New Waterstone(WSBF) - 2024 Q4 - Annual Report

Loan Portfolio and Composition - As of December 31, 2024, Waterstone Bank's loan portfolio composition included 30.71% one- to four-family residential loans, 44.12% multi-family residential loans, and 18.65% commercial real estate loans[36]. - The total loan portfolio at December 31, 2024, was $1.68 billion, with a net loan amount of $1.66 billion after accounting for an allowance for credit losses of $18.25 million[36]. - One- to four-family residential mortgage loans totaled $516.1 million, representing 30.7% of total loans as of December 31, 2024[39]. - Multi-family loans amounted to $741.4 million, accounting for 44.1% of total loans at the same date[42]. - Home equity loans and lines of credit reached $13.2 million, or 0.8% of total loans outstanding as of December 31, 2024[45]. - Construction and land loans totaled $61.4 million, representing 3.7% of total loans[46]. - Commercial real estate loans were $313.5 million, making up 18.7% of total loans as of December 31, 2024[50]. - The average outstanding one- to four-family first mortgage loan balance was approximately $302,000[41]. - The average outstanding multi-family mortgage loan balance was approximately $1.6 million[43]. - The average outstanding commercial loan was $467,000 as of December 31, 2024[54]. Mortgage Banking Operations - Waterstone Financial's mortgage banking subsidiary, Waterstone Mortgage Corporation, originated $2.13 billion in mortgage loans held for sale during the year ended December 31, 2024[22]. - The company originated $2.15 billion in mortgage loans held for sale during the year ended December 31, 2024, an increase of $26.6 million, or 1.3%, from the previous year[94]. - Total mortgage banking noninterest income increased by $5.8 million, or 7.4%, to $84.3 million during the year ended December 31, 2024[94]. - The gross margin on loans originated and sold increased by 0.2% for the year ended December 31, 2024, compared to the previous year[94]. - The mix of loan types trended towards more conventional loans, comprising 63.8% of all loan originations during the year ended December 31, 2024[95]. Asset Quality and Credit Losses - Total non-accrual loans increased by $857,000 to $5.7 million as of December 31, 2024, compared to $4.8 million as of December 31, 2023[67]. - The ratio of non-accrual loans to total loans receivable was 0.34% at December 31, 2024, up from 0.29% at December 31, 2023[67]. - Total nonperforming assets rose to $6.2 million as of December 31, 2024, compared to $5.1 million as of December 31, 2023[64]. - Loans past due less than 90 days increased by $4.3 million during the year ended December 31, 2024, totaling $11.1 million[77]. - Total loans past due increased by $3.9 million, or 34.4%, to $15.1 million at December 31, 2024, from $11.3 million at December 31, 2023[77]. - The outstanding principal balance of the five largest non-accrual loans totaled $2.6 million, representing 45.9% of total non-accrual loans as of December 31, 2024[69]. - The allowance for credit losses - loans decreased by $302,000 to $18.2 million at December 31, 2024, from $18.5 million at December 31, 2023[85]. - Net recoveries totaled $40,000 for the year ended December 31, 2024, compared to net charge-offs of $135,000 for the year ended December 31, 2023[86]. Deposits and Funding - Total deposits increased by $169.3 million, or 14.2%, from December 31, 2023 to December 31, 2024, driven by a $175.3 million increase in certificates of deposit[114]. - Certificates of deposit comprised 66.6% of total customer deposits as of December 31, 2024, with a weighted average cost of 4.42%[111]. - The company had $905.5 million in certificates of deposit as of December 31, 2024, compared to $730.3 million as of December 31, 2023[113]. - As of December 31, 2024, total deposits amounted to $1,266,337,000, with a year-over-year growth of 3.20% compared to $1,209,617,000 in 2023[117]. - The balance of uninsured deposits of $250,000 or more increased to $327.2 million in 2024 from $287.9 million in 2023[117]. Capital and Regulatory Compliance - WaterStone Bank's capital to assets ratio was 15.68% as of December 31, 2024, significantly above the minimum requirement of 6%[145]. - The common equity Tier 1 capital ratio was 19.21%, indicating strong capital adequacy compared to the required minimum of 4.5%[156]. - The Tier 1 leverage ratio stood at 15.55%, well above the minimum requirement of 4.0%[156]. - WaterStone Bank's total risk-based capital ratio was 20.29%, exceeding the minimum requirement of 8.0%[156]. - WaterStone Bank is classified as "well capitalized" under federal regulations, meeting all capital requirements[156]. - The Federal Deposit Insurance Corporation insures deposits up to $250,000 per depositor per account ownership category[140]. - WaterStone Bank's assessment rates for deposit insurance range from 2.5 to 32 basis points based on total assets less tangible capital[141]. - WaterStone Bank is required to hold $20.3 million in capital stock of the Federal Home Loan Bank of Chicago as of December 31, 2024[172]. Regulatory Environment - Waterstone Financial is subject to comprehensive regulation by the Wisconsin Department of Financial Institutions and the FDIC[21]. - Waterstone Financial operates in a highly regulated environment, subject to supervision by various bank regulatory agencies[200]. - Federal regulations require annual on-site examinations for depository institutions, with exceptions for well-capitalized institutions with assets under $3 billion[168]. - The Federal Reserve Board's regulations require holding companies to act as a source of strength to their subsidiary depository institutions during financial stress[180]. - Waterstone Financial is subject to limitations on dividend payments if stockholders' equity would fall below the liquidation account amount[182]. Employee and Corporate Culture - The company had 600 full-time equivalent employees as of December 31, 2024, with a focus on creating a culture that attracts and retains top talent[120]. - The company offers comprehensive compensation and benefits packages, including a 401k Plan and Employee Stock Ownership Plan, to attract and retain key talent[121].