Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Nine Months Ended September 30, 2025

WAUWATOSA, Wis., Oct. 23, 2025 (GLOBE NEWSWIRE) -- Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $7.9 million, or $0.45 per diluted share, for the quarter ended September 30, 2025 compared to $4.7 million, or $0.26 per diluted share, for the quarter ended September 30, 2024. Net income totaled $7.7 million, or $0.43 per diluted share, for the quarter ended June 30, 2025. Net income per diluted share was $1.04 for the nine months ended September 30, 2025 compared to net income per diluted share of $0.72 for the nine months ended September 30, 2024.

“We sustained our improved 2025 performance, exceeding the prior year, as well as our 2025 second quarter results due primarily to improved net interest margin and continued strong asset quality metrics,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “With improved earnings in both our Community and Mortgage Banking segments, consolidated earnings totaled $0.45 per diluted share, which represents a 73.1% increase compared to the quarter ended September 30, 2024. The Community Banking segment achieved growth in net interest income of $2.4 million, or 19.3%, compared to the quarter ended September 30, 2024 primarily due to continued growth in yield on our loans held for investment, as well as a reduction of our cost of funds. Continued strong asset quality resulted in a release from our allowance for credit losses. The Mortgage Banking segment recorded a second straight quarter of pre-tax income due to continued focus on expense management and improved margins. We added $0.61 to book value per share during the quarter through strong earnings, an active share repurchase program, and improving valuations on our investment security portfolio, prior to declaring a quarterly dividend of $0.15 per share.”

Highlights of the Quarter Ended September 30, 2025

Waterstone Financial, Inc. (Consolidated)

Consolidated net income of Waterstone Financial, Inc. totaled $7.9 million for the quarter ended September 30, 2025 compared to net income of $4.7 million for the quarter ended September 30, 2024.Consolidated return on average assets (annualized) was 1.42% for the quarter ended September 30, 2025 and 0.83% for the quarter ended September 30, 2024.Consolidated return on average equity (annualized) was 9.14% for the quarter ended September 30, 2025 and 5.55% for the quarter ended September 30, 2024.Dividends declared during the quarter ended September 30, 2025 totaled $0.15 per common share.During the quarter ended September 30, 2025, we repurchased approximately 270,000 shares at a cost (including the federal excise tax) of $3.8 million, or $14.15 per share. The share repurchases increased book value approximately $0.07 during the quarter ended September 30, 2025.Nonperforming assets as a percentage of total assets was 0.27% at September 30, 2025, 0.37% at June 30, 2025, and 0.25% at September 30, 2024.Past due loans as a percentage of total loans was 0.50% at September 30, 2025, 0.69% at June 30, 2025, and 0.63% at September 30, 2024.Book value per share was $18.65 at September 30, 2025 and $17.53 at December 31, 2024.

