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WF

Waterstone Financial, Inc. (WSBF)·Q4 2024 Earnings Summary

Executive Summary

  • WSBF delivered consolidated net income of $5.2M and diluted EPS of $0.28 in Q4 2024, reversing a Q4 2023 net loss of ~$0.0M and < $0.01 EPS; ROAA was 0.94% and ROAE was 6.05% .
  • Net interest margin expanded materially to 2.42% (from 2.13% in Q3 and 2.25% in Q4 2023) as loan yields improved and borrowing costs fell, while deposit costs moderated sequentially .
  • Community Banking pre-tax income rose to $6.7M (+26% YoY), with stronger NII and improved efficiency ratio (51.54%), while Mortgage Banking posted a narrower pre-tax loss of $0.6M alongside higher loan sale margins (3.74%) despite lower QoQ originations .
  • Capital return remained active: $0.15 dividend declared Dec 19, 2024 (payable Feb 3, 2025) and 194K shares repurchased for $2.8M ($14.43/share) in Q4; book value per share ended at $17.53 .
  • Street consensus via S&P Global for Q4 2024 EPS and revenue was unavailable due to data access limits; estimates comparison not possible. If coverage resumes, the NIM trajectory and stable asset quality—offset by higher past due loans—likely drive estimate revisions mix .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 2.42% QTD, reflecting higher loan yields and lower borrowing costs QoQ; this supported NII growth to $12.835M .
  • Community Banking segment: pre-tax income $6.687M (+26% YoY), NII $12.886M (+6.9% YoY), efficiency ratio improved to 51.54%; CEO emphasized core deposit growth and strong asset quality .
  • Mortgage Banking: gross margin on loans sold rose to 3.74% (from 3.51% YoY), and compensation expenses fell 7.4% YoY via headcount reductions and fewer new branches; segment remained close to breakeven .
  • Quote: “We achieved loan growth, achieved core deposit growth (excluding brokered certificates of deposit), and continued to maintain strong asset quality metrics… [Mortgage Banking] remained profitable due in large part to our continued focus on cost control” — CEO William Bruss .

What Went Wrong

  • Total noninterest income declined sequentially to $19.005M (vs. $22.552M in Q3 and $26.497M in Q2), reflecting lower mortgage banking volumes relative to prior quarters .
  • Past due loans increased to 0.95% of total loans (vs. 0.63% in Q3 and 0.68% in Q4 2023); Community Banking past due balances rose to $12.8M from $8.0M in Q3 .
  • Mortgage originations fell QoQ to $470.650M (from $558.729M in Q3 and $634.109M in Q2); purchase mix dropped to 82.1% (from 88.9% in Q3), signaling softer demand despite margin resilience .
  • Provisioning lifted: consolidated provision for credit losses turned positive at $367K (vs. negative $377K in Q3), including $270K provision for unfunded commitments tied to an increase in construction loans waiting to be funded .

Financial Results

Consolidated Performance vs Prior Quarters

MetricQ2 2024Q3 2024Q4 2024
Diluted EPS ($)$0.31 $0.26 $0.28
Net Income ($USD Millions)$5.712 $4.728 $5.210
Net Interest Income ($USD Millions)$10.679 $11.517 $12.835
Total Noninterest Income ($USD Millions)$26.497 $22.552 $19.005
Income Before Tax ($USD Millions)$7.142 $5.886 $6.206
Total Noninterest Expense ($USD Millions)$30.259 $28.560 $25.267
Net Interest Margin - QTD (%)2.01% 2.13% 2.42%
ROAA - QTD (%)1.02% 0.83% 0.94%
ROAE - QTD (%)6.84% 5.55% 6.05%
Total Revenues (NII + Noninterest) ($USD Millions)$37.176 $34.069 $31.840
Note: Total Revenues calculated as Net Interest Income + Total Noninterest Income using figures from cited consolidated summaries .

YoY Highlights (Q4 2024 vs Q4 2023)

  • Diluted EPS: $0.28 vs < $0.01; Net income: $5.210M vs $(0.040)M; NIM: 2.42% vs 2.25% .
  • Noninterest income: $19.005M vs $16.876M; Total noninterest expense: $25.267M vs $29.662M .

Segment Breakdown (Q4 2024)

Segment MetricCommunity BankingMortgage Banking
Net Interest Income ($USD Millions)$12.886 $(0.092)
Total Noninterest Income ($USD Millions)$1.595 $17.455
Total Noninterest Expense ($USD Millions)$7.463 $17.952
Pre-Tax Income ($USD Millions)$6.687 $(0.625)
Net (Loss) Income ($USD Millions)$5.288 $(0.197)
Efficiency Ratio - QTD (non-GAAP) (%)51.54% 103.39%
Loan Originations ($USD Millions)N/A$470.650
Purchase / Refinance Mix (%)N/A82.1% / 17.9%
Gross Margin on Loans Sold (%)N/A3.74%

Key Performance Indicators (Q4 2024)

