Core Viewpoint - Zacks Investment Research has initiated coverage of Waterstone Financial, Inc. (WSBF) with a Neutral recommendation, indicating a balanced outlook for the company despite its capital strength and earnings stability, due to several risk factors and operational inefficiencies limiting near-term upside potential [1] Financial Strength - Waterstone's financial foundation is robust, with a Common Equity Tier 1 (CET1) capital ratio of 20.32% and a Total Capital Ratio of 21.40% as of March 2025, significantly exceeding regulatory minimums [2] - The company offers a consistent dividend yield of 4.4%, above the industry average, with the most recent quarterly dividend of 15 cents per share declared in June [2] Performance Metrics - Improvements in net interest margin from 2.15% in Q1 2024 to 2.47% in Q1 2025 reflect effective asset-liability management and lower borrowing costs [3] - Interest-earning asset yields rose to 5.46%, while reliance on higher-cost Federal Home Loan Bank borrowings has significantly declined [3] Liquidity Position - As of March 31, 2025, Waterstone holds $43.3 million in cash and has $377 million in unused FHLB borrowing capacity, indicating a strong liquidity position [4] - The deposit base continues to expand, particularly in time deposits, providing flexibility in funding and pricing strategies [4] Challenges - The Mortgage Banking segment reported a $1.6 million loss in Q1, reversing a profit from the same period last year, driven by a 20% decline in loan originations [5] - The company has $21.8 million in unrealized losses on its securities portfolio, primarily in government-sponsored mortgage-backed securities, which could impact book value if interest rates rise [5] Credit Quality - Substandard commercial real estate loans are elevated at $11.9 million, with collateral-dependent loans rising sharply to $17.5 million, indicating potential pressure in the CRE segment [6] - Nonaccrual loans increased to $7.4 million, highlighting concerns regarding credit quality trends [6] Market Sentiment - Waterstone's share price has underperformed compared to peers and the broader market, reflecting tepid investor sentiment [7] - Trading multiples suggest the stock is not overvalued but do not indicate a compelling discount, with the market pricing in a stable but limited growth trajectory [7]

Financial Performance - Bank results were quite good, particularly regarding the resiliency of consumer credit quality [1] - Goldman Sachs' numbers were very strong, especially in equity trading and M&A activity [4] - Year-over-year loan growth has started to pick up for banks in the second quarter [6] Market Trends & Activities - M&A and ECM activity picked up, particularly at the end of the second quarter [2][3] - Loan growth is starting to pick up, evidenced by weekly H8 data from the Fed [6] - There's a broadening of the possibility when it comes to acquisitions, though with a high bar [12][13] Regulatory Environment - The regulatory approach is becoming less onerous, evidenced by changes to the supplementary leverage ratio and positive stress test results [8][9] - Basel 3 endgame final capital rules are expected to be less onerous than the original proposal [9] - The ability for banks to give back more excess capital is increasing [10] Investment Outlook - Some deregulation benefits are factored into stock valuations, but not entirely due to uncertainty about the Basel 3 endgame [11] - High valuations and excess capital levels could lead to more acquisitions by large investment banks or regional banks [13]

Joining me now to look ahead to these reports is Alexander Yokum from CFR. Alexander, welcome. So, Wells Fargo has a lot of consumer business here.How relevant is that to the regionals, which I think of as as dealing more with small businesses. Yeah, thank you. Uh, thank you for having me on.Um, yeah, I think it is somewhat relevant. Um, I think investors were concerned with that net interest income downgrade in terms of the guidance and I think they are reading through that into the regional banks. You kno ...

