Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2023 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) | 53226 | | --- | | 11200 W. Plank Court Wauwatosa, Wisconsin | (Address of principal executive offices) (Zip Code) (414) 761-1000 (Registrant's telephone number, including ar ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2023 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36271 WATERSTONE FINANCIAL, INC. (Exact name of registrant as specified in its charter) Maryland 90-1026709 (State or other jurisdiction of incorporation or ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 | 53226 | | --- | | 11200 W. Plank Court Wauwatosa, Wisconsin | Form 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36271 WATERSTONE FINANCIAL, INC. (Exact name of registrant as specified in its charter) Mar ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-36271 WATERSTONE FINANCIAL, INC. (Exact name of registrant as specified in its charter) Maryland 90-1026709 (State or other jurisdiction of incorporation or organization) ...

Table of Contents For the quarterly period ended September 30, 2022 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36271 WATERSTONE FINANCIAL, INC. (Exact name of registrant as specified in its charter) Maryland 90-1026709 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☒ Quarterly report pursuant to Secti ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%20l.%20Financial%20Statements) The financial statements present the company's financial position, results of operations, and cash flows, highlighting a decrease in assets and net income Consolidated Statements of Financial Condition - Total assets decreased to **$1.94 billion** as of June 30, 2022, from **$2.22 billion** at December 31, 2021, primarily due to a significant reduction in cash and cash equivalents and loans held for sale[11](index=11&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $122,193 | $376,722 | | Loans held for sale | $206,702 | $312,738 | | Loans receivable, net | $1,259,289 | $1,190,007 | | **Total Assets** | **$1,941,097** | **$2,215,858** | | **Liabilities & Equity** | | | | Total deposits | $1,213,230 | $1,233,386 | | Borrowings | $281,100 | $477,127 | | **Total Liabilities** | **$1,554,717** | **$1,783,085** | | **Total Shareholders' Equity** | **$386,380** | **$432,773** | Consolidated Statements of Income - Net income for the second quarter of 2022 was **$8.0 million**, a significant decrease from **$17.9 million** in the same period of 2021, driven by a sharp reduction in mortgage banking income[13](index=13&type=chunk) Consolidated Income Statement Summary (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $14,081 | $14,277 | $25,945 | $28,229 | | Mortgage Banking Income | $29,410 | $49,649 | $57,685 | $104,040 | | Total Noninterest Income | $31,238 | $52,044 | $61,056 | $108,243 | | Total Noninterest Expenses | $35,050 | $43,297 | $69,984 | $86,297 | | **Net Income** | **$7,990** | **$17,894** | **$13,282** | **$39,238** | | Diluted EPS | $0.36 | $0.74 | $0.58 | $1.64 | Consolidated Statements of Changes in Shareholders' Equity - Shareholders' equity decreased from **$432.8 million** at year-end 2021 to **$386.4 million** at June 30, 2022, driven by stock repurchases, comprehensive loss, and cash dividends[17](index=17&type=chunk) - The company repurchased **2,099,000 shares** of common stock for **$37.9 million** during the first six months of 2022[17](index=17&type=chunk) Consolidated Statements of Cash Flows - Cash and cash equivalents decreased by **$254.5 million** in the first six months of 2022, compared to an increase of **$134.0 million** in the same period of 2021[22](index=22&type=chunk) - Significant financing activities in the first half of 2022 included the repayment of **$195.0 million** in long-term debt and the repurchase of **$37.9 million** in common stock[22](index=22&type=chunk) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $118,163 | $76,913 | | Net cash (used in) provided by investing activities | ($100,752) | $64,108 | | Net cash used in financing activities | ($271,940) | ($7,049) | | **(Decrease) increase in cash and cash equivalents** | **($254,529)** | **$133,972** | Notes to Consolidated Financial Statements - The Company adopted ASC