Community Banking Segment

Pre-tax income totaled $8.4 million for the quarter ended September 30, 2025, which represents a $2.8 million, or 49.4%, increase compared to $5.6 million for the quarter ended September 30, 2024.Net interest income totaled $14.6 million for the quarter ended September 30, 2025, which represents a $2.4 million, or 19.3%, increase compared to $12.3 million for the quarter ended September 30, 2024.Average loans held for investment totaled $1.68 billion during the quarter ended September 30, 2025, which represents a decrease of $6.2 million, or 0.4%, compared to the quarter ended September 30, 2024. The decrease was primarily due to a decrease in single-family mortgages offset by an increase multi-family mortgages. Average loans held for investment increased $15.0 million compared to $1.67 billion for the quarter ended June 30, 2025. The increase was primarily due to an increase in multi-family mortgages.Net interest margin increased 63 basis points to 2.76% for the quarter ended September 30, 2025 compared to 2.13% for the quarter ended September 30, 2024, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in the cost of borrowings and weighted average cost of deposits. Net interest margin increased 16 basis points compared to 2.60% for the quarter ended June 30, 2025, which was primarily driven by an increase in weighted average yield on loans receivable and held for sale and decreases in cost of borrowings and weighted average cost of deposits.Past due loans at the community banking segment totaled $6.8 million at September 30, 2025, $8.9 million at June 30, 2025, and $8.0 million at September 30, 2024.The segment had a negative provision for credit losses related to funded loans of $137,000 for the quarter ended September 30, 2025 compared to a negative provision for credit losses related to funded loans of $218,000 for the quarter ended September 30, 2024. The current quarter decrease was primarily due to decreases in single-family and commercial real estate qualitative risk factors, offset by an increase in the multi-family loan balances. The negative provision for credit losses related to unfunded loan commitments was $139,000 for the quarter ended September 30, 2025 compared to a negative provision for credit losses related to unfunded loan commitments of $84,000 for the quarter ended September 30, 2024. The negative provision for credit losses related to unfunded loan commitments for the quarter ended September 30, 2025 was due primarily to a decrease in the construction loans waiting to be funded.The efficiency ratio, a non-GAAP ratio, was 48.94% for the quarter ended September 30, 2025, compared to 60.35% for the quarter ended September 30, 2024.Average core retail deposits (excluding brokered and escrow accounts) totaled $1.31 billion during the quarter ended September 30, 2025, an increase of $65.4 million, or 5.2%, compared to $1.25 billion during the quarter ended September 30, 2024 due primarily to increases in money market and certificated of deposits balances. Average deposits increased $1.3 million, or 0.4% annualized, compared to $1.31 billion for the quarter ended June 30, 2025. The segment had an average of $61.8 million in brokered certificate of deposits during the quarter ended September 30, 2025 compared to $435,000 during the quarter ended September 30, 2024.

Mortgage Banking Segment

Pre-tax income totaled $1.3 million for the quarter ended September 30, 2025, compared to $144,000 for the quarter ended September 30, 2024.Loan originations decreased $19.3 million, or 3.5%, to $539.4 million during the quarter ended September 30, 2025, compared to $558.7 million during the quarter ended September 30, 2024. Origination volume relative to purchase activity accounted for 90.1% of originations for the quarter ended September 30, 2025 compared to 88.9% of total originations for the quarter ended September 30, 2024.Mortgage banking non-interest income decreased $401,000, or 1.9%, to $21.0 million for the quarter ended September 30, 2025, compared to $21.4 million for the quarter ended September 30, 2024.Gross margin on loans sold totaled 3.87% for the quarter ended September 30, 2025, compared to 3.83% for the quarter ended September 30, 2024.Total compensation, payroll taxes and other employee benefits decreased $214,000, or 1.3%, to $15.7 million during the quarter ended September 30, 2025 compared to $15.9 million during the quarter ended September 30, 2024. The decrease primarily related to decreased commission expense, manager pay expense, and salary expense offset by an increase in sign on incentives for new loan officers added.

About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank, a community-focused financial institution established in 1921. WaterStone Bank offers a comprehensive suite of personal and business banking products and operates 14 branch locations across southeastern Wisconsin. WaterStone Bank is also the parent company of WaterStone Mortgage Corporation, a national lender licensed in 48 states.

With a long-standing commitment to innovation, integrity, and community service, Waterstone Financial, Inc. supports the financial and homeownership goals of customers nationwide. For more information about WaterStone Bank, go to wsbonline.com.

Forward-Looking Statements
This press release contains statements or information that may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as “may,” “expects,” “anticipates,” “estimates” or “believes.” Any such statements are based upon current expectations that involve a number of risks and uncertainties and are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. Factors that might cause such a difference include changes in interest rates; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk factors referenced in Item 1A. Risk Factors in Waterstone’s most recent Annual Report on Form 10-K and as may be described from time to time in Waterstone’s subsequent SEC filings, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only Waterstone’s belief as of the date of this press release.

