	2,253,032			$	2,259,507
Share Information
Shares outstanding			17,988				18,360
Book value per share		$	19.29			$	19.03

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES SUMMARY OF KEY QUARTERLY FINANCIAL DATA (Unaudited)
		At or For the Three Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2026				2026				2026				2025				2025
		(Dollars in Thousands, except per share amounts)
Condensed Results of Operations:
Net interest income		$	16,416			$	16,010			$	15,463			$	15,711			$	14,739
Provision (credit) for credit losses			443				236				264				(558	)			(269	)
Total noninterest income			19,290				24,240				20,228				21,459				22,302
Total noninterest expense			27,662				29,379				27,875				27,677				27,466
Income before income taxes			7,601				10,635				7,552				10,051				9,844
Income tax expense			1,427				2,173				1,555				2,338				1,918
Net income		$	6,174			$	8,462			$	5,997			$	7,713			$	7,926
Income per share – basic		$	0.36			$	0.49			$	0.35			$	0.44			$	0.45
Income per share – diluted		$	0.36			$	0.49			$	0.34			$	0.44			$	0.45
Dividends declared per common share		$	0.17			$	0.17			$	0.17			$	0.15			$	0.15
Performance Ratios (annualized):
Return on average assets - QTD			1.09	%			1.52	%			1.10	%			1.35	%			1.42	%
Return on average equity - QTD			6.93	%			9.65	%			6.88	%			8.74	%			9.14	%
Net interest margin - QTD			3.06	%			3.03	%			2.97	%			2.89	%			2.76	%
Return on average assets - YTD			1.24	%			1.31	%			1.10	%			1.19	%			1.13	%
Return on average equity - YTD			7.82	%			8.26	%			6.88	%			7.62	%			7.23	%
Net interest margin - YTD			3.02	%			3.00	%			2.97	%			2.68	%			2.61	%
Asset Quality Ratios:
Past due loans to total loans			0.81	%			0.63	%			0.58	%			0.86	%			0.50	%
Nonaccrual loans to total loans			0.68	%			0.39	%			0.44	%			0.37	%			0.35	%
Nonperforming assets to total assets			0.55	%			0.30	%			0.35	%			0.29	%			0.27	%
Allowance for credit losses - loans to loans receivable			1.05	%			1.06	%			1.05	%			1.04	%			1.03	%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS (Unaudited)
		At or For the Three Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2026				2026				2026				2025				2025
Average balances		(Dollars in Thousands)
Interest-earning assets
Loans receivable and held for sale		$	1,804,340			$	1,799,170			$	1,788,736			$	1,842,908			$	1,809,600
Mortgage related securities			184,800				185,513				183,980				180,434				178,063
Debt securities, federal funds sold and short term investments			139,186				136,901				137,861				133,781				131,165
Total interest-earning assets			2,128,326				2,121,584				2,110,577				2,157,123				2,118,828
Noninterest-earning assets			112,180				109,031				108,366				107,462				103,434
Total assets		$	2,240,506			$	2,230,615			$	2,218,943			$	2,264,585			$	2,222,262
Interest-bearing liabilities
Demand accounts		$	94,151			$	93,170			$	90,133			$	92,292			$	90,015
Money market, savings, and escrow accounts			370,761				354,112				343,416				339,368				334,300
Certificates of deposit - retail			822,452				817,261				817,019				823,586				823,274
Certificates of deposit - brokered			80,366				86,441				110,192				105,496				61,814
Total interest-bearing deposits			1,367,730				1,350,984				1,360,760				1,360,742				1,309,403
Borrowings			388,730				399,510				377,438				419,541				440,968
Total interest-bearing liabilities			1,756,460				1,750,494				1,738,198				1,780,283				1,750,371
Noninterest-bearing demand deposits			86,908				87,072				88,975				89,673				88,799
Noninterest-bearing liabilities			43,778				41,506				38,073				44,688				39,136
Total liabilities			1,887,146				1,879,072				1,865,246				1,914,644				1,878,306
Equity			353,360				351,543				353,697				349,941				343,956
Total liabilities and equity		$	2,240,506			$	2,230,615			$	2,218,943			$	2,264,585			$	2,222,262
Average Yield/Costs (annualized)
Loans receivable and held for sale			5.93	%			5.93	%			5.88	%			5.85	%			5.84	%
Mortgage related securities			3.23	%			3.20	%			3.21	%			3.09	%			3.04	%
Debt securities, federal funds sold and short term investments			4.51	%			4.39	%			4.74	%			4.54	%			4.74	%
Total interest-earning assets			5.60	%			5.59	%			5.58	%			5.54	%			5.53	%
Demand accounts			0.11	%			0.11	%			0.11	%			0.11	%			0.11	%
Money market and savings accounts			2.13	%			2.16	%			2.25	%			2.09	%			2.04	%
Certificates of deposit - retail			3.56	%			3.57	%			3.68	%			3.78	%			3.92	%
Certificates of deposit - brokered			3.85	%			3.81	%			3.82	%			3.89	%			4.11	%
Total interest-bearing deposits			2.95	%			2.98	%			3.09	%			3.12	%			3.19	%
Borrowings			3.51	%			3.56	%			3.42	%			3.51	%			3.86	%
Total interest-bearing liabilities			3.08	%			3.11	%			3.16	%			3.21	%			3.36	%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES SUMMARY OF QUARTERLY AVERAGE LOAN BALANCES (Unaudited)
		September 30, 2026								June 30, 2026								September 30, 2025
		Ending Balance				Quarterly Average Balance				Ending Balance				Quarterly Average Balance				Ending Balance				Quarterly Average Balance
		(Dollars in Thousands)
Loans Receivable Category
One- to four-family		$	450,887			$	453,534			$	460,495			$	464,384			$	506,758			$	503,112
Over four family			810,524				802,369				781,860				773,593				769,325				740,220
Home equity			12,544				12,994				12,939				13,165				13,382				13,686
Construction and land			59,239				61,681				67,944				65,428				69,152				67,678
Commercial real estate			327,692				327,858				324,373				324,029				323,613				325,033
Consumer Loans			692				675				680				694				938				849
Commercial business loans			36,441				35,996				35,590				35,357				31,668				31,322
Total		$	1,698,019			$	1,695,107			$	1,683,881			$	1,676,650			$	1,714,836			$	1,681,900

