Waterstone Financial Reports Q1 2025 Results with Slight Net Income Decrease

Waterstone Financial, Inc. reported its financial results for the first quarter of 2025, revealing a net income of $3.036 million, a slight decrease from $3.038 million in the same period last year. The company's earnings per share increased to $0.17 from $0.16, reflecting a stable performance despite a challenging economic environment. Total interest income rose to $27.755 million, up from $26.905 million, primarily driven by an increase in interest income from loans, which reached $25.078 million compared to $24.484 million in the prior year.

The company's total assets decreased by $34.2 million, or 1.5%, to $2.175 billion as of March 31, 2025, down from $2.209 billion at the end of 2024. This decline was largely attributed to a reduction in loans receivable, which fell to $1.664 billion from $1.681 billion. Notably, the allowance for credit losses decreased to $17.905 million from $18.247 million, reflecting a negative provision for credit losses of $558,000 during the quarter, compared to a provision of $67,000 in the previous year. This change was primarily due to improved asset quality metrics and a decrease in historical loss rates.

In terms of operational developments, Waterstone Financial's community banking segment generated the majority of net interest income, while the mortgage banking segment faced challenges with a net loss of $1.625 million, down from a profit of $298,000 in the prior year. The mortgage banking segment originated $387.7 million in loans held for sale, a decrease of 20.1% from the previous year, driven by reduced demand in the market. The company also reported a decrease in noninterest income, which fell to $17.097 million from $21.248 million, largely due to lower mortgage banking income.

Looking ahead, Waterstone Financial remains focused on managing its interest rate risk and maintaining liquidity. The company has emphasized the importance of its deposit base in funding its operations, with total deposits increasing by $21.3 million to $1.381 billion. The bank is considered "well-capitalized" under regulatory guidelines, with all capital ratios exceeding the required minimums. The management expressed optimism about navigating the current economic landscape while continuing to adapt its strategies to meet market demands.