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Get filing alertsWaterstone Financial Q1 net income doubles to $6.0M on margin expansion, mortgage rebound
Filed April 23, 2026 · Period ending April 23, 2026 · ~1 min read
Key Changes
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high
Net income surged 98% to $6.0M ($0.34/share) from $3.0M ($0.17/share) in Q1 2025, driven by Community Banking margin expansion and Mortgage Banking turnaround. Return on equity improved to 6.88% from 3.61%.
Exhibit 99.1 view on EDGAR → -
high
Community Banking net interest margin expanded 50 basis points to 2.97% from 2.47%, producing record Q1 net interest income of $15.2M (up 22.8% YoY) on higher loan yields and lower funding costs.
Exhibit 99.1 view on EDGAR → -
high
Mortgage Banking returned to profitability with $22K pre-tax income versus $2.2M loss in Q1 2025, as originations jumped 31.1% to $508.3M on declining rates and refinance activity rising to 26.1% of volume.
Exhibit 99.1 view on EDGAR → -
medium
Company returned $7.3M to shareholders via $4.4M in buybacks (246K shares at $17.89 average) and raised quarterly dividend to $0.17/share from $0.15. Book value per share increased to $19.19.
Exhibit 99.1 view on EDGAR → -
medium
Provision for credit losses of $240K (versus $314K credit in Q1 2025) reflected multi-family and construction loan growth. Asset quality remained solid: 0.35% nonperforming assets, 0.58% past due loans.
Exhibit 99.1 view on EDGAR →
Summary
Waterstone Financial delivered a strong Q1 2026, with net income doubling to $6.0 million ($0.34 per share) from $3.0 million a year earlier. The performance was driven by two key factors: the Community Banking segment achieved record net interest income of $15.2 million as its margin expanded 50 basis points to 2.97%, benefiting from higher loan yields and lower funding costs, while the Mortgage Banking segment swung to profitability on a 31% surge in originations to $508 million as periodic rate declines spurred refinance activity. The company returned $7.3 million to shareholders through share repurchases and an increased dividend (now $0.17 per share quarterly), while maintaining solid asset quality metrics—nonperforming assets at 0.35% of total assets and past due loans declining to 0.58%.
The modest $240,000 provision for credit losses reflected portfolio growth in multi-family and construction lending rather than deterioration. For holders, the results demonstrate operating leverage in both business lines and management's commitment to capital return, with return on equity improving to 6.88% from 3.61% a year ago.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
net income of $6.0 million, or $0.34 per diluted share, for the quarter ended March 31, 2026 compared to $3.0 million, or $0.17 per diluted share, for the quarter ended March 31, 2025
Waterstone Financial reported Q1 2026 net income of $6.0 million ($0.34 per diluted share), doubling from $3.0 million ($0.17 per diluted share) in Q1 2025. The 98% year-over-year increase was driven by net interest margin expansion in the Community Banking segment and increased mortgage origination volumes. Return on average assets improved to 1.10% from 0.57%, and return on average equity rose to 6.88% from 3.61%.
Added in current filing · view on EDGAR →
The Community Banking segment had a record first quarter net interest income of $15.2 million, which represented a $2.8 million, or 22.8%, increase compared to the quarter ended March 31, 2025 as net interest margin grew to 2.97% for the quarter. The increases were primarily due to continued growth in yield on our loans held for investment and reduction of our cost of funds.
The Community Banking segment achieved record Q1 net interest income of $15.2 million, up $2.8 million (22.8%) year-over-year. Net interest margin expanded 50 basis points to 2.97% from 2.47% in Q1 2025, driven by higher loan yields and lower funding costs. The segment's pre-tax income increased $1.4 million (23.7%) to $7.5 million.
Added in current filing · view on EDGAR →
Pre-tax income totaled $ ... 22,000 for the quarter ended March 31, 2026, compared to a pre-tax loss of $2.2 million for the quarter ended March 31, 2025. ... Loan originations increased $120.6 million, or 31.1%, to $508.3 million during the quarter ended March 31, 2026, compared to $387.7 million during the quarter ended March 31, 2025.
The Mortgage Banking segment returned to profitability with $22,000 pre-tax income in Q1 2026, reversing a $2.2 million pre-tax loss in Q1 2025. Loan originations surged 31.1% to $508.3 million as interest rates declined periodically during the quarter. Refinance activity increased to 26.1% of originations from 12.5% in the prior-year quarter, while gross margin on loans sold compressed to 3.65% from 3.98%.
Added in current filing · view on EDGAR →
The segment had a provision for credit losses related to funded loans of $240,000 for the quarter ended March 31, 2026 compared to a negative provision for credit losses related to funded loans of $314,000 for the quarter ended March 31, 2025. The current quarter increase was primarily due to increases in multi-family and construction loan balances along with an increase in multi-family external qualitative factors.
Waterstone recorded a $240,000 provision for credit losses on funded loans in Q1 2026, reversing from a $314,000 credit in Q1 2025. The provision was driven by growth in multi-family and construction loan balances and an increase in multi-family external qualitative factors. Asset quality metrics remained strong: nonperforming assets at 0.35% of total assets, past due loans at 0.58% of total loans (down from 0.86% at year-end 2025), and allowance for credit losses at 1.05% of loans receivable.
Added in current filing · view on EDGAR →
We increased our book value per share $0.33 during the quarter with continued strong earnings and the share repurchase program, prior to declaring an increased quarterly dividend of $0.17 per share. In total, $7.3 million was returned to shareholders through buybacks and dividends in the quarter. ... During the quarter ended March 31, 2026, we repurchased approximately 246,000 shares at a cost (including the federal excise tax) of $4.4 million, or $17.89 per share.
Waterstone returned $7.3 million to shareholders in Q1 2026 through a combination of share repurchases and dividends. The company repurchased approximately 246,000 shares at an average cost of $17.89 per share (including federal excise tax) for $4.4 million, and increased its quarterly dividend to $0.17 per share from $0.15. Book value per share rose $0.16 to $19.19 from $19.03 at year-end 2025.
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