New Waterstone(US:WSBF)2020-11-04 22:08Financial 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].