KPIValue
Loans Receivable ($USD Millions)$1,680.576
Total Deposits ($USD Millions)$1,359.897
Borrowings ($USD Millions)$446.519
Book Value per Share ($)$17.53
Past Due Loans / Total Loans (%)0.95%
Nonaccrual Loans / Total Loans (%)0.34%
Nonperforming Assets / Total Assets (%)0.28%
ACL - Loans / Loans Receivable (%)1.09%
Net Interest Margin - QTD (%)2.42%
Mortgage Originations ($USD Millions)$470.650
Gross Margin on Loans Sold (%)3.74%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Quarterly Cash Dividend per Share ($)Q1 2025 payable Feb 3, 2025$0.15 (Q3 2024 declared) $0.15 (Declared Dec 19, 2024) Maintained
Revenue/Margins/OpEx/OI&E/Tax RateN/ANone providedNone providedN/A
Segment-specific guidanceN/ANone providedNone providedN/A
Share RepurchasesQ4 2024Ongoing program~194K shares repurchased at ~$14.43/share; $2.8M total cost Continued program

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was available in the document set despite searches; theme tracking below draws from press releases and 8-K disclosures.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Interest rate environment and NIMQ2: Margin pressure from elevated short-term funding rates; Q3: NIM up 12bp QoQ; 50bp Fed cut in Sep partially helped borrowings .NIM up to 2.42%; 100bp Fed cuts in H2 cited; borrowing costs fell QoQ .Improving NIM trajectory.
Mortgage banking cost disciplineQ2: Efficiency improvements, YoY margin up; Q3: Segment profitable with cost control .Gross margin 3.74%; comp down 7.4% YoY; near breakeven .Sustained cost control offsets softer volumes.
Core deposit growthQ2: Avg deposits up $28.8M QoQ; Q3: +$27.6M QoQ, limited brokered CDs .Avg core deposits $1.27B, +$28.8M QoQ; brokered CDs $94.3M .Continued growth; more brokered CDs.
Loan growthQ2/Q3: Avg loans up QoQ; YoY gains from construction/CRE .Avg loans $1.68B; down $6.3M QoQ; YoY up $21.5M .Moderating QoQ; still YoY expansion.
Asset qualityQ2/Q3: NPAs ~0.25%; PD loans ~0.63–0.76% .NPAs 0.28%; PD loans 0.95% .Slight deterioration.
Capital return (dividends/repurchases)Q2: Repurchased ~481K shares; dividend $0.15; Q3: Repurchased ~71K shares; dividend $0.15 .Declared $0.15 dividend; repurchased ~194K shares at $14.43 .Ongoing, stepped-up repurchase in Q4.

Management Commentary

  • “We achieved loan growth, achieved core deposit growth (excluding brokered certificates of deposit), and continued to maintain strong asset quality metrics… The Mortgage Banking segment remained profitable due in large part to our continued focus on cost control as funding volumes are still facing headwinds from the higher fixed-rate mortgage rates.” — William Bruss, CEO .
  • Community Banking: “Net interest margin increased 17 basis points YoY to 2.42%… primarily driven by an increase in weighted average yield on loans receivable… and a decrease in weighted average cost of borrowings QoQ” .
  • Mortgage Banking: “Gross margin on loans sold totaled 3.74%… compensation and benefits decreased 7.4% YoY due to reduced headcount and fewer new branches” .

Q&A Highlights

  • No Q4 2024 earnings call transcript was found; therefore Q&A themes, guidance clarifications, and tone shifts vs prior quarters are not available in the document set [List: 0 transcripts found].

Estimates Context

  • S&P Global Wall Street consensus estimates for Q4 2024 EPS and revenue were unavailable due to data access limits at the time of retrieval; as a result, we cannot quantify beats/misses vs Street for this quarter. Values would normally be retrieved from S&P Global; unavailable here.
  • Directionally, NIM expansion and lower noninterest expenses support the bank-side earnings cadence, while lower QoQ mortgage originations could temper near-term mortgage segment revenue expectations; any Street updates should weigh margin resilience against volume softness .

Key Takeaways for Investors

  • NIM inflection: 2.42% QTD (up 29bp QoQ) on rising loan yields and lower borrowing costs suggests improving core profitability into 2025 as rate cuts flow through liabilities .
  • Operating leverage: Consolidated noninterest expense fell to $25.3M from $28.6M in Q3 and $30.3M in Q2, bolstering earnings quality despite lower mortgage volumes .
  • Mortgage margins resilient: Gross margin 3.74% and lower compensation costs indicate disciplined execution; watch for volumes to stabilize before margin expansion fully converts to earnings growth .
  • Asset quality watchlist: PD loans rose to 0.95% and NPAs to 0.28%; not alarming, but trend bears monitoring against CRE exposure commentary and provisioning for unfunded commitments .
  • Capital return supports valuation: $0.15 dividend maintained and stepped-up buybacks in Q4; book value per share at $17.53 provides tangible support .
  • Mix shift impacts revenue optics: Lower QoQ noninterest income (mortgage) offsets higher NII; traders should focus on NIM trajectory and expense discipline as near-term drivers .
  • Data gap on Street estimates: With S&P Global consensus unavailable, price reactions may center on internal metrics (NIM, expenses, credit) rather than beat/miss headlines; monitor for subsequent estimate updates.