Non-GAAP Financial Measures
Management uses non-GAAP financial information in its analysis of the Company's performance. Management believes that this non-GAAP measure provides a greater understanding of ongoing operations and enhances comparability of results of operations with prior periods. The Company’s management believes that investors may use this non-GAAP measure to analyze the Company's financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in this measure and that different companies might calculate this measure differently.

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) For The Three Months
Ended September 30, For The Nine Months
Ended September 30, 2025 2024 2025 2024 (In Thousands, except per share amounts) Interest income: Loans $26,625 $26,590 $77,578 $76,675 Mortgage-related securities 1,365 1,137 3,809 3,360 Debt securities, federal funds sold and short-term investments 1,566 1,464 4,609 4,081 Total interest income 29,556 29,191 85,996 84,116 Interest expense: Deposits 10,527 10,477 32,826 29,163 Borrowings 4,290 7,197 12,147 21,620 Total interest expense 14,817 17,674 44,973 50,783 Net interest income 14,739 11,517 41,023 33,333 Provision (credit) for credit losses (269) (377) (836) (535)Net interest income after provision (credit) for loan losses 15,008 11,894 41,859 33,868 Noninterest income: Service charges on loans and deposits 618 545 1,624 1,434 Increase in cash surrender value of life insurance 526 410 2,021 1,562 Mortgage banking income 20,875 21,294 59,162 66,200 Other 283 303 921 1,101 Total noninterest income 22,302 22,552 63,728 70,297 Noninterest expenses: Compensation, payroll taxes, and other employee benefits 20,534 21,017 58,702 62,655 Occupancy, office furniture, and equipment 1,688 1,857 5,370 5,994 Advertising 712 926 2,181 2,827 Data processing 1,210 1,297 3,735 3,745 Communications 249 232 741 698 Professional fees 380 569 2,616 2,070 Real estate owned 4 - (14) 14 Loan processing expense 688 697 2,425 2,604 Other 2,001 1,965 6,437 5,762 Total noninterest expenses 27,466 28,560 82,193 86,369 Income before income taxes 9,844 5,886 23,394 17,796 Income tax expense 1,918 1,158 4,705 4,318 Net income $7,926 $4,728 $18,689 $13,478 Income per share: Basic $0.45 $0.26 $1.04 $0.72 Diluted $0.45 $0.26 $1.04 $0.72 Weighted average shares outstanding: Basic 17,639 18,350 17,962 18,631 Diluted 17,671 18,445 17,985 18,677

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION September 30,
2025 December 31,
2024 (Unaudited) Assets (In Thousands, except per share amounts) Cash $50,075 $35,182 Federal funds sold 3,407 4,302 Interest-earning deposits in other financial institutions and other short-term investments 286 277 Cash and cash equivalents 53,768 39,761 Securities available for sale (at fair value) 226,403 208,549 Loans held for sale (at fair value) 135,676 135,909 Loans receivable 1,714,836 1,680,576 Less: Allowance for credit losses ("ACL") - loans 17,670 18,247 Loans receivable, net 1,697,166 1,662,329 Office properties and equipment, net 18,737 19,389 Federal Home Loan Bank stock (at cost) 20,707 20,295 Cash surrender value of life insurance 76,813 74,612 Real estate owned, net 85 505 Prepaid expenses and other assets 39,814 48,259 Total assets $2,269,169 $2,209,608 Liabilities and Shareholders' Equity Liabilities: Demand deposits $176,568 $171,115 Money market and savings deposits 306,778 283,243 Time deposits 902,627 905,539 Total deposits 1,385,973 1,359,897 Borrowings 469,061 446,519 Advance payments by borrowers for taxes 26,993 5,630 Other liabilities 41,647 58,427 Total liabilities 1,923,674 1,870,473 Shareholders' equity: Preferred stock - - Common stock 185 193 Additional paid-in capital 80,521 91,214 Retained earnings 287,868 277,196 Unearned ESOP shares (9,792) (10,682)Accumulated other comprehensive loss, net of taxes (13,287) (18,786)Total shareholders' equity 345,495 339,135 Total liabilities and shareholders' equity $2,269,169 $2,209,608 Share Information Shares outstanding 18,524 19,343 Book value per share $18.65 $17.53