Monetary Policy & Inflation - The Fed's current approach is considered prudent, aiming to avoid premature easing of rates that could reignite inflation, reminiscent of the early 1980s when a double-dip recession occurred after the Fed provided relief too quickly, leading to a surge in rates to 21% [2][3] Economic Outlook - The underlying economy is perceived to be in good shape, supported by strong credit quality, which is expected to continue into the current quarter [3] - Resolution of tariff uncertainties within the next month or two is anticipated to further strengthen the economy [3] Fiscal Policy Impact - The passage of "the big beautiful bill" (likely referring to tax legislation) is expected to have a positive impact [3][4] - Accelerated depreciation provisions within the bill are projected to unleash trillions of dollars in spending, particularly benefiting onshore manufacturing and expansions, with significant economic activity expected from 2026 onwards [5] Investment & Finance - The accelerated depreciation provision is viewed favorably by equipment financiers, with one company identifying as the fourth or fifth largest in the country [5]

HAUPPAUGE, N.Y., June 17, 2025 (GLOBE NEWSWIRE) -- Dime Community Bancshares, Inc. (the “Company” or “Dime”) (NASDAQ: DCOM), the parent company of Dime Community Bank (the “Bank”), announced that Kroll Bond Rating Agency (“KBRA”), in a report dated June 17, 2025, revised its ratings outlook from “Stable” to “Positive.” Kroll’s deposit and senior unsecured debt rating for Dime Community Bank is BBB+. According to the KBRA report, the revision of the Outlook to “Positive” primarily reflects the strong executi ...

Core Insights - OppFi's net charge-off rate has significantly improved, indicating better credit quality and risk management strategies [1][2][5] - The company's adjusted net income has surged, reflecting the positive impact of reduced charge-offs on profitability [5][6] Performance Metrics - In Q1 2025, OppFi reported a net charge-off rate of 35%, a decrease of 700 basis points from the previous quarter and 1300 basis points year-over-year [2][9] - Adjusted net income reached $33.8 million, marking a 285.1% increase year-over-year [5][9] Risk Management Strategies - The implementation of Model 6 has enhanced OppFi's ability to identify long-term credit risks and target higher-quality borrowers [3][9] - Effective loan recovery efforts have contributed to minimizing losses on defaulted loans, further reducing net charge-offs [4][9] Market Position - OppFi's stock has increased by 252.9% over the past year, outperforming competitors and the industry average [7][9] - The company trades at a forward price-to-earnings ratio of 9.32, significantly lower than the industry average of 22.58 [11] Future Outlook - The Zacks Consensus Estimate for OppFi's earnings for 2025 has risen by 15% over the last 60 days, indicating positive market sentiment [13] - OppFi holds a Zacks Rank 1 (Strong Buy), reflecting strong investor confidence [15]

Core Viewpoint - Cullen/Frost Bankers, Inc. (CFR) reported a strong first-quarter 2025 performance with earnings per share of $2.30, reflecting a 6.9% increase year-over-year, surpassing the Zacks Consensus Estimate by 5.9% [1][2] Financial Performance - The net income available to common shareholders was $149.3 million, up 11.4% from the prior-year quarter [2] - Total revenues reached $560.4 million, marking a 7.2% year-over-year increase and exceeding the Zacks Consensus Estimate by 1.8% [3] - Net interest income (NII) on a taxable-equivalent basis increased by 6.1% to $436.4 million year-over-year, while the net interest margin (NIM) expanded by 12 basis points to 3.60% [3] - Non-interest income improved by 11.3% year-over-year to $124 million, driven by increases in all components except for other non-interest income [4] Expenses and Credit Quality - Non-interest expenses rose by 6.7% year-over-year to $349.8 million, with a notable increase of 9.3% to $377.7 million when excluding special surcharge expenses related to FDIC insurance [5] - Credit loss expenses were recorded at $13.1 million, slightly down from $13.7 million in the prior-year quarter, but the allowance for credit losses on loans increased to 1.32% of total loans [7] Capital Ratios and Profitability - The Tier 1 risk-based capital ratio improved to 14.30%, up from 13.89% a year earlier, while the total risk-based capital ratio rose to 15.76% from 15.35% [8] - Return on average assets and return on average common equity were reported at 1.19% and 15.54%, respectively, compared to 1.09% and 15.22% in the prior-year quarter [9] Strategic Outlook - The company is well-positioned for revenue growth due to steady improvements in NII and non-interest income, supported by a solid capital position and efforts to expand in Texas markets [10]

