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Item 9A. Controls and Procedures

2022-02-28 compared with 2021-03-02 · 72 added, 72 removed, 106 unchanged (58% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures :

The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

Change in Internal Control Over Financial Reporting :

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the final fiscal quarter of the period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act.

As of December 31, 2020, management assessed the effectiveness of the Company’s internal control over financial reporting based on criteria for effective internal control over financial reporting established in “Internal Control—Integrated Framework,” issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO) in 2013.

The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has

evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered

by this report.

summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

As of December 31, 2021, management

assessed the effectiveness of the Company’s internal control over financial reporting based on criteria for effective internal control over financial reporting established in “Internal Control—Integrated Framework,” issued by the Committee of

Sponsoring Organization of the Treadway Commission (COSO) in 2013.

Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2021 is effective.

RSM US LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued a report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020.

The report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, is included below under the heading “Report of Independent Registered Public Accounting Firm.”

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Waterstone Financial, Inc.

Opinion on the Internal Control Over Financial Reporting

We have audited Waterstone Financial Inc.

and Subsidiaries' (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company and our report dated March 1, 2021 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ RSM US LLP

Chicago, Illinois

March 1, 2021

CliftonLarsonAllen LLP the Company’s registered public accounting firm, has audited the Company’s internal control over financial

reporting as of December 31, 2021.

The audit report by CliftonLarsonAllen LLP is located in Item 8 of this report.

There were no changes in the Company’s internal controls over financial reporting (as defined in Rule 13a - 15(f) under the Exchange Act) that occurred

during the year ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no significant changes in the Company’s internal controls

or in other factors that could significantly affect internal controls subsequent to the date of their evaluation or material weaknesses in such internal controls requiring corrective actions.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

The information in the Company’s definitive Proxy Statement, prepared for the 2021 Annual Meeting of Shareholders, which contains information concerning directors of the Company under the caption “Proposal 1 - Election of Directors” and compliance with Section 16 reporting requirements under the caption “Delinquent Section 16(a) Reports” and information concerning corporate governance under the caption “Other Board and Corporate Governance Matters” and "Board Meetings and Committees," is incorporated herein by reference.

The information in the Company’s definitive Proxy Statement, prepared for the 2022 Annual Meeting of Shareholders, which contains

information concerning directors of the Company under the caption “Proposal 1 - Election of Directors” and compliance with Section 16 reporting requirements under the caption “Delinquent Section 16(a) Reports” and information concerning corporate

governance under the caption “Other Board and Corporate Governance Matters” and "Board Meetings and Committees," is incorporated herein by reference.

Executive Officers of the Registrant

The table below sets forth certain information regarding the persons who have been determined, by our board of directors, to be executive officers of the Company.

The table below sets forth certain information regarding the persons who have been determined, by our board of directors, to be

executive officers of the Company.

The executive officers of the Company are elected annually and hold office until their respective successors have been elected or until death, resignation, retirement or removal by the Board of directors.

8 unchanged sentences

Executive Compensation

The information in the Company’s definitive Proxy Statement, prepared for the 2021 Annual Meeting of Shareholders, which contains information concerning this item under the captions “Executive Compensation,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” and “Compensation Committee Report,” is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information in the Company’s definitive Proxy Statement, prepared for the 2022 Annual Meeting of Shareholders, which contains

information concerning this item under the captions “Executive Compensation,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Discussion and Analysis,” and “Compensation Committee Report,” is

incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

The information in the Company’s definitive Proxy Statement, prepared for the 2022 Annual Meeting of Shareholders, which contains

information concerning this item under the caption “Beneficial Ownership of Common Stock,” is incorporated herein by reference.

Compensation Plans

Set forth below is information as of December 31, 2021 regarding equity compensation plans that have been approved by shareholders.

The Company has no equity based benefit plans, other than its employee stock ownership plan, that were not approved by shareholders.

The Company has no equity based benefit plans, other than its employee stock ownership plan, that were not approved by

shareholders.

Number of shares to be issued upon exercise of outstanding options and rights

2 unchanged sentences

2020 Omnibus Incentive Plan

Consists of 30,000 shares reserved for grants of stock options.

On December 31, 2020, 30,000 options were outstanding with a weighted average exercise price of $16.61 of which none were exercisable as of that date.

Consists of 60,000 shares reserved for grants of stock options and 28,722 shares reserved for grants of restricted stock.

On December 31, 2021, 60,000 options were outstanding with a weighted average exercise price of $19.25 of which 4,000 were exercisable as of that date.

Certain Relationships and Related Transactions, and Director Independence

The information in the Company’s definitive Proxy Statement, prepared for the 2021 Annual Meeting of Shareholders, which contains information concerning this item under the captions “Transactions with Certain Related Parties,” and “Board Meetings and Committees,” is incorporated herein by reference.

The information in the Company’s definitive Proxy Statement, prepared for the 2022 Annual Meeting of Shareholders, which contains

information concerning this item under the captions “Transactions with Certain Related Parties,” and “Board Meetings and Committees,” is incorporated herein by reference.

Principal Accountant Fees and Services

The information in the Company’s definitive Proxy Statement, prepared for the 2021 Annual Meeting of Shareholders, which contains information concerning this item under the caption “Ratification of the Appointment of Our Independent Registered Public Accounting Firm,” is incorporated herein by reference.

