Waterstone Financial, Inc.

Previous wording

The following discussion and analysis is presented to assist the reader in understanding and evaluating the Company’s financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements, footnotes, and supplemental financial data appearing elsewhere in this Quarterly Report on Form 10-Q and should be read in conjunction therewith. The detailed discussion in the sections below focuses on the results of operations for the three and nine months ended September 30, 2025 and 2024 and the financial condition as of September 30, 2025 compared to the financial condition as of December 31, 2024.

Current wording

The following discussion and analysis is presented to assist the reader in understanding and evaluating the Company’s financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements, footnotes, and supplemental financial data appearing elsewhere in this Quarterly Report on Form 10-Q and should be read in conjunction therewith. The detailed discussion in the sections below focuses on the results of operations for the three months ended March 31, 2026 and 2025 and the financial condition as of March 31, 2026 compared to the financial condition as of December 31, 2025.

Previous wording

Our community banking segment generates the significant majority of our consolidated net interest income and requires the significant majority of our provision for loan losses. Our mortgage banking segment generates the significant majority of our noninterest income and a majority of our noninterest expenses. We have provided below a discussion of the material results of operations for each segment on a separate basis for the three and nine months ended September 30, 2025 and 2024, which focuses on noninterest income and noninterest expenses. We have also provided a discussion of the consolidated operations of the Company, which includes the consolidated operations of the Bank and Waterstone Mortgage Corporation, for the same periods.

Current wording

Our community banking segment generates the significant majority of our consolidated net interest income and requires the significant majority of our provision for loan losses. Our mortgage banking segment generates the significant majority of our noninterest income and a majority of our noninterest expenses. We have provided below a discussion of the material results of operations for each segment on a separate basis for the three months ended March 31, 2026 and 2025, which focuses on noninterest income and noninterest expenses. We have also provided a discussion of the consolidated operations of the Company, which includes the consolidated operations of the Bank and Waterstone Mortgage Corporation, for the same periods.

Previous wording

There were no significant items that impacted earnings for the three and nine months ended September 30, 2025 and 2024.

Current wording

There were no significant items that impacted earnings for the three months ended March 31, 2026 and 2025.

Previous wording

Net income totaled $6.9 million for the three months ended September 30, 2025 compared to $4.7 million for the three months ended September 30, 2024. Net interest income increased $2.4 million to $14.6 million for the three months ended September 30, 2025 compared to $12.3 million for the three months ended September 30, 2024. Interest expense on borrowings decreased $3.1 million as growth in time deposits allowed us to carry a lower average balance of FHLB advances.

Current wording

Net income totaled $6.0 million for the three months ended March 31, 2026 compared to $4.6 million for the three months ended March 31, 2025. Net interest income increased $2.8 million to $15.2 million for the three months ended March 31, 2026 compared to $12.4 million for the three months ended March 31, 2025. Interest expense on borrowings decreased $742,000 as growth in time deposits allowed us to carry a lower average balance of FHLB advances and interest expense on deposits decreased as accounts repriced at a lower rate and transitioned to more money market accounts.

Previous wording

Net income totaled $948,000 for the three months ended September 30, 2025 compared to a net loss of $50,000 for the three months ended September 30, 2024. We originated $539.4 million in mortgage loans held for sale (including sales to the community banking segment) during the three months ended September 30, 2025, which represents a decrease of $19.3 million, or 3.5%, from the $558.7 million originated during the three months ended September 30, 2024. The decrease in loan production volume was driven by a $10.7 million, or 2.2%, decrease in purchase products and a $8.6 million decrease in refinance products. Total mortgage banking noninterest income decreased $401,000, or 1.9%, to $21.0 million during the three months ended September 30, 2025 compared to $21.4 million during the three months ended September 30, 2024. The decrease in mortgage banking noninterest income was related to a 3.5% decrease in volume and was partially offset by a 1.1% increase in gross margin on loans originated and sold for the three months ended September 30, 2025 compared to September 30, 2024. Gross margin on loans originated and sold is the ratio of mortgage banking income (excluding the change in interest rate lock fair value) divided by total loan originations. We sell loans on both a servicing-released and a servicing-retained basis. Waterstone Mortgage Corporation has contracted with a third party to service the loans for which we retain servicing.