Topic 326 (CECL) on January 1, 2022, resulting in a **$1.4 million** after-tax decrease to retained earnings[35](index=35&type=chunk) - The company operates through two main subsidiaries: WaterStone Bank SSB, a community bank, and Waterstone Mortgage Corporation, a mortgage banking subsidiary[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Non-accrual loans increased to **$7.5 million** (0.59% of total loans) at June 30, 2022, from **$5.6 million** (0.46% of total loans) at December 31, 2021[80](index=80&type=chunk) - The company has two reportable segments: Community Banking and Mortgage Banking[155](index=155&type=chunk)[156](index=156&type=chunk)[158](index=158&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | One- to four-family | $312,657 | $300,523 | | Multi-family | $597,304 | $537,956 | | Commercial real estate | $266,375 | $250,676 | | Construction and land | $70,075 | $82,588 | | Other | $29,149 | $34,042 | | **Total** | **$1,276,560** | **$1,205,785** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Profitability declined significantly due to the mortgage banking segment's performance amid rising interest rates, while total assets decreased from lower cash balances Results of Operations - The Mortgage Banking segment's net income plummeted to **$1.7 million** in Q2 2022 from **$10.4 million** in Q2 2021, caused by lower origination volume and compressed margins[179](index=179&type=chunk) - The Community Banking segment's Q2 2022 net income was **$6.3 million**, down from **$7.5 million** in Q2 2021, due to lower net interest income[174](index=174&type=chunk) - Consolidated noninterest income for Q2 2022 decreased **40.0%** to **$31.2 million**, primarily due to a **$20.2 million** drop in mortgage banking income[195](index=195&type=chunk) - Consolidated noninterest expenses for Q2 2022 decreased **19.0%** to **$35.1 million**, mainly from an **$8.1 million** reduction in compensation and benefits[197](index=197&type=chunk)[200](index=200&type=chunk) Consolidated Results of Operations Summary | Metric | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Income (in thousands) | $7,990 | $17,894 | $13,282 | $39,238 | | Diluted EPS | $0.36 | $0.74 | $0.58 | $1.64 | | Annualized ROA | 1.61% | 3.25% | 1.30% | 3.62% | | Annualized ROE | 7.93% | 16.49% | 6.42% | 18.49% | Financial Condition - Total assets decreased by **$274.8 million (12.4%)** to **$1.94 billion** at June 30, 2022, mainly due to a **$254.5 million** decrease in cash[225](index=225&type=chunk)[226](index=226&type=chunk)[228](index=228&type=chunk) - Loans receivable held for investment grew by **$70.8 million** to **$1.28 billion**, driven by increases in core real estate loan categories[228](index=228&type=chunk) - Total borrowings decreased by **$196.0 million (41.1%)** to **$281.1 million**, primarily due to the payoff of **$200.0 million** in FHLB borrowings[235](index=235&type=chunk) - Shareholders' equity declined by **$46.4 million** to **$386.4 million**, impacted by dividends, stock repurchases, and the adoption of CECL[238](index=238&type=chunk) Asset Quality - The allowance for credit losses on loans increased by **$1.5 million** to **$17.3 million** at June 30, 2022, due to the CECL adoption and provisions[231](index=231&type=chunk)[259](index=259&type=chunk) - Total past due loans increased slightly to **$7.7 million** (0.60% of total loans) at June 30, 2022, from **$7.1 million** (0.59% of total loans) at year-end 2021[255](index=255&type=chunk) Nonperforming Assets (in thousands) | Category | June 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total non-accrual loans | $7,493 | $5,574 | | Real estate owned | $148 | $148 | | **Total nonperforming assets** | **$7,641** | **$5,722** | | Nonperforming assets to total assets | 0.39% | 0.26% | Liquidity and Capital Resources - Primary uses of cash in the first half of 2022 included **$1.45 billion** to fund loans, **$195.0 million** for debt payoffs, and **$37.9 million** for stock repurchases[268](index=268&type=chunk) - Primary sources of cash included **$1.59 billion** in proceeds from the sale of loans and **$13.3 million** in net income[269](index=269&type=chunk) - At June 30, 2022, WaterStone Bank **exceeded all regulatory capital requirements** and was