22 unchanged sentences
changes in tax policies or assessment policies;
+Added: changes in liquidity, including the size and composition of our deposit portfolio, and the percentage of uninsured deposits in the portfolio;
changes in consumer demand, spending, borrowing and savings habits;
7 unchanged sentences
the ability of the U.S.
−Removed: Government to manage federal debt limits or remain open;
+Added: Government to manage federal debt limits;
+Added: the imposition of tariffs or other domestic or international governmental policies;
significant increases in our loan losses;
21 unchanged sentences
WaterStone Bank also offers home equity loans and lines of credit, construction and land loans, commercial business loans, and consumer loans.
−Removed: WaterStone Bank funds its loan production primarily with retail deposits and Federal Home Loan Bank advances.
+Added: WaterStone Bank funds its loan production primarily with retail deposits, brokered deposits, and Federal Home Loan Bank advances.
Our deposit offerings include certificates of deposit, money market savings accounts, transaction deposit accounts, noninterest bearing demand accounts and individual retirement accounts.
17 unchanged sentences
This wholly-owned subsidiary owns and manages the majority of the consolidated investment portfolio.
−Removed: It has its own board of directors currently comprised of its President, the WaterStone Bank Chief Financial Officer, Treasury Officer and the Chairman of Waterstone Financial’s board of directors.
+Added: It has its own board of directors currently comprised of its President, the WaterStone Bank Chief Financial Officer, and the Chairman of Waterstone Financial’s board of directors.
Waterstone Mortgage Corporation.
Acquired in 2006, Waterstone Mortgage Corporation is a mortgage banking business with offices in 26 states.
−Removed: It has its own board of directors currently comprised of its President, its Chief Financial Officer, its Chief Operating Officer, the WaterStone Bank Chief Executive Officer, President, Chief Financial Officer, Chief Credit Officer, and a member of the WaterStone Bank Board of Directors.
+Added: It has its own board of directors currently comprised of its President, its Chief Financial Officer, its Chief Operating Officer, the WaterStone Bank Chief Executive Officer, Chief Financial Officer, Chief Credit Officer, and a member of the WaterStone Bank Board of Directors.
Main Street Real Estate Holdings, LLC.
9 unchanged sentences
Waterstone Mortgage Corporation.
−Removed: As of December 31, 2023, Waterstone Mortgage Corporation had 15 offices in Florida, nine offices in New Mexico, four offices in each of Arizona, Virginia, and Wisconsin, three offices in each of California, Maryland, New Hampshire, Oklahoma, and Texas, two offices in each of Delaware, Idaho, Kansas, Minnesota, and South Carolina, and one office in each of Colorado, Connecticut, Iowa, Illinois, Kentucky, Massachusetts, Michigan, Missouri, New Jersey, Rhode Island, and Tennessee.
+Added: As of December 31, 2024, Waterstone Mortgage Corporation had nine offices in Florida, eight offices in New Mexico, six offices each in Virginia and Wisconsin, four offices each in Arizona, Oklahoma, and Texas, three offices in New Hampshire, two offices each in California, Idaho, Maryland, and Minnesota, and one office each in Colorado, Connecticut, Delaware, Iowa, Illinois, Kansas, Massachusetts, Michigan, Missouri, North Carolina, New Jersey, Rhode Island, South Carolina, and Tennessee.
WaterStone Bank .
19 unchanged sentences
At December 31, 2024, commercial business loans, home equity loans, and construction and land loans totaled $34.1 million, $13.2 million and $61.4 million, respectively.
−Removed: The largest exposure to one borrower or group of related borrowers was $43.8 million in the multi-family category.
+Added: The largest exposure to one borrower or group of related borrowers was $51.0 million in the construction category.
The borrower represented a total of 3.0% of the total loan portfolio as of December 31, 2024.
10 unchanged sentences
Allowance for credit losses ("ACL") - loans
−Removed: (1) The Company adopted ASU 2016-13 as of January 1, 2022.
−Removed: The 2021 amount presented is calculated under the prior accounting standard.
Loan Portfolio Maturities and Yields.
50 unchanged sentences
In reaching a decision whether to make a multi-family real estate loan, we consider gross revenues and the net operating income of the property, the borrower’s expertise and credit history, global cash flows, and the appraised value of the underlying property.
−Removed: We will also consider the terms and conditions of the leases and the credit quality of the tenants.
We generally require that the properties securing these real estate loans have debt service coverage ratios (the ratio of earnings before interest, income taxes, depreciation and amortization divided by interest expense and current maturities of long term debt) of at least 1.15 times.
11 unchanged sentences
At December 31, 2024, the unadvanced portion of home equity lines of credit totaled $11.5 million.
−Removed: The underwriting standards utilized for home equity loans and home equity lines of credit include a determination of the applicant’s credit history, an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan, and the value of the collateral securing the loan.
