Earnings jump and capital returns at Waterstone (NASDAQ: WSBF)

Rhea-AI Filing Summary

Waterstone Financial, Inc. reported stronger quarterly results for the three months ended March 31, 2026. Net income was $6.0 million, or $0.34 diluted EPS, up from $3.0 million, or $0.17, a year earlier, though down from $7.7 million, or $0.44, in the prior quarter.

The Community Banking segment delivered record first-quarter net interest income of $15.2 million, as net interest margin expanded to 2.97% from 2.47% a year ago. Average core retail deposits rose 4.3% year over year, while the efficiency ratio improved to 52.48% from 59.66%.

The Mortgage Banking segment returned to a small profit, with pre-tax income of $22,000 versus a $2.2 million loss a year ago. Loan originations increased 31.1% to $508.3 million, although gross margin on loans sold narrowed to 3.65% from 3.98%.

Asset quality remained solid, with nonperforming assets at 0.35% of total assets and past due loans at 0.58%. Book value per share rose to $19.19, and shareholders received $0.17 per share in dividends, while the company repurchased about 246,000 shares for $4.4 million, returning a total of $7.3 million through buybacks and dividends.

Positive

• Profitability strengthened materially: net income rose to $6.0 million (diluted EPS $0.34) from $3.0 million ($0.17) a year earlier, supported by a higher 2.97% net interest margin and improved segment results.
• Capital return and book value growth: the company raised its quarterly dividend to $0.17 per share and repurchased about 246,000 shares for $4.4 million, while increasing book value per share to $19.19.

Negative

• None.

Insights

Banking equity analyst

Quarter shows stronger profitability, better margins, and active capital return.

Waterstone Financial more than doubled net income year over year to $6.0M, with diluted EPS at $0.34. Key drivers were net interest margin expansion to 2.97% and record Community Banking net interest income of $15.2M, alongside higher mortgage origination volumes.

Returns improved as annualized ROA reached 1.10% and ROE 6.88%, up from 0.57% and 3.61% a year earlier. Asset quality metrics such as nonperforming assets at 0.35% of total assets and past due loans at 0.58% remained conservative, even as the allowance for credit losses increased modestly.

Capital management was active: dividends of $0.17 per share plus repurchases of roughly 246,000 shares for $4.4M brought total capital returned to shareholders to $7.3M in the quarter. Subsequent filings may provide additional color on how management balances growth, credit provisioning, and ongoing buybacks in future periods.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Net income: $5.997M Diluted EPS: $0.34 Net interest margin: 2.97% +5 more

8 metrics

Net income $5.997M Quarter ended March 31, 2026 vs $3.036M in Q1 2025

Diluted EPS $0.34 Quarter ended March 31, 2026 vs $0.17 in Q1 2025

Net interest margin 2.97% Q1 2026 consolidated, up from 2.47% in Q1 2025

Return on average assets 1.10% Annualized Q1 2026 vs 0.57% in Q1 2025

Return on average equity 6.88% Annualized Q1 2026 vs 3.61% in Q1 2025

Share repurchases 246,000 shares for $4.4M Average cost $17.89 per share in Q1 2026

Loan originations $508.3M Mortgage Banking segment in Q1 2026, up 31.1% YoY

Nonperforming assets ratio 0.35% Nonperforming assets as % of total assets at March 31, 2026

Key Terms

net interest margin, efficiency ratio, nonperforming assets, allowance for credit losses, +2 more

6 terms

net interest margin financial

"net interest margin grew to 2.97% for the quarter"

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.

efficiency ratio financial

"The efficiency ratio, a non-GAAP ratio, was 52.48% for the quarter"

A measure of how much a company spends to produce each dollar of revenue, usually shown as operating expenses divided by revenue and expressed as a percentage. Think of it as a household’s budget: a lower percentage means more of each dollar earned stays as profit, while a higher number means costs are eating into returns. Investors use it to judge cost control and compare how efficiently companies turn revenue into earnings, especially in banks and financial firms.

nonperforming assets financial

"Nonperforming assets as a percentage of total assets was 0.35%"

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.

allowance for credit losses financial

"Allowance for credit losses ("ACL") - loans was 17,709"

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

gross margin on loans sold financial

"Gross margin on loans sold totaled 3.65% for the quarter"