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited) At or For the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 (Dollars in Thousands, except per share amounts) Condensed Results of Operations: Net interest income $14,739 $13,708 $12,576 $12,835 $11,517 Provision (credit) for credit losses (269) (9) (558) 367 (377)Total noninterest income 22,302 24,329 17,097 19,005 22,552 Total noninterest expense 27,466 28,377 26,350 25,267 28,560 Income before income taxes 9,844 9,669 3,881 6,206 5,886 Income tax expense 1,918 1,942 845 996 1,158 Net income $7,926 $7,727 $3,036 $5,210 $4,728 Income per share – basic $0.45 $0.43 $0.17 $0.28 $0.26 Income per share – diluted $0.45 $0.43 $0.17 $0.28 $0.26 Dividends declared per common share $0.15 $0.15 $0.15 $0.15 $0.15 Performance Ratios (annualized): Return on average assets - QTD 1.42% 1.39% 0.57% 0.94% 0.83%Return on average equity - QTD 9.14% 9.04% 3.61% 6.05% 5.55%Net interest margin - QTD 2.76% 2.60% 2.47% 2.42% 2.13% Return on average assets - YTD 1.13% 0.99% 0.57% 0.84% 0.81%Return on average equity - YTD 7.23% 6.32% 3.61% 5.48% 5.30%Net interest margin - YTD 2.61% 2.54% 2.47% 2.17% 2.09% Asset Quality Ratios: Past due loans to total loans 0.50% 0.69% 0.67% 0.95% 0.63%Nonaccrual loans to total loans 0.35% 0.49% 0.45% 0.34% 0.32%Nonperforming assets to total assets 0.27% 0.37% 0.35% 0.28% 0.25%Allowance for credit losses - loans to loans receivable 1.03% 1.07% 1.08% 1.09% 1.07%

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
(Unaudited) At or For the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 Average balances (Dollars in Thousands) Interest-earning assets Loans receivable and held for sale $1,809,600 $1,812,065 $1,768,617 $1,819,574 $1,870,627 Mortgage related securities 178,063 173,220 170,947 168,521 170,221 Debt securities, federal funds sold and short-term investments 131,165 131,710 123,004 124,658 115,270 Total interest-earning assets 2,118,828 2,116,995 2,062,568 2,112,753 2,156,118 Noninterest-earning assets 103,434 105,382 105,030 100,627 104,600 Total assets $2,222,262 $2,222,377 $2,167,598 $2,213,380 $2,260,718 Interest-bearing liabilities Demand accounts $90,015 $89,548 $87,393 $92,247 $89,334 Money market, savings, and escrow accounts 334,300 320,908 300,686 306,478 304,116 Certificates of deposit - retail 823,274 830,550 818,612 810,340 785,793 Certificates of deposit - brokered 61,814 72,533 97,101 59,254 435 Total interest-bearing deposits 1,309,403 1,313,539 1,303,792 1,268,319 1,179,678 Borrowings 440,968 437,784 397,053 464,964 600,570 Total interest-bearing liabilities 1,750,371 1,751,323 1,700,845 1,733,283 1,780,248 Noninterest-bearing demand deposits 88,799 85,665 80,372 87,889 91,532 Noninterest-bearing liabilities 39,136 42,669 44,905 49,645 49,787 Total liabilities 1,878,306 1,879,657 1,826,122 1,870,817 1,921,567 Equity 343,956 342,720 341,476 342,563 339,151 Total liabilities and equity $2,222,262 $2,222,377 $2,167,598 $2,213,380 $2,260,718 Average Yield/Costs (annualized) Loans receivable and held for sale 5.84% 5.73% 5.75% 5.75% 5.65%Mortgage related securities 3.04% 2.90% 2.83% 2.67% 2.66%Debt securities, federal funds sold and short-term investments 4.74% 4.74% 4.90% 4.85% 5.05%Total interest-earning assets 5.53% 5.43% 5.46% 5.46% 5.39% Demand accounts 0.11% 0.11% 0.11% 0.11% 0.11%Money market and savings accounts 2.04% 2.07% 2.10% 2.00% 1.94%Certificates of deposit – retail 3.92% 4.11% 4.33% 4.53% 4.54%Certificates of deposit - brokered 4.11% 4.35% 4.18% 4.18% 0.00%Total interest-bearing deposits 3.19% 3.35% 3.52% 3.58% 3.53%Borrowings 3.86% 3.67% 3.93% 4.11% 4.77%Total interest-bearing liabilities 3.36% 3.43% 3.62% 3.72% 3.95%

