3 unchanged sentences
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
−Removed: September 30, 2024
+Added: March 31, 2025
December 31, 2024
−Removed: (Dollars In Thousands, except share and per share data)
+Added: (In Thousands, except share and per share data)
$ 37,459 $ 35,182
42 unchanged sentences
Shareholders’ equity:
−Removed: Preferred stock (par value $ .01 per share) Authorized - 50,000,000 shares at September 30, 2024 and at December 31, 2023, no shares issued
−Removed: Common stock (par value $ .01 per share) Authorized - 100,000,000 shares at September 30, 2024 and at December 31, 2023, Issued and Outstanding - 19,456,939 at September 30, 2024 and 20,314,786 at December 31, 2023
+Added: Preferred stock (par value $ .01 per share) authorized - 50,000,000 shares at March 31, 2025 and at December 31, 2024, no shares issued
+Added: Common stock (par value $ .01 per share) authorized - 100,000,000 shares at March 31, 2025 and at December 31, 2024, issued and outstanding - 19,281,231 at March 31, 2025 and 19,343,251 at December 31, 2024
Additional paid-in capital
14 unchanged sentences
CONSOLIDATED STATEMENTS OF INCOME
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(In Thousands, except per share amounts)
30 unchanged sentences
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(In Thousands)
16 unchanged sentences
(In Thousands, except per share amounts)
−Removed: For the nine months ended September 30, 2023
+Added: For the three months ended March 31, 2024
Balances at December 31, 2023
15 unchanged sentences
( 422 ) ( 4 ) ( 5,342 ) - - - ( 5,346 )
−Removed: Balances at September 30, 2023
+Added: Balances at March 31, 2024
19,910 $ 199 $ 98,610 $ 269,827 $ ( 11,572 ) $ ( 19,061 ) $ 338,003
−Removed: (In Thousands, except per share amounts)
−Removed: For the nine months ended September 30, 2024
+Added: For the three months ended March 31, 2025
Balances at December 31, 2024
15 unchanged sentences
( 237 ) ( 2 ) ( 3,171 ) - - - ( 3,173 )
−Removed: Balances at September 30, 2024
−Removed: 19,457 $ 194 $ 92,789 $ 274,748 $ ( 10,979 ) $ ( 14,750 ) $ 342,002
−Removed: Comprehensive
−Removed: Shareholders'
−Removed: Income (Loss)
−Removed: (In Thousands, except per share amounts)
−Removed: For the three months ended September 30, 2023
−Removed: Balances at June 30, 2023
−Removed: 21,376 $ 214 $ 116,611 $ 272,229 $ ( 12,463 ) $ ( 20,828 ) $ 355,763
−Removed: Comprehensive loss:
−Removed: - - - 3,253 - - 3,253
−Removed: Other comprehensive loss
−Removed: - - - - - ( 3,444 ) ( 3,444 )
−Removed: Total comprehensive loss
−Removed: ESOP shares committed to be released to Plan participants
−Removed: - - 50 - 297 - 347
−Removed: Cash dividend, $ 0.15 per share
−Removed: - - - ( 2,947 ) - - ( 2,947 )
−Removed: Stock compensation activity, net of tax
−Removed: - - - - - - -
−Removed: Stock compensation expense
−Removed: - - 34 - - - 34
−Removed: Purchase of common stock returned to authorized but unissued
−Removed: ( 516 ) ( 5 ) ( 6,675 ) - - - ( 6,680 )
−Removed: Balances at September 30, 2023
−Removed: 20,860 $ 209 $ 110,020 $ 272,535 $ ( 12,166 ) $ ( 24,272 ) $ 346,326
−Removed: (In Thousands, except per share amounts)
−Removed: For the three months ended September 30, 2024
−Removed: Balances at June 30, 2024
−Removed: 19,479 195 92,964 272,778 ( 11,276 ) ( 19,715 ) 334,946
−Removed: Comprehensive income:
−Removed: - - - 4,728 - - 4,728
−Removed: Other comprehensive income
−Removed: - - - - - 4,965 4,965
−Removed: Total comprehensive income
−Removed: ESOP shares committed to be released to Plan participants
−Removed: - - 84 - 297 - 381
−Removed: Cash dividend, $ 0.15 per share
−Removed: - - - ( 2,758 ) - - ( 2,758 )
−Removed: Stock compensation activity, net of tax
−Removed: 50 - 634 - - - 634
−Removed: Stock compensation expense
−Removed: - - 105 - - - 105
−Removed: Purchase of common stock returned to authorized but unissued
−Removed: ( 72 ) ( 1 ) ( 998 ) - - - ( 999 )
−Removed: Balances at September 30, 2024
+Added: Balances at March 31, 2025
19,281 $ 193 $ 90,470 $ 277,521 $ ( 10,386 ) $ ( 16,438 ) $ 341,360
3 unchanged sentences
CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(In Thousands)
9 unchanged sentences
Proceeds on sales of loans originated for sale
−Removed: Increase in accrued interest receivable
+Added: (Increase) decrease in accrued interest receivable
Increase in cash surrender value of life insurance
2 unchanged sentences
Decrease in prepaid tax expense
−Removed: Decrease in derivative liabilities
−Removed: Gain on sale of mortgage servicing rights
−Removed: Increase in other assets
+Added: (Decrease) increase in derivative liabilities
+Added: Decrease (increase) in other assets
Increase (decrease) in other liabilities
1 unchanged sentence
Investing activities:
−Removed: Net increase in loans receivable
+Added: Net decrease (increase) in loans receivable
Purchases of:
1 unchanged sentence
Mortgage related securities
−Removed: Bank owned life insurance
Premises and equipment
3 unchanged sentences
Sales of FHLB Stock
−Removed: Proceeds on sales of mortgage servicing rights
−Removed: Death benefit on bank owned life insurance
−Removed: Net cash used in investing activities
+Added: Net cash provided by (used in) investing activities
Financing activities:
7 unchanged sentences
Proceeds from stock option exercises
−Removed: Net cash provided by financing activities
+Added: Net cash (used in) provided by financing activities
Increase in cash and cash equivalents
29 unchanged sentences
The accompanying unaudited consolidated financial statements and related notes should be read in conjunction with the Company’s December 31, 2024 Annual Report on Form 10 -K.
−Removed: Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any other period.
+Added: Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other period.
The preparation of the unaudited consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period.
3 unchanged sentences
The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report on Form 10 -Q were issued.
−Removed: There were no significant subsequent events for the three and nine months ended September 30, 2024 through the issuance date of these unaudited consolidated financial statements that warranted adjustment to or disclosure in the unaudited consolidated financial statements.
+Added: There were no significant subsequent events for the three months ended March 31, 2025 through the issuance date of these unaudited consolidated financial statements that warranted adjustment to or disclosure in the unaudited consolidated financial statements.
Impact of Recent Accounting Pronouncements
−Removed: In December 2023, the FASB issued ASU No.
+Added: The Company adopted ASU No.
2023 - 09, “Income Taxes (Topic 740 ):
1 unchanged sentence
This update is effective for fiscal years beginning after December 15, 2024.
−Removed: The Corporation is assessing the impact of the standard.
+Added: Adoption of ASU No.
+Added: 2023 - 09 did not have a material impact on the Company's consolidated financial statements.
Note 2 — Securities Available for Sale
The amortized cost and fair values of the Company’s investment in securities available for sale follow:
−Removed: September 30, 2024
+Added: March 31, 2025
(In Thousands)
Mortgage-backed securities
−Removed: $ 11,581 $ 6 $ ( 1,259 ) $ 10,328
Collateralized mortgage obligations:
Government sponsored enterprise issued
−Removed: 148,811 441 ( 16,571 ) 132,681
Private-label issued
−Removed: 7,344 - ( 589 ) 6,755
Mortgage-related securities
−Removed: 167,736 447 ( 18,419 ) 149,764
Government sponsored enterprise bonds
−Removed: 2,500 - ( 77 ) 2,423
Municipal securities
−Removed: 49,340 1,236 ( 846 ) 49,730
Other debt securities
−Removed: 12,500 - ( 1,253 ) 11,247
Debt securities
−Removed: 64,340 1,236 ( 2,176 ) 63,400
−Removed: $ 232,076 $ 1,683 $ ( 20,595 ) $ 213,164
December 31, 2024
1 unchanged sentence
Mortgage-backed securities
−Removed: $ 12,651 $ 5 $ ( 1,475 ) $ 11,181
Collateralized mortgage obligations
Government sponsored enterprise issued
−Removed: 152,700 212 ( 19,445 ) 133,467
Private-label issued
−Removed: 8,061 - ( 801 ) 7,260
Mortgage related securities
−Removed: 173,412 217 ( 21,721 ) 151,908
Government sponsored enterprise bonds
−Removed: 2,500 - ( 152 ) 2,348
Municipal securities
−Removed: 39,304 980 ( 796 ) 39,488
Other debt securities
−Removed: 12,500 - ( 1,337 ) 11,163
Debt securities
−Removed: 54,304 980 ( 2,285 ) 52,999
−Removed: $ 227,716 $ 1,197 $ ( 24,006 ) $ 204,907
The Company’s mortgage-backed securities and collateralized mortgage obligations issued by government sponsored enterprises are guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
−Removed: At September 30, 2024 , and December 31, 2023 , $ 119.1 million and $ 128.1 million of the Company’s mortgage related securities were pledged as collateral to secure funding from the Federal Reserve Bank's new borrowing facility.
−Removed: Additionally at September 30, 2024 , $ 130,000 of the Company's mortgage related securities were pledged as collateral to secure mortgage banking related activities.
−Removed: At December 31, 2023 , $ 183,000 of the Company's mortgage related securities were pledged as collateral to secure mortgage banking related activities.
−Removed: The amortized cost and fair values of investment securities by contractual maturity at September 30, 2024 are shown below.
+Added: At March 31, 2025 , $ 98,000 of the Company's mortgage related securities were pledged as collateral to secure mortgage banking related activities.
+Added: At December 31, 2024 , $ 114,000 of the Company's mortgage related securities were pledged as collateral to secure mortgage banking related activities and $ 128.1 million of the Company's mortgage related securities were pledged as collateral to secure funding from the Federal Reserve Bank's borrowing facility.
+Added: The amortized cost and fair values of investment securities by contractual maturity at March 31, 2025 are shown below.
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
2 unchanged sentences
Due within one year
−Removed: $ 7,699 $ 7,612
Due after one year through five years
Due after five years through ten years
−Removed: 27,828 27,055
Due after ten years
−Removed: 22,758 22,494
Mortgage-related securities
−Removed: 167,736 149,764
−Removed: $ 232,076 $ 213,164
Gross unrealized losses on securities available for sale and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:
−Removed: September 30, 2024
+Added: March 31, 2025
Less than 12 months
2 unchanged sentences
Mortgage-backed securities
−Removed: $ - $ - $ 9,879 $ 1,259 $ 9,879 $ 1,259
Collateralized mortgage obligations:
Government sponsored enterprise issued
−Removed: 3,326 9 101,959 16,562 105,285 16,571
Private-label issued
−Removed: - - 5,789 589 5,789 589
Government sponsored enterprise bonds
−Removed: - - 2,423 77 2,423 77
Municipal securities
−Removed: 1,497 3 5,604 843 7,101 846
Other debt securities
−Removed: - - 11,247 1,253 11,247 1,253
−Removed: $ 4,823 $ 12 $ 136,901 $ 20,583 $ 141,724 $ 20,595
December 31, 2024
3 unchanged sentences
Mortgage-backed securities
−Removed: $ 215 $ 1 $ 10,682 $ 1,474 $ 10,897 $ 1,475
Collateralized mortgage obligations:
Government sponsored enterprise issued
−Removed: 2,442 42 110,271 19,403 112,713 19,445
Private-label issued
−Removed: - - 6,250 801 6,250 801
Government sponsored enterprise bonds
−Removed: - - 2,348 152 2,348 152
Municipal securities
−Removed: 7,597 36 5,808 760 13,405 796
Other debt securities
−Removed: - - 11,163 1,337 11,163 1,337
−Removed: $ 10,254 $ 79 $ 146,522 $ 23,927 $ 156,776 $ 24,006
The Company reviews the investment securities portfolio on a quarterly basis to monitor securities in unrealized loss positions, which were comprised of 163 individual securities, to determine whether the impairment is due to credit-related factors or noncredit-related factors.
In making this evaluation, management considers the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.
−Removed: As of September 30, 2024 and December 31, 2023 , no allowance for credit losses on securities was recognized.
+Added: As of March 31, 2025 and December 31, 2024 , no allowance for credit losses on securities was recognized.
The Company does not consider its securities with unrealized losses to be attributable to credit-related factors, as the unrealized losses in each category have occurred as a result of changes in noncredit-related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration.
Furthermore, the Company does not have the intent to sell any of these securities and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost.
−Removed: During the three and nine months ended September 30, 2024 and September 30, 2023 , there were no sales of securities.
+Added: During the three months ended March 31, 2025 and March 31, 2024 , there were no sales of securities.
Note 3 - Loans Receivable
−Removed: Loans receivable at September 30, 2024 and December 31, 2023 are summarized as follows:
−Removed: September 30, 2024
+Added: Loans receivable at March 31, 2025 and December 31, 2024 are summarized as follows:
+Added: March 31, 2025
December 31, 2024
17 unchanged sentences
While the real estate collateralizing these loans is primarily residential in nature, it ranges from owner-occupied single family homes to large apartment complexes.
−Removed: Qualifying loans receivable totaling $ 1.24 billion and $ 1.25 billion at September 30, 2024 and December 31, 2023 , respectively, were pledged as collateral against $ 423.0 million and $ 464.0 million in outstanding Federal Home Loan Bank of Chicago ("FHLB") advances under a blanket security agreement at September 30, 2024 and December 31, 2023 .
−Removed: Certain of the Company's executive officers, directors, employees, and their related interests have loans with the Bank.
−Removed: These loans to related parties are summarized below:
−Removed: Nine months ended
−Removed: September 30, 2024
−Removed: September 30, 2023
−Removed: (In Thousands)
−Removed: Balance at beginning of period
−Removed: $ 3,319 $ 2,847
−Removed: ( 505 ) ( 137 )
−Removed: Balance at end of period
−Removed: $ 3,091 $ 3,168
−Removed: None of these loans were past due or considered impaired as of September 30, 2024 or December 31, 2023 .
