New Waterstone(WSBF) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for the community banking segment increased to $6.9 million for Q3 2025, up from $4.7 million in Q3 2024, representing a 46.8% increase[155] - Net interest income rose by $2.4 million to $14.6 million in Q3 2025 compared to $12.3 million in Q3 2024, a growth of 19.5%[155] - The mortgage banking segment reported a net income of $948,000 in Q3 2025, a turnaround from a net loss of $50,000 in Q3 2024[158] - Net income for the nine months ended September 30, 2025, totaled $17.8 million, up from $11.7 million for the same period in 2024[176] - Net income for the nine months ended September 30, 2025, increased to $18.7 million, up from $13.5 million in the same period of 2024, representing a growth of 38.8%[183] - Earnings per share (EPS) for the nine months ended September 30, 2025, rose to $1.04, compared to $0.72 for the same period in 2024, reflecting an increase of 44.4%[183] Income and Expenses - Total noninterest income decreased by $250,000, or 1.1%, to $22.3 million, primarily due to a $19.9 million, or 3.6%, decrease in total loan origination volume[172] - Total noninterest income decreased by $6.6 million, or 9.3%, to $63.7 million for the nine months ended September 30, 2025, compared to $70.3 million for the same period in 2024[194] - Total noninterest expenses decreased by $1.1 million, or 3.8%, to $27.5 million for the three months ended September 30, 2025, compared to $28.6 million for the same period in 2024[173] - Total noninterest expenses decreased by $4.2 million, or 4.8%, to $82.2 million for the nine months ended September 30, 2025, compared to $86.4 million for the same period in 2024[195] - Compensation and employee benefits expense decreased by $290,000 to $5.0 million in Q3 2025, primarily due to lower health insurance claims[157] - Total compensation and employee benefits decreased by $3.5 million, or 7.3%, to $44.1 million for the nine months ended September 30, 2025, primarily due to reduced employee headcount[181] Asset Quality and Credit Losses - The provision for credit losses was negative $269,000 for the three months ended September 30, 2025, compared to negative $377,000 for the same period in 2024, reflecting improved risk factors[170] - The provision for credit losses was a negative $836,000 for the nine months ended September 30, 2025, compared to a negative provision of $535,000 in the same period of 2024, indicating improved asset quality[192] - Total nonperforming assets decreased to $6.1 million at September 30, 2025, from $6.2 million at December 31, 2024, with total non-accrual loans to total loans remaining stable at 0.35%[212] - The allowance for credit losses decreased to $17.7 million at September 30, 2025, with a negative provision of $599,000 for the nine months ended September 30, 2025[204] - Past due loans decreased by $6.6 million, or 43.7%, to $8.5 million at September 30, 2025, from $15.1 million at December 31, 2024[221] Loan Originations and Mortgage Banking - Total mortgage loan originations decreased by $19.3 million, or 3.5%, to $539.4 million in Q3 2025 from $558.7 million in Q3 2024[158] - Mortgage banking noninterest income decreased by $7.4 million, or 11.1%, to $59.4 million for the nine months ended September 30, 2025, due to a decrease in loan production volume[179] - The company originated $1.52 billion in mortgage loans held for sale during the nine months ended September 30, 2025, a decrease of $162.0 million, or 9.7%, from the previous year[179] - Mortgage banking income declined by $7.0 million, or 10.6%, primarily due to a $150.1 million decrease in loan origination volumes, which fell to $1.51 billion[194] Interest Income and Margin - Net interest margin improved to 2.76% in Q3 2025 compared to 2.14% in Q3 2024[165] - Net interest income increased by $7.7 million, or 23.1%, to $41.0 million during the nine months ended September 30, 2025, compared to $33.3 million in 2024[190] - The average yield on loans increased by 22 basis points, contributing to a $903,000 increase in interest income on loans, despite a $48.3 million decrease in average loans receivable[191] - Interest income on loans rose by $35,000, or 0.1%, to $26.6 million, driven by a 19 basis point increase in average yield, despite a $61.0 million decrease in average loans receivable[168] Regulatory and Capital Position - As of September 30, 2025, WaterStone Bank exceeded all regulatory capital requirements and is considered "well capitalized" under regulatory guidelines[241] - Shareholders' equity increased by $6.4 million to $345.5 million at September 30, 2025, primarily due to increases in net income and the fair value of the securities portfolio[210] - The Company had approximately $365.8 million of uninsured deposits for approximately 1,462 customers as of September 30, 2025[237] Interest Rate Risk Management - WaterStone Bank's interest rate risk management strategy includes emphasizing variable rate loans and reducing the expected average life of the investment portfolio[245] - The most recent income simulation indicates that a 100 basis point increase in interest rates would decrease forecast net interest income over the next 12 months by 3.60%[249] - Conversely, a 100 basis point decrease in interest rates would increase net interest income by 1.01%[249] - The Asset/Liability Committee meets at least weekly to review asset/liability policies and interest rate risk position[244] - The bank's interest rate risk exposure is regularly monitored and evaluated quarterly[246]