COMMUNITY BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited) At or For the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 (Dollars in Thousands) Condensed Results of Operations: Net interest income $14,617 $13,640 $12,403 $12,886 $12,250 Provision (credit) for credit losses (276) (19) (518) 331 (302)Total noninterest income 1,359 1,686 1,348 1,595 1,227 Noninterest expenses: Compensation, payroll taxes, and other employee benefits 5,036 5,027 5,212 4,883 5,326 Occupancy, office furniture and equipment 907 920 1,076 825 904 Advertising 213 219 171 204 311 Data processing 733 806 712 691 720 Communications 108 99 100 89 80 Professional fees 200 196 347 196 190 Real estate owned 4 (8) (10) 12 - Loan processing expense - - - - - Other 617 466 596 563 602 Total noninterest expense 7,818 7,725 8,204 7,463 8,133 Income before income taxes 8,434 7,620 6,065 6,687 5,646 Income tax expense 1,518 1,400 1,427 1,399 941 Net income $6,916 $6,220 $4,638 $5,288 $4,705 Efficiency ratio - QTD (non-GAAP) 48.94% 50.40% 59.66% 51.54% 60.35%Efficiency ratio - YTD (non-GAAP) 52.71% 54.78% 59.66% 59.58% 62.58%

MORTGAGE BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited) At or For the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 (Dollars in Thousands) Condensed Results of Operations: Net interest loss $103 $53 $152 $(92) $(760)Provision for credit losses 7 10 (40) 36 (75)Total noninterest income 20,985 22,643 15,731 17,455 21,386 Noninterest expenses: Compensation, payroll taxes, and other employee benefits 15,716 16,312 12,054 13,781 15,930 Occupancy, office furniture and equipment 781 833 853 754 953 Advertising 499 527 552 523 615 Data processing 475 507 498 542 570 Communications 141 158 135 135 152 Professional fees 180 303 1,373 917 379 Real estate owned - - - - - Loan processing expense 688 817 920 486 697 Other 1,271 1,230 1,751 814 1,261 Total noninterest expense 19,751 20,687 18,136 17,952 20,557 (Loss) income before income taxes (benefit) expense 1,330 1,999 (2,213) (625) 144 Income tax (benefit) expense) 382 531 (588) (428) 194 Net (loss) income $948 $1,468 $(1,625) $(197) $(50) Efficiency ratio - QTD (non-GAAP) 93.66% 91.15% 114.18% 103.39% 99.67%Efficiency ratio - YTD (non-GAAP) 98.17% 100.63% 114.18% 97.74% 96.23% Loan originations $539,404 $588,838 $387,729 $470,650 $558,729 Purchase 90.1% 91.7% 87.5% 82.1% 88.9%Refinance 9.9% 8.3% 12.5% 17.9% 11.1%Gross margin on loans sold(1) 3.87% 3.84% 3.98% 3.74% 3.83%

(1) Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations.

Contact: Mark R. Gerke
Chief Financial Officer
414-459-4012
[email protected]