−Removed: An analysis of past due loans receivable as of September 30, 2024 and December 31, 2023 follows:
−Removed: As of September 30, 2024
+Added: Qualifying loans receivable totaling $ 1.25 billion and $ 1.23 billion at March 31, 2025 and December 31, 2024 , respectively, were pledged as collateral against $ 384.1 million and $ 443.6 million in outstanding Federal Home Loan Bank of Chicago ("FHLB") advances under a blanket security agreement at March 31, 2025 and December 31, 2024 .
+Added: An analysis of past due loans receivable as of March 31, 2025 and December 31, 2024 follows:
+Added: As of March 31, 2025
1-59 Days Past Due (1) 60-89 Days Past Due (2) 90 Days or Greater Total Past Due Current (3)
31 unchanged sentences
$ 9,732 $ 1,405 $ 3,985 $ 15,122 $ 1,665,454 $ 1,680,576
−Removed: ( 1 ) Includes $ 1.1 million and $ 193,000 at September 30, 2024 and December 31, 2023 , respectively, which are on non-accrual status.
−Removed: ( 2 ) Includes $ 4,000 and $ 11,000 at September 30, 2024 and December 31, 2023 , respectively, which are on non-accrual status.
−Removed: ( 3 ) Includes $ 150,000 and $ 171,000 at September 30, 2024 and December 31, 2023 , respectively, which are on non-accrual status.
−Removed: The following tables present the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2024 and the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2023 :
−Removed: One- to Four-Family
−Removed: Land and Construction
−Removed: Commercial Real Estate
−Removed: (In Thousands)
−Removed: Nine months ended September 30, 2024
−Removed: Balance at beginning of period
−Removed: $ 6,886 $ 7,318 $ 211 $ 983 $ 2,561 $ 56 $ 534 $ 18,549
−Removed: Provision (credit) for credit losses - loans
−Removed: ( 1,661 ) ( 243 ) ( 12 ) 271 1,204 43 ( 41 ) ( 439 )
−Removed: ( 3 ) - - - - ( 26 ) - ( 29 )
−Removed: 104 8 - 2 3 - - 117
−Removed: Balance at end of period
−Removed: $ 5,326 $ 7,083 $ 199 $ 1,256 $ 3,768 $ 73 $ 493 $ 18,198
−Removed: Nine months ended September 30, 2023
−Removed: Balance at beginning of period
−Removed: $ 4,743 $ 7,975 $ 174 $ 1,352 $ 3,199 $ 47 $ 267 $ 17,757
−Removed: Provision (credit) for credit losses - loans
−Removed: 1,412 ( 248 ) 7 ( 189 ) ( 458 ) 36 269 829
−Removed: ( 63 ) - - - - ( 29 ) - ( 92 )
−Removed: 46 5 4 2 2 - - 59
−Removed: Balance at end of period
−Removed: $ 6,138 $ 7,732 $ 185 $ 1,165 $ 2,743 $ 54 $ 536 $ 18,553
+Added: ( 1 ) Includes $ 221,000 and $ 522,000 at March 31, 2025 and December 31, 2024 , respectively, which are on non-accrual status.
+Added: ( 2 ) Includes $ - and $ 1.1 million March 31, 2025 and December 31, 2024 , respectively, which are on non-accrual status.
+Added: ( 3 ) Includes $ 1.1 million and $ 28,000 at March 31, 2025 and December 31, 2024 , respectively, which are on non-accrual status.
+Added: The following tables present the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2025 and the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2024 :
One to-Four- Family
2 unchanged sentences
(In Thousands)
−Removed: Three months ended September 30, 2024
+Added: Three months ended March 31, 2025
Balance at beginning of period
6 unchanged sentences
$ 4,979 $ 6,938 $ 193 $ 1,042 $ 4,173 $ 77 $ 503 $ 17,905
−Removed: Three months ended September 30, 2023
+Added: Three months ended March 31, 2024
Balance at beginning of period
41 unchanged sentences
This reserve is maintained at a level that management believes is sufficient to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans.
−Removed: The allowance for unfunded commitments at September 30, 2024 and December 31, 2023 was $ 972,000 and $ 1.1 million.
+Added: The allowance for unfunded commitments were $ 1.0 million and $ 1.2 million at March 31, 2025 and December 31, 2024 , respectively.
Provision for Credit Losses :
3 unchanged sentences
Three months ended
−Removed: Nine months ended
−Removed: September 30, 2024
−Removed: September 30, 2023
−Removed: September 30, 2024
−Removed: September 30, 2023
+Added: March 31, 2025
+Added: March 31, 2024
(In Thousands)
2 unchanged sentences
Unfunded commitments
−Removed: ( 84 ) 239 ( 96 ) 262
Investment securities
4 unchanged sentences
The following tables present collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation.
−Removed: The following tables present collateral dependent loans by portfolio segment as of September 30, 2024 and December 31, 2023 :
+Added: The following tables present collateral dependent loans by portfolio segment as of March 31, 2025 and December 31, 2024 :
+Added: March 31, 2025
+Added: December 31, 2024
+Added: (In Thousands)
+Added: Collateral dependent loans
+Added: Residential real estate:
One- to four-family
1 unchanged sentence
Commercial real estate
−Removed: (In Thousands)
−Removed: Allowance related to collateral dependent loans
−Removed: $ - $ - $ - $ - $ - $ - $ - $ -
−Removed: Allowance related to pooled loans
−Removed: 5,326 7,083 199 1,256 3,768 73 493 18,198
−Removed: Allowance at end of period
−Removed: $ 5,326 $ 7,083 $ 199 $ 1,256 $ 3,768 $ 73 $ 493 $ 18,198
−Removed: Collateral dependent loans
−Removed: $ 2,270 $ - $ 152 $ - $ 5,333 $ - $ 1,685 $ 9,440
−Removed: 531,731 723,238 13,275 75,403 308,620 897 32,799 1,685,963
−Removed: Total gross loans
−Removed: $ 534,001 $ 723,238 $ 13,427 $ 75,403 $ 313,953 $ 897 $ 34,484 $ 1,695,403
−Removed: One- to Four- Family Multi-Family
−Removed: Construction and Land Commercial Real Estate Consumer
−Removed: (In Thousands)
−Removed: Allowance related to collateral dependent loans
−Removed: $ - $ - $ - $ - $ - $ - $ - $ -
−Removed: Allowance related to pooled loans
−Removed: 6,886 7,318 211 983 2,561 56 534 18,549
−Removed: Allowance at end of period
−Removed: $ 6,886 $ 7,318 $ 211 $ 983 $ 2,561 $ 56 $ 534 $ 18,549
−Removed: Collateral dependent loans
−Removed: $ 2,209 $ - $ 90 $ - $ 5,493 $ - $ 1,536 $ 9,328
−Removed: 548,981 707,566 13,138 53,371 295,399 848 35,584 1,654,887
−Removed: Total gross loans
+Added: Commercial loans
+Added: Total loans receivable
17,454 10,093
22 unchanged sentences
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.
−Removed: The following table presents information relating to the Company’s internal risk ratings of its loans receivable as of September 30, 2024 and December 31, 2023 :
+Added: The following table presents information relating to the Company’s internal risk ratings of its loans receivable as of March 31, 2025 and December 31, 2024 :
One to Four-Family
2 unchanged sentences
(In Thousands)
−Removed: At September 30, 2024
+Added: At March 31, 2025
$ 7,150 $ - $ 148 $ - $ 11,901 $ - $ 1,731 $ 20,930
8 unchanged sentences
Credit Quality Information:
−Removed: The following table presents total loans by risk categories and year of origination as of September 30, 2024 :
+Added: The following table presents total loans by risk categories and year of origination as of March 31, 2025 :
(In Thousands)
67 unchanged sentences
$ 223,353 $ 422,359 $ 399,336 $ 235,390 $ 169,655 $ 210,260 $ 20,220 $ 1,680,576
−Removed: The following presents data on restructurings of financing receivables whose borrowers are experiencing financial difficulty:
−Removed: As of September 30, 2024
−Removed: (Dollars in Thousands)
−Removed: One- to four-family
−Removed: $ - - $ 523 1 $ 523 1
−Removed: $ - - $ 523 1 $ 523 1
−Removed: The following presents data on troubled debt restructurings:
−Removed: As of December 31, 2023
−Removed: (Dollars in Thousands)
−Removed: One- to four-family
−Removed: $ - - $ 543 2 $ 543 2
−Removed: $ - - $ 543 2 $ 543 2
−Removed: The following presents restructurings of financing receivables whose borrowers are experiencing financial difficulty by concession type:
−Removed: As of September 30, 2024
−Removed: Performing in accordance with modified terms
−Removed: (Dollars in Thousands)
−Removed: Principal forbearance
−Removed: $ 523 1 $ - - $ 523 1
−Removed: $ 523 1 $ - - $ 523 1
−Removed: The following presents troubled debt restructurings by concession type:
−Removed: As of December 31, 2023
−Removed: Performing in accordance with modified terms
−Removed: (Dollars in Thousands)
−Removed: Interest reduction
−Removed: $ 15 1 $ - - $ 15 1
−Removed: Principal forbearance
−Removed: 528 1 - - 528 1
−Removed: $ 543 2 $ - - $ 543 2
−Removed: There were no restructurings of financing receivables whose borrowers are experiencing financial difficulty during the three or nine months ended September 30, 2024 .
−Removed: There were no loans modified as troubled debt restructurings during the three or nine months ended September 30, 2023 .
−Removed: There were no restructurings of financing receivables whose borrowers are experiencing financial difficulty within the past twelve months of which there was a default during the three or nine months ended September 30, 2024 or September 30, 2023 .
−Removed: The following table presents data on non-accrual loans as of September 30, 2024 and December 31, 2023 :
−Removed: September 30, 2024
+Added: There were no borrowers are experiencing financial difficulty as of March 31, 2025 and December 31, 2024 .
+Added: There were no restructuring of financing receivables whose borrowers are experiencing financial difficulty during the three months ended March 31, 2025 or March 31, 2024 .
+Added: There were no restructurings of financing receivables whose borrowers are experiencing financial difficulty within the past twelve months of which there was a default during the three months ended March 31, 2025 or March 31, 2024 .
+Added: The following table presents data on non-accrual loans as of March 31, 2025 and December 31, 2024 :
+Added: March 31, 2025
December 31, 2024
11 unchanged sentences
0.34 % 0.26 %
−Removed: Residential one - to four -family mortgage loans that were in the process of foreclosure were $ 604,000 and $ 250,000 at September 30, 2024 and December 31, 2023 , respectively.
+Added: Residential one - to four -family mortgage loans that were in the process of foreclosure were $ 1.4 million and $ 1.9 million at March 31, 2025 and December 31, 2024 , respectively.
Note 4 — Mortgage Servicing Rights
The following table presents the activity in the Company’s mortgage servicing rights:
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(In Thousands)
2 unchanged sentences
( 43 ) ( 170 )
−Removed: ( 1,958 ) ( 2,767 )
Mortgage servicing rights at end of the period
−Removed: Valuation allowance recovered during the period
+Added: Valuation allowance (recorded) recovered during the period
Mortgage servicing rights at end of the period, net
$ 825 $ 2,161
−Removed: During the nine months ended September 30, 2024 , $ 1.66 billion in residential loans were originated for sale on a consolidated basis generating mortgage banking income of $ 66.2 million.
−Removed: During the same period in the prior year, sales of loans held for sale totaled $ 1.58 billion, generating mortgage banking income of $ 59.9 million.
−Removed: The unpaid principal balance of loans serviced for others was $ 67.0 million and $ 238.7 million at September 30, 2024 and December 31, 2023 , respectively.
+Added: The unpaid principal balance of loans serviced for others was $ 94.8 million and $ 83.4 million at March 31, 2025 and December 31, 2024 , respectively.
These loans are not reflected in the consolidated statements of financial condition.
−Removed: The fair value of mortgage servicing rights was $ 499,000 at September 30, 2024 and $ 2.2 million at December 31, 2023 , respectively.
−Removed: During the three months ended September 30, 2024 , there were no sales of mortgage servicing rights.
−Removed: During the nine months ended September 30, 2024 , the Company sold mortgage servicing rights related to $ 233.0 million in loans receivable with a book value of $ 2.0 million for $ 2.1 million resulting in a gain on sale of $ 152,000 .
−Removed: During the three months ended September 30, 2023 , there were no sales of mortgage servicing rights.
−Removed: During the nine months ended September 30, 2023 , the Company sold mortgage servicing rights related to $ 318.4 million of loans serviced for others with a book value of $ 2.9 million for $3.5 million resulting in a gain on sale of $583,000 .
+Added: The fair value of mortgage servicing rights was $ 894,000 at March 31, 2025 and $ 807,000 at December 31, 2024 , respectively.
+Added: During the three months ended March 31, 2025 and March 31, 2024 , there were no sales of mortgage servicing rights.
The following table shows the estimated future amortization expense for mortgage servicing rights for the periods indicated:
2 unchanged sentences
Note 5 — Deposits
−Removed: At September 30, 2024 and December 31, 2023 , the aggregate balance of uninsured time deposits of $250,000 or more was $ 160.5 million and $ 131.4 million, respectively.
+Added: At March 31, 2025 and December 31, 2024 , the aggregate balance of uninsured time deposits of $250,000 or more was $ 173.7 million and $ 167.3 million, respectively.
The Company does not have uninsured deposits less than $250,000 in aggregate balance.
−Removed: A summary of the contractual maturities of time deposits at September 30, 2024 is as follows:
+Added: A summary of the contractual maturities of time deposits at March 31, 2025 is as follows:
(In Thousands)
5 unchanged sentences
Certain directors and executive officers, including their immediate families and companies in which they are principal owners, are depositors of the Bank.
−Removed: Such deposits amounted to $ 13.4 million and $ 9.0 million at September 30, 2024 and December 31, 2023 , respectively.
+Added: Such deposits amounted to $ 21.2 million and $ 11.3 million at March 31, 2025 and December 31, 2024 , respectively.
