Financial Performance - Net income for the community banking segment increased to $7.3 million for Q1 2021, up from $4.1 million in Q1 2020, reflecting a significant improvement in financial performance [164]. - Total net income for the three months ended March 31, 2021, was $21.3 million, a significant increase from $6.1 million in the same period of 2020, representing a 251.5% growth [171]. - Earnings per share (EPS) increased to $0.90 for basic and $0.89 for diluted, compared to $0.24 for both in the prior year [171]. - Annualized return on average assets rose to 3.99% from 1.21%, and return on average equity increased to 20.49% from 6.24% [171]. Income Sources - Net interest income rose by $1.3 million to $14.2 million in Q1 2021 compared to $12.9 million in Q1 2020, driven by decreased interest expense [164]. - The mortgage banking segment reported net income of $14.0 million for Q1 2021, a substantial increase from $2.0 million in Q1 2020 [168]. - Total noninterest income rose by $24.7 million, or 78.6%, to $56.2 million, driven primarily by a 78.9% increase in mortgage banking income [183]. Loan Activity - Mortgage loan originations reached $1.12 billion in Q1 2021, representing a 57.3% increase from $708.8 million in Q1 2020, primarily due to a surge in refinance products [168]. - Total loan origination volume increased by $421.4 million, or 61.3%, to $1.11 billion during the three months ended March 31, 2021 [183]. - Average loans increased by $95.2 million, or 6.1%, while the average balance of loans held for sale surged by $141.6 million, or 84.0% [180]. Noninterest Expenses - Total noninterest expenses increased by $7.8 million, or 22.1%, to $43.0 million for the three months ended March 31, 2021, compared to $35.2 million for the same period in 2020 [184]. - Compensation, payroll taxes, and other employee benefits in the mortgage banking segment rose by $9.9 million, or 50.9%, to $29.3 million due to increased commission expenses and branch manager pay [184]. Asset and Deposit Growth - Total assets increased by $13.4 million, or 0.6%, to $2.20 billion at March 31, 2021, driven by higher cash and cash equivalents and prepaid expenses [186]. - Cash and cash equivalents surged by $103.6 million, or 109.4%, to $198.4 million at March 31, 2021, reflecting increased deposits and advance payments by borrowers for taxes [187]. - Total deposits rose by $34.8 million to $1.22 billion at March 31, 2021, with increases in money market, savings, demand, and time deposits [194]. Loan Losses and Recoveries - The provision for loan losses was a negative $1.1 million for the quarter, compared to a provision of $750,000 in the same quarter of 2020 [181]. - The allowance for loan losses decreased by $1.0 million to $17.8 million at March 31, 2021, due to improved economic factors reducing the required allowance [192]. - Net recoveries for the three months ended March 31, 2021, were $27,000, or 0.01% of average loans annualized, compared to net recoveries of $54,000, or less than 0.02% for the same period in 2020 [220]. Regulatory Compliance and Capital Position - The company maintained all capital ratios above regulatory requirements as of March 31, 2021, indicating a strong capital position despite potential credit losses [161]. - WaterStone Bank exceeded all regulatory capital requirements and is considered "well capitalized" under regulatory guidelines as of March 31, 2021 [235]. - Shareholders' equity increased by $17.6 million to $430.7 million at March 31, 2021, primarily due to net income and additional paid-in capital from stock options exercised [198]. Interest Rate Management - Interest rate risk management strategies include emphasizing variable rate loans and reducing the expected average life of the investment portfolio [244]. - A 100 basis point increase in interest rates is projected to increase net interest income by 5.95%, while a decrease of the same magnitude would decrease it by 4.41% [248].