considered "well capitalized"[278](index=278&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=72&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate sensitivity, with models showing a negative impact on net interest income from both rising and falling rates - The company's primary market risk is **interest rate risk** due to its asset/liability structure, which is managed by an Asset/Liability Committee[283](index=283&type=chunk) Net Interest Income Sensitivity Analysis (as of June 30, 2022) | Immediate Change in Rates | +300 bps | +200 bps | +100 bps | -100 bps | | :--- | :--- | :--- | :--- | :--- | | **Percentage Change** | **(2.20)%** | **(0.95)%** | **(0.43)%** | **(1.97)%** | [Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting during the quarter - Based on an evaluation as of June 30, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures are effective**[290](index=290&type=chunk) - **No material changes** occurred during the fiscal quarter that have affected, or are reasonably likely to affect, the company's internal control over financial reporting[291](index=291&type=chunk) [PART II. OTHER INFORMATION](index=73&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=73&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially impact its consolidated financial statements - Information regarding legal proceedings is detailed in Note 9 of the financial statements[292](index=292&type=chunk) [Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were identified since its 2021 Annual Report on Form 10-K - **No material changes** in risk factors were reported from the company's 2021 Annual Report on Form 10-K[293](index=293&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company continued its stock repurchase program, buying back over 1.4 million shares during the second quarter of 2022 - The current share repurchase plan allows for the repurchase of 3,500,000 shares; as of the end of the quarter, **1,350,513 shares may yet be purchased**[294](index=294&type=chunk) Common Stock Repurchases in Q2 2022 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2022 | 417,700 | $18.08 | | May 2022 | 657,371 | $16.53 | | June 2022 | 342,333 | $16.87 | | **Total** | **1,417,404** | **$17.07** | [Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including required Sarbanes-Oxley certifications and financial statements in iXBRL format - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and financial statements in iXBRL format[298](index=298&type=chunk)

OR Table of Contents ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36271 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2022 (414) 761-1000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: WATERSTONE FINANCIAL, ...

Mortgage Banking - Waterstone Financial's mortgage banking subsidiary, Waterstone Mortgage Corporation, originated $4.20 billion in mortgage loans held for sale during the year ended December 31, 2021[18]. - Waterstone Mortgage Corporation originated $4.23 billion in mortgage loans held for sale during the year ended December 31, 2021, a decrease of $201.7 million, or 4.6%, from the previous year[95]. - Total mortgage banking income decreased by $39.1 million, or 16.5%, to $197.6 million during the year ended December 31, 2021, compared to $236.7 million in 2020[95]. - The gross margin on loans originated and sold decreased by 11.6% for the year ended December 31, 2021, compared to the previous year[95]. - Loans originated for the purchase of residential property comprised 69.5% of total originations during the year ended December 31, 2021, up from 61.1% in 2020[96]. Loan Portfolio - As of December 31, 2021, WaterStone Bank's loan portfolio comprised 24.9% in one- to four-family residential loans ($300.5 million), 44.6% in multi-family residential loans ($538.0 million), and 20.8% in commercial real estate loans ($250.7 million)[29]. - As of December 31, 2021, total loans amounted to $1,205.8 million, with a decrease from $1,375.1 million in 2020, representing a decline of approximately 12.3%[31]. - One- to four-family residential mortgage loans totaled $300.5 million, accounting for 24.9% of total loans, down from 31.0% in 2020[35]. - Multi-family loans reached $538.0 million, representing 44.6% of total loans, a