Note 6 — Borrowings
Borrowings consist of the following:
−Removed: September 30, 2024
−Removed: Callable/Putable
−Removed: (Dollars in Millions)
−Removed: FHLB advances
−Removed: $ 10,000 August 2, 2027
−Removed: August 1, 2024
−Removed: 10,000 August 5, 2027
−Removed: August 5, 2024
−Removed: 50,000 December 14, 2027
−Removed: December 14, 2017
−Removed: 10,000 May 15, 2029
−Removed: 10,000 June 4, 2029
−Removed: 10,000 June 5, 2029
−Removed: 10,000 June 14, 2029 3.43 % Fixed
−Removed: Putable June 14, 2024 Monthly
−Removed: 10,000 June 18, 2029 3.47 % Fixed
−Removed: Putable June 18, 2024 Monthly
−Removed: 10,000 July 9, 2029 3.40 % Fixed
−Removed: Putable July 8, 2024 Monthly
−Removed: 10,000 July 12, 2029 3.35 % Fixed
−Removed: Putable July 12, 2024 Monthly
−Removed: 10,000 August 2, 2029 2.89 % Fixed
−Removed: Putable August 2, 2024 Monthly
−Removed: 10,000 September 6, 2034 2.32 % Fixed
−Removed: Putable September 6, 2024 Monthly
−Removed: Total FHLB long-term advances
−Removed: 160,000 2.82 %
−Removed: 40,000 October 1, 2024
−Removed: 15,000 October 3, 2024
−Removed: 12,900 October 3, 2024
−Removed: 4,400 October 3, 2024
−Removed: 29,000 October 7, 2024
−Removed: 22,000 October 15, 2024
−Removed: 14,500 October 15, 2024
−Removed: 4,400 October 15, 2024
−Removed: 23,700 October 15, 2024
−Removed: 10,800 October 15, 2024
−Removed: 14,800 October 21, 2024
−Removed: 2,700 October 21, 2024
−Removed: 11,400 October 21, 2024 4.84 % Fixed
−Removed: 6,800 October 28, 2024 4.83 % Fixed
−Removed: 7,100 October 28, 2024 4.83 % Fixed
−Removed: 23,500 December 27, 2024 4.79 % Fixed
−Removed: 20,000 January 29, 2025 4.74 % Fixed
−Removed: Total FHLB short-term advances
−Removed: 263,000 5.02 %
−Removed: Total FHLB advances
−Removed: 423,000 4.19 %
−Removed: Short-Term Borrowings
−Removed: Federal reserve bank
−Removed: $ 136,300 January 16, 2025
−Removed: Total federal reserve bank
−Removed: $ 136,300 4.76 %
−Removed: Repurchase agreements
−Removed: $ 827 N/A 7.85 % Variable
−Removed: Total short-term borrowings
−Removed: $ 137,127 4.78 %
−Removed: Total borrowings
−Removed: $ 560,127 4.33 %
+Added: March 31, 2025
December 31, 2024
−Removed: Callable/Putable
+Added: Weighted Average Rate
+Added: Weighted Average Rate
(Dollars in Thousands)
FHLB advances
−Removed: $ 50,000 December 14, 2027 1.73 % Fixed
−Removed: Putable December 14, 2019 Single
−Removed: 10,000 August 7, 2028 3.51 % Fixed
−Removed: Putable December 7, 2023 Quarterly
−Removed: 10,000 August 8, 2028 3.52 % Fixed
−Removed: Putable December 8, 2023 Quarterly
−Removed: 10,000 October 10, 2028
−Removed: November 10, 2023
−Removed: 10,000 October 10, 2028
−Removed: November 10, 2023
−Removed: 10,000 November 3, 2028
−Removed: December 4, 2023
−Removed: 10,000 November 6, 2028
−Removed: December 6, 2023
−Removed: 15,000 November 14, 2028
−Removed: December 14, 2023
−Removed: 10,000 November 29, 2028 3.38 % Fixed
−Removed: Putable December 29, 2023 Quarterly
−Removed: 10,000 November 29, 2028 3.43 % Fixed
−Removed: Putable January 29, 2024 Quarterly
−Removed: 10,000 December 4, 2028
−Removed: January 4, 2023
−Removed: Total FHLB long-term advances
−Removed: 155,000 2.89 %
−Removed: 60,000 January 2, 2024 5.44 % Fixed
−Removed: 20,000 January 2, 2024 5.45 % Fixed
−Removed: 20,000 January 5, 2024 5.48 % Fixed
−Removed: 20,500 January 8, 2024
−Removed: 18,000 January 8, 2024
−Removed: 14,000 January 16, 2024
−Removed: 21,000 January 22, 2024
−Removed: 33,000 January 29, 2024
−Removed: 27,500 February 20, 2024
−Removed: 27,000 February 27, 2024 5.42 % Fixed
−Removed: 24,500 March 13, 2024 5.39 % Fixed
−Removed: 23,500 December 29, 2024
−Removed: Total FHLB short-term advances
−Removed: 309,000 5.37 %
+Added: FHLB short-term advances
+Added: FHLB long-term advances maturing 2027
+Added: FHLB long-term advances maturing 2028
+Added: FHLB long-term advances maturing 2029
+Added: FHLB long-term advances maturing 2030
Total FHLB advances
−Removed: 464,000 4.54 %
−Removed: Short-Term Borrowings
−Removed: Federal reserve bank
−Removed: $ 145,000 December 31, 2024 4.83 % Fixed
−Removed: Total Federal reserve bank
−Removed: $ 145,000 4.83 %
Repurchase agreements
−Removed: $ 2,054 N/A 8.20 % Variable
−Removed: Total short-term borrowings
−Removed: $ 147,054 4.88 %
Total borrowings
−Removed: $ 611,054 4.62 %
−Removed: The short-term repurchase agreement represents the outstanding portion of a total $ 50.0 million commitment with one unrelated banks as of September 30, 2024 .
+Added: The short-term repurchase agreement represents the outstanding portion of a total $ 50.0 million commitment with one unrelated bank as of March 31, 2025 .
The short-term repurchase agreement is utilized by Waterstone Mortgage Corporation to finance loans originated for sale.
1 unchanged sentence
Related interest rates are based upon the note rate associated with the loans being financed.
−Removed: The short-term repurchase agreement had a $ 827,000 balance at September 30, 2024 and a $ 2.1 million balance at December 31, 2023 .
+Added: The short-term repurchase agreement had a $ 11.7 million balance at March 31, 2025 and a $ 3.0 million balance at December 31, 2024 .
+Added: The $ 194.1 million in FHLB short-term advances as of March 31,2025 have fixed rates.
+Added: The $ 190.0 million in FHLB long-term advances as of March 31, 2025 have fixed rates.
+Added: A total of $ 140.0 million in FHLB long-term advances have FHLB call options available.
The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities.
6 unchanged sentences
Under the master netting agreement, the Company is entitled to set off the collateral placed with a single counterparty against obligations owed to that counterparty.
−Removed: The Federal Reserve Bank (“FRB”) created a new borrowing facility called the Bank Term Funding Program.
−Removed: This program allows a bank to borrow against its investment portfolio, at par value, with no reduction for unrealized losses.
−Removed: The term is for one year and interest rate is fixed at the time the advance is taken and there is no prepayment penalty.
−Removed: Allowable investments for pledge are those the FRB can own.
−Removed: This would include all of the Company’s investment securities except municipal securities, private label bonds, and corporate bonds.
−Removed: At September 30, 2024 , the Company had fully utilized its borrowing capacity under this program.
−Removed: The program does not allow for additional funding capacity after March 11, 2024.
−Removed: At September 30, 2024 , the Company had approximately $ 362.5 million in unused borrowing capacity at the FHLB.
+Added: At March 31, 2025 , the Company had approximately $ 377.2 million in unused borrowing capacity at the FHLB.
The Company selects loans that meet underwriting criteria established by the FHLB as collateral for outstanding advances.
The Company’s borrowings from the FHLB are limited to 76 % of the carrying value of unencumbered one - to four -family mortgage loans, 73 % of the carrying value of multi-family loans and 62 % of the carrying value of home equity loans.
−Removed: In addition, these advances were collateralized by FHLB stock of $ 21.7 million at September 30, 2024 and $ 20.9 million at December 31, 2023 , respectively.
+Added: In addition, these advances were collateralized by FHLB stock of $ 18.4 million at March 31, 2025 and $ 20.3 million at December 31, 2024 , respectively.
In the event of prepayment, the Company is obligated to pay all remaining contractual interest on the advance.
18 unchanged sentences
The minimum capital conservation buffer is 2.5%.
−Removed: As of September 30, 2024 , the Bank was considered well-capitalized, with all capital ratios exceeding the well-capitalized requirement.
+Added: As of March 31, 2025 , the Bank was considered well-capitalized, with all capital ratios exceeding the well-capitalized requirement.
There are no conditions or events that management believes have changed the Bank’s prompt corrective action capitalization category.
The Bank is subject to regulatory restrictions on the amount of dividends it may declare and pay to the Company without prior regulatory approval, and to regulatory notification requirements for dividends that do not require prior regulatory approval.
−Removed: The actual and required capital amounts and ratios for the Bank as of September 30, 2024 and December 31, 2023 are presented in the tables below:
−Removed: September 30, 2024
+Added: The actual and required capital amounts and ratios for the Bank as of March 31, 2025 and December 31, 2024 are presented in the tables below:
+Added: March 31, 2025
For Capital Adequacy Purposes
58 unchanged sentences
The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.
−Removed: September 30, 2024
+Added: March 31, 2025
December 31, 2024
22 unchanged sentences
The Company holds mortgages on the underlying real estate as collateral supporting those commitments for which collateral is deemed necessary.
−Removed: The Company has determined that there are no probable losses related to commitments to extend credit or the standby letters of credit as of September 30, 2024 and December 31, 2023 .
+Added: The Company has determined that there are no probable losses related to commitments to extend credit or the standby letters of credit as of March 31, 2025 and December 31, 2024 .
Please see Note 3 - Loans Receivable for discussion on the allowance for credit losses - unfunded commitments.
6 unchanged sentences
Given that the underlying loans delivered to buyers are predominantly conventional first lien mortgages, historical experience has resulted in insignificant losses and repurchase activity.
−Removed: The Company's reserve for losses related to these recourse provisions totaled $ 1.9 million as of September 30, 2024 and $ 2.1 million as of December 31, 2023 .
+Added: The Company's reserve for losses related to these recourse provisions totaled $ 1.2 million as of March 31, 2025 and $ 1.3 million as of December 31, 2024 .
In the normal course of business, the Company, or its subsidiaries, are involved in various legal proceedings.
In the opinion of management, any liability resulting from pending proceedings would not be expected to have a material adverse effect on the Company's consolidated financial statements.
+Added: During the three months ended March 31, 2025, the Company finalized a legal settlement.
+Added: In relation to this matter, the Company had an accrued legal liability balance of $ 1.7 million and $ 1.3 million included within accrued liabilities on the consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively.
Note 9 – Derivative Financial Instruments
28 unchanged sentences
The following tables presents the outstanding notional balances and fair values of outstanding derivative instruments:
−Removed: September 30, 2024
+Added: March 31, 2025
Derivatives not designated as Hedging Instruments
39 unchanged sentences
Commercial borrower swaps are completed independently with each borrower and are not subject to master netting arrangements.
−Removed: As of September 30, 2024 and December 31, 2023 , no back-to-back swaps were in default.
+Added: As of March 31, 2025 and December 31, 2024 , no back-to-back swaps were in default.
The Company pays fixed rates and receives floating rates based upon LIBOR on the swaps with dealer counterparties.
Dealer counterparty swaps are subject to master netting agreements among the contracts within our Bank.
−Removed: No right of offset existed with dealer counterparty swaps as of September 30, 2024 and December 31, 2023 .
+Added: No right of offset existed with dealer counterparty swaps as of March 31, 2025 and December 31, 2024 .
All changes in the fair value of these instruments are recorded in other non-interest income.
−Removed: The Company pledged no cash at September 30, 2024 and at December 31, 2023 .
+Added: The Company pledged no cash at March 31, 2025 and at December 31, 2024 .
Note 10 – Earnings Per Share
2 unchanged sentences
Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding adjusted for the dilutive effect of all potential common shares.
−Removed: There were 183,000 and 199,000 antidilutive shares of common stock for the three months ended September 30, 2024 and 2023 , respectively.
−Removed: There were 206,000 and 162,000 antidilutive shares of common stock for the nine months ended September 30, 2024 and 2023 , respectively.
+Added: There were 222,000 and 508,000 antidilutive shares of common stock for the three months ended March 31, 2025 and 2024 , respectively.
Presented below are the calculations for basic and diluted earnings per share:
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(In Thousands, except per share amounts)
−Removed: $ 4,728 $ 3,253 $ 13,478 $ 9,415
Weighted average shares outstanding
−Removed: 18,350 19,998 18,631 20,420
Effect of dilutive potential common shares
Diluted weighted average shares outstanding
−Removed: $ 18,445 $ 20,022 $ 18,677 $ 20,473
Basic earnings per share
−Removed: $ 0.26 $ 0.16 $ 0.72 $ 0.46
Diluted earnings per share
−Removed: $ 0.26 $ 0.16 $ 0.72 $ 0.46
Note 11 – Fair Value Measurements
10 unchanged sentences
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
−Removed: The following table presents information about our assets recorded in the consolidated statements of financial condition at their fair value on a recurring basis as of September 30, 2024 and December 31, 2023 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.
+Added: The following table presents information about our assets recorded in the consolidated statements of financial condition at their fair value on a recurring basis as of March 31, 2025 and December 31, 2024 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.
Fair Value Measurements Using
−Removed: September 30, 2024
+Added: March 31, 2025
(In Thousands)
75 unchanged sentences
The table below presents reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 ) during 2025 and 2024 .
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
−Removed: (In Thousands)
+Added: Three months ended March 31,
(In Thousands)
7 unchanged sentences
Assets Recorded at Fair Value on a Non-recurring Basis
−Removed: The following tables present information about assets recorded in the consolidated statements of financial condition at their fair value on a non-recurring basis as of September 30, 2024 and December 31, 2023 , and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.