Gross margin on loans sold measures the percentage difference between the money a lender receives when it sells loans and the lender’s cost to originate or carry those loans. Think of it like a store’s markup: it shows how much the seller keeps after accounting for the loan’s cost. Investors watch it because a higher margin signals healthier profitability, better pricing power and lower likelihood of surprise losses when loans are packaged and sold.

non-GAAP financial measures financial

"Management uses non-GAAP financial information in its analysis"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

Earnings Snapshot

Net income: $5.997M

Q1 2026

Net income $5.997M +97% YoY

Diluted EPS $0.34 +100% YoY

Net interest margin 2.97% +0.50 pts YoY

Return on average assets 1.10% +0.53 pts YoY

Return on average equity 6.88% +3.27 pts YoY

Understanding 8-K Material Events →

false 0001569994 0001569994 2026-04-23 2026-04-23

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 23, 2026

Waterstone Financial, Inc.

(Exact name of registrant as specified in its charter)

Maryland	001-36271	90-1026709
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

11200 W Plank Ct, Wauwatosa, Wisconsin 53226

(Address of principal executive offices)

414-761-1000

Registrant’s telephone number, including area code:

Not Applicable

Former name or former address, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.01 Par Value		WSBF		The NASDAQ Stock Market, LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities and Exchange Act of 1934.

☐ Emerging growth company

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02 Results of Operations and Financial Condition.

On April 23, 2026, Waterstone Financial, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2026. A copy of the press release is being furnished to the Securities and Exchange Commission as Exhibit 99.1 attached to this report and incorporated by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
99.1	Press release of Waterstone Financial, Inc. issued April 23, 2026.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Waterstone Financial, Inc.
Date: April 23, 2026		/s/ Mark R. Gerke
		Name:    Mark R. Gerke
		Title:    Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release of Waterstone Financial, Inc. issued April 23, 2026.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

Exhibit 99.1

Waterstone Financial, Inc. Announces Results of Operations for the Three Months Ended March 31, 2026.

WAUWATOSA, WI – 4/23/26– Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $6.0 million, or $0.34 per diluted share, for the quarter ended March 31, 2026 compared to $3.0 million, or $0.17 per diluted share, for the quarter ended March 31, 2025.  Net income totaled $7.7 million, or $0.44 per diluted share, for the quarter ended December 31, 2025. 

"We started 2026 on a strong note due to continued net interest margin expansion and increased loan origination volumes at the mortgage banking segment,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. "The Community Banking segment had a record first quarter net interest income of $15.2 million, which represented a $2.8 million, or 22.8%, increase compared to the quarter ended March 31, 2025  as net interest margin grew to 2.97% for the quarter.  The increases were primarily due to continued growth in yield on our loans held for investment and reduction of our cost of funds. We did increase our allowance for credit losses due to certain external qualitative factors even though asset quality metrics continue to stay strong. The Mortgage Banking segment increased pre-tax income $2.2 million due to an increase in loan origination activity as rates decreased periodically throughout the quarter.  We increased our book value per share $0.33 during the quarter with continued strong earnings and the share repurchase program, prior to declaring an increased quarterly dividend of $0.17 per share. In total, $7.3 million was returned to shareholders through buybacks and dividends in the quarter." 

Highlights of the Quarter Ended March 31, 2026

Waterstone Financial, Inc. (Consolidated)

●	Consolidated net income of Waterstone Financial, Inc. totaled $6.0 million for the quarter ended March 31, 2026 compared to net income of $3.0 million for the quarter ended March 31, 2025.
●	Consolidated return on average assets (annualized) was 1.10% for the quarter ended March 31, 2026 and 0.57% for the quarter ended March 31, 2025.
●	Consolidated return on average equity (annualized) was 6.88% for the quarter ended March 31, 2026 and 3.61% for the quarter ended March 31, 2025.
●	Dividends declared during the quarter ended March 31, 2026 totaled $0.17 per common share.
●	During the quarter ended March 31, 2026, we repurchased approximately 246,000 shares at a cost (including the federal excise tax) of $4.4 million, or $17.89 per share.
●	Nonperforming assets as a percentage of total assets was 0.35% at March 31, 2026, 0.29% at December 31, 2025, and 0.35% at March 31, 2025.
●	Past due loans as a percentage of total loans was 0.58% at March 31, 2026, 0.86% at December 31, 2025, and 0.67% at March 31, 2025.
●	Book value per share was $19.19 at March 31, 2026 and $19.03 at December 31, 2025.