slight decrease from 44.8% in 2020[38]. - Commercial real estate loans totaled $250.7 million, or 20.8% of total loans, with an average loan balance of approximately $946,000[46][47]. Loan Losses and Non-Performing Assets - The allowance for loan losses was $15.8 million, compared to $18.8 million in 2020, indicating a reduction of 16.3%[31]. - Total non-accrual loans increased to $5.6 million as of December 31, 2021, compared to $5.5 million at December 31, 2020, reflecting a 0.46% ratio of non-accrual loans to total loans receivable[64]. - The total non-performing assets amounted to $5.7 million as of December 31, 2021, compared to $5.9 million at December 31, 2020[64]. - The company recorded $12,000 in loan principal charge-offs during the year ended December 31, 2021[64]. - The provision for loan losses was a credit of $3.99 million for the year ended December 31, 2021, compared to a provision of $6.34 million in 2020[87]. Deposits and Market Position - WaterStone Bank had a market share of 1.5% of all deposits in the Milwaukee-Waukesha metropolitan area, ranking 10th out of 46 financial institutions as of June 30, 2021[26]. - Total deposits increased by $48.5 million, or 4.1%, from December 31, 2020 to December 31, 2021, driven by a 25.5% increase in total transaction accounts[117]. - Total deposits increased to $1,250.845 million in 2021, up from $1,161.936 million in 2020, representing a growth of 7.6%[120]. - Certificates of deposit comprised 50.8% of total customer deposits as of December 31, 2021, with a weighted average cost of 0.51%[113]. - The average balance of transaction accounts was $575.350 million in 2021, with a weighted average yield of 0.17%[120]. Regulatory Compliance and Capital - WaterStone Bank's capital to assets ratio was 17.08% as of December 31, 2021, significantly above the minimum requirement of 6%[152]. - As of December 31, 2021, WaterStone Bank was classified as well-capitalized with a common equity Tier 1 ratio of 24.50% and a total risk-based capital ratio of 25.52%[163]. - WaterStone Bank's Required Liquidity Ratio was 8.0% as of December 31, 2021, in compliance with Wisconsin regulations[167]. - WaterStone Bank must maintain a minimum common equity Tier 1 capital ratio of 4.5% and a Tier 1 leverage ratio of 4.0% under federal regulations[153]. - The Federal Deposit Insurance Corporation insures deposits at WaterStone Bank up to a maximum of $250,000[147]. Investment Portfolio - Waterstone Financial's investment subsidiary, Wauwatosa Investments, Inc., manages the majority of the consolidated investment portfolio[20]. - The investment portfolio is primarily comprised of securities classified as available for sale, with no investment securities sold during the years ended December 31, 2021, 2020, and 2019[99]. - As of December 31, 2021, the mortgage-backed securities portfolio totaled $19.5 million with a weighted average yield of 2.34% and a weighted average remaining life of 6.3 years[102]. - The collateralized mortgage obligations portfolio amounted to $99.3 million, yielding a weighted average of 1.54% and having a weighted average remaining life of 3.5 years[103]. - Private-label mortgage-backed securities totaled $2.9 million, with a weighted average yield of 2.80% and a weighted average remaining life of 0.8 years[104]. Employee and Corporate Governance - The company had 870 full-time equivalent employees as of December 31, 2021, with a focus on attracting and retaining top talent[123]. - The company offers comprehensive compensation and benefits packages, including a 401k Plan and Employee Stock Ownership Plan[124]. - WaterStone Bank was rated "satisfactory" in its Community Reinvestment Act compliance during its most recent regulatory examination[177]. - Waterstone Financial is subject to regulatory capital requirements that are equally stringent as those applicable to its subsidiary depository institutions[186]. - Regulation O requires that any proposed loan to an insider be approved in advance by a majority of the board of directors[172].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 001-36271 WATERSTONE FINANCIAL, INC. (Exact name of registrant as specified in its charter) Maryland 90-1026709 (State or other jurisdiction of incorporation or organization ...

