0001569994-16-000084.txt : 20160422 0001569994-16-000084.hdr.sgml : 20160422 20160422160119 ACCESSION NUMBER: 0001569994-16-000084 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20160422 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20160422 DATE AS OF CHANGE: 20160422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Waterstone Financial, Inc. CENTRAL INDEX KEY: 0001569994 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36271 FILM NUMBER: 161586703 BUSINESS ADDRESS: STREET 1: 11200 WEST PLANK COURT CITY: WAUWATOSA STATE: WI ZIP: 53226 BUSINESS PHONE: (414) 761-1000 MAIL ADDRESS: STREET 1: 11200 WEST PLANK COURT CITY: WAUWATOSA STATE: WI ZIP: 53226 8-K 1 form8k.htm
 
 
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 22, 2016
WATERSTONE FINANCIAL, INC.
(Exact name of Registrant as specified in its charter)

Maryland
(State or Other Jurisdiction
of Incorporation)
001-36271
(Commission File Number)
90-1026709
(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)


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))
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.02 Results of Operations and Financial Condition.

On April 22, 2016, Waterstone Financial, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2016.  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 22, 2016.




 
 
 
 
 
 
 
 
 
 
 
 
 
- 2 -
 

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 22, 2016
/s/ Mark R. Gerke
Name: Mark R. Gerke
Title: Chief Financial Officer

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 3 -
 
 
 
EXHIBIT INDEX




Exhibit No.    Description
 
 99.1                          Press release of Waterstone Financial, Inc. issued April 22, 2016.

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 4 -
 EX-99.1 2 exhibit991.htm
Exhibit 99.1
 
 
WATERSTONE FINANCIAL, INC.
WATERSTONE BANK
11200 W. PLANK CT.
WAUWATOSA, WI 53226
 
Contact:  Douglas S. Gordon
President and CEO
414.459.4100
DouglasGordon@wsbonline.com
 
Exhibit 99.1
 
Waterstone Financial, Inc. Announces Results of Operations for the Quarter Ended March 31, 2016.
WAUWATOSA, WI – 04/22/2016 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income per diluted share of $0.14 for the quarter ended March 31, 2016, which represents a 55.6% increase compared to net income per diluted share of $0.09 for the quarter ended March 31, 2015 and a 27.3% increase compared to net income per diluted share of $0.11 for the quarter ended December 31, 2015.
"Our Community Banking segment highlighted the positive results we achieved during the first quarter of 2016." said Doug Gordon, CEO of Waterstone Financial, Inc. "With significant increases in our net interest margin, and continued improvement in our asset quality, Community Banking net income increased 54% as compared to the first quarter of 2015."

Highlights of the Quarter Ended March 31, 2016
 
●
 
Consolidated net income of Waterstone Financial, Inc. totaled $3.9 million for the quarter ended March 31, 2016, compared to $3.0 million for the quarter ended March 31, 2015 and $3.1 million for the quarter ended December 31, 2015.
●
 
Return on average assets totaled 0.90% for the three months ended March 31, 2016 compared to 0.69% for the three months ended March 31, 2015.
●
 
Continued a share repurchase program, under which 242,700 shares were repurchased at an average price of $13.54 per share on the open market during the quarter ended March 31, 2016.  Since the inception of the share repurchase plan in March of 2015, the Company has repurchased a total of 5,836,453 shares at an average cost of $12.96 per share.
 
Community Banking Segment Highlights
●
 
Net income of the Community Banking segment totaled $2.5 million for the quarter ended March 31, 2016, which represents a 53.5% increase compared to net income of $1.6 million for the quarter ended March 31, 2015 and a 40.0% increase compared to net income of $1.8 million for the quarter ended December 31, 2015.
●
 
Net interest margin increased 17 bps to 2.48% for the three months ended March 31, 2016 compared to 2.31% for the three month period ended March 31, 2015.
●
 
Total loans increased $47.5 million, or 4.5%, to $1.11 billion at March 31, 2016 compared to $1.06 billion at March 31, 2015.
●
 
Total deposits increased $63.6 million, or 7.4%, to $918.3 million at March 31, 2016 compared to $854.7 million at March 31, 2015.  Total core deposits increased $33.5 million, or 15.5%, to $249.0 million at March 31, 2016 compared to $215.5 million at March 31, 2015.  The increase in core deposits was comprised of growth in demand deposits of $5.1 million or 5.3% and growth of money market and savings deposits of $28.3 million, or 23.9%.
●
 
Borrowings decreased $37.8 million to $396.2 million at March 31, 2016 from $434.0 million at March 31, 2015.  A total of $50.0 million of fixed rate borrowings were paid off during the quarter with funds raised through our retail delivery channels.
●
 