Community Banking Segment

●	Pre-tax income totaled $7.5 million for the quarter ended March 31, 2026, which represents a $1.4 million, or 23.7%, increase compared to $6.1 million for the quarter ended March 31, 2025.
●	Net interest income totaled $15.2 million for the quarter ended March 31, 2026, which represents a $2.8 million, or 22.8%, increase compared to $12.4 million for the quarter ended March 31, 2025.
●	Average loans held for investment totaled $1.68 billion during the quarter ended March 31, 2026, which represents an increase of $3.8 million, or 0.2%, compared to $1.67 billion for the quarter ended March 31, 2025. The increase was primarily due to increases in multi-family, construction, and commercial real estate mortgages offset by a decrease in single-family mortgages. Average loans held for investment decreased $33.3 million compared to $1.71 billion for the quarter ended December 31, 2025. The decrease was primarily due to a decrease in single-family real estate mortgages.
●	Net interest margin increased 50 basis points to 2.97% for the quarter ended March 31, 2026 compared to 2.47% for the quarter ended March 31, 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 eight basis points compared to 2.89% for the quarter ended December 31, 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.
●	Past due loans at the community banking segment totaled $6.9 million at March 31, 2026, $10.4 million at December 31, 2025, and $7.6 million at March 31, 2025.

●	The segment had a provision for credit losses related to funded loans of $240,000 for the quarter ended March 31, 2026 compared to a negative provision for credit losses related to funded loans of $314,000 for the quarter ended March 31, 2025.  The current quarter increase was primarily due to increases in multi-family and construction loan balances along with an increase in multi-family external qualitative factors. The provision for credit losses related to unfunded loan commitments was $44,000 for the quarter ended March 31, 2026 compared to a negative provision for credit losses related to unfunded loan commitments of $204,000 for the quarter ended March 31, 2025. The provision for credit losses related to unfunded loan commitments for the quarter ended March 31, 2026 was due primarily to an increase of the loan pipeline balance at quarter end.
●	The efficiency ratio, a non-GAAP ratio, was 52.48% for the quarter ended March 31, 2026, compared to 59.66% for the quarter ended March 31, 2025.
●	Average core retail deposits (excluding brokered and escrow accounts) totaled $1.33 billion during the quarter ended March 31, 2026, an increase of $54.8 million, or 4.3%, compared to $1.28 billion during the quarter ended March 31, 2025 due primarily to increases in money market and demand deposits balances. Average core retail deposits increased $8.7 million, or 2.6% annualized, compared to $1.32 billion for the quarter ended December 31, 2025.  The segment had an average of $110.2 million in brokered certificate of deposits during the quarter ended March 31, 2026 compared to $97.1 million during the quarter ended March 31, 2025.

Mortgage Banking Segment

●	Pre-tax income totaled $22,000 for the quarter ended March 31, 2026, compared to a pre-tax loss of $2.2 million for the quarter ended March 31, 2025.
●	Loan originations increased $120.6 million, or 31.1%, to $508.3 million during the quarter ended March 31, 2026, compared to $387.7 million during the quarter ended March 31, 2025. Origination volume relative to purchase activity accounted for 73.9% of originations for the quarter ended March 31, 2026 compared to 87.5% of total originations for the quarter ended March 31, 2025.
●	Mortgage banking non-interest income increased $3.4 million, or 21.5%, to $19.1 million for the quarter ended March 31, 2026, compared to $15.7 million for the quarter ended March 31, 2025.
●	Gross margin on loans sold totaled 3.65% for the quarter ended March 31, 2026, compared to 3.98% for the quarter ended March 31, 2025.
●	Total compensation, payroll taxes and other employee benefits increased $2.4 million or 20.1%, to $14.5 million during the quarter ended March 31, 2026 compared to $12.1 million during the quarter ended March 31, 2025. The increase primarily related to increased commission expense, manager pay expense, production incentive expense, and salary expense.
●	Professional fees decreased $1.2 million, or 88.9%, to $152,000 for the quarter ended March 31, 2026, compared to $1.4 million for the quarter ended March 31, 2025.  The decrease was primarily related to legal services and the finalization of a settlement during the three months ended March 31, 2025.

