New Waterstone(US:WSBF)2021-03-02 00:32Mortgage 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].