+Added: The following tables present information about assets recorded in the consolidated statements of financial condition at their fair value on a non-recurring basis as of March 31, 2025 and December 31, 2024 , and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.
Fair Value Measurements Using
−Removed: September 30, 2024
+Added: March 31, 2025
(In Thousands)
1 unchanged sentence
$ 135 $ - $ - $ 135
−Removed: Impaired mortgage servicing rights
Fair Value Measurements Using
3 unchanged sentences
$ 505 $ - $ - $ 505
−Removed: Impaired mortgage servicing rights
−Removed: 1,063 - - 1,063
Real estate owned – On a non-recurring basis, real estate owned is recorded in the consolidated statements of financial condition at the lower of cost or fair value.
8 unchanged sentences
The Company records the mortgage servicing rights at the lower of amortized cost or fair value.
−Removed: For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2024 and December 31, 2023 , the significant unobservable inputs used in the fair value measurements were as follows:
+Added: For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2025 and December 31, 2024 , the significant unobservable inputs used in the fair value measurements were as follows:
Significant Unobservable Input Value
Fair Value at Significant
−Removed: September 30,
(Dollars in Thousands)
23 unchanged sentences
32.4 % 96.9 % 79.6 %
−Removed: Mortgage servicing rights
−Removed: 1,063 Pricing models
−Removed: Prepayment rate
−Removed: 6.7 % 23.9 % 14.6 %
−Removed: Discount rate
−Removed: 10.0 % 15.5 % 11.2 %
−Removed: Cost to service
−Removed: $ 77 $ 471 $ 107
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
6 unchanged sentences
The carrying amounts and fair values of the Company’s financial instruments consist of the following:
−Removed: September 30, 2024
+Added: March 31, 2025
December 31, 2024
38 unchanged sentences
Fair values for the Company’s commitments to extend credit and standby letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the counterparty’s credit standing, and discounted cash flow analyses.
−Removed: The fair value of the Company’s commitments to extend credit was not material at September 30, 2024 and December 31, 2023 .
+Added: The fair value of the Company’s commitments to extend credit was not material at March 31, 2025 and December 31, 2024 .
Note 12 – Segment Reporting
−Removed: Selected financial and descriptive information is required to be provided about reportable operating segments, considering a "management approach" concept as the basis for identifying reportable segments.
−Removed: The management approach is based on the way that management organizes the segments within the enterprise for making operating decisions, allocating resources, and assessing performance.
−Removed: Consequently, the segments are evident from the structure of the enterprise's internal organization, focusing on financial information that an enterprise's chief operating decision-makers use to make decisions about the enterprise's operating matters.
The Company has determined that it has two reportable segments:
15 unchanged sentences
Mortgage banking products and services are provided by offices in 25 states with the ability to lend in 48 states.
+Added: The Company’s chief executive officer has been identified as the chief operating decision maker (“CODM”).
+Added: Selected financial and descriptive information is reported to the CODM.
+Added: The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
+Added: The CODM uses the Community Banking and Mortgage Banking segment's net interest income, non-interest income, non-interest expense, and pre-tax income for making operating decisions, allocating resources (including employees, financial, or capital resources), and assessing performance.
+Added: Based on the reviews of these two segments and other company-wide initiatives, the CODM is informed about allocation of resources to the Holding Company and Other segment.
Presented below is the segment information:
−Removed: As of or for the three months ended September 30, 2024
+Added: As of or for the three months ended March 31, 2025
(In Thousands)
−Removed: Net interest income (expense)
+Added: Net interest income
$ 12,403 $ 152 $ 21 $ 12,576
1 unchanged sentence
( 518 ) ( 40 ) - ( 558 )
−Removed: Net interest income (expense) after provision (credit) for credit losses
+Added: Net interest income after provision (credit) for credit losses
12,921 192 21 13,134
10 unchanged sentences
Communications
−Removed: Professional fees
100 135 - 235
−Removed: Real estate owned
−Removed: Loan processing expense
−Removed: 602 1,261 102 1,965
−Removed: Total noninterest expenses
−Removed: 8,133 20,557 ( 130 ) 28,560
−Removed: Income before income tax expense
−Removed: 5,646 144 96 5,886
−Removed: Income tax expense
−Removed: 941 194 23 1,158
−Removed: Net income (loss)
−Removed: $ 4,705 $ ( 50 ) $ 73 $ 4,728
−Removed: $ 2,472,126 $ 193,726 $ ( 421,516 ) $ 2,244,336
−Removed: As of or for the three months ended September 30, 2023
−Removed: (In Thousands)
−Removed: Net interest income (expense)
−Removed: $ 12,431 $ ( 550 ) $ 108 $ 11,989
−Removed: Provision for credit losses
−Removed: Net interest income (expense) after provision for credit losses
−Removed: 11,986 ( 550 ) 108 11,544
−Removed: Noninterest income:
−Removed: 966 21,452 ( 188 ) 22,230
−Removed: Noninterest expenses:
−Removed: Compensation, payroll taxes, and other employee benefits
−Removed: 4,618 17,186 ( 216 ) 21,588
−Removed: Occupancy, office furniture and equipment
−Removed: 852 1,141 - 1,993
−Removed: 200 716 - 916
−Removed: Data processing
−Removed: 672 551 6 1,229
−Removed: Communications
Professional fees
1 unchanged sentence
Real estate owned
+Added: ( 10 ) - - ( 10 )
Loan processing expense
9 unchanged sentences
$ 2,396,042 $ 155,056 $ ( 375,731 ) $ 2,175,367
−Removed: As of or for the nine months ended September 30, 2024
+Added: As of or for the three months ended March 31, 2024
(In Thousands)
16 unchanged sentences
Communications
−Removed: 217 481 - 698
Professional fees
11 unchanged sentences
$ 2,640 $ 298 $ 100 $ 3,038
−Removed: As of or for the nine months ended September 30, 2023
−Removed: (In Thousands)
−Removed: Net interest income (loss)
$ 2,197,708 $ 210,784 $ ( 173,768 ) $ 2,234,724
−Removed: Provision for credit losses
−Removed: 991 100 - 1,091
−Removed: Net interest income (loss) after provision for credit losses
−Removed: 38,686 ( 1,554 ) 236 37,368
−Removed: Noninterest income:
−Removed: 3,493 62,444 ( 1,628 ) 64,309
−Removed: Noninterest expenses:
−Removed: Compensation, payroll taxes, and other employee benefits
−Removed: 14,469 50,214 ( 648 ) 64,035
−Removed: Occupancy, office furniture and equipment
−Removed: 2,756 3,546 - 6,302
−Removed: 614 2,135 - 2,749
−Removed: Data processing
−Removed: 1,875 1,547 19 3,441
−Removed: Communications
−Removed: 220 499 - 719
−Removed: Professional fees
−Removed: 540 1,218 21 1,779
−Removed: Real estate owned
−Removed: Loan processing expense
−Removed: - 2,672 - 2,672
−Removed: 3,240 6,252 ( 1,142 ) 8,350
−Removed: Total noninterest expenses
−Removed: 23,717 68,083 ( 1,750 ) 90,050
−Removed: Income (loss) before income tax expense (benefit)
−Removed: 18,462 ( 7,193 ) 358 11,627
−Removed: Income tax expense (benefit)
−Removed: 3,903 ( 1,785 ) 94 2,212
−Removed: Net income (loss)
−Removed: $ 14,559 $ ( 5,408 ) $ 264 $ 9,415
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations
33 unchanged sentences
Government to manage federal debt limits;
+Added: the imposition of tariffs or other domestic or international governmental policies
significant increases in our loan losses;
9 unchanged sentences
It is intended to complement the unaudited consolidated financial statements, footnotes, and supplemental financial data appearing elsewhere in this Quarterly Report on Form 10-Q and should be read in conjunction therewith.
−Removed: The detailed discussion in the sections below focuses on the results of operations for the three and nine months ended September 30, 2024 and 2023 and the financial condition as of September 30, 2024 compared to the financial condition as of December 31, 2023.
+Added: The detailed discussion in the sections below focuses on the results of operations for the three months ended March 31, 2025 and 2024 and the financial condition as of March 31, 2025 compared to the financial condition as of December 31, 2024.
As described in the notes to the unaudited consolidated financial statements, we have two reportable segments:
6 unchanged sentences
Our mortgage banking segment generates the significant majority of our noninterest income and a majority of our noninterest expenses.
−Removed: We have provided below a discussion of the material results of operations for each segment on a separate basis for the three and nine months ended September 30, 2024 and 2023, which focuses on noninterest income and noninterest expenses.
+Added: We have provided below a discussion of the material results of operations for each segment on a separate basis for the three months ended March 31, 2025 and 2024, which focuses on noninterest income and noninterest expenses.
We have also provided a discussion of the consolidated operations of the Company, which includes the consolidated operations of the Bank and Waterstone Mortgage Corporation, for the same periods.
Significant Items
−Removed: There were no significant items that impacted earnings for the three and nine months ended September 30, 2024 and 2023.
−Removed: Comparison of Community Banking Segment Results of Operations for the Three Months Ended September 30, 2024 and 2023
−Removed: Net income totaled $4.7 million for the three months ended September 30, 2024 compared to $4.5 million for the three months ended September 30, 2023.
−Removed: Net interest income decreased $181,000 to $12.3 million for the three months ended September 30, 2024 compared to $12.4 million for the three months ended September 30, 2023.
−Removed: Interest expense on deposits and borrowings increased $3.4 million as replacement rates increased in the rising interest rate environment.
−Removed: Offsetting the increase in interest expense on deposit and borrowings, interest income on loans increased $3.2 million as replacement rates and average loans held for investment balances were higher than in the prior year and interest income on debt securities, federal funds sold and short-term investments increased due to the increase in the average balance and replacement rates.
−Removed: There was a negative provision for credit losses of $302,000 for the three months ended September 30, 2024 compared to a provision for credit losses of $445,000 for the three months ended September 30, 2023.
−Removed: The negative provision for credit losses of $302,000 consisted of a $218,000 negative provision related to loans and $84,000 negative provision related to unfunded commitments for the three months ended September 30, 2024.
−Removed: During the three months ended September 30, 2024, the current quarter decrease was primarily due to a decrease in historical loss rates, net recoveries for the period, and improvements in certain internal asset quality metrics offset by an adjustment in the qualitative factors primarily related to increases in economic risks related to commercial real estate loans during the quarter.
−Removed: The negative provision for credit losses related to unfunded loan commitments was $84,000 for the quarter ended September 30, 2024 compared to a provision for credit losses related to unfunded loan commitments of $239,000 for the quarter ended September 30, 2023.
−Removed: The negative provision for credit losses related to unfunded loan commitments for the quarter ended September 30, 2024 was due primarily to a decrease of loans that are currently waiting to be funded compared to the prior quarter end.
−Removed: We made adjustments to our qualitative factors, primarily to account for the changes in internal metrics and external risk factors.
−Removed: The forecast factor remained unchanged as we monitor the economic environment going forward.
−Removed: Compensation, payroll taxes, and other employee benefits expense increased $708,000 to $5.3 million compared to the quarter ending September 30, 2023 primarily due to an increase in health insurance expense as claims increased.
+Added: There were no significant items that impacted earnings for the three months ended March 31, 2025 and 2024.
+Added: Comparison of Community Banking Segment Results of Operations for the Three Months Ended March 31, 2025 and 2024
+Added: Net income totaled $4.6 million for the three months ended March 31, 2025 compared to $2.6 million for the three months ended March 31, 2024.
+Added: Net interest income increased $805,000 to $12.4 million for the three months ended March 31, 2025 compared to $11.6 million for the three months ended March 31, 2024.
+Added: Interest expense on borrowings decreased $3.1 million as growth in time deposits allowed us to carry a lower average balance of FHLB advances.
+Added: There was a negative provision for credit losses of $518,000 for the three months ended March 31, 2025 compared to a provision for credit losses of $105,000 for the three months ended March 31, 2024.
+Added: The negative provision for credit losses of $518,000 consisted of a $354,000 negative provision related to loans and $204,000 negative provision related to unfunded commitments for the three months ended March 31, 2025.
+Added: The current quarter decrease was primarily due to decreases in historical loss rates and loan portfolio balances offset by an increase in the commercial real estate loan qualitative factors primarily related to increases in economic risks and internal asset quality risks.
+Added: The negative provision for credit losses related to unfunded loan commitments was $205,000 for the quarter ended March 31, 2025 compared to a provision for credit losses related to unfunded loan commitments of $70,000 for the quarter ended March 31, 2024.The negative provision for credit losses related to unfunded loan commitments for the quarter ended March 31, 2025 was primarily due to a decrease in construction loans that are waiting to be funded compared to the prior quarter end and decrease in historical loss rates.
+Added: Compensation, payroll taxes, and other employee benefits expense decreased $148,000 to $5.2 million compared to the quarter ending March 31, 2024 primarily due to a decrease in health insurance expense as claims decreased.
Other noninterest expense decreased $95,000 to $596,000 as certain loan fees paid to the mortgage banking segment for the purchase of single-family adjustable rate mortgage loans decreased.
These fees are eliminated in the consolidated statements of income.
−Removed: Comparison of Mortgage Banking Segment Results of Operations for the Three Months Ended September 30, 2024 and 2023
−Removed: Net loss totaled $50,000 for the three months ended September 30, 2024 compared to net loss of $1.4 million for the three months ended September 30, 2023.
−Removed: We originated $558.7 million in mortgage loans held for sale (including sales to the community banking segment) during the three months ended September 30, 2024, which represents a decrease of $38.8 million, or 6.5%, from the $597.6 million originated during the three months ended September 30, 2023.
+Added: Comparison of Mortgage Banking Segment Results of Operations for the Three Months Ended March 31, 2025 and 2024
+Added: Net loss totaled $1.6 million for the three months ended March 31, 2025 compared to net income of $298,000 for the three months ended March 31, 2024.
+Added: We originated $387.7 million in mortgage loans held for sale (including sales to the community banking segment) during the three months ended March 31, 2025, which represents a decrease of $97.4 million, or 20.1%, from the $485.1 million originated during the three months ended March 31, 2024.