−Removed: Home equity loans are offered with adjustable rates of interest and with terms up to seven years.
−Removed: The loan-to-value ratio for our home equity loans and our lines of credit is generally limited to 90% when combined with the first security lien, if applicable.
−Removed: Our home equity lines of credit have ten-year terms and adjustable rates of interest, subject to a contractual floor, which are indexed to the prime rate, as reported in The Wall Street Journal .
−Removed: Interest rates on home equity lines of credit are generally limited to a maximum rate of 18%.
The average outstanding home equity loan balance was approximately $55,000 at December 31, 2024, with the largest outstanding balance at that date of $690,000.
7 unchanged sentences
The average outstanding construction loan balance totaled approximately $4.2 million on December 31, 2024, with the largest outstanding balance at $12.8 million.
−Removed: The average outstanding land loan balance was approximately $303,000 on December 31, 2023, and the largest outstanding balance on that date was $1.1 million.
−Removed: Before making a commitment to fund a construction loan, we require an appraisal of the property by an independent licensed appraiser.
−Removed: We also review and inspect each property before disbursement of funds during the term of the construction loan.
−Removed: Loan proceeds are disbursed after inspection based on either the percentage of completion method or the actual cost of the completed work.
+Added: The average outstanding land loan balance was approximately $181,000 on December 31, 2024, and the largest outstanding balance on that date was $513,000.
Construction financing is generally considered to involve a higher degree of credit risk than longer-term financing on improved, owner-occupied real estate.
20 unchanged sentences
Commercial loans totaled $34.1 million at December 31, 2024, or 2.0% of total loans, and are made up of loans secured by accounts receivable, inventory, equipment and real estate.
−Removed: Our commercial loans are generally made to borrowers that are located in our primary market area.
−Removed: Working capital lines of credit are granted for the purpose of carrying inventory and accounts receivable or purchasing equipment.
−Removed: These lines require that certain collateral levels must be maintained and are monitored on a monthly or quarterly basis.
−Removed: Working capital lines of credit are short-term loans of 12 months or less with variable interest rates.
At December 31, 2024, the unadvanced portion of working capital lines of credit totaled $15.1 million.
7 unchanged sentences
All loans originated for investment are underwritten pursuant to internally developed policies and procedures.
−Removed: While we generally underwrite owner-occupied residential mortgage loans to Freddie Mac and Fannie Mae standards, due to several unique characteristics, our loans originated prior to 2008 do not conform to the secondary market standards.
−Removed: The unique features of these loans include interest payments in advance of the month in which they are earned and discretionary rate adjustments that are not tied to an independent index.
+Added: While we generally underwrite owner-occupied residential mortgage loans to Freddie Mac and Fannie Mae standards.
Exclusive of our mortgage banking operations, we retain in our portfolio all of the loans that we originate.
7 unchanged sentences
Any secured mortgage loan up to $500,000 for a borrower with total outstanding loans from us of less than $1.0 million that is independently underwritten can be approved by the Chief Credit Officer or select lending personnel.
−Removed: Any secured mortgage loan up to $1.0 million can be approved by the Chief Executive Officer.
+Added: Any secured mortgage loan up to $1.0 million can be approved by any of the two the Chief Executive Officer, Chief Credit Officer, or select lending personnel.
Any secured mortgage loan ranging from $500,001 to $3.0 million or any new loan to a borrower with outstanding loans from us exceeding $1.0 million must be approved by the Officer Loan Committee.
−Removed: Any non-real estate loan up to $250,000 for a borrower with total outstanding loans from us of less than $250,000 that is independently underwritten can be approved by select lending personnel.
−Removed: Any non-real estate loan up to $500,000 for a borrower with total outstanding loans from us of less than $500,000 that is independently underwritten can be approved by the Chief Executive Officer or Business Banking Manager.
+Added: Any non-real estate loan up to $500,000 for a borrower with total outstanding loans from us of less than $500,000 that is independently underwritten can be approved by the Chief Executive Officer or Chief Credit Officer.
Any non-real estate loan ranging from $500,001 to $3.0 million or any new non-real estate loan to a borrower with outstanding loans exceeding $500,000 must be approved by the Officer Loan Committee.
66 unchanged sentences
Total financing receivables whose borrowers are experiencing financial difficulty
−Removed: Financial receivables whose borrowers are experiencing financial difficulty totaled $543,000 at December 31, 2023, compared to $936,000 at December 31, 2022.
−Removed: At December 31, 2023, all of the financial receivables whose borrowers are experiencing financial difficulty were performing in accordance with their restructured terms.
+Added: There were no financial receivables whose borrowers are experiencing financial difficulty at December 31, 2024, compared to $543,000 at December 31, 2023.
All financial receivables whose borrowers are experiencing financial difficulty are considered to be impaired and are risk rated as either substandard or watch and are included in the internal risk rating tables disclosed in the notes to the consolidated financial statements.
