0001569994-20-000004.txt : 20200130 0001569994-20-000004.hdr.sgml : 20200130 20200130160126 ACCESSION NUMBER: 0001569994-20-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20200130 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20200130 DATE AS OF CHANGE: 20200130 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: 20561365 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):  January 30, 2020
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))
 
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities and Exchange Act of 1934 (§240.12b-2 of this chapter).

¨ 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 January 30, 2020, Waterstone Financial, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2019.  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 January 30, 2020




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 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:  January 30, 2020
/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 January 30, 2020.

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 4 -
 EX-99.1 2 exhibit991.htm
Exhibit 99.1
 
 
WATERSTONE FINANCIAL, INC.
WATERSTONE BANK
11200 W. PLANK CT.
WAUWATOSA, WI 53226
 
Contact:  Mark R. Gerke
Chief Financial Officer
414.459.4012
markgerke@wsbonline.com


Exhibit 99.1
Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Year Ended December 31, 2019.
WAUWATOSA, WI – 01/30/2020 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $8.8 million, or $0.34 per diluted share for the quarter ended December 31, 2019 compared to $5.7 million, or $0.21 per diluted share for the quarter ended December 31, 2018. Net income per diluted share was $1.37 for the year ended December 31, 2019 compared to net income per diluted share of $1.11 for the year ended December 31, 2018.
“We finished a successful fiscal 2019 with a record pre-tax income for a 4th quarter,” said Douglas Gordon, CEO of Waterstone Financial, Inc. “The record $11.8 million in consolidated 4th quarter pre-tax income represents a 62.2% increase over the prior year’s comparable quarter.  The results are driven by a record pre-tax 4th quarter from the Community Banking segment and another successful quarter from the Mortgage Banking segment. During the quarter, the Community Banking segment achieved loan and deposit growth, while continuing to invest in technology and additional branch locations for the convenience of our customers. The Mortgage Banking segment continued to benefit from increased production volumes of refinance products, while maintaining a continued focus on cost discipline throughout the organization.”

Highlights of the Quarter and Year Ended December 31, 2019

Waterstone Financial, Inc. (Consolidated)

•
Consolidated net income of Waterstone Financial, Inc. totaled $8.8 million for the quarter ended December 31, 2019, compared to $5.7 million for the quarter ended December 31, 2018.
•
Consolidated net income of Waterstone Financial, Inc. totaled $35.9 million for the year ended December 31, 2019, compared to $30.8 million for the year ended December 31, 2018.
•
Consolidated return on average assets was 1.75% for the quarter ended December 31, 2019 compared to 1.18% for the quarter ended December 31, 2018.
•
Consolidated return on average assets was 1.82% for the year ended December 31, 2019 compared to 1.64% for the year ended December 31, 2018.
•
Consolidated return on average equity was 8.91% for the quarter ended December 31, 2019 and 5.58% for the quarter ended December 31, 2018.
•
Consolidated return on average equity was 9.14% for the year ended December 31, 2019 and 7.60% for the year ended December 31, 2018.
•
Dividends declared totaled $0.12 per share during the quarter ended December 31, 2019 amounting to a total of $0.98 in dividends declared per share during the year ended December 31, 2019.
•
The Company returned a total of $48.4 million to shareholders through dividends declared and stock repurchases in 2019.



