Waterstone Financial, Inc. · NASDAQ:WSBF
Waterstone Financial — Investor Presentation (August 2016)
28 slides from Waterstone Financial's investor presentation, August 2016
Slide 1: Investor Presentation August 2016
WEEE INVESTOR PRESENTATION Me Be INC. INVESTOR PRESENTATION AUGUST 2016
Slide 2: Forward-Looking Statement Disclosure
FORWARD-LOOKING STATEMENT DISCLOSURE This presentation contains comments or information that may constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties.
Slide 3: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS MARKET CAPITALIZATION $447.1 million 1921 BOOK VALUE PER SHARE $13.74 Wauwatosa Savings & Loan founded CLOSING PRICE/ TANGIBLE BOOK VALUE 111.8% 2005 DIVIDEND YIELD 2.09% Initial Public Offering TOTAL ASSETS $1.8 billion of $100 million TOTAL LOANS $1.1 billion TOTAL DEPOSIT
Slide 4: Executive Management
EXECUTIVE MANAGEMENT DOUG S. GORDON REBECCA M. ARNDT Chief Executive Officer & President Chief Retail Banking & Investment Services Officer & Waterstone Financial Inc. Senior Vice President WaterStone Bank SSB WaterStone Bank SSB • Joined WaterStone Bank in 2005 •Joined WaterStone Bank in 2006 • Chi
Slide 5: Key Strategic Initiatives
KEY STRATEGIC INITIATIVES ASSET / LIABILITY CAPITAL MORTGAGE GROWTH & DEPLOYMENT BANKING OPTIMIZATION • Repurchase Program (1) • Growth in C&I and CRE • Focus on high margin • Organic Growth as we transition from purchase product to add • Acquisitions residential lender to franchise value • Dividend
Slide 6: Ownership
OWNERSHIP INSTITUTIONAL 7.2% - Renaissance Technologies INVESTORS 5.7% - Arles Partners LP WSBF INSIDERS 7.7% - Directors and Executives 8.7% - WaterStone Bank SSB ESOP and 401k Plans 6
Slide 7: WSBF Financial Performance
WSBF FINANCIAL PERFORMANCE At or for the Year Ended At or for the Six Months Ended 2013 2014 2015 2015 2016 Net Income $14,708 $12,732 $16,570 $8,300 $11,628 Return on Average Assets 0.90% 0.71% 0.94% 0.95% 1.34% Return on Average Equity 7.01% 2.89% 3.99% 3.83% 5.89% Return on Adjusted Average Equit
Slide 8: Community Banking Segment
COMMUNITY BANKING SEGMENT ASSETS $1.8 billion EMPLOYEES 179 RETAIL BRANCHES 11 LOANS $1.1 billion CORE DEPOSITS TO TOTAL DEPOSITS 75% TRANSACTION DEPOSITS TO TOTAL DEPOSITS 28% EFFICIENCY RATIO 60.8% TOTAL CAPITAL RATIO 21.06% TOTAL RISK BASED 30.91% CAPITAL RATIO 8
Slide 9: Financial Performance
FINANCIAL PERFORMANCE At of for the Year Ended At or for the Six Months Ended 2013 2014 2015 2015 2016 Net Income $9,017 $9,980 $8,250 $4,014 $5,794 Average Balance of Loans $1,109,799 $1,106,176 $1,085,846 $1,077,330 $1,114,796 Average Non-interest Bearing Transaction Deposits $43,707 $50,212 $65,9
Slide 10: Branch Locations
BRANCH LOCATIONS TFT Bermantown ale Mequon Ashippun (32) @ olgate fa] Fe a1} (45) aS Brown Deer G7) slend G2) Glendale } Waitefish Bay. ihitefish Bay Nagawicka Lake f=) Delafield “Waterville Dousman ae and — “Wy New Berlin ic } mA ¥ Ds Muskego 10
Slide 11: Poised to Grow Market Share
POISED TO GROW MARKET SHARE CAPACITY TO GROW IN OUR 8th IN MARKET SHARE OUT OF INSTITUTIONS IN THE MILWAUKEE MSA CURRENT MARKETS MARKET DEPOSITS/BR DEPOSITS/B RANK INSTITUTION BRANCHES DEPOSITS WSB SHARE ANCH YEAR ENDED RANCH BRANCHES ($ in Billions) ($ in Millions) ($ in Millions) 1 U.S. Bank 53 $2
Slide 12: Core Deposits
CORE DEPOSITS MAINTAIN FOCUS ON CORE FUNDING | TRANSITION MIX TOWARDS TRANSACTION ACCOUNTS December 31, 2010 June 30, 2016 CORE DEPOSITS(1): 76% CORE DEPOSITS(1): 75% TRANSACTION DEPOSITS(2): 15% TRANSACTION DEPOSITS(2): 28% NON-INTEREST BEARING INTEREST NON-INTEREST BROKERED BEARING BEARING TIME, 1
Slide 13: Refinance Wholesale Funding
REFINANCE WHOLESALE FUNDING Maturing wholesale funding presents an opportunity to reduce our cost of funds and drive an increase in net interest margin and profitability. QUARTER PRINCIPAL RATE Matured 1Q 2016 $50,000,000 4.01% 2Q 2016 20,000,000 4.49% ESTIMATED 1.00% 1.25% 70,000,000 4.15% IMPACT O