Specific reserves have been established to the extent that the collateral-based impairment analyses indicate that a collateral shortfall exists or to the extent that a discounted cash flow analysis results in an impairment.
−Removed: Our financial receivables whose borrowers are experiencing financial difficulty are short-term modifications.
−Removed: Typical initial restructured terms include six to twelve months of principal forbearance, a reduction in interest rate or both.
−Removed: Restructured terms do not include a reduction of the outstanding principal balance unless mandated by a bankruptcy court.
−Removed: Finance terms may be renewed or further modified at the end of the initial term for an additional period if performance has been acceptable and the short-term borrower difficulty persists.
Information with respect to the accrual status of our financial receivables whose borrowers are experiencing financial difficulty is provided in the following table.
19 unchanged sentences
The increase was primarily due to an increase in delinquent one- to four-family loans during the year ended December 31, 2024.
−Removed: Loans past due 90 days or more increased $750,000.
−Removed: The increase in loans past due 90 days or more was primarily due to an increase in one-to four-family loans receivable during the year ended December 31, 2023.
+Added: Loans past due 90 days or more decreased $448,000.
+Added: The decrease in loans past due 90 days or more was primarily due to a decrease in one-to four-family loans receivable during the year ended December 31, 2024.
Potential Problem Loans.
5 unchanged sentences
Total real estate owned was $505,000 at December 31, 2024, and $254,000 at December 31, 2023.
−Removed: During the year ended December 31, 2023 and December 31, 2022, there was no significant activity.
+Added: During the years ended December 31, 2024 and December 31, 2023, there was no significant activity.
New appraisals received on real estate owned and collateral dependent impaired loans are based upon an "as is value" assumption.
5 unchanged sentences
Comparing the estimated current value to that of updated listed sales prices on our real estate owned and that of similar properties (not owned by the Company).
−Removed: We owned three properties at December 31, 2023 and one property at December 31, 2022.
+Added: We owned two properties at December 31, 2024 and three properties at December 31, 2023.
Habitable real estate owned is managed with the intent of attracting a lessee to generate revenue.
26 unchanged sentences
(1) The Company adopted ASU 2016-13 as of January 1, 2022.
−Removed: The prior year amounts presented are calculated under the prior accounting standard.
−Removed: The allowance for credit losses - loans increased $792,000 to $18.5 million at December 31, 2023 from $17.8 million at December 31, 2022.
+Added: The allowance for credit losses - loans decreased $302,000 to $18.2 million at December 31, 2024 from $18.5 million at December 31, 2023.
During the year ended December 31, 2024, there was a $342,000 provision for credit losses.
−Removed: Additionally, net charge-offs totaled $135,000 for the year ended December 31, 2023.
−Removed: We had net charge-offs of $135,000, or 0.01% of average loans annualized, for the year ended December 31, 2023, compared to net recoveries of $519,000 or 0.04% of average loans annualized, for the year ended December 31, 2022.
−Removed: Of the $135,000 in net charge-offs during the year ended December 31, 2023, the majority of the activity related to loans secured by one-to four-family loan categories.
+Added: Additionally, net recoveries totaled $40,000 for the year ended December 31, 2024.
+Added: We had net recoveries of $40,000, or less than 0.01% of average loans annualized, for the year ended December 31, 2024, compared to net charge-offs of $135,000 or 0.01% of average loans annualized, for the year ended December 31, 2023.
+Added: Of the $40,000 in net recoveries during the year ended December 31, 2024, the majority of the activity related to loans secured by one-to four-family loan categories.
Our underwriting policies and procedures emphasize that credit decisions must rely on both the credit quality of the borrower and the estimated value of the underlying collateral.
10 unchanged sentences
% of Allowance in Category to Total Allowance
−Removed: Allowance for Loan Losses - Loans (1)
+Added: Allowance for Credit Losses - Loans
% of Loans in Category to Total Loans
% of Allowance in Category to Total Allowance
−Removed: Allowance for Loan Losses - Loans (1)
+Added: Allowance for Credit Losses - Loans
% of Loans in Category to Total Loans
5 unchanged sentences
Total allowance for credit losses - loans
−Removed: (1) The Company adopted ASU 2016-13 as of January 1, 2022.
−Removed: 2021 amounts presented are calculated under the prior accounting standard.
Our underwriting policies and procedures emphasize that credit decisions must rely on both the credit quality of the borrower and the estimated value of the underlying collateral.
4 unchanged sentences
As of December 31, 2024, the allowance for credit losses to total loans receivable was 1.09% and 322.10% of non-performing loans, compared to 1.11%, and 385.79%, respectively at December 31, 2023.
−Removed: The increase in the allowance for credit losses during the year ended December 31, 2023 reflects the increased size of our loan portfolio and certain qualitative factors.
−Removed: The overall increase was related primarily to the one- to four-family category.