The decrease in loan production volume was driven by a $114.5 million, or 24.8%, decrease in purchase products and was offset by a $14.5 million increase in refinance products.
−Removed: Total mortgage banking noninterest income decreased $66,000, or 0.3%, to $21.4 million during the three months ended September 30, 2024 compared to $21.5 million during the three months ended September 30, 2023.
−Removed: The decrease in mortgage banking noninterest income was related to a 6.5% decrease in volume offset by a 5.9% increase in gross margin on loans originated and sold for the three months ended September 30, 2024 compared to September 30, 2023.
−Removed: Gross margin on 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.
−Removed: The gross margin on loans originated and sold contraction reflects decreased industry demand due to the increased competition from mortgage originators.
−Removed: We sell loans on both a servicing-released and a servicing-retained basis.
−Removed: Waterstone Mortgage Corporation has contracted with a third party to service the loans for which we retain servicing.
−Removed: Additionally, our overall margin can be affected by the mix of both loan type (conventional loans versus governmental) and loan purpose (purchase versus refinance).
−Removed: Conventional loans include loans that conform to Fannie Mae and Freddie Mac standards, whereas governmental loans are those loans guaranteed by the federal government, such as a Federal Housing Authority or U.S.
−Removed: Department of Agriculture loan.
−Removed: Loans originated for the purchase of a residential property comprised 88.9% of total originations during the three months ended September 30, 2024, compared to 95.4% of total originations during the three months ended September 30, 2023, respectively.
−Removed: The mix of loan type trended towards more conventional loans and less governmental loans, with governmental loans and conventional loans comprising 35.2% and 64.8% of all loan originations, respectively, during the three months ended September 30, 2024, compared to 39.2% and 60.8% of all loan originations, respectively, during the three months ended September 30, 2023.
−Removed: Total compensation, payroll taxes and other employee benefits decreased $1.3 million, or 7.3%, to $15.9 million for the three months ended September 30, 2024 compared to $17.2 million for the three months ended September 30, 2023.
−Removed: The decrease primarily related to decreased salary expense and incentives expense driven by reduced employee headcount and a decrease in new branches added over the past year.
−Removed: Consolidated Waterstone Financial, Inc.
−Removed: Results of Operations
−Removed: Three months ended September 30,
−Removed: (Dollars In Thousands, except per share amounts)
−Removed: Earnings per share - basic
−Removed: Earnings per share - diluted
−Removed: Annualized return on average assets
−Removed: Annualized return on average equity
−Removed: Net Interest Income
−Removed: Average Balance Sheets, Interest and Yields/Costs
−Removed: The following table sets forth average balance sheets, annualized average yields and costs, and certain other information for the periods indicated.
−Removed: Non-accrual loans are included in the computation of the average balances of loans receivable and held for sale.
−Removed: The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.
−Removed: Yields on interest-earning assets are computed on a fully tax-equivalent yield, where applicable.
−Removed: Three months ended September 30,
−Removed: Average Balance
−Removed: Average Balance
−Removed: (Dollars in Thousands)
−Removed: Interest-earning assets:
−Removed: Loans receivable and held for sale (1)
−Removed: Mortgage related securities (2)
−Removed: Debt securities, federal funds sold and short-term investments(2) (3)
−Removed: Total interest-earning assets
−Removed: Noninterest-earning assets
−Removed: Liabilities and equity
−Removed: Interest-bearing liabilities:
−Removed: Demand accounts
−Removed: Money market and savings accounts
−Removed: Time deposits
−Removed: Total interest-bearing deposits
−Removed: Total interest-bearing liabilities
−Removed: Noninterest-bearing liabilities
−Removed: Noninterest-bearing deposits
−Removed: Other noninterest-bearing liabilities
−Removed: Total noninterest-bearing liabilities
−Removed: Total liabilities
−Removed: Total liabilities and equity
−Removed: Net interest income / Net interest rate spread (4)
−Removed: taxable equivalent adjustment
−Removed: Net interest income, as reported
−Removed: Net interest-earning assets (5)
−Removed: Net interest margin (6)
−Removed: Tax equivalent effect
−Removed: Net interest margin on a fully tax equivalent basis
−Removed: Average interest-earning assets to average interest-bearing liabilities
−Removed: Interest income includes net deferred loan fee amortization income of $168,000 and $179,000 for the three months ended September 30, 2024 and 2023, respectively.
−Removed: Average balance of mortgage related and debt securities are based on amortized historical cost.
−Removed: Interest income from tax-exempt securities is computed on a taxable equivalent basis using a tax rate of 21% for the three months ended September 30, 2024 and 2023.
−Removed: The yields on debt securities, federal funds sold and short-term investments before tax-equivalent adjustments were 5.05% and 4.45% for the three months ended September 30, 2024 and 2023, respectively.
−Removed: Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities and is presented on a fully tax equivalent basis.
−Removed: Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
−Removed: Net interest margin represents net interest income divided by average total interest-earning assets.
−Removed: Rate/Volume Analysis
−Removed: The following table sets forth the effects of changing rates and volumes on our net interest income for the periods indicated.
−Removed: The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume).
−Removed: The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate).
−Removed: The net column represents the sum of the prior columns.
−Removed: For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.
−Removed: Three months ended September 30,
−Removed: 2024 versus 2023
−Removed: Increase (Decrease) due to
−Removed: (In Thousands)
−Removed: Interest income:
−Removed: Loans receivable and held for sale(1) (2)
−Removed: Mortgage related securities (3)
−Removed: Other earning assets(3) (4)
−Removed: Total interest-earning assets
−Removed: Interest expense:
−Removed: Demand accounts
−Removed: Money market and savings accounts
−Removed: Time deposits
−Removed: Total interest-bearing deposits
−Removed: Total interest-bearing liabilities
−Removed: Net change in net interest income
−Removed: ______________
−Removed: Interest income includes net deferred loan fee amortization income of $168,000 and $179,000 for the three months ended September 30, 2024 and 2023, respectively.
−Removed: Non-accrual loans have been included in average loans receivable balance.
−Removed: Includes available for sale securities.
−Removed: Average balance of available for sale securities is based on amortized historical cost.
−Removed: Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 21% for the three months ended September 30, 2024 and September 30, 2023.
−Removed: Net interest income decreased $472,000, or 3.9%, to $11.5 million during the three months ended September 30, 2024 compared to $12.0 million during the three months ended September 30, 2023 primarily due to the increased cost of funds as a result of the rising interest rate environment.
−Removed: Interest income on loans increased $2.8 million, or 11.6%, to $26.6 million due primarily to a 39 basis point increase in average yield on loans as interest rates continued to increase over the past year and an increase in average loan balance as loans held for investment increased.
−Removed: The increase in average loan balance was driven by an increase of a $60.9 million, or 3.7%, in the average balance of loans held for investment and an increase of $12.5 million, or 7.3%, in average loans held for sale.
−Removed: Interest expense on time deposits increased $2.7 million, or 44.1%, to $9.0 million primarily due to a 111 basis point increase in average cost of time deposits.
−Removed: Additionally, the average balance of time deposits increased $66.5 million compared to the prior year period.
−Removed: Interest expense on money market, savings, and escrow accounts increased $293,000, or 24.6%, to $1.5 million due primarily to a 40 basis point increase in average cost of money market, savings, and escrow accounts as rates increased to stay competitive in the market.
−Removed: Partially offsetting the increase in average cost, the average balance decreased $2.7 million.
−Removed: Interest expense on borrowings increased $251,000, or 3.6%, to $7.2 million due to a six basis point increase in the cost of borrowings during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 as we transitioned to more short-term fundings.
−Removed: Additionally, the average balance increased $15.8 million to $600.6 million during the three months ended September 30, 2024, compared to $584.8 million during the three months ended September 30, 2023.
−Removed: Provision for Credit Losses
−Removed: There was a negative provision for credit losses of $377,000 for the three months ended September 30, 2024 compared to a $445,000 provision for credit losses for the three months ended September 30, 2023.
−Removed: The $377,000 negative provision for credit losses consisted of a $293,000 negative provision related to loans and a negative provision related to unfunded commitments of $84,000 for the three months ended September 30, 2024.
−Removed: During the three months ended September 30, 2024, the decrease related to loans was primarily due to a recovery, a decrease in historical losses used in the calculation, and an improvement in certain asset quality metrics.
−Removed: The decrease in provision related to unfunded commitments was primarily due to an decrease in the construction loans yet to be funded.
−Removed: We made adjustments to our qualitative factors, primarily to account for the changes in internal metrics and external risk factors.
−Removed: The forecast factor remained unchanged as we monitor the economic environment going forward.
−Removed: The provision is primarily a function of the Company's reserving methodology and assessments of certain quantitative and qualitative factors which are used to determine an appropriate allowance for credit losses for the period.
−Removed: See further discussion regarding the allowance for loan losses in the "Asset Quality" section for an analysis of charge-offs, nonperforming assets, specific reserves and additional provisions and the "Allowance for Credit Loss" section.
−Removed: Noninterest Income
−Removed: Three months ended September 30,
−Removed: (Dollars In Thousands)
−Removed: Service charges on loans and deposits
−Removed: Increase in cash surrender value of life insurance
−Removed: Mortgage banking income
−Removed: Total noninterest income
−Removed: Total noninterest income increased $322,000, or 1.4%, to $22.6 million during the three months ended September 30, 2024 compared to $22.2 million during the three months ended September 30, 2023.
−Removed: The increase in mortgage banking income was primarily the result of a increase in gross margin on loans originated and sold offset by a decrease in loan origination volumes.
−Removed: Gross margin on 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.
−Removed: Gross margin on loans originated and sold increased 5.9% at the mortgage banking segment.
−Removed: See "Comparison of Mortgage Banking Segment Results of Operations for the Three Months Ended September 30, 2024 and 2023" above for additional discussion of the increase in mortgage banking income.
−Removed: Total loan origination volume on a consolidated basis decreased $42.6 million, or 7.1%, to $555.5 million during the three months ended September 30, 2024 compared to $598.1 million during the three months ended September 30, 2023.
−Removed: Three months ended September 30,
−Removed: (Dollars In Thousands)
−Removed: Compensation, payroll taxes, and other employee benefits
−Removed: Occupancy, office furniture, and equipment
−Removed: Data processing
−Removed: Communications
−Removed: Professional fees
−Removed: Real estate owned
−Removed: Loan processing expense
−Removed: Total noninterest expenses
−Removed: Total noninterest expenses decreased $1.5 million, or 4.9%, to $28.6 million during the three months ended September 30, 2024 compared to $30.0 million during the three months ended September 30, 2023.
−Removed: Compensation, payroll taxes and other employee benefits expense at our mortgage banking segment decreased $1.3 million, or 7.3%, to $15.9 million during the three months ended September 30, 2024.
−Removed: The decrease primarily related to decreased salary expense and incentives expense driven by reduced employee headcount and a decrease in new branches added over the past year
−Removed: Compensation, payroll taxes and other employee benefits expense at the community banking segment increased $708,000, or 15.3%, to $5.3 million during the three months ended September 30, 2024.
−Removed: The increase was primarily due to an increase in health insurance expense as claims increased.
−Removed: Occupancy, office furniture and equipment expense at the mortgage banking segment decreased $188,000 to $953,000 during the three months ended September 30, 2024, primarily resulting from decreased rent and depreciation expenses as underperforming branches were closed over the past year.
−Removed: Occupancy, office furniture and equipment expense at the community banking segment increased $52,000 to $904,000 during the three months ended September 30, 2024.
−Removed: The increase was due primarily to increases related to new equipment expenses.
−Removed: Professional fees decreased $176,000 to $569,000 during the three months ended September 30, 2024.
−Removed: The decrease related to a decrease in legal fees at the mortgage banking segment related to a complaint.
−Removed: In July 2022, a complaint was filed by Mutual of Omaha Mortgage, Inc.
−Removed: asserting claims against Waterstone Mortgage Corporation relating to certain employees hired by Waterstone Mortgage Corporation who previously worked for Mutual.
−Removed: The Company intends to continue to vigorously defend its interests in this matter and pursue all possible defenses against the claims.
−Removed: Given the current stage of the litigation, the Company is not yet able to make a determination as to the likelihood of an unfavorable outcome in this matter, nor is it able to estimate the range of any possible loss.
−Removed: Other noninterest expense decreased $619,000, or 24.0%, to $2.0 million during the three months ended September 30, 2024.
−Removed: The decrease primarily related to decreased provision for branch losses and provision for loan sale losses at the mortgage banking segment.
−Removed: Income tax expense totaled $1.2 million for the three months ended September 30, 2024 compared to $500,000 during the three months ended September 30, 2023.
−Removed: Income tax expense was recognized on the statement of income during the three months ended September 30, 2024 at an effective rate of 19.7% of pretax income and during the three months ended September 30, 2023 at an effective rate of 13.3% of pretax income.
−Removed: The increase in the effective rate related to a decrease in pre-tax income during the three months ended September 30, 2023.
−Removed: Comparison of Community Banking Segment Results of Operations for the Nine Months Ended September 30, 2024 and 2023
−Removed: Net income totaled $11.7 million for the nine months ended September 30, 2024 compared to $14.6 million for the nine months ended September 30, 2023.
−Removed: Net interest income decreased $4.6 million to $35.1 million for the nine months ended September 30, 2024 compared to $39.7 million for the nine months ended September 30, 2023.
−Removed: Interest expense on deposits and borrowings increased $17.2 million as replacement rates increased in the rising interest rate environment.
−Removed: Offsetting the increase in interest expense on deposit and borrowings, interest income on loans increased $11.8 million as replacement rates and average loans held for investment balances were higher than in the prior year.
−Removed: There was a negative provision for credit losses of $476,000 for the nine months ended September 30, 2024 compared to a provision for credit losses of $991,000 for the nine months ended September 30, 2023.
−Removed: The negative provision for credit losses of $476,000 consisted of a $380,000 negative provision related to loans and $96,000 negative provision related to unfunded commitments for the nine months ended September 30, 2024.
−Removed: During the nine months ended September 30, 2024, the decrease related to loans was primarily due to decreases in historical loss rates and loan originations.
−Removed: The decrease in provision related to unfunded commitments was primarily due to an decrease in the loans that are currently waiting to be funded compared to the prior quarter end.