Slide 14: Loan Composition
LOAN COMPOSITION $27,360 $16,842 $23,173 June 30, 2016 $134,537 Multi-family One- to four-family $544,753 Commercial real estate Home Equity $383,029 Commercial Construction and Land Total Bank Capital of approximately $384 million provides capacity 14 to grow multi-family and commercial real estate
Slide 15: Asset Quality
ASSET QUALITY 9.0% 7.9% 8.0% 7.7% Non Performing Assets to Total Assets 7.0% 6.7% 6.6% Loan Past Due to Total Loans 6.0% 5.0% 4.0% 4.0% 3.8% 3.2% 3.1% 3.0% 2.0% 1.5% 1.0% 1.1% 1.0% 0.7% 0.0% 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 6/30/16 (1) Non-Performing Assets peaked at $149 million (8.8%)
Slide 16: Waterstone Mortgage Corporation
WATERSTONE MORTGAGE CORPORATION TOTAL EMPLOYEES 645 BRANCH LOCATIONS 45 WAREHOUSE CAPACITY $250 million – WaterStone Bank $35 million – UBS DELEGATED PRODUCTS Conventional FHA/VA, USDA Portfolio Various State Bond Programs DELEGATED MI MGIC, UG, Radian, Essent AGENCY APPROVALS FNMA, FHLMC, GNMA, VA,
Slide 17: Executive Management
EXECUTIVE MANAGEMENT ERIC J. EGENHOEFER KEVIN P. GILLESPIE Chief Executive Officer & President Chief Operating Officer Waterstone Mortgage Corporation Waterstone Mortgage Corporation •Founded Waterstone Mortgage in 2000 •Joined Waterstone Mortgage in 2014 •Chief Executive Officer since 2000 •Chief O
Slide 18: Executive Management
EXECUTIVE MANAGEMENT KERRY M. WIRTH ROBERT B. SELINGO Senior Vice President – Loan Operations Senior Vice President – Secondary Marketing Waterstone Mortgage Corporation Waterstone Mortgage Corporation •Joined Waterstone Mortgage in 2009 •Joined Waterstone Mortgage in 2013 •Senior Vice President sin
Slide 19: Financial Performance
FINANCIAL PERFORMANCE At of for the Year Ended At or for the Six Months Ended 2013 2014 2015 2015 2016 NET INCOME $5,451 $2,442 $8,261 $4,310 $5,800 LOANS FUNDED $1,751,054 $1,661,376 $1,986,147 $995,131 $1,046,354 % PURCHASE 68% 87% 84% 82% 87% MORTGAGE BANKING INCOME $80,260 $77,982 $99,318 $50,61
Slide 20: Locations in 21 States
Waterstone LS MORTGAGE LOCATIONS IN 21 STATES Waterstone Mortgage has locations in 21 states and the ability to lend 38 states. States with branch locations States in which Waterstone Mortgage does not currently lend States in which Waterstone Mortgage currently lends 20
Slide 21: New Branches Added in 2016
8 NEW BRANCHES ADDED IN 2016 21
Slide 22: Loan Origination Volume
LOAN ORIGINATION VOLUME $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6 MO 2015 6 MO 2016 22
Slide 23: Funded Loan Volume Composition
FUNDED LOAN VOLUME COMPOSITION 100% % of Purchase Business 90% 87% 88% 84% 80% 70% 68% 60% 56% 56% 52% 50% 40% 37% 30% 20% 10% 0% 2013 2014 2015 6 MO 2016 WMC MBA 23
Slide 24: Loan Officer Productivity
LOAN OFFICER PRODUCTIVITY 350 5 310 4.5 4.6 4.6 300 4 Units Originated Per Month Number of Loan Officers 250 3.5 217 200 3 200 3.1 189 2.5 150 2.4 2 100 1.5 1 50 0.5 0 0 2013 2014 2015 2016 24
Slide 25: Key Competitive Advantage
KEY COMPETITIVE ADVANTAGE PURCHASE – AVERAGE DAYS APP TO CLOSE 60 Post TRID 50 51 49 50 48 45 45 46 46 45 45 45 46 40 35 36 34 33 33 33 34 32 31 32 32 30 30 20 10 0 WMC Ellie Mae 25 Source: Ellie Mae Origination Insights
Slide 26: Key Competitive Advantage
KEY COMPETITIVE ADVANTAGE Waterstone Connect Proivides real-time data on loan status and alerts on exception conditions Proprietary Loan Calendar - Use of eSign and Calculates dates for key eConsent for disclosure milestones to drive towards packages the target close date Encompass Loan Origination
Slide 27: MBA Total Volume Forecast
MBA TOTAL VOLUME FORECAST 27 Source: Mortgage Bankers Association 5-10-16
Slide 28: Doug S. Gordon
DOUG S. GORDON Chief Executive Officer & President WaterStone Bank SSB 414.459.4100 DouglasGordon@WSBonline.com
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