+Added: The decrease in the allowance for credit losses during the year ended December 31, 2024 reflects the decrease in historical losses used in the calculation and certain qualitative factors.
+Added: The overall decrease was related primarily to the one- to four-family category.
See Note 3 of the notes to the consolidated financial statements for further discussion on the allowance for credit losses - loans.
1 unchanged sentence
In addition to the lending activities previously discussed, we also originate single-family residential mortgage loans for sale in the secondary market through Waterstone Mortgage Corporation.
−Removed: Waterstone Mortgage Corporation originated, including loans sold to WaterStone Bank, $2.12 billion in mortgage loans held for sale during the year ended December 31, 2023, which was a volume decrease of $641.8 million, or 23.2%, from the $2.76 billion originated during the year ended December 31, 2022.
−Removed: The decrease in loan production volume was driven by a $424.9 million, or 17.3%, decrease in purchase products due to an increase in mortgage rates year-over-year and the decline in affordable housing inventories.
−Removed: Mortgage refinance products decreased $216.8 million, or 71.8% as interest rates remained high.
−Removed: Total mortgage banking income decreased $25.6 million, or 24.6%, to $78.5 million during the year ended December 31, 2023 compared to $104.1 million during the year ended December 31, 2022.
−Removed: The decrease in mortgage banking noninterest income was related to a 23.2% decrease in volume and an 2.6% decrease in gross margin on loans originated and sold for the year ended December 31, 2023 compared to December 31, 2022.
+Added: Waterstone Mortgage Corporation originated, including loans sold to WaterStone Bank, $2.15 billion in mortgage loans held for sale during the year ended December 31, 2024, which was a volume increase of $26.6 million, or 1.3%, from the $2.12 billion originated during the year ended December 31, 2023.
+Added: The increase in loan production volume was driven by a $109.4 million, or 128.5%, increase in refinance products due to a decrease in mortgage rates at times throughout the year.
+Added: Mortgage purchase products decreased $82.8 million, or 4.1% as housing inventory remained low.
+Added: Total mortgage banking noninterest income increased $5.8 million, or 7.4%, to $84.3 million during the year ended December 31, 2024 compared to $78.5 million during the year ended December 31, 2023.
+Added: The increase in mortgage banking noninterest income was related to a 1.3% increase in volume and a 0.2% increase in gross margin on loans originated and sold for the year ended December 31, 2024 compared to December 31, 2023.
Gross margin on those loans originated and sold is the ratio of mortgage banking income (excluding the change in interest rate lock fair value) divided by total loan originations.
5 unchanged sentences
Loans originated for the purchase of a residential property, which generally yield a higher margin than loans originated for refinancing existing loans, comprised 88.9% of total originations during the year ended December 31, 2024, compared to 96.0% of total originations during the year ended December 31, 2023.
−Removed: The mix of loan type trended towards more governmental loans and less conventional loans comprising 41.0% and 59.0% of all loan originations, respectively, during the year ended December 31, 2023, compared to 29.3% and 70.7% of all loan originations, respectively, during the year ended December 31, 2022.
+Added: The mix of loan type trended towards more conventional loans and less government loans comprising 63.8% and 36.2% of all loan originations, respectively, during the year ended December 31, 2024, compared to 59.0% and 41.0% of all loan originations, respectively, during the year ended December 31, 2023.
Investment Activities
26 unchanged sentences
The estimated fair value of our mortgage-backed securities portfolio at December 31, 2024 was $1.7 million less than the amortized cost of $11.3 million.
−Removed: Mortgage-backed securities valued at $183,000 were pledged as collateral for mortgage banking activities as of December 31, 2023.
−Removed: Mortgage-backed securities valued at $10.6 million were pledged as collateral for advances from the Federal Reserve Bank as of December 31, 2023.
+Added: No mortgage-backed securities were pledged as collateral for mortgage banking activities as of December 31, 2024.
Investments in mortgage-backed securities involve a risk that actual prepayments may differ from estimated prepayments over the life of the security, which may require adjustments to the amortization of any premium or accretion of any discount relating to such instruments, thereby changing the net yield on such securities.
6 unchanged sentences
The estimated fair value of our collateralized mortgage obligations portfolio at December 31, 2024 was $19.5 million less than the amortized cost of $151.2 million.
−Removed: At December 31, 2023, $115.2 million in collateralized mortgage obligation securities were pledged as collateral for advances from the Federal Reserve Bank.
Investments in collateralized mortgage obligations involve a risk that actual may differ from estimated prepayments over the life of the security, which may require adjustments to the amortization of any premium or accretion of any discount relating to such instruments, thereby changing the net yield on such securities.
13 unchanged sentences
The estimated fair value of our government sponsored enterprise bond portfolio at December 31, 2024 was $60,000 less than the amortized cost of $2.5 million.