Financial Performance - Net income for the community banking segment increased to $7.5 million for Q2 2021, up from $4.1 million in Q2 2020, representing an increase of 82.9%[195] - Net income for the three months ended June 30, 2021, was $17.9 million, down from $20.9 million in 2020, resulting in a decrease in earnings per share from $0.86 to $0.75[203] - Net income for the six months ended June 30, 2021, increased by $6.7 million to $14.9 million compared to $8.2 million for the same period in 2020[220] - Earnings per share increased to $1.65 for the six months ended June 30, 2021, compared to $1.08 for the same period in 2020[228] Income and Expenses - Net interest income rose by $816,000 to $14.5 million in Q2 2021 compared to $13.7 million in Q2 2020[195] - Total noninterest income decreased by $14.9 million, or 22.2%, to $52.0 million for the three months ended June 30, 2021, compared to $66.9 million for the same period in 2020[215] - Total noninterest expenses decreased by $4.4 million, or 9.2%, to $43.3 million for the three months ended June 30, 2021, compared to $47.7 million for the same period in 2020[217] - Total noninterest income increased by $9.9 million, or 10.0%, to $108.2 million during the six months ended June 30, 2021, compared to $98.4 million in the same period of 2020[242] Loan Performance - The mortgage banking segment reported a net income of $10.4 million for Q2 2021, down from $16.8 million in Q2 2020, a decrease of 38.7%[199] - Mortgage loan originations decreased by $77.5 million, or 6.8%, to $1.07 billion in Q2 2021 compared to $1.14 billion in Q2 2020[199] - Total loans originated for investment decreased to $127.8 million for the six months ended June 30, 2021, down from $252.0 million for the same period in 2020[252] - Total loans past due decreased by $992,000, or 12.6%, to $6.9 million at June 30, 2021, compared to $7.9 million at December 31, 2020[280] Provisions and Allowances - The company reported a negative provision for loan losses of $750,000 for Q2 2021, compared to a provision of $4.3 million in Q2 2020[196] - The negative provision for loan losses was $750,000 for the three months ended June 30, 2021, compared to a provision of $4.5 million for the same period in 2020[213] - The company recorded a negative provision for loan losses of $1.9 million for the six months ended June 30, 2021, compared to a provision of $5.1 million for the same period in 2020[221] - The allowance for loan losses decreased by $1.4 million to $17.4 million at June 30, 2021, reflecting a negative provision for loan losses of $1.8 million[285] Capital and Assets - The company maintained all capital ratios in excess of regulatory requirements as of June 30, 2021, despite potential adverse impacts from credit losses[192] - Shareholders' equity increased by $18.6 million to $431.7 million at June 30, 2021, primarily due to net income and additional paid-in capital[261] - Total assets increased by $17.4 million, or 0.8%, to $2.20 billion at June 30, 2021, from $2.18 billion at December 31, 2020[247] - Cash and cash equivalents surged by $134.0 million, or 141.4%, to $228.7 million at June 30, 2021, compared to $94.8 million at December 31, 2020[248] Interest Rates and Margins - The net interest margin increased to 2.78% in Q2 2021 from 2.62% in Q2 2020[211] - A 100 basis point increase in interest rates is projected to increase net interest income by 8.08% over the next 12 months, while a decrease of 100 basis points would decrease it by 5.56%[318] - Interest expense on time deposits decreased by $2.6 million, or 75.2%, primarily due to a 141 basis point decrease in average cost[212] Mortgage Banking Segment - Total mortgage banking noninterest income decreased by $13.7 million, or 21.3%, to $50.6 million in Q2 2021 from $64.2 million in Q2 2020[199] - Mortgage banking income decreased by $14.1 million, or 22.1%, primarily due to a decrease in loan origination volume, which fell by $52.2 million, or 4.7%, to $1.06 billion[216] - The company originated $2.18 billion in mortgage loans during the six months ended June 30, 2021, an increase of $328.7 million, or 17.8%, from $1.85 billion in the same period in 2020[224] Liquidity and Commitments - The company maintains liquid assets to meet liquidity needs, adjusting levels based on loan commitments and deposit outflows[292] - The company had outstanding commitments to originate loans receivable of $55.6 million and unfunded commitments under construction loans of $57.5 million as of June 30, 2021[301] - Total contractual obligations as of June 30, 2021, amounted to $1.71 billion, with demand deposits at $208.5 million and time deposits at $671.1 million[306]