Mortgage Banking - Waterstone Financial's mortgage banking subsidiary, Waterstone Mortgage Corporation, originated approximately $4.33 billion in mortgage loans held for sale during the year ended December 31, 2020[19]. - Waterstone Mortgage Corporation had 59 offices in 22 states as of December 31, 2020[16]. - Waterstone Mortgage Corporation originated $4.43 billion in mortgage loans held for sale during the year ended December 31, 2020, a 51.6% increase from $2.92 billion in 2019[96]. - Total mortgage banking income rose to $236.7 million in 2020, an increase of 86.5% compared to $126.9 million in 2019, driven by higher loan production volume[96]. - The gross margin on loans originated and sold increased by 20.2% in 2020, reflecting improved profitability in mortgage banking activities[96]. - The mix of loan types shifted, with conventional loans comprising 75.8% of total originations in 2020, up from 69.5% in 2019, suggesting a strategic focus on higher-margin products[97]. Loan Portfolio Composition - As of December 31, 2020, one- to four-family residential mortgage loans comprised $426.8 million, or 31.0% of Waterstone Bank's total loan portfolio[30]. - Multi-family residential mortgage loans represented $571.9 million, or 41.6% of the total loan portfolio as of December 31, 2020[30]. - Commercial real estate loans accounted for $238.4 million, or 17.3% of the total loan portfolio at the same date[30]. - Total loans amounted to $1,375.1 million, with a slight decrease from $1,388.0 million in 2019[32]. - One- to four-family residential mortgage loans totaled $426.8 million, representing 31.0% of total loans, down from 34.6% in 2019[36]. - Multi-family loans accounted for $571.9 million, or 41.6% of total loans, a decrease from 42.1% in 2019[39]. - Commercial loans reached $45.4 million, or 3.3% of total loans, including $18.1 million in Paycheck Protection Program (PPP) loans[49][50]. Loan Performance and Risk - The allowance for loan losses was $18.8 million, an increase from $12.4 million in 2019, indicating a rise in potential credit risk[32]. - Total non-accrual loans decreased by $1.5 million, or 20.9%, to $5.6 million as of December 31, 2020, compared to $7.0 million as of December 31, 2019[64]. - The ratio of non-accrual loans to total loans receivable was 0.40% at December 31, 2020, down from 0.51% at December 31, 2019[64]. - Troubled debt restructurings totaled $11.6 million at December 31, 2020, compared to $4.0 million at December 31, 2019[70]. - The outstanding principal balance of the five largest non-accrual loans as of December 31, 2020, totaled $2.4 million, representing 43.8% of total non-accrual loans[66]. - Total loans past due increased by $1.4 million, or 22.1%, to $7.9 million at December 31, 2020, compared to $6.5 million at December 31, 2019[77]. Deposits and Funding - Total deposits increased by $117.1 million, or 11.0%, from December 31, 2019, driven by a $155.5 million increase in transaction accounts[117]. - As of December 31, 2020, total deposits amounted to $1,161.936 million, with a weighted average cost of 1.19%[120]. - Certificates of deposit comprised 59.2% of total customer deposits as of December 31, 2020, with a weighted average cost of 0.86%[113]. - The company funds its loan production primarily with retail deposits and Federal Home Loan Bank advances[17]. Capital and Regulatory Compliance - WaterStone Bank's capital to assets ratio was 17.13% as of December 31, 2020, significantly above the required minimum of 6%[152]. - The bank's common equity Tier 1 ratio was 21.44%, indicating strong capital adequacy[165]. - WaterStone Bank is classified as "well capitalized" under regulatory standards, meeting all required capital ratios[165]. - The Dodd-Frank Act increased the minimum target Deposit Insurance Fund ratio to 1.35%, which was exceeded in November 2018[149]. - WaterStone Bank's Required Liquidity Ratio was 8.0% as of December 31, 2020, in compliance with WDFI regulations[171]. Employee and Corporate Governance - The company had approximately 812 full-time equivalent employees as of December 31, 2020, with a focus on attracting and retaining top talent[123]. - The company has implemented a culture of inclusion and diversity, which is integral to its talent retention strategy[123]. - Waterstone Financial complies with the Sarbanes-Oxley Act of 2002 to enhance corporate responsibility and improve disclosure accuracy[198].