- 5 -
Community Banking Segment

•
Pre-tax income totaled $8.3 million for the quarter ended December 31, 2019, which represents a 10.5% increase compared to $7.5 million for the quarter ended December 31, 2018.
•
Net interest income totaled $13.5 million for the quarter ended December 31, 2019, which represents a 2.2% decrease compared to $13.8 million for the quarter ended December 31, 2018.
•
Average loans held for investment totaled $1.38 billion during the quarter ended December 31, 2019, which represents an increase of $15.0 million, or 1.1%, compared to the quarter ended December 31, 2018. Average loans held for investment increased $1.4 million, or 0.4% annualized, compared to $1.38 billion for the quarter ended September 30, 2019.
•
Net interest margin decreased 20 basis points to 2.79% for the quarter ended December 31, 2019 compared to 2.99% for the quarter December 31, 2018, which was a result of the increase in cost of funding as money market accounts, certificates of deposit, and borrowings repriced at higher rates over the past year. Net interest margin decreased one basis point compared to 2.80% for the quarter ended September 30, 2019.
•
The segment had $200,000 negative provision for loan losses for the quarter ended December 31, 2019 compared to no provision for loan losses for loan losses for the quarter ended December 31, 2018. Net recoveries totaled $10,000 for the quarter ended December 31, 2019, compared to net recoveries of $22,000 for the quarter ended December 31, 2018.
•
Noninterest income increased $734,000 for the quarter ended December 31, 2019 compared to the quarter ended December 31, 2018 as loan prepayment penalties on existing loans increased. Additionally, the bank received fees for originating loan swaps which began in the current quarter.
•
Noninterest expenses decreased $161,000 for the quarter ended December 31, 2019 compared to the quarter ended December 31, 2018. Compensation expenses decreased $68,000 as health insurance expense decreased offset by an increase in salaries. Advertising expense increased $132,000 as we increased efforts to attract new customers and data processing expense increased $161,000 as we continue to make investments in technology.  Professional fees decreased $177,000 due to less consulting and net real estate owned expenses decreased $189,000 as gains on sales of real estate owned increased. Other noninterest expenses decreased $73,000 as FDIC insurance premiums decreased offset by increased losses on fixed asset disposals.
•
The efficiency ratio was 46.23% for the quarter ended December 31, 2019, compared to 48.69% for the quarter ended December 31, 2018.
•
Average deposits (excluding escrow accounts) totaled $1.06 billion during the quarter ended December 31, 2019, an increase of $36.4 million, or 3.6%, compared to $1.02 billion during the quarter ended December 31, 2018.  Average deposits increased $9.0 million, or 3.4% annualized, compared to the quarter ended September 30, 2019.
•
Nonperforming assets as percentage of total assets was 0.39% at December 31, 2019, 0.41% at September 30, 2019, and 0.45% at December 31, 2018.
•
Past due loans as percentage of total loans was 0.47% at December 31, 2019, 0.62% at September 30, 2019, and 0.50% at December 31, 2018.

Mortgage Banking Segment

•
Pre-tax income totaled $3.4 million for the quarter ended December 31, 2019, compared to $308,000 of pre-tax loss for the quarter ended December 31, 2018.
•
Loan originations increased approximately $176.9 million, or 29.5%, to $777.1 million during the quarter ended December 31, 2019, compared to $600.2 million during the quarter ended December 31, 2018.  Origination volume relative to purchase activity accounted for 72.1% of originations for the quarter ended December 31, 2019 compared to 91.1% of total originations for the quarter ended December 31, 2018.
•
Mortgage banking income increased $7.5 million, or 29.8%, to $32.4 million for the quarter ended December 31, 2019, compared to $25.0 million for the quarter ended December 31, 2018.
•
Gross margin on loans sold increased to 4.27% for the quarter ended December 31, 2019, compared to 4.17% for the quarter ended December 31, 2018.

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, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha/Brookfield, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin along with a commercial lending office in Minneapolis, Minnesota. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.

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.