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, visit 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 March 31,
		2026				2025
		(In Thousands, except per share amounts)
Interest income:
Loans		$	25,951			$	25,078
Mortgage-related securities			1,454				1,191
Debt securities, federal funds sold and short-term investments			1,610				1,486
Total interest income			29,015				27,755
Interest expense:
Deposits			10,373				11,332
Borrowings			3,179				3,847
Total interest expense			13,552				15,179
Net interest income			15,463				12,576
Provision (credit) for credit losses			264				(558	)
Net interest income after provision (credit) for loan losses			15,199				13,134
Noninterest income:
Service charges on loans and deposits			374				593
Increase in cash surrender value of life insurance			549				481
Mortgage banking income			18,950				15,728
Other			355				295
Total noninterest income			20,228				17,097
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			19,842				17,047
Occupancy, office furniture, and equipment			1,966				1,929
Advertising			617				723
Data processing			1,258				1,212
Communications			258				235
Professional fees			383				1,736
Real estate owned			2				(10	)
Loan processing expense			1,029				920
Other			2,520				2,558
Total noninterest expenses			27,875				26,350
Income before income taxes			7,552				3,881
Income tax expense			1,555				845
Net income		$	5,997			$	3,036
Income per share:
Basic		$	0.35			$	0.17
Diluted		$	0.34			$	0.17
Weighted average shares outstanding:
Basic			17,373				18,267
Diluted			17,430				18,280

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

		March 31,				December 31,
		2026				2025
		(Unaudited)
Assets		(In Thousands, except per share amounts)
Cash		$	38,759			$	63,560
Federal funds sold			5,598				7,255
Interest-earning deposits in other financial institutions and other short term investments			296				292
Cash and cash equivalents			44,653				71,107
Securities available for sale (at fair value)			237,024				230,848
Loans held for sale (at fair value)			144,350				145,057
Loans receivable			1,684,312				1,675,552
Less: Allowance for credit losses ("ACL") - loans			17,709				17,478
Loans receivable, net			1,666,603				1,658,074
Office properties and equipment, net			19,273				18,855
Federal Home Loan Bank stock (at cost)			18,760				19,804
Cash surrender value of life insurance			77,902				77,353
Real estate owned, net			318				424
Prepaid expenses and other assets			42,335				37,985
Total assets		$	2,251,218			$	2,259,507
Liabilities and Shareholders' Equity
Liabilities:
Demand deposits		$	181,758			$	175,595
Money market and savings deposits			342,527				329,031
Time deposits			914,502				932,646
Total deposits			1,438,787				1,437,272
Borrowings			413,034				412,258
Advance payments by borrowers for taxes			11,128				2,996
Other liabilities			40,058				57,589
Total liabilities			1,903,007				1,910,115
Shareholders' equity:
Preferred stock			-				-
Common stock			182				184
Additional paid-in capital			74,488				78,014
Retained earnings			296,027				292,957
Unearned ESOP shares			(9,199	)			(9,496	)
Accumulated other comprehensive loss, net of taxes			(13,287	)			(12,267	)
Total shareholders' equity			348,211				349,392
Total liabilities and shareholders' equity		$	2,251,218			$	2,259,507
Share Information
Shares outstanding			18,146				18,360
Book value per share		$	19.19			$	19.03

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

SUMMARY OF KEY QUARTERLY FINANCIAL DATA

(Unaudited)

		At or For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2026				2025				2025				2025				2025
		(Dollars in Thousands, except per share amounts)
Condensed Results of Operations:
Net interest income		$	15,463			$	15,711			$	14,739			$	13,708			$	12,576
Provision (credit) for credit losses			264				(558	)			(269	)			(9	)			(558	)
Total noninterest income			20,228				21,459				22,302				24,329				17,097
Total noninterest expense			27,875				27,677				27,466				28,377				26,350
Income before income taxes			7,552				10,051				9,844				9,669				3,881
Income tax expense			1,555				2,338				1,918				1,942				845
Net income		$	5,997			$	7,713			$	7,926			$	7,727			$	3,036
Income per share – basic		$	0.35			$	0.44			$	0.45			$	0.43			$	0.17
Income per share – diluted		$	0.34			$	0.44			$	0.45			$	0.43			$	0.17
Dividends declared per common share		$	0.17			$	0.15			$	0.15			$	0.15			$	0.15
Performance Ratios (annualized):
Return on average assets - QTD			1.10	%			1.35	%			1.42	%			1.39	%			0.57	%
Return on average equity - QTD			6.88	%			8.74	%			9.14	%			9.04	%			3.61	%
Net interest margin - QTD			2.97	%			2.89	%			2.76	%			2.60	%			2.47	%
Return on average assets - YTD			1.10	%			1.19	%			1.13	%			0.99	%			0.57	%
Return on average equity - YTD			6.88	%			7.62	%			7.23	%			6.32	%			3.61	%
Net interest margin - YTD			2.97	%			2.68	%			2.61	%			2.54	%			2.47	%
Asset Quality Ratios:
Past due loans to total loans			0.58	%			0.86	%			0.50	%			0.69	%			0.67	%
Nonaccrual loans to total loans			0.44	%			0.37	%			0.35	%			0.49	%			0.45	%
Nonperforming assets to total assets			0.35	%			0.29	%			0.27	%			0.37	%			0.35	%
Allowance for credit losses - loans to loans receivable			1.05	%			1.04	%			1.03	%			1.07	%			1.08	%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS

(Unaudited)

		At or For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2026				2025				2025				2025				2025
Average balances		(Dollars in Thousands)
Interest-earning assets
Loans receivable and held for sale		$	1,788,736			$	1,842,908			$	1,809,600			$	1,812,065			$	1,768,617
Mortgage related securities			183,980				180,434				178,063				173,220				170,947
Debt securities, federal funds sold and short term investments			137,861				133,781				131,165				131,710				123,004
Total interest-earning assets			2,110,577				2,157,123				2,118,828				2,116,995				2,062,568
Noninterest-earning assets			108,366				107,462				103,434				105,382				105,030
Total assets		$	2,218,943			$	2,264,585			$	2,222,262			$	2,222,377			$	2,167,598
Interest-bearing liabilities
Demand accounts		$	90,133			$	92,292			$	90,015			$	89,548			$	87,393
Money market, savings, and escrow accounts			343,416				339,368				334,300				320,908				300,686
Certificates of deposit - retail			817,019				823,586				823,274				830,550				818,612
Certificates of deposit - brokered			110,192				105,496				61,814				72,533				97,101
Total interest-bearing deposits			1,360,760				1,360,742				1,309,403				1,313,539				1,303,792
Borrowings			377,438				419,541				440,968				437,784				397,053
Total interest-bearing liabilities			1,738,198				1,780,283				1,750,371				1,751,323				1,700,845
Noninterest-bearing demand deposits			88,975				89,673				88,799				85,665				80,372
Noninterest-bearing liabilities			38,073				44,688				39,136				42,669				44,905
Total liabilities			1,865,246				1,914,644				1,878,306				1,879,657				1,826,122
Equity			353,697				349,941				343,956				342,720				341,476
Total liabilities and equity		$	2,218,943			$	2,264,585			$	2,222,262			$	2,222,377			$	2,167,598
Average Yield/Costs (annualized)
Loans receivable and held for sale			5.88	%			5.85	%			5.84	%			5.73	%			5.75	%
Mortgage related securities			3.21	%			3.09	%			3.04	%			2.90	%			2.83	%
Debt securities, federal funds sold and short term investments			4.74	%			4.54	%			4.74	%			4.74	%			4.90	%
Total interest-earning assets			5.58	%			5.54	%			5.53	%			5.43	%			5.46	%
Demand accounts			0.11	%			0.11	%			0.11	%			0.11	%			0.11	%
Money market and savings accounts			2.25	%			2.09	%			2.04	%			2.07	%			2.10	%
Certificates of deposit - retail			3.68	%			3.78	%			3.92	%			4.11	%			4.33	%
Certificates of deposit - brokered			3.82	%			3.89	%			4.11	%			4.35	%			4.18	%
Total interest-bearing deposits			3.09	%			3.12	%			3.19	%			3.35	%			3.52	%
Borrowings			3.42	%			3.51	%			3.86	%			3.67	%			3.93	%
Total interest-bearing liabilities			3.16	%			3.21	%			3.36	%			3.43	%			3.62	%

COMMUNITY BANKING SEGMENT

SUMMARY OF KEY QUARTERLY FINANCIAL DATA

(Unaudited)