Financial Performance - Net income for the community banking segment was $6.2 million for Q3 2020, down from $6.7 million in Q3 2019, with net interest income decreasing by $424,000 to $13.5 million [200]. - The mortgage banking segment reported net income of $20.1 million for Q3 2020, significantly up from $4.1 million in Q3 2019, driven by a 52.3% increase in mortgage loan originations to $1.30 billion [204]. - Net income for the three months ended September 30, 2020, was $26.3 million, up from $10.9 million in 2019, representing a significant increase [208]. - Earnings per share (basic and diluted) rose to $1.08 for the three months ended September 30, 2020, compared to $0.42 in 2019 [208]. - Net income for the nine months ended September 30, 2020, totaled $53.3 million, compared to $27.1 million for the same period in 2019 [235]. - Earnings per share increased to $2.16 for the nine months ended September 30, 2020, compared to $1.04 for the same period in 2019 [235]. Income and Expenses - Total noninterest income increased by $1.7 million, primarily due to gains from bank-owned life insurance policies [202]. - Total noninterest income increased by $38.3 million, or 102.1%, to $75.8 million for the three months ended September 30, 2020, compared to $37.5 million for the same period in 2019 [220]. - Total noninterest expenses increased by $16.8 million, or 46.3%, to $53.0 million for the three months ended September 30, 2020, compared to $36.2 million for the same period in 2019 [224]. - Total noninterest expenses increased by $35.0 million, or 34.6%, to $135.9 million for the nine months ended September 30, 2020, compared to $100.9 million for the same period in 2019 [251]. - Total mortgage banking noninterest income rose by $36.6 million, or 100.2%, to $73.1 million in Q3 2020 compared to $36.5 million in Q3 2019 [204]. Loan and Provision for Losses - Provision for loan losses was $1.0 million for Q3 2020, compared to a negative provision of $150,000 in Q3 2019, reflecting increased loan downgrades [201]. - The provision for loan losses was $6.1 million for the nine months ended September 30, 2020, compared to a negative provision of $850,000 for the same period in 2019 [228]. - The provision for loan losses was $6.3 million for the nine months ended September 30, 2020, compared to a negative provision of $730,000 for the same period in 2019 [246]. - The allowance for loan losses increased by $6.5 million to $18.8 million at September 30, 2020, due to increased economic uncertainty [260]. - The allowance for loan losses increased by $6.5 million to $18.8 million at September 30, 2020, reflecting a provision of $6.3 million due to economic conditions related to the COVID-19 pandemic [292]. Assets and Liabilities - Total assets increased by $224.5 million, or 11.2%, to $2.22 billion at September 30, 2020, from $2.00 billion at December 31, 2019 [254]. - Total deposits rose by $116.9 million to $1.18 billion at September 30, 2020, with increases in money market and savings deposits, demand deposits, and time deposits [263]. - Total borrowings increased by $68.6 million, or 14.2%, to $552.1 million at September 30, 2020 [264]. - Cash and cash equivalents increased by $12.3 million, or 16.5%, to $86.6 million at September 30, 2020, compared to $74.3 million at December 31, 2019 [255]. - Loans held for sale increased by $165.7 million to $385.8 million at September 30, 2020, driven by increased refinancing activity due to lower mortgage rates [256]. Capital and Equity - The company’s capital ratios were above all regulatory requirements as of September 30, 2020, but could be adversely affected by further credit losses [197]. - Shareholders' equity increased by $5.7 million to $399.4 million at September 30, 2020, primarily due to net income and additional paid-in capital [267]. - The company exceeded all regulatory capital requirements and is considered "well capitalized" under regulatory guidelines as of September 30, 2020 [310]. Loan Modifications and Programs - The company modified eight loans totaling $3.2 million under the CARES Act as of September 30, 2020, which are not considered troubled debt restructurings [199]. - The company modified $3.2 million of loans under the CARES Act, consisting of principal and interest deferrals [283]. - The company funded 279 Paycheck Protection Program (PPP) loans totaling $30.1 million as of September 30, 2020, with a guaranteed interest rate of 1.0% [199]. Market and Economic Conditions - Interest income on loans increased due to volume, but overall interest income may be negatively impacted by deferred payments due to COVID-19 [196]. - A 100 basis point increase in interest rates is projected to increase net interest income by 1.71% over the next 12 months, while a decrease of 100 basis points would decrease net interest income by 3.48% [325]. - The mix of loan types shifted towards more conventional loans, which comprised 75.6% of total originations in Q3 2020, compared to 70.1% in Q3 2019 [205].