- 6 -

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF INCOME
  
(Unaudited)
  
 
  
For The Three Months Ended December 31,
    
For The Year Ended December 31,
  
 
  
2019
    
2018
    
2019
    
2018
  
 
  
(In Thousands, except per share amounts)
  
Interest income:
                        
Loans
  
$
18,547
      
17,468
      
72,235
      
66,966
  
Mortgage-related securities
    
718
      
723
      
2,978
      
2,648
  
Debt securities, federal funds sold and short-term investments
    
1,013
      
1,137
      
4,528
      
4,086
  
Total interest income
    
20,278
      
19,328
      
79,741
      
73,700
  
Interest expense:
                                
Deposits
    
4,465
      
3,540
      
17,278
      
11,627
  
Borrowings
    
2,687
      
2,322
      
10,266
      
7,896
  
Total interest expense
    
7,152
      
5,862
      
27,544
      
19,523
  
Net interest income
    
13,126
      
13,466
      
52,197
      
54,177
  
Provision for loan losses
    
(170
)
    
-
      
(900
)
    
(1,060
)
Net interest income after provision for loan losses
    
13,296
      
13,466
      
53,097
      
55,237
  
Noninterest income:
                                
Service charges on loans and deposits
    
1,091
      
348
      
2,363
      
1,680
  
Increase in cash surrender value of life insurance
    
356
      
352
      
1,935
      
1,848
  
Mortgage banking income
    
32,140
      
24,221
      
125,666
      
113,151
  
Other
    
222
      
715
      
786
      
1,520
  
Total noninterest income
    
33,809
      
25,636
      
130,750
      
118,199
  
Noninterest expenses:
                                
Compensation, payroll taxes, and other employee benefits
    
26,491
      
23,114
      
101,718
      
97,784
  
Occupancy, office furniture, and equipment
    
2,521
      
2,860
      
10,606
      
10,855
  
Advertising
    
1,051
      
1,039
      
3,885
      
4,123
  
Data processing
    
989
      
735
      
3,630
      
2,792
  
Communications
    
320
      
382
      
1,359
      
1,611
  
Professional fees
    
1,167
      
397
      
3,605
      
2,327
  
Real estate owned
    
(221
)
    
(62
)
    
(146
)
    
1
  
Loan processing expense
    
746
      
643
      
3,288
      
3,372
  
Other
    
2,273
      
2,738
      
8,328
      
10,291
  
Total noninterest expenses
    
35,337
      
31,846
      
136,273
      
133,156
  
Income before income taxes
    
11,768
      
7,256
      
47,574
      
40,280
  
Income tax expense
    
2,974
      
1,578
      
11,671
      
9,526
  
Net income
  
$
8,794
      
5,678
      
35,903
      
30,754
  
Income per share:
                                
Basic
  
$
0.34
      
0.21
      
1.38
      
1.12
  
Diluted
  
$
0.34
      
0.21
      
1.37
      
1.11
  
Weighted average shares outstanding:
                                
Basic
    
25,586
      
26,994
      
26,021
      
27,363
  
Diluted
    
25,852
      
27,218
      
26,247
      
27,634
  




- 7 -


WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  
 
  
December 31,
    
December 31,
  
 
  
2019
    
2018
  
 
  
(Unaudited)
        
Assets
  
(In Thousands, except per share amounts)
  
Cash
  
$
52,814
    
$
48,234
  
Federal funds sold
    
12,704
      
25,100
  
Interest-earning deposits in other financial institutions and other short term investments
    
8,782
      
12,767
  
Cash and cash equivalents
    
74,300
      
86,101
  
Securities available for sale (at fair value)
    
178,476
      
185,720
  
Loans held for sale (at fair value)
    
220,123
      
141,616
  
Loans receivable
    
1,388,031
      
1,379,148
  
Less: Allowance for loan losses
    
12,387
      
13,249
  
Loans receivable, net
    
1,375,644
      
1,365,899
  
 
                
Office properties and equipment, net
    
25,028
      
24,524
  
Federal Home Loan Bank stock (at cost)
    
21,150
      
19,350
  
Cash surrender value of life insurance
    
69,665
      
67,550
  
Real estate owned, net
    
748
      
2,152
  
Prepaid expenses and other assets
    
31,213
      
22,469
  
Total assets
  
$
1,996,347
    
$
1,915,381
  
 
                
Liabilities and Shareholders' Equity
                
Liabilities:
                