The information in the Company’s definitive Proxy Statement, prepared for the 2022 Annual Meeting of Shareholders, which contains

information concerning this item under the caption “Ratification of the Appointment of Our Independent Registered Public Accounting Firm,” is incorporated herein by reference.

Exhibits and Financial Statement Schedules

Documents filed as part of the Report:

Financial Statements and Financial Statement Schedules .

Financial Statements and Financial Statement

The following consolidated financial statements of Waterstone Financial, Inc.

and subsidiaries are filed as part of this report under Item 8, “Financial Statements and Supplementary Data”:

and subsidiaries are filed as part of this report under

Item 8, “Financial Statements and Supplementary Data”:

Report of CliftonLarsonAllen LLP, Independent Registered Public Accounting Firm, on consolidated financial statements.

(PCAOB ID 655 )

Report of RSM US LLP, Independent Registered Public Accounting Firm, on consolidated financial statements.

(PCAOB ID 49 )

Consolidated Statements of Financial Condition – December 31, 2021 and 2020.

4 unchanged sentences

Notes to Consolidated Financial Statements.

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

See Exhibit Index following the signature page of this report, which is incorporated herein by reference.

Each management contract or compensatory plan or arrangement required to be filed as an exhibit to this report is identified in the Exhibit Index by an asterisk following its exhibit number.

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not

required under the related instructions or are inapplicable, and therefore have been omitted.

See Exhibit Index following

the signature page of this report, which is incorporated herein by reference.

Each management contract or compensatory plan or arrangement required to be filed as an exhibit to this report is identified in the Exhibit Index by an asterisk following

its exhibit number.

Form 10-K Summary

14 unchanged sentences

Employment Agreement By and Between WaterStone Bank SSB and Douglas S.

Change in Control Agreement Between WaterStone Bank SSB and Julie Glynn †(4)

Waterstone Financial, Inc.

2 unchanged sentences

List of Subsidiaries (6)

Consent of Independent Registered Public Accounting Firm

Consent of Independent Registered Public

Accounting Firm

Consent of Independent Registered Public

Accounting Firm

Powers of Attorney

Sarbanes-Oxley Act Section 302 Certification signed by the Chief Executive Officer of Waterstone Financial

Sarbanes-Oxley Act Section 302 Certification signed by the Chief Financial Officer of Waterstone Financial

Sarbanes-Oxley Act Section 302 Certification

signed by the Chief Executive Officer of Waterstone Financial

Sarbanes-Oxley Act Section 302 Certification

signed by the Chief Financial Officer of Waterstone Financial

Certification pursuant to 18 U.S.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by the Chief Executive Officer of Waterstone Financial

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by the Chief Executive Officer of Waterstone Financial

Certification pursuant to 18 U.S.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by the Chief Financial Officer of Waterstone Financial

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by the Chief Financial Officer of Waterstone Financial

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL

Inline XBRL Taxonomy Extension Schema

5 unchanged sentences

† Management compensation contract or agreement

(1) Incorporated by reference to the registration Statement on Form S-1 filed by Wauwatosa Holdings, Inc.

(1) Incorporated by reference to the registration Statement on Form S-1 filed by Wauwatosa

Holdings, Inc.

(the predecessor corporation to Waterstone Financial, Inc., a federal corporation) (Commission file no.

12 unchanged sentences

Securities and Exchange Commission on March 13, 2020 (File No.

(7) Incorporated by reference to Exhibit 21.1 to Report on Form 10-K filed with the U.S.

Securities and Exchange Commission on March 13, 2020 (File No.

(8) Incorporated by reference to Appendix A to the Definitive Proxy Statement for the 2020 Annual Meeting of Shareholders filed by Waterstone Financial, Inc.

(7) Incorporated

by reference to Appendix A to the Definitive Proxy Statement for the 2020 Annual Meeting of Shareholders filed by Waterstone Financial, Inc.

(Commission file no.

1 unchanged sentence

Securities and Exchange Commission on April 9, 2020.

(9) Incorporated by reference to Exhibit 10.1 to Report on Form 8-K filed with the U.S.

(8) Incorporated by reference to Exhibit 10.1 to Report on Form 8-K filed

with the U.S.

Securities and Exchange Commission on November 3, 2020 (File No.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

WATERSTONE FINANCIAL, INC.

March 01, 2021

February 28, 2022

/s/ Douglas S.

3 unchanged sentences

Gordon or Mark R.

Gerke, or any of them, as attorneys-in-fact with full power of substitution, to execute in the name and on behalf of such person, individually, and in each capacity stated below or otherwise, and to file, any and all amendments to this report.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.*

Gerke, or any of them, as attorneys-in-fact

with full power of substitution, to execute in the name and on behalf of such person, individually, and in each capacity stated below or otherwise, and to file, any and all amendments to this report.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on

behalf of the registrant and in the capacities indicated.*

Signature and Title

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Tyus, Director

*Each of the above signatures is affixed as of March 1, 2021.

Tyus was elected to serve on the board of directors of Waterstone Financial, Inc.

on February 8, 2021.

*Each of the above signatures is affixed as of February 28, 2022.

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.

What changed 10-K

Item 9A. Controls and Procedures