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]

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].

Financial Performance - Net income for the community banking segment decreased to $4.1 million for Q1 2020, down from $5.8 million in Q1 2019, with net interest income decreasing by $224,000 to $12.9 million [191]. - The mortgage banking segment reported a net income of $2.0 million for Q1 2020, compared to $719,000 in Q1 2019, with mortgage loan originations increasing by $207.4 million, or 41.4%, to $708.8 million [195]. - Net income decreased to $6.069 million for the three months ended March 31, 2020, down from $6.542 million in the same period of 2019, representing a decline of 7.2% [198]. - Earnings per share (EPS) decreased to $0.24 for both basic and diluted shares, compared to $0.25 for basic and $0.24 for diluted shares in the prior year [198]. Income and Expenses - Total noninterest income increased by $7.2 million, or 29.7%, to $31.5 million during the three months ended March 31, 2020, compared to $24.3 million in the same period of 2019 [209]. - Total compensation, payroll taxes, and other employee benefits increased by $3.3 million, or 20.7%, to $19.4 million for the three months ended March 31, 2020, compared to $16.1 million for the same period in 2019 [197]. - Total noninterest expenses increased by $5.9 million, or 20.0%, to $35.2 million for the three months ended March 31, 2020, compared to $29.3 million for the same period in 2019 [211]. Loan Performance - The provision for loan losses was $750,000 for Q1 2020, compared to a negative provision of $700,000 in Q1 2019, reflecting worsening economic conditions [192]. - The provision for loan losses was $785,000 for the three months ended March 31, 2020, compared to a negative provision of $680,000 for the same period in 2019, reflecting worsening economic conditions due to the COVID-19 pandemic [207]. - Total loans past due increased by $4.6 million, or 70.5%, to $11.0 million at March 31, 2020, from $6.5 million at December 31, 2019 [242]. - The allowance for loan losses increased by $839,000 to $13.2 million at March 31, 2020, compared to $12.4 million at December 31, 2019 [249]. Assets and Liabilities - Total assets increased by $60.3 million, or 3.0%, to $2.06 billion at March 31, 2020, primarily due to increases in loans held for sale and loans receivable [213]. - Total deposits increased by $18.3 million to $1.09 billion at March 31, 2020, driven by a $23.5 million increase in money market and savings deposits [222]. - Total borrowings increased by $38.6 million, or 8.0%, to $522.2 million at March 31, 2020, with the community banking segment adding $40.0 million in short-term borrowings [223]. - Shareholders' equity decreased by $21.9 million to $371.8 million at March 31, 2020, primarily due to dividend declarations and stock repurchases [226]. Capital and Regulatory Compliance - As of March 31, 2020, the company maintained capital ratios exceeding all regulatory requirements, indicating sufficient capital to withstand potential economic downturns [188]. - The company is considered "well capitalized" under regulatory guidelines, exceeding all capital requirements as of March 31, 2020 [268]. COVID-19 Impact - The company modified 164 loans totaling $99.7 million under COVID-19 payment deferral programs, with an additional 13 loans totaling $7.2 million modified for principal and interest deferral [184]. - Interest income may be negatively impacted due to COVID-19-related payment deferrals, with potential future credit losses affecting reported income [187]. - The provision for loan losses was $785,000 for the three months ended March 31, 2020, reflecting an increased allocation due to the COVID-19 pandemic [249]. Mortgage Banking - Total mortgage banking noninterest income rose by $7.2 million, or 30.7%, to $30.8 million in Q1 2020, driven by increased loan production volume [195]. - Mortgage banking income increased by $7.047 million, or 30.2%, to $30.406 million, driven by a total loan origination volume increase of $196.5 million, or 40.0%, to $687.7 million [210].

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 ...