−Removed: We made adjustments to our qualitative factors, primarily to account for the changes in internal metrics and external risk factors.
−Removed: The forecast factor remained unchanged as we monitor the economic environment going forward.
−Removed: Compensation, payroll taxes, and other employee benefits expense increased $1.3 million to $15.8 million compared to the quarter ending September 30, 2023 primarily due to an increase in health insurance expense as claims increased.
−Removed: Other noninterest expense decreased $1.3 million to $2.0 million as certain loan fees paid to the mortgage banking segment for the purchase of single-family adjustable rate mortgage loans decreased.
−Removed: These fees are eliminated in the consolidated statements of income.
−Removed: Comparison of Mortgage Banking Segment Results of Operations for the Nine Months Ended September 30, 2024 and 2023
−Removed: Net income totaled $1.6 million for the nine months ended September 30, 2024 compared to net loss of $5.4 million for the nine months ended September 30, 2023.
−Removed: We originated $1.68 billion in mortgage loans held for sale (including sales to the community banking segment) during the nine months ended September 30, 2024, which represents an increase of $14.3 million, or 0.9%, from the $1.66 billion originated during the nine months ended September 30, 2023.
−Removed: The increase in loan production volume was driven by a $75.2 million increase in refinance products as mortgage rates decreased to start the year offset by a $62.5 million , or 3.9%, decrease in purchase products.
−Removed: Total mortgage banking noninterest income increased $4.4 million, or 7.0%, to $66.8 million during the nine months ended September 30, 2024 compared to $62.4 million during the nine months ended September 30, 2023.
−Removed: The increase in mortgage banking noninterest income was related to a 0.9% increase in volume and by a 6.6% increase in gross margin on loans originated and sold for the nine months ended September 30, 2024 compared to September 30, 2023.
+Added: Total mortgage banking noninterest income decreased $4.6 million, or 22.6%, to $15.7 million during the three months ended March 31, 2025 compared to $20.3 million during the three months ended March 31, 2024.
+Added: The decrease in mortgage banking noninterest income was related to a 20.1% decrease in volume and a 3.1% decrease in gross margin on loans originated and sold for the three months ended March 31, 2025 compared to March 31, 2024.
Gross margin on 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
Department of Agriculture loan.
−Removed: Loans originated for the purchase of a residential property comprised 90.9% of total originations during the nine months ended September 30, 2024, compared to 96.1% of total originations during the nine months ended September 30, 2023, respectively.
−Removed: The mix of loan type trended towards more conventional loans and less governmental loans, with governmental loans and conventional loans comprising 36.3% and 63.7% of all loan originations, respectively, during the nine months ended September 30, 2024, compared to 37.9% and 62.1% of all loan originations, respectively, during the nine months ended September 30, 2023.
−Removed: The decrease in other noninterest income was due primarily to a decrease in gain on sale of mortgage servicing rights.
−Removed: During the nine months ended September 30, 2024, the Company sold mortgage servicing rights related to $233.1 million in loans serviced for third parties.
−Removed: The sale generated $2.1 million in net proceeds on a mortgage servicing rights book value of $2.0 million and resulted in a $152,000 gain during the nine months ended September 30, 2024.
−Removed: During the nine months ended September 30, 2023, the Company sold mortgage servicing rights related to $318.4 million in loans serviced for third parties.
−Removed: The sale generated $3.5 million in net proceeds and a $583,000 gain.
−Removed: Total compensation, payroll taxes and other employee benefits decreased $2.6 million, or 5.3%, to $47.6 million for the nine months ended September 30, 2024 compared to $50.2 million for the nine months ended September 30, 2023.
−Removed: The decrease in compensation expense was primarily related to decreased salaries driven by a reduction in headcount, sign on incentives, and health insurance expense offset by loan production commissions and branch manager pay.
+Added: Loans originated for the purchase of a residential property comprised 87.5% of total originations during the three months ended March 31, 2025, compared to 93.0% of total originations during the three months ended March 31, 2024, respectively.
+Added: The mix of loan type trended towards more conventional loans and less governmental loans, with governmental loans and conventional loans comprising 38.0% and 62.0% of all loan originations, respectively, during the three months ended March 31, 2025, compared to 39.1% and 60.9% of all loan originations, respectively, during the three months ended March 31, 2024.
+Added: Total compensation, payroll taxes and other employee benefits decreased $2.7 million, or 18.3%, to $12.1 million for the three months ended March 31, 2025 compared to $14.8 million for the three months ended March 31, 2024.
+Added: The decrease primarily related to decreased commission expense, branch manager pay, salary expense, and sign-on incentives driven by reduced employee headcount and a decrease in loan origination volumes and branch profitability.
+Added: Professional fees increased $853,000, or 164.0%, to $1.4 million for the quarter ended March 31, 2025, compared to $520,000 for the quarter ended March 31, 2024.
+Added: The increase was primarily related to legal services and the finalization of a settlement related to a previously disclosed legal matter during the three months ended March 31, 2025.
+Added: The Company maintained a $1.3 million accrual related to this legal matter as of December 31, 2024.
Consolidated Waterstone Financial, Inc.
Results of Operations
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(Dollars In Thousands, except per share amounts)
9 unchanged sentences
Yields on interest-earning assets are computed on a fully tax-equivalent yield, where applicable.
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
Average Balance
11 unchanged sentences
Money market and savings accounts
−Removed: Time deposits
+Added: Time deposits - retail
+Added: Time deposits -brokered
Total interest-bearing deposits
7 unchanged sentences
Net interest income / Net interest rate spread (4)
−Removed: taxable equivalent adjustment
−Removed: Net interest income, as reported
Net interest-earning assets (5)
Net interest margin (6)
−Removed: Tax equivalent effect
−Removed: Net interest margin on a fully tax equivalent basis
Average interest-earning assets to average interest-bearing liabilities
−Removed: Interest income includes net deferred loan fee amortization income of $486,000 and $474,000 for the nine months ended September 30, 2024 and 2023, respectively.
+Added: Interest income includes net deferred loan fee amortization income of $206,000 and $152,000 for the three months ended March 31, 2025 and 2024, respectively.
Average balance of mortgage related and debt securities are based on amortized historical cost.
−Removed: Interest income from tax-exempt securities is computed on a taxable equivalent basis using a tax rate of 21% for the nine months ended September 30, 2024 and 2023.
−Removed: The yields on debt securities, federal funds sold and short-term investments before tax-equivalent adjustments were 4.90% and 3.97% for the nine months ended September 30, 2024 and 2023, respectively.
+Added: Yields on tax-exempt municipal securities are not presented on a tax-equivalent basis in this table.
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities and is presented on a fully tax equivalent basis.
7 unchanged sentences
For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
2025 versus 2024
9 unchanged sentences
Money market and savings accounts
−Removed: Time deposits
+Added: Time deposits - retail
+Added: Time deposits - brokered
Total interest-bearing deposits
2 unchanged sentences
______________
−Removed: Interest income includes net deferred loan fee amortization income of $486,000 and $474,000 for the nine months ended September 30, 2024 and 2023, respectively.
+Added: Interest income includes net deferred loan fee amortization income of $206,000 and $152,000 for the three months ended March 31, 2025 and 2024, respectively.
Non-accrual loans have been included in average loans receivable balance.
1 unchanged sentence
Average balance of available for sale securities is based on amortized historical cost.
−Removed: Interest income from tax exempt securities is computed on a taxable equivalent basis using a tax rate of 21% for the nine months ended September 30, 2024 and September 30, 2023.
−Removed: Net interest income decreased $5.1 million, or 13.3%, to $33.3 million during the nine months ended September 30, 2024 compared to $38.5 million during the nine months ended September 30, 2023 primarily due to the increased cost of funds as a result of the rising interest rate environment.
−Removed: Interest income on loans increased $10.8 million, or 16.4%, to $76.7 million due primarily to a 48 basis point increase in average yield on loans as interest rates continued to increase over the past year and an increase in average loan balance as loans held for investment increased.
−Removed: The increase in average loan balance was driven by an increase of a $91.5 million, or 5.8%, in the average balance of loans held for investment and an increase of $16.1 million, or 10.3%, in average loans held for sale.
−Removed: Interest expense on time deposits increased $10.8 million, or 76.5%, to $25.0 million primarily due to a 163 basis point increase in average cost of time deposits.
−Removed: Additionally, the average balance of time deposits increased $73.3 million compared to the prior year period.
+Added: Yields on tax-exempt municipal securities are not presented on a tax-equivalent basis in this table.
+Added: Net interest income increased $1.4 million, or 12.9%, to $12.6 million during the three months ended March 31, 2025 compared to $11.1 million during the three months ended March 31, 2024 primarily due to increased yields on our loan and securities portfolios as well as decreased cost of bowwowings as a larger portion of our investments were funded by deposits rather than borrowings.
+Added: Additionally, there was a decrease in borrowing rates compared to the prior year period.
+Added: Interest income on loans increased $594,000, or 2.4%, to $25.1 million due primarily to a 29 basis point increase in average yield on loans as interest rates continued to increase.
+Added: Interest expense on retail time deposits increased $1.1 million, or 13.7%, to $8.8 million primarily due to the the increase in average balance of $79.1 million.
+Added: Additionally, the average cost of retail time deposits increased by 14 basis points compared to the prior year period.
+Added: Interest expense on brokered time deposits increased $1.1 million due to the addition of $97.0 million in brokered time deposits.
Interest expense on money market, savings, and escrow accounts increased $310,000, or 24.8%, to $1.6 million due primarily to a 31 basis point increase in average cost of money market, savings, and escrow accounts as rates increased to stay competitive in the market.
−Removed: Partially offsetting the increase in average cost, the average balance decreased $18.5 million.
−Removed: Interest expense on borrowings increased $5.1 million, or 30.5%, to $21.6 million due to a 53 basis point increase in the cost of borrowings during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as we transitioned to more short-term fundings.
−Removed: Additionally, the average balance increased $82.1 million to $608.7 million during the nine months ended September 30, 2024, compared to $526.5 million during the nine months ended September 30, 2023.
+Added: Additionally, the average balance increased $19.5 million.
+Added: Interest expense on borrowings decreased $3.0 million, or 43.4%, to $3.8 million due to a $205.6 million decrease in the average balance of borrowings during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 as we transitioned to more time deposits.
+Added: Additionally, the average cost of borrowings decreased by 61 basis points as there were fed funds rate cuts over the past year.
Provision for Credit Losses
−Removed: There was a negative provision for credit losses of $535,000 for the nine months ended September 30, 2024 compared to a $1.1 million provision for credit losses for the nine months ended September 30, 2023.
−Removed: The $535,000 negative provision for credit losses consisted of a $439,000 negative provision related to loans and a negative provision related to unfunded commitments of $96,000 for the nine months ended September 30, 2024.
−Removed: During the nine months ended September 30, 2024, the decrease related to loans was primarily due to a decrease in originations and historical losses used in the calculation and the decrease in provision related to unfunded commitments was primarily due to a decrease in the loans yet to be funded.
+Added: There was a negative provision for credit losses of $558,000 for the three months ended March 31, 2025 compared to a $67,000 provision for credit losses for the three months ended March 31, 2024.
+Added: The $558,000 negative provision for credit losses consisted of a $354,000 negative provision related to loans and a negative provision related to unfunded commitments of $204,000 for the three months ended March 31, 2025.
+Added: During the three months ended March 31, 2025, the decrease related to loans was primarily due to a decrease in historical losses used in the calculation, a decrease in loan balance, and an improvement in certain asset quality metrics.
+Added: The decrease in provision related to unfunded commitments was primarily due to a decrease in the construction loans yet to be funded.
We made adjustments to our qualitative factors, primarily to account for the changes in internal metrics and external risk factors.
3 unchanged sentences
Noninterest Income
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(Dollars In Thousands)
3 unchanged sentences
Total noninterest income
−Removed: Total noninterest income increased $6.0 million, or 9.3% to $70.3 million during the nine months ended September 30, 2024 compared to $64.3 million during the nine months ended September 30, 2023.
−Removed: The increase resulted primarily from increase in mortgage banking noninterest income offset by a decrease in other income.
−Removed: The increase in mortgage banking income was primarily the result of a increase in loan origination volume and gross margin on loans originated and sold.
+Added: Total noninterest income decreased $4.2 million, or 19.5%, to $17.1 million during the three months ended March 31, 2025 compared to $21.2 million during the three months ended March 31, 2024.
+Added: The decrease in mortgage banking income was primarily the result of a decrease in gross margin on loans originated and a decrease in loan origination volumes.
Gross margin on 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.
−Removed: Total loan origination volume on a consolidated basis increased $86.5 million, or 5.5%, to $1.66 billion during the nine months ended September 30, 2024 compared to $1.58 billion during the nine months ended September 30, 2023.
−Removed: Gross margin on loans originated and sold increased 6.6% at the mortgage banking segment.
−Removed: See "Comparison of Mortgage Banking Segment Results of Operations for the nine months ended September 30, 2024 and 2023" above for additional discussion of the increase in mortgage banking income.
−Removed: The decrease in other noninterest income was due primarily to a decrease in gain on sale of mortgage servicing rights.
−Removed: During the nine months ended September 30, 2024, the Company sold mortgage servicing rights related to $233.1 million in loans serviced for third parties.
−Removed: The sale generated $2.1 million in net proceeds on a mortgage servicing rights book value of $2.0 million and resulted in a $152,000 gain during the nine months ended September 30, 2024.
−Removed: During the nine months ended September 30, 2023, the Company sold mortgage servicing rights related to $318.4 million in loans serviced for third parties.
−Removed: The sale generated $3.5 million in net proceeds and a $583,000 gain.
−Removed: As of September 30, 2024 and September 30, 2023, the Company maintained servicing rights related to $67.0 million and $220.0 million, respectively, in loans previously sold to third parties.
−Removed: Nine months ended September 30,
+Added: Gross margin on loans originated and sold decreased 3.1% at the mortgage banking segment.
+Added: See "Comparison of Mortgage Banking Segment Results of Operations for the Three Months Ended March 31, 2025 and 2024" above for additional discussion of the increase in mortgage banking income.