Financial Performance - Net income for the community banking segment was $4.1 million for Q2 2020, down from $5.8 million in Q2 2019, while net interest income increased to $13.7 million from $13.5 million [189]. - The mortgage banking segment reported a net income of $16.8 million for Q2 2020, significantly up from $3.9 million in Q2 2019, with mortgage loan originations increasing by 44.1% to $1.14 billion [193]. - Net income for the three months ended June 30, 2020, was $20.9 million, up from $9.6 million in 2019, representing a 117.5% increase [197]. - Net income for the six months ended June 30, 2020 was $27.0 million, compared to $16.2 million for the same period in 2019, representing a year-over-year increase of 66.8% [221]. - Net income in the mortgage banking segment totaled $18.7 million for the six months ended June 30, 2020, compared to $4.6 million for the same period in 2019 [218]. - Earnings per share (EPS) increased to $0.86 for basic and $0.85 for diluted, compared to $0.37 for both in the prior year [197]. - Earnings per share for the six months ended June 30, 2020 was $1.08, compared to $0.61 for the same period in 2019 [221]. Income and Expenses - Total noninterest income for the community banking segment rose by $1.9 million, primarily due to increased loan fees, including prepayment fees and fees from loan swaps [191]. - Total mortgage banking noninterest income increased by 86.9% to $64.2 million in Q2 2020, driven by higher loan volume and improved gross margins [193]. - Total noninterest income rose by $31.7 million, or 90.1%, to $66.9 million during the three months ended June 30, 2020, compared to $35.2 million in 2019 [208]. - Total noninterest expenses increased by $12.3 million, or 34.9%, to $47.7 million for the three months ended June 30, 2020 compared to $35.4 million for the same period in 2019 [210]. - Total noninterest expenses increased by $18.2 million, or 28.1%, to $82.9 million during the six months ended June 30, 2020 [236]. - Total compensation, payroll taxes, and other employee benefits increased by $9.6 million, or 42.3%, to $32.1 million for the three months ended June 30, 2020, compared to $22.6 million for the same period in 2019 [196]. - Compensation, payroll taxes, and other employee benefits increased by $12.9 million, or 33.4%, to $51.5 million for the six months ended June 30, 2020 compared to $38.6 million for the same period in 2019 [220]. Loan Performance - The provision for loan losses was $4.3 million for Q2 2020, compared to no provision in Q2 2019, reflecting adjustments for increased unemployment rates [190]. - The provision for loan losses was $4.5 million for the three months ended June 30, 2020, compared to $30,000 in the same period of 2019, reflecting economic challenges due to the COVID-19 pandemic [206]. - Provision for loan losses was $5.1 million for the six months ended June 30, 2020, compared to a negative provision of $700,000 for the same period in 2019 [213]. - The provision for loan losses recorded during the current year reflects an increased allocation related to the economic conditions due to the COVID-19 pandemic [278]. - The total loan modifications under the CARES Act amounted to $121.8 million, representing 8.49% of total loans receivable as of June 30, 2020 [268]. - The company modified 191 loans totaling $113.9 million under COVID-19 payment deferral programs, with modifications ranging from 90 to 180 days [182]. - The company modified $113.9 million of loans for a period ranging from 90 to 180 days, consisting of principal payment deferral as of June 30, 2020 [266]. Asset and Liability Management - Total assets increased by $221.2 million, or 11.1%, to $2.22 billion at June 30, 2020, from $2.00 billion at December 31, 2019 [238]. - Total deposits increased by $89.9 million to $1.16 billion at June 30, 2020, primarily from money market and savings deposits [247]. - Total borrowings increased by $115.5 million, or 23.9%, to $599.1 million at June 30, 2020, with significant short-term FHLB borrowings [248]. - The company had $727.9 million in certificates of deposit scheduled to mature in one year or less [291]. - Total contractual obligations as of June 30, 2020, amounted to $1.77 billion, with significant portions due within one year [297]. - The company is considered "well capitalized" under regulatory guidelines, exceeding all regulatory capital requirements [295]. Market and Economic Conditions - The company experienced a significant increase in refinance products, which rose by $410.3 million, or 417.0%, due to decreasing mortgage rates [193]. - The gross margin on loans originated and sold increased by 27.0% in Q2 2020, reflecting heightened industry demand due to low mortgage rates [193]. - A 100 basis point increase in interest rates is projected to increase net interest income by 1.90% over the next 12 months, while a decrease of 100 basis points would decrease it by 3.76% [308]. - The company has implemented strategies to manage interest rate risk, including emphasizing variable rate loans and shortening the expected average life of the investment portfolio [304]. Equity and Shareholder Information - Shareholders' equity decreased by $8.1 million to $385.6 million at June 30, 2020, primarily due to dividend declarations and stock repurchases [251]. - The company repurchased 9,727,753 shares at an average price of $14.25 under previously approved stock repurchase plans [294].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q T Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2020 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) (State or other jurisdiction of incorporation or organization) (IRS Employer Identifi ...

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 1 0 - K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 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) (I.R.S. Employer Identification No.) | | 11200 W Plank Ct, Wauwatosa, Wisconsin 53226 | | (A ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q T Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2019 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) (State or other jurisdiction of incorporation or organization) (IRS Employer Iden ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q T Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2019 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) (State or other jurisdiction of incorporation or organization) (IRS Employer Identific ...