−Removed: Government sponsored enterprise bond securities valued at $2.3 million were pledged as collateral for advances from the Federal Reserve Bank as of December 31, 2023
Municipal Obligations.
5 unchanged sentences
The weighted average yield on this portfolio was 4.79% at December 31, 2024, with a weighted average remaining life of 6.7 years.
−Removed: The estimated fair value of our municipal obligations bond portfolio at December 31, 2023 was $184,000 more than the amortized cost of $39.3 million.
+Added: The estimated fair value of our municipal obligations bond portfolio at December 31, 2024 was $947,000 less than the amortized cost of $48.0 million.
Other Debt Securities.
As of December 31, 2024, we held other debt securities in the portfolio that totaled $11.3 million.
−Removed: Other debt securities consists of two corporate bonds.
+Added: Other debt securities consisted of two corporate bonds.
The weighted average yield on this portfolio was 3.02% at December 31, 2024, with a weighted average remaining life of 5.3 years.
46 unchanged sentences
At December 31, 2024 and December 31, 2023, $905.5 million and $730.3 million of our deposit accounts were certificates of deposit, of which $842.4 million and $622.4 million, respectively, had remaining maturities of one year or less.
−Removed: Deposits decreased by $8.4 million, or 0.7%, from December 31, 2022 to December 31, 2023.
−Removed: The decrease in deposits was the result of a $96.4 million, or 17.3%, decrease in total transaction accounts offset by an $88.0 million, or 13.7% increase in time deposits.
−Removed: The Company had no deposits obtained directly from brokers as of December 31, 2023 and December 31, 2022.
+Added: The Company had $94.3 million in certificates of deposits obtained directly from brokers as of December 31, 2024 and none at December 31, 2023.
+Added: Deposits increased by $169.3 million, or 14.2%, from December 31, 2023 to December 31, 2024.
+Added: The increase in deposits was the result of a $175.3 million, or 24.0%, increase in total certificates of deposit offset by an $6.0 million, or 1.3% decrease in demand deposits.
The following table sets forth the distribution of total deposit accounts, by account type, at the dates indicated.
13 unchanged sentences
Regular savings
−Removed: Money market and savings deposits
+Added: Money market and escrow deposits
Total transaction accounts
−Removed: Certificates of deposit
+Added: Certificates of deposit - retail
+Added: Certificates of deposit - brokered
Total deposits
8 unchanged sentences
Over 12 months
−Removed: Our borrowings at December 31, 2023 consisted of $464.0 million in advances from the Federal Home Loan Bank of Chicago, $145.0 million in short-term borrowings with the Federal Reserve Bank (“FRB”), and $2.1 million outstanding balance in short-term repurchase agreements used to fund loans held for sale.
+Added: Our borrowings at December 31, 2024 consisted of $443.6 million in advances from the Federal Home Loan Bank of Chicago and $3.0 million outstanding balance in short-term repurchase agreements used to fund loans held for sale.
The following table sets forth information concerning balances and interest rates on borrowings at the dates and for the periods indicated.
7 unchanged sentences
As of December 31, 2024, we had 600 full-time equivalent employees.
−Removed: A total of 182 are WaterStone Bank employees and 516 are employees of Waterstone Mortgage Corporation.
+Added: A total of 173 were WaterStone Bank employees and 427 were employees of Waterstone Mortgage Corporation.
We believe we are able to attract and retain top talent by creating a culture that challenges and engages our employees, offering them opportunities to learn, grow and achieve their career goals.
Further, our commitment to a culture of inclusion is integral to our goal of attracting and retaining the best talent and ultimately driving our business performance.
−Removed: Our Diversity and Inclusion strategy includes regular training and development for all employees and partnerships with non-profit organizations that share in our inclusion mission.
Our employees participate in a wide array of volunteer activities and we support their charitable giving by matching employee contributions to qualified nonprofit organizations.
7 unchanged sentences
This regulation and supervision establishes a comprehensive framework of activities in which an institution may engage and is intended primarily for the protection of the Federal Deposit Insurance Corporation’s Deposit Insurance Fund and depositors, and not for the protection of security holders.
−Removed: WaterStone Bank also is regulated to a lesser extent by the Federal Reserve Board, governing reserves to be maintained against deposits and other matters.
WaterStone Bank also is a member of and owns stock in the Federal Home Loan Bank of Chicago, which is one of the 11 regional banks in the Federal Home Loan Bank System.
8 unchanged sentences
A less than satisfactory rating may also prevent a financial institution, such as WaterStone Bank or Waterstone Financial, from obtaining necessary regulatory approvals to pay dividends, repurchase shares of common stock, acquire other financial institutions or establish new branches.
−Removed: In addition, we must comply with significant anti-money laundering and anti-terrorist financing laws and regulations, Community Reinvestment Act laws and regulations, and fair lending laws and regulations.
