Key Highlights

  • Second-quarter net income was $8.5 million, or $0.49 per diluted share, versus $0.43 a year earlier.
  • Net interest margin reached 3.03%, up from 2.60% a year earlier.
  • Mortgage originations rose 5.6% to $621.8 million.
  • Book value per share was $19.53 at June 30, 2026, up from $19.03 at year-end 2025.
  • The company repurchased about 200,000 shares for $3.7 million in the quarter.

Waterstone Financial Earnings: What Do the Latest Filings Show?

Waterstone Financial (NASDAQ:WSBF) appeared on the Tuesday, October 27 earnings screen without reported figures, and the company's most recent results release is its second-quarter report dated July 23. That release showed net income of $8.5 million, or $0.49 per diluted share, versus $7.7 million, or $0.43. Six-month net income was $14.5 million, or $0.84, versus $10.8 million, or $0.59.

Return on average assets was 1.52% versus 1.39%, and return on average equity was 9.65% versus 9.04%. Waterstone is a Wisconsin-based holding company with a community bank and a nationwide mortgage banking arm, with total assets of $2.25 billion.

First-quarter net income had been $6.0 million, or $0.34 per diluted share, so the second quarter marked a step up.

Waterstone Financial Margin: How Strong Is Community Banking?

Net interest margin was 3.03%, up 43 basis points from 2.60% a year earlier and 6 basis points from 2.97% in the first quarter. Management said it was the highest level since the fourth quarter of 2022, reflecting higher loan yields and lower funding costs.

Net interest income was $16.0 million versus $13.7 million. Community Banking net interest income rose 16.1% to a record $15.8 million, and pre-tax income rose 18.2% to $9.0 million. The segment efficiency ratio improved to 48.16% from 50.40%.

Average loans held for investment were $1.68 billion, with multi-family growth offsetting single-family declines. Average core retail deposits rose 2.0% to $1.34 billion, while brokered certificates of deposit averaged $86.4 million versus $72.5 million.

Waterstone Mortgage Banking: Can Volume Offset Thinner Sale Margins?

Mortgage Banking pre-tax income fell 20.2% to $1.6 million. Originations rose 5.6% to $621.8 million, with purchase loans at 88.6% of volume, but the gross margin on loans sold fell to 3.60% from 3.84% a year earlier and 3.65% in the first quarter.

Mortgage banking income was $22.1 million versus $22.6 million. Consolidated noninterest income was $24.2 million, and noninterest expense rose to $29.4 million from $28.4 million. The segment efficiency ratio was 92.97%.

In the first quarter, the segment had earned only $22,000 pre-tax on originations of $508.3 million.

Waterstone Financial Capital: What to Watch in the Next Report?

Nonperforming assets were 0.30% of total assets versus 0.37% a year earlier. Past due loans were 0.63% of total loans, and the allowance for credit losses was 1.06% of loans, or $17.9 million. The provision was $236,000 versus a $9,000 credit.

Shareholders' equity was $351.1 million, and book value per share rose $0.51 in the quarter to $19.53. The quarterly dividend was $0.17, up from $0.15, and about 200,000 shares were repurchased at $18.40, returning $6.5 million in total.

Investors will watch whether margin gains persist, how mortgage sale margins trend, and the pace of buybacks when third-quarter results arrive. Management also noted that business and commercial real estate loans in the pipeline had increased at quarter-end, which bears on loan growth.