Financial Performance - Net income for the community banking segment remained stable at $5.8 million for both Q1 2019 and Q1 2018, while net interest income decreased by $172,000 to $13.1 million [169]. - The mortgage banking segment reported a net income of $719,000 for Q1 2019, down from $1.1 million in Q1 2018, with mortgage loan originations decreasing by $14.6 million, or 2.8% [172]. - Total mortgage banking noninterest income decreased by $1.2 million, or 4.7%, to $23.6 million in Q1 2019 compared to $24.7 million in Q1 2018 [172]. - The overall net interest margin decreased to 2.93% in Q1 2019 from 3.18% in Q1 2018, reflecting increased interest expenses [178]. - The annualized return on average assets decreased to 1.39% in Q1 2019 from 1.57% in Q1 2018 [175]. - The annualized return on average equity decreased to 6.65% in Q1 2019 from 6.90% in Q1 2018 [175]. Income and Expenses - Compensation, payroll taxes, and other employee benefits expense decreased by $181,000, or 1.1%, to $16.1 million in Q1 2019 compared to Q1 2018 [174]. - Total noninterest income decreased by $926,000, or 3.7%, to $24.3 million during the three months ended March 31, 2019, primarily due to a decrease in mortgage banking income [189]. - Total noninterest expenses decreased by $798,000, or 2.6%, to $29.3 million during the three months ended March 31, 2019 [191]. Loan Loss Provisions - The provision for loan losses was a negative provision of $700,000 in Q1 2019, compared to a negative provision of $900,000 in Q1 2018 [169]. - Provision for loan losses amounted to a negative provision of $680,000 for the three months ended March 31, 2019, compared to a negative provision of $880,000 for the same period in 2018 [187]. - The allowance for loan losses decreased by $688,000 to $12.6 million at March 31, 2019, reflecting a negative provision due to an improved risk profile [227]. - Net charge-offs for the three months ended March 31, 2019, were $8,000, or less than 0.01% of average loans annualized [228]. Asset and Liability Management - Total assets increased by $13.3 million, or 0.7%, to $1.93 billion at March 31, 2019, from $1.92 billion at December 31, 2018 [193]. - Cash and cash equivalents increased by $18.7 million, or 21.8%, to $104.8 million at March 31, 2019, compared to $86.1 million at December 31, 2018 [194]. - Total deposits decreased by $1.2 million to $1.04 billion at March 31, 2019, primarily due to a decrease in demand and time deposits [201]. - Total borrowings increased by $13.4 million to $448.5 million at March 31, 2019, with external short-term borrowings at the mortgage banking segment increasing [202]. - Shareholders' equity decreased by $15.2 million to $384.5 million at March 31, 2019, primarily due to dividend declarations and stock repurchases [205]. Loan Portfolio and Quality - The mix of loan types shifted, with conventional loans comprising 68.4% of total originations in Q1 2019, down from 69.1% in Q1 2018 [173]. - Total non-accrual loans increased by $243,000, or 3.7%, to $6.8 million as of March 31, 2019 [210]. - Total loans past due decreased by $656,000, or 9.4%, to $6.3 million at March 31, 2019, compared to $7.0 million at December 31, 2018 [221]. - The allowance for loan losses to non-accrual loans ratio at the end of the period was 184.77% [227]. Capital Management - WaterStone Bank exceeded all regulatory capital requirements and is considered "well capitalized" as of March 31, 2019 [247]. - The company repurchased 7,497,453 shares at an average price of $13.80, with authorization to purchase an additional 230,300 shares [246]. - Total contractual obligations amounted to $1,497.4 million, with demand deposits at $128.5 million and time deposits at $733.5 million [249]. Interest Rate Risk - Interest rate risk management strategies include emphasizing variable rate loans and shortening the expected average life of the investment portfolio [258]. - A 100 basis point increase in interest rates is projected to decrease net interest income by 0.65%, while a decrease of 100 basis points would increase it by 2.18% [262].