Financial Data and Key Metrics Changes - The company reported net income of $21,500,000 for Q1 2025, resulting in diluted earnings per share of $0.71, with an annualized return on average assets of 1.03% and an annualized return on average tangible common equity of 14.14% [5][14] - There was a linked quarter decrease of $94,400,000 or 2% in loans, primarily due to payoff activity in the commercial real estate (CRE) portfolio [5][14] - The net interest margin increased by three basis points to 2.86%, and net interest income rose by $145,000 [6][19] Business Line Data and Key Metrics Changes - First quarter commercial loan production totaled approximately $142,000,000, representing a 46% increase over Q1 2024, with only $52,000,000 funded during the quarter [8] - The loan pipeline exceeds $1,900,000,000, the largest in the last 24 to 36 months, with a balanced mix of approximately 45% term loans and 55% construction loans [10] - Nonperforming assets remained low at 0.39% of total assets, despite an increase in classified loans to $67,000,000 from $48,000,000 [12][15] Market Data and Key Metrics Changes - The Texas economy is anticipated to grow at a faster pace than the overall projected U.S. growth rate, contributing to a healthy market environment [6] - The average rate of loans funded during the first quarter was approximately 7.3%, with loans exposed to the oil and gas industry totaling $111,000,000 or 2.4% of total loans [15] Company Strategy and Development Direction - The company anticipates mid-single digit loan growth for 2025, despite the first quarter's loan reduction [5][14] - There is a focus on expanding the commercial and industrial (C and I) initiative, which now represents approximately 25% of the total pipeline [11] - The company is optimistic about loan growth and is making progress in the C and I space, particularly in Houston [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the operating environment, despite uncertainties related to market conditions and tariff negotiations [6] - The company expects to see positive impacts on margins due to anticipated repricing of the CD portfolio and new swaps implemented [31][32] - Management is confident in maintaining mid-single digit loan growth guidance for the year, supported by a dynamic loan pipeline [62] Other Important Information - The securities portfolio decreased by $76,900,000 or 2.7% from the previous quarter, primarily due to maturities and principal payments [16] - The company did not repurchase any shares during the first quarter but has repurchased 196,419 shares at an average price of $26.82 per share after the quarter [18] Q&A Session Summary Question: Loan pipeline and growth guidance - The loan pipeline of $1,900,000,000 is the largest in two years, with expectations of 25% to 30% pull-through historically [26] - The guidance for mid-single digit loan growth remains intact despite some unexpected payoffs [62] Question: Margin outlook - The company anticipates a positive impact on margins as a portion of the CD portfolio matures and reprices lower [31] Question: Expense management - Expenses came in lower than budgeted due to decreases in salaries and employee benefits, with no targeted reductions implemented [38] Question: Credit quality and restructured loans - A large construction loan in Austin, Texas was extended and moved to nonperforming status, but the borrower has not missed payments and leasing activity is positive [40]

