Waterstone Financial, Inc. Segments Disclosure

18)	Segment Reporting

 

The Company has determined that it has two reportable segments: community banking and mortgage banking. The Company's operating segments are presented based on its management structure and management accounting practices. The structure and practices are specific to the Company and therefore, the financial results of the Company's business segments are not necessarily comparable with similar information for other financial institutions.

 

Community Banking

 

The Community Banking segment provides consumer and business banking products and services to customers primarily within Southeastern Wisconsin.  Within this segment, the following products and services are provided:  (1) lending solutions such as residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; (2) deposit and transactional solutions such as checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services; (3) investable funds solutions such as savings, money market deposit accounts, IRA accounts, certificates of deposit, and (4) fixed and variable annuities, insurance as well as trust and investment management accounts.

 

Consumer products include loan and deposit products: mortgage, home equity loans and lines, personal term loans, demand deposit accounts, interest bearing transaction accounts and time deposits. Consumer products also include personal investment services. Business banking products include secured and unsecured lines and term loans for working capital, inventory and general corporate use, commercial real estate construction loans, demand deposit accounts, interest bearing transaction accounts and time deposits.

 

Mortgage Banking

 

The Mortgage Banking segment provides residential mortgage loans for the primary purpose of sale in the secondary market. Mortgage banking products and services are provided by offices in 24 states with the ability to lend in 48 states.

 

The Company’s chief executive officer has been identified as the chief operating decision maker (“CODM”). Selected financial and descriptive information is reported to the CODM. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM uses the Community Banking and Mortgage Banking segment's net interest income, non-interest income, non-interest expense, and pre-tax income for making operating decisions, allocating resources (including employees, financial, or capital resources), and assessing performance. Based on the reviews of these two segments and other company-wide initiatives, the CODM is informed about allocation of resources to the Holding Company and Other segment.

  

		As of or for the Year ended December 31, 2025
		Community Banking				Mortgage Banking				Holding Company and Other				Consolidated
		(In Thousands)
Net interest income		$	56,181			$	513			$	40			$	56,734
Provision (credit) for credit losses			(1,331	)			(63	)			-				(1,394	)
Net interest income after provision for credit losses			57,512				576				40				58,128
Noninterest income			5,698				79,531				(42	)			85,187
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			20,921				59,571				(873	)			79,619
Occupancy, office furniture and equipment			3,929				3,265				-				7,194
Advertising			853				2,024				-				2,877
Data processing			2,992				1,945				4				4,941
Communications			410				563				-				973
Professional fees			928				1,889				18				2,835
Real estate owned			(312	)			-				-				(312	)
Loan processing expense			-				2,996				-				2,996
Other			2,309				5,838				600				8,747
Total noninterest expenses			32,030				78,091				(251	)			109,870
Income before income taxes			31,180				2,016				249				33,445
Income taxes			6,408				569				66				7,043
Net income		$	24,772			$	1,447			$	183			$	26,402
Total assets		$	2,503,180			$	179,845			$	(423,518	)		$	2,259,507

 

		As of or for the Year ended December 31, 2024
		Community Banking				Mortgage Banking				Holding Company and Other				Consolidated
		(In Thousands)
Net interest income		$	47,968			$	(1,945	)		$	145			$	46,168
Provision for credit losses			(145	)			(23	)			-				(168	)
Net interest income after provision for credit losses			48,113				(1,922	)			145				46,336
Noninterest income			5,303				84,250				(251	)			89,302
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			20,685				61,353				(960	)			81,078
Occupancy, office furniture and equipment			3,712				3,861				-				7,573
Advertising			918				2,636				-				3,554
Data processing			2,791				2,169				18				4,978
Communications			306				616				-				922
Professional fees			771				2,385				28				3,184
Real estate owned			26				-				-				26
Loan processing expense			-				3,090				-				3,090
Other			2,528				4,333				370				7,231
Total noninterest expenses			31,737				80,443				(544	)			111,636
Income before income taxes			21,679				1,885				438				24,002
Income taxes			4,697				521				96				5,314
Net income		$	16,982			$	1,364			$	342			$	18,688
Total assets		$	2,441,677			$	177,875			$	(409,944	)		$	2,209,608

  

		As of or for the Year ended December 31, 2023
		Community Banking				Mortgage Banking				Holding Company and Other				Consolidated
		(In Thousands)
Net interest income		$	51,733			$	(1,821	)		$	303			$	50,215
Provision for credit losses			441				215				-				656
Net interest income after provision for credit losses			51,292				(2,036	)			303				49,559
Noninterest income			4,387				78,472				(1,674	)			81,185
Noninterest expenses:
Compensation, payroll taxes, and other employee benefits			19,866				65,095				(865	)			84,096
Occupancy, office furniture and equipment			3,672				4,651				-				8,323
Advertising			977				2,802				-				3,779
Data processing			2,501				2,130				22				4,653
Communications			295				693				-				988
Professional fees			726				1,922				38				2,686
Real estate owned			4				-				-				4
Loan processing expense			-				3,428				-				3,428
Other			3,868				8,953				(1,066	)			11,755
Total noninterest expenses			31,909				89,674				(1,871	)			119,712
Income (loss) before income taxes (benefit)			23,770				(13,238	)			500				11,032
Income taxes (benefit)			5,137				(3,612	)			132				1,657
Net income (loss)		$	18,633			$	(9,626	)		$	368			$	9,375
Total assets		$	2,178,488			$	206,452			$	(171,551	)		$	2,213,389