Total non-performing assets decreased $3.0 million, or 11.3%, to $23.8 million at March 31, 2016 from $26.8 million at December 31, 2015 and decreased $28.8 million, or 54.8%, from $52.6 million at March 31, 2015.
●
 
Total past due loans decreased by $1.8 million, or 15.6%, to $9.7 million at March 31, 2016 from $11.5 million at December 31, 2015 and decreased $17.0 million, or 63.6% from $26.7 million at March 31, 2015.
Mortgage Banking Segment Highlights
●
 
Net income of the Mortgage Banking segment totaled $1.4 million for the quarter ended March 31, 2016, which was relatively flat compared to $1.4 million for the quarter ended March 31, 2015 and $1.2 million for the quarter ended December 31, 2015.
●
 
Loans originated by our mortgage banking subsidiary for the purpose of sale in the secondary market decreased $27.8 million, or 7.0%, to $371.2 million during the three months ended March 31, 2016, compared to $399.0 million for the three months ended March 31, 2015.  The decrease in originations was driven by a decrease in the origination of mortgage refinance products, partially offset by an increase in the origination of loans made for the purpose of residential purchases, which yield a higher margin that refinance loans.  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 85% and 75% of total originations for the three months ended March 31, 2016 and 2015, respectively. Offsetting the overall decrease in origination volumes, margin increased during the three months ended March 31, 2016, compared to the three months ended March 31, 2015.
About Waterstone Financial, Inc.

Waterstone Financial, Inc. (NASDAQ: WSBF) is a single-bank, holding company headquartered in Wauwatosa, WI.  With $1.7 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 20 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.
- 5 -
 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF INCOME
  
(Unaudited)
  
 
  
For The Three Months Ended March 31,
  
 
  
2016
    
2015
  
 
  
(In Thousands, except per share amounts)
  
Interest income:
            
Loans
  
$
13,784
      
13,313
  
Mortgage-related securities
    
838
      
839
  
Debt securities, federal funds sold and short-term investments
    
974
      
866
  
Total interest income
    
15,596
      
15,018
  
Interest expense:
                
Deposits
    
1,719
      
1,353
  
Borrowings
    
3,894
      
4,229
  
Total interest expense
    
5,613
      
5,582
  
Net interest income
    
9,983
      
9,436
  
Provision for loan losses
    
205
      
335
  
Net interest income after provision for loan losses
    
9,778
      
9,101
  
Noninterest income:
                
Service charges on loans and deposits
    
337
      
406
  
Increase in cash surrender value of life insurance
    
241
      
207
  
Mortgage banking income
    
20,614
      
21,039
  
Gain on sale of available for sale securities
    
-
      
44
  
Other
    
253
      
337
  
Total noninterest income
    
21,445
      
22,033
  
Noninterest expenses:
                
Compensation, payroll taxes, and other employee benefits
    
17,686
      
18,078
  
Occupancy, office furniture, and equipment
    
2,336
      
2,443
  
Advertising
    
658
      
653
  
Data processing
    
643
      
575
  
Communications
    
342
      
370
  
Professional fees
    
523
      
497
  
Real estate owned
    
144
      
543
  
FDIC insurance premiums
    
205
      
336
  
Other
    
2,685
      
2,933
  
Total noninterest expenses
    
25,222
      
26,428
  
Income before income taxes
    
6,001
      
4,706
  
Income tax expense
    
2,140
      
1,690
  
Net income
  
$
3,861
      
3,016
  
Income per share:
                
Basic
  
$
0.14
      
0.09
  
Diluted
  
$
0.14
      
0.09
  
Weighted average shares outstanding:
                
Basic
    
26,966
      
32,369
  
Diluted
    
27,279
      
32,650
  
 
 
- 6 -
 
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  
 
            
 
  
March 31, 2016
    
December 31, 2015
  
 
  
(Unaudited)
        
Assets
  
(In Thousands, except per share amounts)
  
Cash
  
$
79,077
      
57,419
  
Federal funds sold
    
22,877
      
20,297
  
Interest-earning deposits in other financial institutions and other short term investments
    
20,760
      
22,755
  
Cash and cash equivalents
    
122,714
      
100,471
  
Securities available for sale (at fair value)
    
267,733
      
269,658
  
Loans held for sale (at fair value)
    
107,387
      
166,516
  
Loans receivable
    
1,112,237
      
1,114,934
  
Less: Allowance for loan losses
    
15,805
      
16,185
  
Loans receivable, net
    
1,096,432
      
1,098,749
  
 
                
Office properties and equipment, net
    
25,109
      
25,328
  
Federal Home Loan Bank stock (at cost)
    
19,500
      
19,500
  
Cash surrender value of life insurance
    
59,803
      
49,562
  
Real estate owned, net
    
8,304
      
9,190
  
Prepaid expenses and other assets
    
30,596
      
23,755
  
Total assets
  
$
1,737,578
      
1,762,729
  
 
                