+Added: In addition, we must comply with significant anti-money laundering and countering the financing of terrorism laws and regulations, Community Reinvestment Act laws and regulations, and fair lending laws and regulations.
Government agencies have the authority to impose monetary penalties and other sanctions on institutions that fail to comply with these laws and regulations, which could significantly affect our business activities, including our ability to acquire other financial institutions or expand our branch network.
31 unchanged sentences
The activity regulations provide that state banks that meet applicable minimum capital requirements would be permitted to engage in certain activities that are not permissible for national banks, including certain real estate and securities activities conducted through subsidiaries.
−Removed: The Federal Deposit Insurance Corporation will not approve an activity that it determines presents a significant risk to the Federal Deposit Insurance Corporation insurance fund.
+Added: The Federal Deposit Insurance Corporation will not approve an activity that it determines presents a significant risk to the Federal Deposit Insurance Corporation's Deposit Insurance Fund.
The current activities of WaterStone Bank and its subsidiaries are permissible under applicable federal regulations.
20 unchanged sentences
Under Wisconsin law, WaterStone Bank is required to obtain and maintain insurance on its deposits from a deposit insurance corporation.
−Removed: The deposits of WaterStone Bank are insured up to the applicable limits by the Federal Deposit Insurance Corporation.
+Added: The deposits of WaterStone Bank are insured up to applicable limits by the Federal Deposit Insurance Corporation.
Federal Law and Regulation.
30 unchanged sentences
In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet its minimum risk-based capital requirements.
−Removed: In assessing an institution’s capital adequacy, the Federal Deposit Insurance Corporation takes into consideration, not only these numeric factors, but qualitative factors as well, including the bank’s exposure to interest rate risk.
+Added: In assessing an institution’s capital adequacy, the Federal Deposit Insurance Corporation takes into consideration, not only these numeric factors, but qualitative factors as well, including a bank’s exposure to interest rate risk.
The Federal Deposit Insurance Corporation has the authority to establish higher capital requirements for individual institutions where deemed necessary due to a determination that an institution’s capital levels are, or are likely to become, inadequate in light of particular circumstances.
10 unchanged sentences
Federal bank regulatory authorities are required to take "prompt corrective action" with respect to institutions that do not meet minimum capital requirements.
−Removed: For these purposes, the statute establishes five capital categories:
+Added: For these purposes, Federal Deposit Insurance Act establishes five capital categories:
well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.
−Removed: Under the regulations, a bank is deemed to be (i) "well capitalized" if it has total risk-based capital ratio of 10.0% or more, has a Tier 1 risk-based capital ratio of 8.0% or more, has a Tier 1 leveraged capital ratio of 5.0% or more and a common equity Tier 1 ratio of 6.5% or more, and is not subject to any written capital order or directive;
−Removed: (ii) "adequately capitalized" if it has a total risk-based capital ratio of 8.0% or more, a Tier 1 risk-based capital ratio of 6.0% or more, a Tier 1 leveraged capital ratio of 4.0% or more and a common equity Tier 1 capital ratio of 4.5% or more, and does not meet the definition of "well capitalized";
−Removed: (iii) "undercapitalized" if it has a total risk-based capital ratio that is less than 8.0%, a Tier 1 risk-based capital ratio that is less than 6.0%, a Tier 1 leverage capital ratio that is less than 4.0%, a Tier 1 leverage capital ratio that is less than 3.0%, or a common equity Tier 1 capital ratio of less than 4.5%;
−Removed: (iv) "significantly undercapitalized" if it has a total risk-based capital ratio that is less than 6.0% and a Tier 1 risk-based capital ratio that is less than 4.0% or a common equity Tier 1 ratio of less than 3.0%;
+Added: Under the implementing regulations, a bank is deemed to be (i) "well capitalized" if it has total risk-based capital ratio of 10.0% or more, has a Tier 1 risk-based capital ratio of 8.0% or more, has a Tier 1 leverage ratio of 5.0% or more and a common equity Tier 1 ratio of 6.5% or more, and is not subject to any written agreement, order or capital or prompt corrective action directive;
+Added: (ii) "adequately capitalized" if it has a total risk-based capital ratio of 8.0% or more, a Tier 1 risk-based capital ratio of 6.0% or more, a Tier 1 leverage ratio of 4.0% or more and a common equity Tier 1 capital ratio of 4.5% or more, and does not meet the definition of "well capitalized";
+Added: (iii) "undercapitalized" if it has a total risk-based capital ratio that is less than 8.0%, a Tier 1 risk-based capital ratio that is less than 6.0%, a Tier 1 leverage ratio that is less than 4.0%, or a common equity Tier 1 capital ratio of less than 4.5%;
+Added: (iv) "significantly undercapitalized" if it has a total risk-based capital ratio that is less than 6.0%, a Tier 1 risk-based capital ratio that is less than 4.0%, a Tier 1 leverage ratio that is less than 3.0%, or a common equity Tier 1 ratio of less than 3.0%;
and (v) "critically undercapitalized" if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%.