		At or For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2026				2025				2025				2025				2025
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	15,226			$	15,521			$	14,617			$	13,640			$	12,403
Provision (credit) for credit losses			284				(518	)			(276	)			(19	)			(518	)
Total noninterest income			1,153				1,305				1,359				1,686				1,348
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			5,575				5,646				5,036				5,027				5,212
Occupancy, office furniture and equipment			1,103				1,026				907				920				1,076
Advertising			212				250				213				219				171
Data processing			765				741				733				806				712
Communications			112				103				108				99				100
Professional fees			228				185				200				196				347
Real estate owned			2				(298	)			4				(8	)			(10	)
Loan processing expense			-				-				-				-				-
Other			598				630				617				466				596
Total noninterest expense			8,595				8,283				7,818				7,725				8,204
Income before income taxes			7,500				9,061				8,434				7,620				6,065
Income tax expense			1,538				2,063				1,518				1,400				1,427
Net income		$	5,962			$	6,998			$	6,916			$	6,220			$	4,638
Efficiency ratio - QTD (non-GAAP)			52.48	%			49.23	%			48.94	%			50.40	%			59.66	%
Efficiency ratio - YTD (non-GAAP)			52.48	%			51.76	%			52.71	%			54.78	%			59.66	%

MORTGAGE BANKING SEGMENT

SUMMARY OF KEY QUARTERLY FINANCIAL DATA

(Unaudited)

		At or For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2026				2025				2025				2025				2025
		(Dollars in Thousands)
Condensed Results of Operations:
Net interest income		$	214			$	205			$	103			$	53			$	152
Provision (credit) for credit losses			(20	)			(40	)			7				10				(40	)
Total noninterest income			19,121				20,172				20,985				22,643				15,731
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			14,471				15,489				15,716				16,312				12,054
Occupancy, office furniture and equipment			863				798				781				833				853
Advertising			405				446				499				527				552
Data processing			490				465				475				507				498
Communications			146				129				141				158				135
Professional fees			152				33				180				303				1,373
Real estate owned			-				-				-				-				-
Loan processing expense			1,029				571				688				817				920
Other			1,777				1,586				1,271				1,230				1,751
Total noninterest expense			19,333				19,517				19,751				20,687				18,136
Income (loss) before income taxes expense (benefit)			22				900				1,330				1,999				(2,213	)
Income tax expense (benefit)			10				244				382				531				(588	)
Net income (loss)		$	12			$	656			$	948			$	1,468			$	(1,625	)
Efficiency ratio - QTD (non-GAAP)			99.99	%			95.78	%			93.66	%			91.15	%			114.18	%
Efficiency ratio - YTD (non-GAAP)			99.99	%			97.56	%			98.17	%			100.63	%			114.18	%
Loan originations		$	508,314			$	534,646			$	539,404			$	588,838			$	387,729
Purchase			73.9	%			78.9	%			90.1	%			91.7	%			87.5	%
Refinance			26.1	%			21.1	%			9.9	%			8.3	%			12.5	%
Gross margin on loans sold(1)			3.65	%			3.80	%			3.87	%			3.84	%			3.98	%

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

FAQ

How did Waterstone Financial (WSBF) perform in the first quarter of 2026?

Waterstone Financial reported net income of $6.0 million, or $0.34 per diluted share, for the quarter ended March 31, 2026, up from $3.0 million, or $0.17, a year earlier, reflecting stronger margins and improved segment performance.

What happened to Waterstone Financial’s net interest margin in Q1 2026?

Net interest margin increased to 2.97% for the quarter ended March 31, 2026, from 2.47% a year earlier. The improvement was driven by a higher weighted average yield on loans and lower costs for deposits and borrowings, supporting stronger net interest income.

How did Waterstone Financial’s mortgage banking segment perform in Q1 2026?

The mortgage banking segment generated pre-tax income of $22,000, compared with a $2.2 million loss a year ago. Loan originations rose 31.1% to $508.3 million, and mortgage banking noninterest income increased to $19.1 million, although gross margin on loans sold declined slightly.

What were Waterstone Financial’s asset quality metrics as of March 31, 2026?

Asset quality remained solid, with nonperforming assets at 0.35% of total assets. Past due loans were 0.58% of total loans. The allowance for credit losses on loans equaled 1.05% of loans receivable, indicating continued conservative credit coverage.

How much capital did Waterstone Financial return to shareholders in Q1 2026?

During the quarter, Waterstone Financial declared dividends of $0.17 per common share and repurchased about 246,000 shares for $4.4 million. In total, the company returned approximately $7.3 million to shareholders through dividends and share buybacks.

What were Waterstone Financial’s key profitability ratios in Q1 2026?

For the quarter ended March 31, 2026, Waterstone Financial reported an annualized return on average assets of 1.10% and return on average equity of 6.88%, both higher than the 0.57% and 3.61% reported for the same quarter in 2025.

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