Core Viewpoint - BankUnited, Inc. (BKU) reported first-quarter 2025 earnings of 78 cents per share, exceeding the Zacks Consensus Estimate of 74 cents and up from 64 cents in the prior-year quarter [1] Financial Performance - Net income for the quarter was $58.5 million, reflecting a 21.9% increase from the previous year, surpassing the estimate of $56.6 million [2] - Quarterly net revenues reached $255.4 million, a 5.7% year-over-year increase, but fell short of the Zacks Consensus Estimate of $261.7 million [3] - Net interest income (NII) was $233.1 million, growing by 8.5%, while the net interest margin (NIM) expanded by 24 basis points to 2.81% [3] Income and Expenses - Non-interest income decreased by 17.1% to $22.3 million, primarily due to a 62.3% drop in lease financing income, which was below the projected $24.8 million [4] - Non-interest expenses rose slightly to $160.2 million, driven by increased employee compensation, technology costs, and other expenses, partially offset by lower depreciation costs [4] Loan and Deposit Trends - Total loans amounted to $24 billion, a slight decrease from the prior quarter, while total deposits were $28.1 billion, showing a marginal increase [5] Credit Quality - The provision for credit losses was $15.1 million, down 1.1% from the previous year, which was better than the expected $16.1 million [6] - The ratio of net charge-offs to average loans increased to 0.33%, up 31 basis points year-over-year, and the non-performing assets ratio rose to 0.76%, an increase of 42 basis points [6] Capital and Profitability Ratios - The Common Equity Tier 1 risk-based capital ratio improved to 12.2% from 11.6%, and the total risk-based capital ratio increased to 14.3% from 13.7% year-over-year [7] - Return on average assets was 0.68%, up from 0.54% in the prior year, and return on average stockholders' equity rose to 8.2% from 7.3% [7] Market Outlook - BankUnited's strategies to enhance fee income, attract low-cost deposits, and benefit from higher interest rates are expected to support revenue growth, despite rising expenses and exposure to commercial real estate and residential loans [8]

Financial Data and Key Metrics Changes - The company reported a solid Return on Assets (ROA) of 1.64% and a pre-provision income growth of 7%, reaching $125 million during the quarter [7] - Net income for the quarter was $77 million, translating to $0.47 per share, compared to $76 million and $0.46 per share in the previous quarter [19] - Net interest income increased to $212 million, up $3 million from the prior quarter, with a net interest margin expansion of 19 basis points to 4.52% [22][26] Business Line Data and Key Metrics Changes - Total loans were slightly down, but core deposit loans remained stable, with a $70 million increase in non-interest bearing deposits [8][10] - Credit performance was stable, with early delinquency down compared to the prior quarter, indicating normalization in consumer credit trends [11][38] - The allowance for credit losses increased by $3.4 million to $247.3 million, reflecting higher qualitative adjustments due to economic uncertainty [39] Market Data and Key Metrics Changes - Year-to-date fiscal government tax collection increased by 3%, and the unemployment rate reached a low not seen in a long time [15] - The company noted a healthy pipeline for loans, sustaining mid-single-digit growth expectations for the year despite market uncertainties [9][18] Company Strategy and Development Direction - The company aims to continue deploying capital opportunistically to improve franchise and shareholder value, with a focus on growing the balance sheet and enhancing product offerings [42][44] - Management emphasized the importance of maintaining disciplined underwriting guidelines while exploring growth opportunities in both commercial and residential sectors [63][71] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about loan growth in the second half of the year, citing a better pipeline compared to the beginning of the year [76][78] - The company remains committed to its mid-single-digit growth guidance, despite acknowledging the unpredictable nature of the economic environment [18][79] Other Important Information - The company resumed its stock purchase program, repurchasing $22 million in the first quarter and planning to complete another $28 million in April [12][43] - The tangible book value per share increased by 7% to $10.64, with the tangible common equity ratio expanding to 9.1% [43] Q&A Session Summary Question: What are the expected yields for the second half of the year? - The expected yields for the second half of the year are projected to be around 1.35% to 1.40% [48] Question: What is the anticipated margin expansion? - The company anticipates a margin expansion of five to seven basis points, assuming a blended rate of new originations between 150 to 300 basis points [49][50] Question: How does the company view loan origination growth? - Management believes both construction and commercial loans will grow, while consumer loans are expected to grow at a slower pace [63] Question: What is the outlook on consumer charge-offs? - The company expects an improvement in consumer charge-off rates year over year, with older vintages that behaved worse being cleared out [81][84] Question: What is the status of the stock buyback program? - The company plans to complete a $50 million buyback by the end of April and retains flexibility for further buybacks if unique opportunities arise [98]