Loan Portfolio - As of December 31, 2018, WaterStone Bank's loan portfolio comprised 35.5% one- to four-family residential loans, 43.3% multi-family residential loans, and 16.4% commercial real estate loans[37]. - Total loans reached $1,379.1 million, with a net loan amount of $1,365.9 million after accounting for an allowance for loan losses of $13.2 million[41]. - As of December 31, 2018, one- to four-family residential mortgage loans totaled $490.0 million, representing 35.5% of total loans[44]. - Multi-family loans amounted to $597.1 million, accounting for 43.3% of total loans at the same date[48]. - The total amount of commercial loans was $225.5 million, representing 16.4% of total loans[41]. - Outstanding home equity loans and lines of credit totaled $20.0 million, representing 1.5% of total loans outstanding[51]. - Construction and land loans amounted to $13.4 million, or 1.0% of total loans, with $66.3 million originated for investment during 2018, accounting for 17.2% of all loans originated for investment[52]. - Commercial real estate loans totaled $225.5 million, or 16.4% of total loans, with $58.2 million originated for investment during 2018, representing 15.1% of all loans originated for investment[57]. Loan Origination - Waterstone Financial's mortgage banking subsidiary, Waterstone Mortgage Corporation, originated approximately $2.51 billion in mortgage loans held for sale during the year ended December 31, 2018[25]. - Waterstone Mortgage Corporation originated $2.60 billion in mortgage loans held for sale during the year ended December 31, 2018, an increase of $52.2 million, or 2.0%, from the previous year[108]. - Total loans originated for investment in 2018 amounted to $385.1 million, compared to $315.2 million in 2017[63]. - Multi-family loans originated for investment during 2018 totaled $123.1 million, or 32.0% of all loans originated for investment[48]. Financial Performance - Total mortgage banking income decreased by $6.7 million, or 5.5%, to $115.4 million during the year ended December 31, 2018, compared to $122.1 million in 2017[109]. - The allowance for loan losses at the end of 2018 was $13.25 million, down from $14.08 million at the end of 2017, reflecting a provision (credit) for loan losses of $(1.06) million[99]. - The net charge-offs for the year ended December 31, 2018, were $(232,000), compared to $786,000 in 2017, indicating a significant reduction in charge-offs[99]. - The total charge-offs for the year ended December 31, 2018, were $84,000, significantly lower than $1.48 million in 2017[99]. Asset Quality - Total non-accrual loans increased by $487,000, or 8.0%, to $6.6 million as of December 31, 2018 compared to $6.1 million as of December 31, 2017[74]. - The ratio of non-accrual loans to total loans receivable was 0.48% at December 31, 2018, compared to 0.47% at December 31, 2017[74]. - Troubled debt restructurings totaled $6.7 million at December 31, 2018, compared to $5.1 million at December 31, 2017[80]. - Total non-performing assets amounted to $8.7 million as of December 31, 2018[74]. - Total loans past due increased by $1.1 million, or 18.8%, to $6.95 million at December 31, 2018, from $5.85 million at December 31, 2017[87]. Capital and Liquidity - As of December 31, 2018, WaterStone Bank had a capital to assets ratio of 20.01%, down from 21.44% in 2017[165]. - WaterStone Bank was classified as well-capitalized with a common equity Tier 1 ratio of 26.05% and a total risk-based capital ratio of 26.95%[177]. - The capital conservation buffer requirement was fully implemented at 2.5% on January 1, 2019, which is necessary for capital distributions and discretionary bonuses[170]. - WaterStone Bank's Required Liquidity Ratio was 8.0% as of December 31, 2018, and the bank was in compliance with this requirement[180]. Regulatory Environment - WaterStone Bank is subject to extensive regulation by the WDFI and the Federal Deposit Insurance Corporation, impacting its operational capabilities[140]. - The Dodd-Frank Act increased the minimum target Deposit Insurance Fund ratio to 1.35% of estimated insured deposits, which was exceeded in November 2018[161]. - Loans to one borrower are limited to 20% of the savings bank's capital plus an additional 5% for fully secured loans, with a maximum of $500,000 for certain purposes[149]. - The Federal Deposit Insurance Corporation has the authority to increase insurance assessments, which could adversely affect WaterStone Bank's operating expenses[162]. Investment Portfolio - Waterstone Financial's investment subsidiary, Wauwatosa Investments, Inc., manages the majority of the consolidated investment portfolio[27]. - The mortgage-backed securities portfolio had a weighted average yield of 2.58% and a weighted average remaining life of 4.2 years at December 31, 2018[116]. - Total securities available for sale amounted to $188.272 million as of December 31, 2018, with a weighted average yield of 2.63%[125]. - The municipal obligations portfolio totaled $55.9 million at December 31, 2018, with a weighted average yield of 2.37% and a weighted average remaining life of 5.2 years[118].