Demand deposits
  
$
130,063
    
$
139,111
  
Money market and savings deposits
    
197,942
      
163,511
  
Time deposits
    
739,771
      
735,873
  
Total deposits
    
1,067,776
      
1,038,495
  
 
                
Borrowings
    
483,562
      
435,046
  
Advance payments by borrowers for taxes
    
4,212
      
4,371
  
Other liabilities
    
47,111
      
37,790
  
Total liabilities
    
1,602,661
      
1,515,702
  
 
                
Shareholders' equity:
                
Preferred stock
    
-
      
-
  
Common stock
    
271
      
285
  
Additional paid-in capital
    
211,997
      
232,406
  
Retained earnings
    
197,393
      
187,153
  
Unearned ESOP shares
    
(16,617
)
    
(17,804
)
Accumulated other comprehensive income (loss), net of taxes
    
642
      
(2,361
)
Total shareholders' equity
    
393,686
      
399,679
  
Total liabilities and shareholders' equity
  
$
1,996,347
    
$
1,915,381
  
 
                
Share Information
                
Shares outstanding
    
27,148
      
28,463
  
Book value per share
  
$
14.50
    
$
14.04
  
Closing market price
  
$
19.03
    
$
16.76
  
Price to book ratio
    
131.24
%
    
119.37
%


- 8 -
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
  
(Unaudited)
  
 
                              
 
  
At or For the Three Months Ended
  
 
  
December 31,
    
September 30,
    
June 30,
    
March 31,
    
December 31,
  
 
  
2019
    
2019
    
2019
    
2019
    
2018
  
 
  
(Dollars in Thousands, except per share amounts)
  
Condensed Results of Operations:
                              
Net interest income
  
$
13,126
      
13,154
      
12,981
      
12,936
      
13,466
  
Provision for loan losses
    
(170
)
    
(80
)
    
30
      
(680
)
    
-
  
Total noninterest income
    
33,809
      
37,494
      
35,190
      
24,257
      
25,636
  
Total noninterest expense
    
35,337
      
36,232
      
35,355
      
29,349
      
31,846
  
Income before income taxes
    
11,768
      
14,496
      
12,786
      
8,524
      
7,256
  
Income tax expense
    
2,974
      
3,572
      
3,143
      
1,982
      
1,578
  
Net income
  
$
8,794
      
10,924
      
9,643
      
6,542
      
5,678
  
Income per share – basic
  
$
0.34
      
0.42
      
0.37
      
0.25
      
0.21
  
Income per share – diluted
  
$
0.34
      
0.42
      
0.37
      
0.24
      
0.21
  
Dividends declared per share
  
$
0.12
      
0.12
      
0.12
      
0.62
      
0.12
  
 
                                        
Performance Ratios (annualized):
                                        
Return on average assets - QTD
    
1.75
%
    
2.17
%
    
1.95
%
    
1.39
%
    
1.18
%
Return on average equity - QTD
    
8.91
%
    
11.15
%
    
9.96
%
    
6.65
%
    
5.58
%
Net interest margin - QTD
    
2.79
%
    
2.80
%
    
2.82
%
    
2.93
%
    
2.99
%
 
                                        
Return on average assets - YTD
    
1.82
%
    
1.84
%
    
1.67
%
    
1.39
%
    
1.64
%
Return on average equity - YTD
    
9.14
%
    
9.21
%
    
8.28
%
    
6.65
%
    
7.60
%
Net interest margin - YTD
    
2.83
%
    
2.85
%
    
2.88
%
    
2.93
%
    
3.09
%
 
                                        
Asset Quality Ratios:
                                        
Past due loans to total loans
    
0.47
%
    
0.62
%
    
0.61
%
    
0.46
%
    
0.50
%
Nonaccrual loans to total loans
    
0.51
%
    
0.46
%
    
0.41
%
    
0.49
%
    
0.48
%
Nonperforming assets to total assets
    
0.39
%
    
0.41
%
    
0.37
%
    
0.44
%
    
0.45
%



- 9 -

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
(Unaudited)
 