COMMUNITY BANKING SEGMENT SUMMARY OF KEY QUARTERLY FINANCIAL DATA (Unaudited)
		At or For the Three Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2026				2026				2026				2025				2025
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	16,025			$	15,830			$	15,226			$	15,521			$	14,617
Provision (credit) for credit losses			488				249				284				(518	)			(276	)
Total noninterest income			1,311				2,020				1,153				1,305				1,359
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			5,639				5,612				5,575				5,646				5,036
Occupancy, office furniture and equipment			1,020				942				1,103				1,026				907
Advertising			165				251				212				250				213
Data processing			718				722				765				741				733
Communications			113				105				112				103				108
Professional fees			199				197				228				185				200
Real estate owned			(31	)			27				2				(298	)			4
Loan processing expense			-				-				-				-				-
Other			767				741				598				630				617
Total noninterest expense			8,590				8,597				8,595				8,283				7,818
Income before income taxes			8,258				9,004				7,500				9,061				8,434
Income tax expense			1,685				1,741				1,538				2,063				1,518
Net income		$	6,573			$	7,263			$	5,962			$	6,998			$	6,916
Efficiency ratio - QTD (non-GAAP)			49.55	%			48.16	%			52.48	%			49.23	%			48.94	%
Efficiency ratio - YTD (non-GAAP)			50.00	%			50.23	%			52.48	%			51.76	%			52.71	%

MORTGAGE BANKING SEGMENT SUMMARY OF KEY QUARTERLY FINANCIAL DATA (Unaudited)
		At or For the Three Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2026				2026				2026				2025				2025
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	351			$	164			$	214			$	205			$	103
Provision (credit) for credit losses			(45	)			(12	)			(20	)			(40	)			7
Total noninterest income			18,171				22,363				19,121				20,172				20,985
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			14,723				16,565				14,471				15,489				15,716
Occupancy, office furniture and equipment			731				628				863				798				781
Advertising			440				476				405				446				499
Data processing			600				557				490				465				475
Communications			168				121				146				129				141
Professional fees			155				103				152				33				180
Real estate owned			-				-				-				-				-
Loan processing expense			696				817				1,029				571				688
Other			1,808				1,676				1,777				1,586				1,271
Total noninterest expense			19,321				20,943				19,333				19,517				19,751
Income (loss) before income taxes			(754	)			1,596				22				900				1,330
Income tax (benefit) expense			(280	)			425				10				244				382
Net (loss) income		$	(474	)		$	1,171			$	12			$	656			$	948
Efficiency ratio - QTD (non-GAAP)			104.31	%			92.97	%			99.99	%			95.78	%			93.66	%
Efficiency ratio - YTD (non-GAAP)			97.94	%			96.21	%			99.99	%			97.56	%			98.17	%
Loan originations		$	509,730			$	621,819			$	508,314			$	534,646			$	539,404
Purchase			90.4	%			88.6	%			73.9	%			78.9	%			90.1	%
Refinance			9.6	%			11.4	%			26.1	%			21.1	%			9.9	%
Gross margin on loans sold(1)			3.48	%			3.60	%			3.65	%			3.80	%			3.87	%

⁽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

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Waterstone Financial's third-quarter 2026 earnings?

Waterstone Financial earned $6.2 million, or $0.36 per diluted share, for the quarter ended September 30, 2026. A year earlier, net income was $7.9 million, or $0.45 per diluted share. Mortgage Banking moved to a pre-tax loss, while Community Banking pre-tax income also declined.

How did Waterstone Financial's nine-month 2026 earnings compare with 2025?

Nine-month net income increased to $20.6 million from $18.7 million. Diluted earnings per share rose to $1.19 from $1.04 for the nine months ended September 30, 2026 and 2025, respectively.

Why did Waterstone Financial's past-due loans and nonperforming assets increase?

The increase related to one lending relationship previously identified as substandard. Community Banking past-due loans totaled $11.7 million at September 30, 2026, compared with $8.5 million at June 30, 2026 and $6.8 million at September 30, 2025.

Why did Waterstone Financial's book value per share decline during the third quarter of 2026?

Waterstone attributed the quarterly decline primarily to higher Treasury rates affecting securities values and the declared dividend. Additional available-for-sale securities losses accounted for approximately $0.46 per share, while the overall quarterly book-value decrease was approximately $0.24 per share.

Why did Waterstone Financial's Mortgage Banking other expenses increase in the third quarter of 2026?

The increase primarily reflected higher provisions for loan-sale losses involving a pool of loans identified with additional repurchase risks. Mortgage Banking other noninterest expense increased $537,000, or 42.3%, to $1.8 million from $1.3 million a year earlier.