Liabilities and Shareholders' Equity
                
Liabilities:
                
Demand deposits
  
$
101,934
      
102,673
  
Money market and savings deposits
    
147,074
      
140,631
  
Time deposits
    
669,288
      
650,057
  
Total deposits
    
918,296
      
893,361
  
 
                
Borrowings
    
396,222
      
441,203
  
Advance payments by borrowers for taxes
    
9,375
      
3,661
  
Other liabilities
    
20,259
      
32,574
  
Total liabilities
    
1,344,152
      
1,370,799
  
 
                
Shareholders' equity:
                
Common stock
    
292
      
294
  
Additional paid-in capital
    
317,552
      
317,022
  
Retained earnings
    
170,586
      
168,089
  
Unearned ESOP shares
    
(21,068
)
    
(21,365
)
Accumulated other comprehensive income, net of taxes
    
2,442
      
582
  
Cost of shares repurchased
    
(76,378
)
    
(72,692
)
Total shareholders' equity
    
393,426
      
391,930
  
Total liabilities and shareholders' equity
  
$
1,737,578
      
1,762,729
  
 
                
Share Information
                
Shares Outstanding
    
29,148
      
29,407
  
Book Value per share
  
$
13.50
      
13.33
  
Closing market price
  
$
13.68
      
14.10
  
Price to book ratio
    
101.35
%
    
105.79
%
 
                
Asset Quality Data
                
Total non accrual loans
  
$
15,468
      
17,604
  
Real estate owned
    
8,304
      
9,190
  
Total nonperforming assets
  
$
23,772
      
26,794
  
 
                
Total non accrual to total loans
    
1.39
%
    
1.58
%
Total nonperforming assets to total assets
    
1.37
%
    
1.52
%
 
                
Allowance for loan losses
  
$
15,805
      
16,185
  
Allowance for loan losses as a % to non-accrual loans
    
102.18
%
    
91.94
%
- 7 -

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,
  
 
  
2016
    
2015
    
2015
    
2015
    
2015
  
 
              
(Dollars in Thousands)
        
Condensed Results of Operations:
                              
Net interest income
  
$
9,983
      
9,438
      
9,910
      
10,060
      
9,436
  
Provision for loan losses
    
205
      
245
      
580
      
805
      
335
  
Total noninterest income
    
21,445
      
22,850
      
28,551
      
31,040
      
22,033
  
Total noninterest expense
    
25,222
      
27,373
      
29,786
      
31,947
      
26,428
  
Income before income taxes
    
6,001
      
4,670
      
8,095
      
8,348
      
4,706
  
Income tax expense
    
2,140
      
1,599
      
2,896
      
3,064
      
1,690
  
Net income
  
$
3,861
      
3,071
      
5,199
      
5,284
      
3,016
  
Income per share – basic
  
$
0.14
      
0.11
      
0.19
      
0.17
      
0.09
  
Income per share – diluted
  
$
0.14
      
0.11
      
0.19
      
0.17
      
0.09
  
 
                                        
Performance Ratios:
                                        
Return on average assets - QTD
    
0.90
%
    
0.69
%
    
1.18
%
    
1.21
%
    
0.69
%
Return on average equity - QTD
    
3.95
%
    
3.10
%
    
5.21
%
    
5.04
%
    
2.71
%
Net interest margin - QTD
    
2.48
%
    
2.26
%
    
2.39
%
    
2.46
%
    
2.31
%
Efficiency ratio - QTD
    
80.25
%
    
84.78
%
    
77.44
%
    
77.73
%
    
83.98
%
Return on average assets - YTD
    
0.90
%
    
0.94
%
    
1.03
%
    
0.95
%
    
0.69
%
Return on average equity - YTD
    
3.95
%
    
3.99
%
    
4.26
%
    
3.83
%
    
2.71
%
Net interest margin - YTD
    
2.48
%
    
2.36
%
    
2.38
%
    
2.38
%
    
2.31
%
Efficiency ratio - YTD
    
80.25
%
    
80.61
%
    
79.40
%
    
80.44
%
    
83.98
%

 

 


WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
SUMMARY OF SHARES REPURCHASED
  
AS PART OF PUBLICLY ANNOUNCED PLANS
  
 
      
For the quarter ended March 31, 2016
      
Total shares repurchased
    
242,700
  
Total cost of shares (including commission)
  
$
3,284,982
  
Average cost per share
  
$
13.54
  
 
        
Total purchased under plan as of  March 31, 2016
        
Total shares repurchased
    
5,836,453
  
Total cost of shares (including commission)
  
$
75,640,918
  
Average cost per share
  
$
12.96
  

 
 
 
 
- 8 -