 
 
 
 
 
 
At or For the Three Months Ended
 
December 31,
September 30,
June 30,
March 31,
December 31,
 
2019
2019
2019
2019
2018
Average balances
(Dollars in Thousands)
Interest-earning assets
 
 
 
 
 
Loans receivable and held for sale
 1,573,190
 1,579,575
 1,552,199
 1,477,991
 1,496,125
Mortgage related securities
 110,426
 114,051
 114,537
 115,674
 111,004
Debt securities, federal funds sold and short term investments
 183,447
 169,621
 180,111
 194,669
 179,232
    Total interest-earning assets
 1,867,063
 1,863,247
 1,846,847
 1,788,334
 1,786,361
Noninterest-earning assets
 125,904
 137,723
 136,263
 125,396
 119,715
    Total assets
 1,992,967
 2,000,970
 1,983,110
 1,913,730
 1,906,076
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
Demand accounts
 38,650
 37,015
 35,744
 36,268
 36,941
Money market, savings, and escrow accounts
 215,332
 206,474
 193,542
 176,237
 184,873
Certificates of deposit
 737,726
 739,544
 736,798
 735,471
 722,774
    Total interest-bearing deposits
 991,708
 983,033
 966,084
 947,976
 944,588
Borrowings
 485,482
 509,099
 504,940
 438,905
 439,601
    Total interest-bearing liabilities
 1,477,190
 1,492,132
 1,471,024
 1,386,881
 1,384,189
Noninterest-bearing demand deposits
 85,815
 86,849
 91,545
 97,951
 97,677
Noninterest-bearing liabilities
 38,580
 33,130
 32,143
 30,027
 20,219
    Total liabilities
 1,601,585
 1,612,111
 1,594,712
 1,514,859
 1,502,085
Equity
 391,382
 388,859
 388,398
 398,871
 403,991
    Total liabilities and equity
 1,992,967
 2,000,970
 1,983,110
 1,913,730
 1,906,076
 
 
 
 
 
 
Average Yield/Costs (annualized)
 
 
 
 
 
Loans receivable and held for sale
4.68%
4.66%
4.66%
4.69%
4.63%
Mortgage related securities
2.58%
2.56%
2.68%
2.66%
2.58%
Debt securities, federal funds sold and short term investments
2.19%
2.53%
2.50%
2.73%
2.52%
    Total interest-earning assets
4.31%
4.34%
4.32%
4.35%
4.29%
 
 
 
 
 
 
Demand accounts
0.10%
0.09%
0.09%
0.09%
0.09%
Money market, savings and escrow accounts
0.66%
0.57%
0.66%
0.63%
0.47%
Certificates of deposit
2.20%
2.24%
2.19%
2.04%
1.82%
    Total interest-bearing deposits
1.79%
1.81%
1.80%
1.71%
1.49%
Borrowings
2.20%
2.14%
2.06%
2.08%
2.10%
    Total interest-bearing liabilities
1.92%
1.92%
1.89%
1.82%
1.68%



- 10 -
COMMUNITY BANKING SEGMENT
  
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
  
(Unaudited)
  
 
                              
 
  
At or For the Three Months Ended
  
 
  
December 31,
    
September 30,
    
June 30,
    
March 31,
    
December 31,
  
 
  
2019
    
2019
    
2019
    
2019
    
2018
  
 
  
(Dollars in Thousands)
  
Condensed Results of Operations:
                              
Net interest income
  
$
13,472
      
13,885
      
13,530
      
13,132
      
13,774
  
Provision for loan losses
    
(200
)
    
(150
)
    
-
      
(700
)
    
-
  
Total noninterest income
    
1,645
      
1,415
      
1,079
      
881
      
911
  
Noninterest expenses:
                                        