4 unchanged sentences
Savings banks deemed by the Federal Deposit Insurance Corporation to be “critically undercapitalized” generally would be subject to the appointment of a receiver or conservator.
−Removed: At December 31, 2023, WaterStone Bank was considered well-capitalized with a common equity Tier 1 capital ratio of 18.99%, Tier 1 leverage capital ratio of 15.62%, a Tier 1 risk-based capital ratio of 18.999% and a total risk based capital ratio of 20.10%.
−Removed: A qualifying institution whose Tier 1 capital equals or exceeds the specified community bank leverage ratio and opts into that framework will be considered well capitalized for prompt corrective action purposes.
+Added: At December 31, 2024, WaterStone Bank was considered well-capitalized with a common equity Tier 1 capital ratio of 19.21%, a Tier 1 leverage ratio of 15.55%, a Tier 1 risk-based capital ratio of 19.21% and a total risk based capital ratio of 20.29%.
Under Wisconsin law and applicable regulations, a Wisconsin savings bank that meets its regulatory capital requirements may declare dividends on capital stock based upon net profits, provided that its paid-in surplus equals its capital stock.
14 unchanged sentences
Regulation D, promulgated by the Federal Reserve Board, imposes reserve requirements on all depository institutions, including WaterStone Bank, which maintain transaction accounts or non-personal time deposits.
−Removed: Checking accounts, NOW accounts, Super NOW checking accounts, and certain other types of accounts that permit payments or transfers to third parties fall within the definition of transaction accounts and are subject to Regulation D reserve requirements, as are any non-personal time deposits (including certain money market deposit accounts) at a savings institution.
−Removed: However, effective March 26, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero, thereby effectively eliminating the requirements.
+Added: Checking accounts, NOW accounts, Super NOW checking accounts, and certain other types of accounts that permit payments or transfers to third parties fall within the definition of transaction accounts and are subject to Regulation D reserve requirements, as are any non-personal time deposits (including certain money market deposit accounts).
+Added: However, in 2020, the Federal Reserve Board reduced reserve requirement ratios to zero, thereby effectively eliminating the requirements.
The Federal Reserve Board took that action due to a change in its approach to monetary policy;
18 unchanged sentences
Under these restrictions, the aggregate amount of the loans to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable to national banks (which is generally 15% of unimpaired capital and unimpaired surplus).
−Removed: Aggregate loans by a savings bank to its insiders and insiders’ related interests in the aggregate may not exceed the savings bank’s unimpaired capital and unimpaired surplus.
+Added: Loans by a savings bank to its insiders and insiders’ related interests in the aggregate may not exceed the savings bank’s unimpaired capital and unimpaired surplus.
With certain exceptions, loans to an executive officer, other than loans for the education of the officer’s children and certain loans secured by the officer’s primary residence, may not exceed the greater of $25,000 or 2.5% of the savings bank’s unimpaired capital and unimpaired surplus, but in no event more than $100,000.
5 unchanged sentences
Under the terms of the discontinued program, the employee interest rate is based on WaterStone Bank’s cost of funds on December 31st of the immediately preceding year and is adjusted annually.
−Removed: At December 31, 2023, the rate of interest on an employee rate mortgage loan was 1.75%, compared to the weighted average rate of 5.35% on all single family mortgage loans.
−Removed: This rate will increase to 3.45% effective March 1, 2024.
Employee rate mortgage loans totaled $466,000, or 0.1%, of our single family residential mortgage loan portfolio on December 31, 2024.
7 unchanged sentences
Customer Privacy
−Removed: Under Wisconsin and federal law and regulations, savings banks, such as WaterStone Bank, are required to develop and maintain privacy policies relating to information on its customers, restrict access to and establish procedures to protect customer data.
+Added: Under Wisconsin and federal law and regulations, savings banks, such as WaterStone Bank, are required to develop and maintain privacy policies relating to its customers' information, and to restrict access to and establish procedures to protect customer data.
Applicable privacy regulations further restrict the sharing of non-public customer data with non-affiliated parties if the customer requests.
8 unchanged sentences
the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.
−Removed: The applicability date for the majority of the provisions in the Community Reinvestment Act regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027.
+Added: Under the regulations, the applicability date for the majority of the provisions in the Community Reinvestment Act regulations is January 1, 2026, and for additional requirements, January 1, 2027.
+Added: However, ongoing litigation may delay these implementation dates and/or permanently enjoin enforcement.
Federal Home Loan Bank System
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collection, foreclosure, repossession and claims-handling procedures;
+Added: unfair and deceptive practices;
other trade practices and privacy regulations providing for the use and safeguarding of non-public personal financial information of borrowers;
2 unchanged sentences
Waterstone Financial is a unitary savings and loan holding company subject to regulation and supervision by the Federal Reserve Board.
