New Waterstone(WSBF) - 2023 Q3 - Quarterly Report

Financial Performance - Net income for the community banking segment was $4.5 million for the three months ended September 30, 2023, down from $6.6 million for the same period in 2022[165]. - Net income for the nine months ended September 30, 2023, totaled $14.6 million, down from $17.1 million for the same period in 2022[189]. - Earnings per share for the nine months ended September 30, 2023, was $0.46, down from $0.84 for the same period in 2022[199]. Deposits and Borrowings - Total deposits increased by 0.5% to $1.21 billion as of September 30, 2023, compared to December 31, 2022, with a $18.2 million increase, or 1.5%, during the three months ended September 30, 2023[162]. - Total borrowings increased by $201.1 million, or 52.0%, to $587.9 million at September 30, 2023[223]. - The average balance of time deposits increased by $94.6 million compared to the prior year period, contributing to the rise in interest expense[208]. Interest Income and Expenses - Net interest income decreased by $3.1 million to $12.4 million for the three months ended September 30, 2023, compared to $15.5 million in 2022[165]. - Interest income on loans increased by $7.6 million, or 46.8%, to $23.8 million, driven by a 94 basis point increase in average yield and a $316.3 million, or 24.1%, increase in average loans held for investment[181]. - Interest expense on time deposits surged by $5.5 million, or 722.5%, to $6.2 million, attributed to a 292 basis point increase in average cost and a $133.7 million increase in average balance[181]. Credit Losses and Non-Performing Loans - The provision for credit losses was $445,000 for the three months ended September 30, 2023, compared to $234,000 in the same period of 2022[167]. - Total non-accrual loans decreased by $224,000, or 5.2%, to $4.1 million as of September 30, 2023, with a ratio of non-accrual loans to total loans receivable at 0.25%[230]. - The allowance for credit losses increased by $796,000 to $18.6 million at September 30, 2023, with a provision of $829,000 for the nine months ended September 30, 2023[221]. Mortgage Banking - The mortgage banking segment reported a net loss of $1.4 million for the three months ended September 30, 2023, compared to a net loss of $1.3 million in 2022[170]. - Mortgage loan originations decreased by $132.3 million, or 18.1%, to $597.6 million for the three months ended September 30, 2023, compared to $729.9 million in 2022[170]. - Total mortgage banking noninterest income decreased by $5.9 million, or 21.4%, to $21.5 million during the three months ended September 30, 2023[170]. Expenses - Total noninterest expenses decreased by $5.7 million, or 15.9%, to $30.0 million for the three months ended September 30, 2023, compared to $35.7 million for the same period in 2022[187]. - Compensation, payroll taxes, and other employee benefits expense increased by $194,000 to $4.6 million for the three months ended September 30, 2023, primarily due to annual raises[169]. - Total noninterest income decreased by $5.2 million, or 18.9%, to $22.2 million, primarily due to declines in mortgage banking income and other income[185]. Asset and Liability Management - 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[264]. - The Asset/Liability Committee meets at least weekly to review asset/liability policies and interest rate risk positions, which are evaluated quarterly[263]. - The company focuses on managing interest rate risk to minimize exposure of earnings and capital to changes in interest rates[264]. Regulatory and Capital Position - The company exceeded all regulatory capital requirements and is considered "well capitalized" under regulatory guidelines as of September 30, 2023[259]. - Shareholders' equity decreased by $24.2 million to $346.3 million at September 30, 2023, primarily due to dividends and stock repurchases[257]. - The company had outstanding commitments to originate loans receivable of $31.0 million as of September 30, 2023[255].