Compensation, payroll taxes, and other employee benefits
    
4,693
      
4,075
      
4,671
      
4,756
      
4,761
  
Occupancy, office furniture and equipment
    
894
      
942
      
944
      
972
      
842
  
Advertising
    
317
      
202
      
220
      
181
      
185
  
Data processing
    
583
      
588
      
493
      
457
      
422
  
Communications
    
93
      
90
      
93
      
82
      
92
  
Professional fees
    
162
      
223
      
160
      
268
      
339
  
Real estate owned
    
(251
)
    
24
      
19
      
32
      
(62
)
Loan processing expense
    
-
      
-
      
-
      
-
      
-
  
Other
    
498
      
583
      
635
      
489
      
571
  
Total noninterest expense
    
6,989
      
6,727
      
7,235
      
7,237
      
7,150
  
Income before income taxes
    
8,328
      
8,723
      
7,374
      
7,476
      
7,535
  
Income tax expense
    
2,033
      
1,982
      
1,594
      
1,687
      
1,632
  
Net income
  
$
6,295
      
6,741
      
5,780
      
5,789
      
5,903
  
 
                                        
Efficiency ratio - QTD
    
46.23
%
    
43.97
%
    
49.52
%
    
51.64
%
    
48.69
%
Efficiency ratio - YTD
    
47.74
%
    
48.27
%
    
50.56
%
    
51.64
%
    
47.63
%




- 11 -

MORTGAGE BANKING SEGMENT
  
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
  
(Unaudited)
  
 
                              
 
  
At or For the Three Months Ended
  
 
  
December 31,
    
September 30,
    
June 30,
    
March 31,
    
December 31,
  
 
  
2019
    
2019
    
2019
    
2019
    
2018
  
 
  
(Dollars in Thousands)
  
Condensed Results of Operations:
                              
Net interest income
  
$
(399
)
    
(774
)
    
(529
)
    
(208
)
    
(332
)
Provision for loan losses
    
30
      
70
      
30
      
20
      
-
  
Total noninterest income
    
32,440
      
36,535
      
34,364
      
23,571
      
24,986
  
Noninterest expenses:
                                        
Compensation, payroll taxes, and other employee benefits
    
21,975
      
23,616
      
22,579
      
16,060
      
18,499
  
Occupancy, office furniture and equipment
    
1,627
      
1,687
      
1,736
      
1,804
      
2,018
  
Advertising
    
734
      
711
      
743
      
777
      
854
  
Data processing
    
402
      
411
      
372
      
308
      
309
  
Communications
    
227
      
268
      
260
      
246
      
290
  
Professional fees
    
1,000
      
688
      
620
      
426
      
52
  
Real estate owned
    
30
      
-
      
-
      
-
      
-
  
Loan processing expense
    
746
      
858
      
879
      
805
      
643
  
Other
    
1,918
      
1,725
      
1,186
      
1,912
      
2,297
  
Total noninterest expense
    
28,659
      
29,964
      
28,375
      
22,338
      
24,962
  
Income (loss) before income taxes
    
3,352
      
5,727
      
5,430
      
1,005
      
(308
)
Income tax expense (benefit)
    
921
      
1,584
      
1,545
      
286
      
(62
)
Net income (loss)
  
$
2,431
      
4,143
      
3,885
      
719
      
(246
)
 
                                        
Efficiency ratio - QTD
    
89.44
%
    
83.79
%
    
83.86
%
    
95.61
%
    
101.25
%
Efficiency ratio - YTD
    
87.47
%
    
86.79
%
    
88.66
%
    
95.61
%
    
92.89
%
 
                                        
Loan originations
  
$
777,073
      
851,297
      
793,254
      
501,432
      
600,156
  
Purchase
    
72.1
%
    
79.0
%
    
87.6
%
    
89.9
%
    
91.1
%
Refinance
    
27.9
%
    
21.0
%
    
12.4
%
    
10.1
%
    
8.9
%
Gross margin on loans sold(1)
    
4.27
%
    
4.30
%
    
4.29
%
    
4.57
%
    
4.17
%
(1) - Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations
  


- 12 -