+Added: Total loan origination volume on a consolidated basis decreased $90.0 million, or 18.8%, to $387.7 million during the three months ended March 31, 2025 compared to $477.8 million during the three months ended March 31, 2024.
+Added: Three months ended March 31,
(Dollars In Thousands)
7 unchanged sentences
Total noninterest expenses
−Removed: Total noninterest expenses decreased $3.7 million, or 4.1%, to $86.4 million during the nine months ended September 30, 2024 compared to $90.1 million during the nine months ended September 30, 2023.
−Removed: Compensation, payroll taxes and other employee benefits expense at our mortgage banking segment decreased $2.6 million, or 5.3%, to $47.6 million during the nine months ended September 30, 2024.
−Removed: The decrease in compensation expense was primarily related to decreased salaries driven by a reduction in headcount, sign on incentives, and health insurance expense offset by branch manager pay and loan production commissions.
−Removed: Compensation, payroll taxes and other employee benefits expense at the community banking segment increased $1.3 million, or 9.2%, to $15.8 million during the nine months ended September 30, 2024.
−Removed: The increase was primarily due to an increase in health insurance expense as claims increased.
−Removed: Occupancy, office furniture and equipment expense at the mortgage banking segment decreased $439,000 to $3.1 million during the nine months ended September 30, 2024, primarily resulting from decreased rent and depreciation expenses as underperforming branches were closed over the past year.
−Removed: Occupancy, office furniture and equipment expense at the community banking segment increased $131,000 to $2.9 million during the nine months ended September 30, 2024.
−Removed: The increase was due primarily to increases in new equipment and repairs and maintenance expenses.
−Removed: Advertising expense increased $78,000, or 2.8%, to $2.8 million during the nine months ended September 30, 2024.
−Removed: The increase was primarily due to advertising expenses at the community banking segment due to the increased efforts to increase deposit accounts.
−Removed: Data processing expense increased $304,000, or 8.8%, to $3.7 million during the nine months ended September 30, 2024.
−Removed: The increases at the community banking and mortgage banking segments were due to additional investments in technology.
−Removed: Professional fees increased $291,000 to $2.1 million during the nine months ended September 30, 2024.
−Removed: The increase related to an increase in legal fees at the mortgage banking segment.
−Removed: In July 2022, a complaint was filed by Mutual of Omaha Mortgage, Inc.
−Removed: asserting claims against Waterstone Mortgage Corporation relating to certain employees hired by Waterstone Mortgage Corporation who previously worked for Mutual.
−Removed: The Company intends to continue to vigorously defend its interests in this matter and pursue all possible defenses against the claims.
−Removed: Given the current stage of the litigation, the Company is not yet able to make a determination as to the likelihood of an unfavorable outcome in this matter, nor is it able to estimate the range of any possible loss.
−Removed: Other noninterest expense decreased $2.6 million, or 31.0%, to $5.8 million during the nine months ended September 30, 2024.
−Removed: The decrease primarily related to decreased provision for branch losses, branch overhead, provision for loan sale losses, and reversal of mortgage servicing rights impairment at the mortgage banking segment.
−Removed: Income tax expense totaled $4.3 million for the nine months ended September 30, 2024 compared to $2.2 million during the nine months ended September 30, 2023.
−Removed: Income tax expense was recognized on the statement of income during the nine months ended September 30, 2024 at an effective rate of 24.3% of pretax income and during the nine months ended September 30, 2023 at an effective rate of 19.0% of pretax income.
−Removed: On March 18, 2024, the State of Wisconsin Department of Revenue issued an emergency ruling with additional details of the law.
−Removed: This publication enabled us to estimate the impact on our Wisconsin state income tax expense.
−Removed: The impact moving forward should result in no Wisconsin state income taxes being expensed, resulting in a lower estimated effective tax rate.
−Removed: The elimination of Wisconsin state income tax expense resulted in the establishment of a valuation allowance for Wisconsin state income deferred tax assets, resulting in a one-time $1.1 million charge to state income tax expense in the first quarter.
−Removed: Partially offsetting the impact of the charge related to the valuation allowance we realized a one-time benefit of approximately $368,000 during the year to recognize a reduction in current state income tax provision.
−Removed: Comparison of Financial Condition at September 30, 2024 and December 31, 2023
−Removed: Total Assets – Total assets increased by $30.9 million, or 1.4%, to $2.24 billion at September 30, 2024 from $2.21 billion at December 31, 2023.
−Removed: The increase in total assets primarily reflects an increase in loans receivable and securities available for sale.
−Removed: The increase in total assets reflects liability increases in deposits and borrowings.
−Removed: Cash and Cash Equivalents – Cash and cash equivalents increased $5.0 million, or 13.7%, to $41.4 million at September 30, 2024, compared to $36.4 million at December 31, 2023.
−Removed: The increase in cash and cash equivalents primarily reflects the increase of funding sources from borrowings, deposits, and advance payments by borrowers for taxes.
−Removed: Securities Available for Sale – Securities available for sale increased $8.3 million to $213.2 million at September 30, 2024.
−Removed: The increase was primarily due to the purchases of securities throughout the year exceeding paydowns and maturities and an increase in fair value as longer term interest rates decreased compared to the beginning of the year.
−Removed: Loans Held for Sale - Loans held for sale decreased $9.1 million to $155.8 million at September 30, 2024 due to the decrease of purchase activity.
−Removed: Loans Receivable - Loans receivable held for investment increased $31.2 million to $1.70 billion at September 30, 2024.
−Removed: The increase in total loans receivable was primarily attributable to increases in each of the multi-family, construction, and commercial real estate loan categories offset by a decrease in the one-to-four family loan category.
+Added: Total noninterest expenses decreased $1.2 million, or 4.4%, to $26.4 million during the three months ended March 31, 2025 compared to $27.6 million during the three months ended March 31, 2024.
+Added: Compensation, payroll taxes and other employee benefits expense at our mortgage banking segment decreased $2.7 million, or 18.3%, to $12.1 million during the three months ended March 31, 2025.
+Added: The decrease primarily related to decreased commission expense, branch manager pay, salary expense, and sign-on incentives driven by reduced employee headcount and a decrease in loan origination volumes and branch profitability.
+Added: Compensation, payroll taxes and other employee benefits expense at the community banking segment decreased $148,000, or 2.8%, to $5.2 million during the three months ended March 31, 2025.
+Added: The decrease was primarily due to a decrease in health insurance expense as claims decreased.
+Added: Occupancy, office furniture and equipment expense at the mortgage banking segment decreased $254,000 to $853,000 during the three months ended March 31, 2025, primarily resulting from decreased rent and depreciation expenses as underperforming branches were closed over the past year.
+Added: Occupancy, office furniture and equipment expense at the community banking segment increased $76,000 to $1.1 million during the three months ended March 31, 2025.
+Added: The increase was due primarily to equipment maintenance and utility costs.
+Added: Professional fees increased $993,000 to $1.7 million during the three months ended March 31, 2025.
+Added: The increase was primarily related to legal services and the finalization of a settlement related to a previously disclosed legal matter during the three months ended March 31, 2025.
+Added: Other noninterest expense increased $1.1 million, or 80.4%, to $2.6 million during the three months ended March 31, 2025.
+Added: The increase primarily related to increased provision for branch losses and branch overhead at the mortgage banking segment.
+Added: Income tax expense totaled $845,000 for the three months ended March 31, 2025 compared to $1.7 million during the three months ended March 31, 2024.
+Added: Income tax expense was recognized on the statement of income during the three months ended March 31, 2025 at an effective rate of 21.8% of pretax income and during the three months ended March 31, 2024 at an effective rate of 36.3% of pretax income.
+Added: The decrease in the effective rate related to one time charge to state income tax in 2024 for the establishment of a valuation allowance a Wisconsin state income deferred tax asset.
+Added: Comparison of Financial Condition at March 31, 2025 and December 31, 2024
+Added: Total Assets – Total assets decreased by $34.2 million, or 1.5%, to $2.18 billion at March 31, 2025 from $2.21 billion at December 31, 2024.
+Added: The decrease in total assets primarily reflects decrease in loans receivable and loans held for sale.
+Added: The decrease in total assets reflects the decrease in borrowings.
+Added: Cash and Cash Equivalents – Cash and cash equivalents increased $3.5 million, or 8.9%, to $43.3 million at March 31, 2025, compared to $39.8 million at December 31, 2024.
+Added: The increase in cash and cash equivalents primarily reflects the increase of funding sources from deposits and advance payments by borrowers for taxes.
+Added: Securities Available for Sale – Securities available for sale increased $5.1 million to $213.6 million at March 31, 2025.
+Added: The increase was primarily due to the purchases of securities exceeding paydowns and maturities and an increase in fair value as longer term interest rates decreased compared to the prior year period.
+Added: Loans Held for Sale - Loans held for sale decreased $19.6 million to $116.3 million at March 31, 2025 due to a decrease in purchase activity as interest rates and affordable housing inventory constraints continue to slow activity.
+Added: Loans Receivable - Loans receivable held for investment decreased $17.1 million to $1.66 billion at March 31, 2025.
+Added: The decrease in total loans receivable was primarily attributable to decreases in each of the multi-family, construction, and home equity loan categories offset by increases in the one-to-four family, commercial real estate, and commercial loan categories.
The following table shows loan originations during the periods indicated.
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(In Thousands)
7 unchanged sentences
Total loans originated for investment
−Removed: Allowance for Credit Losses - Loans - The allowance for credit losses decreased to $18.2 million at September 30, 2024.
−Removed: There was a $439,000 negative provision for credit losses - loans for the nine months ended September 30, 2024.
+Added: Allowance for Credit Losses - Loans - The allowance for credit losses decreased to $17.9 million at March 31, 2025.
+Added: There was a $354,000 negative provision for credit losses - loans for the three months ended March 31, 2025.
The negative provision for credit losses related to loans decreased primarily due to a decrease in historical losses used in the calculation and decreases in certain qualitative factors.
−Removed: During the nine months ended September 30, 2024, we made adjustments to our qualitative factors, primarily to account for the changes in interest rates, internal metrics, and external risk factors.
See Note 3 - Loans Receivable of the notes to unaudited consolidated financial statements for further discussion on the allowance for credit losses.
−Removed: Additionally, net recoveries totaled $88,000 for the nine months ended September 30, 2024.
−Removed: Prepaid expenses and other assets – Total prepaid expenses and other assets decreased $6.6 million to $45.8 million at September 30, 2024.
−Removed: The decrease was primarily due to decreases in back-to-back loan swap fair value adjustment as long term interest rates decreased, mortgage servicing rights due to the sale, and deferred tax assets due to the WI state tax rate decrease.
−Removed: Deposits – Total deposits increased $73.2 million to $1.26 billion at September 30, 2024.
−Removed: The increase was driven by increases of $73.9 million in time deposits and $6.0 million in money market and savings deposits offset by a decrease of $6.7 million in demand deposits.
−Removed: Borrowings – Total borrowings decreased $50.9 million, or 8.3%, to $560.1 million at September 30, 2024.
−Removed: The community banking segment paid off $145.0 million in long-term FHLB borrowings, borrowed $150.0 million of new long-term FHLB borrowings, and paid off $54.7 million in new short-term FHLB and Federal Reserve Bank borrowings.
−Removed: External short-term borrowings at the mortgage banking segment decreased a total of $1.2 million at September 30, 2024 from December 31, 2023.
−Removed: Advance Payments by Borrowers for Taxes - Advance payments by borrowers for taxes increased $21.2 million to $27.8 million at September 30, 2024.
+Added: Additionally, net recoveries totaled $11,000 for the three months ended March 31, 2025.
+Added: Prepaid expenses and other assets – Total prepaid expenses and other assets decreased $4.5 million to $43.8 million at March 31, 2025.
+Added: The decrease was primarily due to decreases in back-to-back loan swap fair value adjustment and the deferred tax asset for unrealized losses as long term interest rates decreased.
+Added: Deposits – Total deposits increased $21.3 million to $1.38 billion at March 31, 2025.
+Added: The increase was driven by increases of $9.3 million in time deposits and $13.0 million in money market and savings deposits offset by a decrease of $932,000 in demand deposits.
+Added: Borrowings – Total borrowings decreased $50.7 million, or 11.3%, to $395.9 million at March 31, 2025.
+Added: The community banking segment decreased its short-term FHLB borrowings by $99.4 million and increased its long-term borrowings by $40.0 million.
+Added: External short-term borrowings at the mortgage banking segment increased a total of $8.7 million at March 31, 2025 from December 31, 2024.
+Added: Advance Payments by Borrowers for Taxes - Advance payments by borrowers for taxes increased $7.0 million to $12.6 million at March 31, 2025.
The increase was the result of payments received from borrowers for their real estate taxes and is seasonally normal, as balances increase during the course of the calendar year until real estate tax obligations are paid in the fourth quarter.
−Removed: Other Liabilities - Other liabilities decreased $10.5 million to $50.5 million at September 30, 2024.
+Added: Other Liabilities - Other liabilities decreased $14.1 million to $44.3 million at March 31, 2025.
Other liabilities decreased primarily due to a seasonal decrease in outstanding checks related to advance payments by borrowers for taxes.
1 unchanged sentence
At the time at which the disbursements are made, the outstanding checks are classified as other liabilities in the statements of financial condition, and these amounts remain classified as other liabilities until settled.
−Removed: Additionally, the back-to-back loan swap fair value adjustment decreased as long term interest rates decreased.
−Removed: Offsetting the decreases, the interest rate expense payable to the Federal Reserve Bank increased as payments are due to time of principal payments.
−Removed: Shareholders ’ Equity – Shareholders' equity decreased $2.1 million to $342.0 million at September 30, 2024.
−Removed: Shareholders' equity decreased primarily due to the declaration of dividends and the repurchase of stock.
−Removed: Partially offsetting the decreases, there were increases due to the net income, equity awards granted, unearned ESOP shares vesting, and an increase in the fair value of the securities portfolio.
+Added: The decrease was also due to decrease in back-to-back loan swap fair value adjustment as long-term interest rates decreased.
+Added: Shareholders ’ Equity – Shareholders' equity increased $2.2 million to $341.4 million at March 31, 2025.
+Added: Shareholders' equity increased primarily due an increase in the fair value of the securities portfolio.