−Removed: The Federal Reserve Board has enforcement authority over Waterstone Financial and its non-savings institution subsidiaries.
+Added: The Federal Reserve Board has enforcement authority over Waterstone Financial and its non-savings bank subsidiaries.
Among other things, that authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a risk to WaterStone Bank.
6 unchanged sentences
Federal law generally prohibits the acquisition of more than 5% of a class of voting stock of a company engaged in impermissible activities.
−Removed: Federal law prohibits a savings and loan holding company, directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings institution or savings and loan holding company without prior written approval of the Federal Reserve Board, and from acquiring or retaining control of any depository institution not insured by the Federal Deposit Insurance Corporation.
−Removed: In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board must consider such things as the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on and the risk to the deposit insurance fund, the convenience and needs of the community and competitive factors.
−Removed: A savings and loan holding company may not acquire a savings institution in another state and hold the target institution as a separate subsidiary unless it is a supervisory acquisition under Section 13(k) of the Federal Deposit Insurance Act or the law of the state in which the target is located authorizes such acquisitions by out-of-state companies.
+Added: Federal law prohibits a savings and loan holding company, directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings association or savings and loan holding company without prior written approval of the Federal Reserve Board, and from acquiring or retaining control of any depository institution not insured by the Federal Deposit Insurance Corporation.
+Added: In evaluating applications by holding companies to acquire savings associations, the Federal Reserve Board must consider such things as the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on and the risk to the Deposit Insurance Fund, the convenience and needs of the community and competitive factors.
+Added: A savings and loan holding company may not acquire a savings association in another state and hold the target institution as a separate subsidiary unless it is a supervisory acquisition under Section 13(k) of the Federal Deposit Insurance Act or the law of the state in which the target is located authorizes such acquisitions by out-of-state companies.
The Federal Reserve Board is required to impose upon bank and savings and loan holding companies consolidated regulatory capital requirements that are equally stringent as those applicable to the subsidiary depository institutions.
1 unchanged sentence
The Dodd-Frank Act extended the "source of strength" doctrine to savings and loan holding companies.
−Removed: The Federal Reserve Board promulgated regulations implementing the "source of strength" policy, which requires holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.
+Added: The Federal Reserve Board promulgated regulations implementing the "source of strength" policy, which requires holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity, managerial, and other support in times of financial stress.
The Federal Reserve Board has issued a policy statement regarding the payment of dividends and the repurchase of shares of common stock by bank and savings and loan holding companies.
23 unchanged sentences
Under the Change in Bank Control Act, no person may acquire control of a savings and loan holding company such as Waterstone Financial unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.
−Removed: Control, as defined under the Change in Bank Control Act, means ownership, control of or the power to vote 25% or more of any class of voting stock.
−Removed: Acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable presumption of control under the applicable regulations under certain circumstances including where, as is the case with Waterstone Financial, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.
−Removed: In addition, the Savings and Loan Holding Company Act provides that no company may acquire control of a savings and loan holding company (as “control” is defined for purposes of that statute) without the prior approval of the Federal Reserve Board.
+Added: Control, as defined under the Change in Bank Control Act and its implementing regulations, means the power, directly or indirectly, to direct the management or policies of an insured depository institution, or the ownership, control of or the power to vote 25% or more of any class of voting stock.
+Added: Under the Change in Bank Control Act’s implementing regulations, acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable presumption of control under certain circumstances including where, as is the case with Waterstone Financial, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.
+Added: In addition, the Home Owners’ Loan Act provides that no company may acquire control of a savings and loan holding company (as “control” is defined for purposes of that statute) without the prior approval of the Federal Reserve Board.
Any company that acquires such control becomes a “savings and loan holding company” subject to registration, examination and regulation by the Federal Reserve Board.
−Removed: Effective September 30, 2020, the Federal Reserve Board adopted changes to its regulatory definition of “control” under the Savings and Loan Holding Company Act.
+Added: Effective September 30, 2020, the Federal Reserve Board adopted changes to its regulatory definition of “control” under the Home Owners’ Loan Act.
Relevant factors include a company’s voting and nonvoting equity interests in the savings and loan holding company, director, officer and employee overlaps, and the scope of business relationships between the company and the savings and loan holding company or its subsidiary institution.
25 unchanged sentences
The Inflation Reduction Act, which was signed into law on August 16, 2022, among other things, implements a new alternative minimum tax of 15% on corporations with profits in excess of $1 billion, a 1% excise tax on stock repurchases, and several tax incentives to promote clean energy and climate initiatives.
−Removed: These provisions are effective beginning January 1, 2023.
−Removed: Based on its analysis of the provisions, the Company reserved approximately $250,000 for the 1% excise tax on stock repurchases.
+Added: These provisions were effective beginning January 1, 2023.
State Taxation
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.