ASSET QUALITY
NONPERFORMING ASSETS
−Removed: At September 30,
At December 31,
24 unchanged sentences
The following table sets forth activity in our non-accrual loans for the periods indicated.
−Removed: At or for the Nine Months
−Removed: Ended September 30,
+Added: At or for the Three Months
+Added: Ended March 31,
(In Thousands)
4 unchanged sentences
Balance at end of period
−Removed: Total non-accrual loans increased by $560,000, or 11.6%, to $5.4 million as of September 30, 2024 compared to $4.8 million as of December 31, 2023.
−Removed: The ratio of non-accrual loans to total loans receivable was 0.32% at September 30, 2024 and 0.29% at December 31, 2023.
−Removed: During the nine months ended September 30, 2024, $2.1 million in loans were placed on non-accrual status.
−Removed: Offsetting this activity, $714,000 in loans returned to accrual status and $840,000 in principal payments were received during the nine months ended September 30, 2024.
−Removed: Of the $5.4 million in total non-accrual loans as of September 30, 2024, $2.6 million in loans have been specifically reviewed to assess whether a specific valuation allowance is necessary.
+Added: Total non-accrual loans increased by $1.8 million, or 31.0%, to $7.4 million as of March 31, 2025 compared to $5.7 million as of December 31, 2024.
+Added: The ratio of non-accrual loans to total loans receivable was 0.45% at March 31, 2025 and 0.34% at December 31, 2024.
+Added: During the three months ended March 31, 2025, $2.3 million in loans were placed on non-accrual status.
+Added: Offsetting this activity, $599,000 in loans returned to accrual status and $70,000 in principal payments were received during the three months ended March 31, 2025.
+Added: Of the $7.4 million in total non-accrual loans as of March 31, 2025, $4.2 million in loans have been specifically reviewed to assess whether a specific valuation allowance is necessary.
A specific valuation allowance is established for an amount equal to the impairment when the carrying value of the loan exceeds the present value of expected future cash flows, discounted at the loan's original effective interest rate or the fair value of the underlying collateral with an adjustment made for costs to dispose of the asset.
−Removed: Based upon these specific reviews, no charge-offs have been recorded over the life of these loans and there were no specific reserves as of September 30, 2024.
−Removed: The remaining $2.8 million of non-accrual loans were reviewed on an aggregate basis as of September 30, 2024.
−Removed: The outstanding principal balance of our five largest non-accrual loans as of September 30, 2024 totaled $2.4 million, which represents 45.6% of total non-accrual loans as of that date.
−Removed: Two of the loans were reviewed on an aggregate basis along with the other loans held for investment at the mortgage segment.
+Added: Based upon these specific reviews, no charge-offs have been recorded over the life of these loans and there were no specific reserves as of March 31, 2025.
+Added: The remaining $3.2 million of non-accrual loans were reviewed on an aggregate basis as of March 31, 2025.
+Added: The outstanding principal balance of our five largest non-accrual loans as of March 31, 2025 totaled $2.9 million, which represents 39.2% of total non-accrual loans as of that date.
+Added: The loans held for investment at the mortgage segment were reviewed on an aggregate basis.
Interest payments received are treated as interest income on a cash basis as long as the remaining book value of the loan (i.e., after charge-off of all identified losses) is deemed to be fully collectible.
1 unchanged sentence
Determination as to the ultimate collectability of the remaining book value is supported by an updated credit department evaluation of the borrower's financial condition and prospects for repayment, including consideration of the borrower's sustained historical repayment performance and other relevant factors.
−Removed: As of September 30, 2024 and December 31, 2023, there were no loans 90 or more days past due and still accruing interest.
+Added: As of March 31, 2025 and December 31, 2024, there were no loans 90 or more days past due and still accruing interest.
LOAN DELINQUENCY
The following table summarizes loan delinquency in total dollars and as a percentage of the total loan portfolio:
−Removed: At September 30,
At December 31,
4 unchanged sentences
Total loans past due to total loans receivable
−Removed: Past due loans decreased by $628,000, or 5.6%, to $10.6 million at September 30, 2024 from $11.3 million at December 31, 2023.
−Removed: Loans past due less than 90 days decreased by $275,000, or 4.0%, primarily due to a decrease in the home equity and commercial real estate loan categories.
−Removed: Loans past due 90 days or more decreased by $353,000, or 8.0%, primarily in the one- to four-family loan category, during the nine months ended September 30, 2024.
+Added: Past due loans decreased by $3.9 million, or 25.8%, to $11.2 million at March 31, 2025 from $15.1 million at December 31, 2024.
+Added: Loans past due less than 90 days decreased by $6.0 million, or 54.1%, primarily due to a decrease in the one-to four-family loan category.
+Added: Loans past due 90 days or more increased by $2.1 million, or 53.2%, primarily in the one- to four-family loan category during the three months ended March 31, 2025.
ALLOWANCE FOR CREDIT LOSSES - LOANS
−Removed: At or for the Nine Months
−Removed: Ended September 30,
+Added: At or for the Three Months
+Added: Ended March 31,
(Dollars in Thousands)
16 unchanged sentences
Net recoveries (annualized) to beginning of the year allowance
−Removed: The allowance for credit losses - loans was $18.2 million at September 30, 2024 and $18.5 million at December 31, 2023.
−Removed: During the nine months ended September 30, 2024, there was a $439,000 negative provision for credit losses.
−Removed: Additionally, net recoveries totaled $88,000 for the nine months ended September 30, 2024.
−Removed: We had net recoveries of $88,000, or 0.01% of average loans annualized, for the nine months ended September 30, 2024, compared to net charge-offs of $33,000, or less than 0.01% of average loans annualized, for the nine months ended September 30, 2023.
+Added: The allowance for credit losses - loans was $17.9 million at March 31, 2025 and $18.2 million at December 31, 2024.
+Added: During the three months ended March 31, 2025, there was a $354,000 negative provision for credit losses.
+Added: Additionally, net recoveries totaled $11,000 for the three months ended March 31, 2025.
+Added: We had net recoveries of $11,000, or less than 0.01% of average loans annualized, for the three months ended March 31, 2025, compared to net recoveries of $3,000, or less than 0.01% of average loans annualized, for the three months ended March 31, 2024.
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.
17 unchanged sentences
Additional sources of liquidity used for the purpose of managing long- and short-term cash flows include advances from the FHLB.
−Removed: During the nine months ended September 30, 2024, primary uses of cash and cash equivalents included:
−Removed: $1.66 billion in funding loans held for sale, $31.1 million to fund loans held for investment, $10.8 million for purchases of mortgage related securities, $12.2 million for purchases of debt securities, $2.3 million for FHLB stock, $145.0 million for payoffs of long-term borrowings, $55.9 million for payoffs of short-term borrowings, $8.5 million for cash dividends paid, and $12.1 million for purchases of our common stock.
−Removed: During the nine months ended September 30, 2024, primary sources of cash and cash equivalents included:
−Removed: $1.74 billion in proceeds from the sale of loans held for sale, $150.0 million in long-term borrowings, $16.7 million in principal repayments on mortgage related securities, $73.2 million for increase in deposits, $5.7 million in maturities of debt securities, $2.1 million in proceeds for mortgage servicing rights sale, and $13.4 million in net income.
−Removed: During the nine months ended September 30, 2023, primary uses of cash and cash equivalents included:
−Removed: $1.58 billion in funding loans held for sale, $140.9 million to fund loans held for investment, $18.9 million for purchases of mortgage related securities, $9.4 million for FHLB stock, $215.0 million for payoffs of long-term borrowings, $12.4 million for cash dividends paid, and $19.8 million for purchases of our common stock.
−Removed: During the nine months ended September 30, 2023, primary sources of cash and cash equivalents included:
−Removed: $1.60 billion in proceeds from the sale of loans held for sale, $174.0 million in long-term borrowings, $242.1 million in short-tern borrowings, $15.9 million in principal repayments on mortgage related securities, $6.2 million for increase in deposits, $3.6 million in maturities of debt securities, $3.5 million in proceeds for mortgage servicing rights sale, and $9.4 million in net income.
+Added: During the three months ended March 31, 2025, primary uses of cash and cash equivalents included:
+Added: $387.7 million in funding loans held for sale, $10.2 million for purchases of mortgage related securities, $90.7 million for payoffs of short-term borrowings, $40.0 million for payoffs of long-term borrowings, $2.7 million for cash dividends paid, and $3.2 million for purchases of our common stock.
+Added: During the three months ended March 31, 2025, primary sources of cash and cash equivalents included:
+Added: $422.9 million in proceeds from the sale of loans held for sale, $80.0 million in long-term borrowings, $5.7 million in principal repayments on mortgage related securities, $21.3 million for increase in deposits, $17.1 million for decrease in loans held for investment, $2.6 million in maturities of debt securities, $1.9 million in repurchased FHLB stock, $2.2 million in exercised stock options, and $3.0 million in net income.
+Added: During the three months ended March 31, 2024, primary uses of cash and cash equivalents included:
+Added: $477.8 million in funding loans held for sale, $600,000 to fund loans held for investment, $2.4 million for purchases of mortgage related securities, $1.1 million for FHLB stock, $50.0 million for payoffs of long-term borrowings, $2.9 million for cash dividends paid, and $5.3 million for purchases of our common stock.
+Added: During the three months ended March 31, 2024, primary sources of cash and cash equivalents included:
+Added: $487.0 million in proceeds from the sale of loans held for sale, $30.0 million in long-term borrowings, $43.1 million in short-tern borrowings, $5.0 million in principal repayments on mortgage related securities, $9.3 million for increase in deposits, $290,000 in maturities of debt securities, and $3.0 million in net income.
A portion of our liquidity consists of cash and cash equivalents, which are a product of our operating, investing and financing activities.
−Removed: At September 30, 2024 and 2023, respectively, $41.4 million and $62.3 million of our assets were invested in cash and cash equivalents.
−Removed: At September 30, 2024, cash and cash equivalents were comprised of the following:
+Added: At March 31, 2025 and 2024, respectively, $43.3 million and $45.7 million of our assets were invested in cash and cash equivalents.
+Added: At March 31, 2025, cash and cash equivalents were comprised of the following:
$37.5 million in cash held at the Federal Reserve Bank and other depository institutions and $5.6 million in federal funds sold and short-term investments.
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If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLB which provide an additional source of funds.
−Removed: At September 30, 2024, we had $160.0 million in long term advances from the FHLB with contractual maturity dates in 2027, 2029, and 2034.
+Added: At March 31, 2025, we had $190.0 million in long term advances from the FHLB with contractual maturity dates in 2027, 2028, 2029, and 2030.
See Note 6 - Borrowings of the notes to unaudited consolidated financial statements for additional information about the remaining call option details of our FHLB long-term debt.
−Removed: The Company had approximately $325.3 million of uninsured deposits for approximately 1,354 customers as of September 30, 2024.
+Added: The Company had approximately $342.7 million of uninsured deposits for approximately 1,430 customers as of March 31, 2025.
Uninsured deposit amounts are estimated based on the portions of customer account balances that exceed the FDIC insurance limits.
−Removed: At September 30, 2024, we had outstanding commitments to originate loans receivable of $28.1 million.
−Removed: In addition, at September 30, 2024, we had unfunded commitments under construction loans of $55.1 million, unfunded commitments under business lines of credit of $12.7 million and unfunded commitments under home equity lines of credit and standby letters of credit of $12.3 million.
−Removed: At September 30, 2024, certificates of deposit scheduled to mature in one year or less totaled $745.3 million.
+Added: At March 31, 2025, we had outstanding commitments to originate loans receivable of $19.0 million.
+Added: In addition, at March 31, 2025, we had unfunded commitments under construction loans of $64.5 million, unfunded commitments under business lines of credit of $13.2 million and unfunded commitments under home equity lines of credit and standby letters of credit of $12.8 million.
+Added: At March 31, 2025, certificates of deposit scheduled to mature in one year or less totaled $845.7million.
Based on prior experience, management believes that, subject to the Bank’s funding needs, a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case.
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The ability of WaterStone Bank to pay dividends is subject to regulatory restrictions.
−Removed: At September 30, 2024, Waterstone Financial, Inc.
+Added: At March 31, 2025, Waterstone Financial, Inc.
(on an unconsolidated basis) had liquid assets totaling $14.6 million.
−Removed: Shareholders' equity decreased $2.1 million to $342.0 million at September 30, 2024.
−Removed: Shareholders' equity decreased primarily due to the declaration of dividends and the repurchase of stock.
−Removed: Partially offsetting the decreases, there were increases due to the net income, equity awards granted, unearned ESOP shares vesting, and an increase in the fair value of the securities portfolio.
+Added: Shareholders' equity increased $2.2 million to $341.4 million at March 31, 2025.
+Added: Shareholders' equity increased primarily due to the increase in valuations of our mortgage related securities.
The Company's Board of Directors authorized a 2,000,000 share stock repurchase program in the second quarter of 2024.
−Removed: As of September 30, 2024, the Company has approximately 1.9 million shares remaining in the plan.
+Added: As of March 31, 2025, the Company has approximately 1.4 million shares remaining in the plan.
WaterStone Bank is subject to various regulatory capital requirements, including a risk-based capital measure.
The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning assets and off-balance sheet items to broad risk categories.
−Removed: At September 30, 2024, WaterStone Bank exceeded all regulatory capital requirements and is considered “well capitalized” under regulatory guidelines.
+Added: At March 31, 2025, WaterStone Bank exceeded all regulatory capital requirements and is considered “well capitalized” under regulatory guidelines.
See “Notes to Unaudited Consolidated Financial Statements - Note 7 - Regulatory Capital.”
Contractual Obligations, Commitments, Contingent Liabilities, and Off-balance Sheet Arrangements
−Removed: During the three months ended September 30, 2024, we entered into $60.0 million of new long-term debt and repaid $160.7 million of short-term debt.
+Added: During the three months ended March 31, 2025, we entered into $80.0 million of new long-term debt, paid down $40.0 in existing long-term debt, and repaid $90.1 million of short-term debt.
See Note 6 - Borrowings of the notes to unaudited consolidated financial statements for additional information about the remaining maturities of our FHLB long-term debt.
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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.