Current wording

Net income totaled $12,000 for the three months ended March 31, 2026 compared to a net loss of $1.6 million for the three months ended March 31, 2025. We originated $508.3 million in mortgage loans held for sale (including sales to the community banking segment) during the three months ended March 31, 2026, which represents an increase of $120.6 million, or 31.1%, from the $387.7 million originated during the three months ended March 31, 2025. The increase in loan production volume was driven by a $36.4 million, or 10.7%, increase in purchase products and a $84.2 million, or 173.7%, increase in refinance products. Total mortgage banking noninterest income increased $3.4 million, or 21.5%, to $19.1 million during the three months ended March 31, 2026 compared to $15.7 million during the three months ended March 31, 2025. The increase in mortgage banking noninterest income was related to a 31.1% increase in volume and was partially offset by a 8.3% decrease in gross margin on loans originated and sold for the three months ended March 31, 2026 compared to March 31, 2025. Gross margin on loans originated and sold is the ratio of mortgage banking income (excluding the change in interest rate lock fair value) divided by total loan originations. We sell loans on both a servicing-released and a servicing-retained basis. Waterstone Mortgage Corporation has contracted with a third party to service the loans for which we retain servicing.

Previous wording

Additionally, our overall margin can be affected by the mix of both loan type (conventional loans versus governmental) and loan purpose (purchase versus refinance). Conventional loans include loans that conform to Fannie Mae and Freddie Mac standards, whereas governmental loans are those loans guaranteed by the federal government, such as a Federal Housing Authority or U.S. Department of Agriculture loan. Loans originated for the purchase of a residential property comprised 90.1% of total originations during the three months ended September 30, 2025, compared to 88.9% of total originations during the three months ended September 30, 2024, respectively. The mix of loan type trended towards more governmental loans and less conventional loans, with governmental loans and conventional loans comprising 37.7% and 62.3% of all loan originations, respectively, during the three months ended September 30, 2025, compared to 35.2% and 64.8% of all loan originations, respectively, during the three months ended September 30, 2024.

Current wording

Additionally, our overall margin can be affected by the mix of both loan type (conventional loans versus governmental) and loan purpose (purchase versus refinance). Conventional loans include loans that conform to Fannie Mae and Freddie Mac standards, whereas governmental loans are those loans guaranteed by the federal government, such as a Federal Housing Authority or U.S. Department of Agriculture loan. Loans originated for the purchase of a residential property comprised 73.9% of total originations during the three months ended March 31, 2026, compared to 87.5% of total originations during the three months ended March 31, 2025, respectively. The mix of loan type trended towards more conventional loans and less governmental loans, with conventional loans and governmental loans comprising 65.1% and 34.9% of all loan originations, respectively, during the three months ended March 31, 2026, compared to 62.0% and 38.0% of all loan originations, respectively, during the three months ended March 31, 2025.

Previous wording

Net interest income increased $3.2 million, or 28.0%, to $14.7 million during the three months ended September 30, 2025 compared to $11.5 million during the three months ended September 30, 2024 primarily due to increased yields on our loan and securities portfolios as well as decreased cost of borrowings as a larger portion of our investments were funded by deposits rather than borrowings. Additionally, there was a decrease in borrowing rates compared to the prior year period.

Current wording

Net interest income increased $2.9 million, or 23.0%, to $15.5 million during the three months ended March 31, 2026 compared to $12.6 million during the three months ended March 31, 2025 primarily due to increased yields on our loan and securities portfolios as well as decreased cost of deposits and borrowings as replacement rates decreased compared to the prior year period.

Previous wording

There was a negative provision for credit losses of $269,000 for the three months ended September 30, 2025 compared to a negative $377,000 provision for credit losses for the three months ended September 30, 2024. The $269,000 negative provision for credit losses consisted of a $130,000 negative provision related to loans and a provision related to unfunded commitments of $139,000 for the three months ended September 30, 2025. During the three months ended September 30, 2025, the 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 for the quarter ended September 30, 2025 was due primarily to a decrease in the construction loans waiting to be funded.

Current wording

There was a provision for credit losses of $264,000 for the three months ended March 31, 2026 compared to a negative $558,000 provision for credit losses for the three months ended March 31, 2025. The $264,000 provision for credit losses consisted of a $220,000 provision related to loans and a provision related to unfunded commitments of $44,000 for the three months ended March 31, 2026. During the three months ended March 31, 2026, the increase was primarily due to increases in multi-family and construction loan balances along with an increase in multifamily external qualitative factors. The provision for credit losses related to unfunded loan commitments for the quarter ended March 31, 2026 was due primarily to an increase in the loan pipeline balance at quarter end.

Previous wording

Income tax expense totaled $1.9 million for the three months ended September 30, 2025 compared to $1.2 million during the three months ended September 30, 2024. Income tax expense was recognized on the statement of income during the three months ended September 30, 2025 at an effective rate of 19.5% of pretax income compared to the three months ended September 30, 2024 at an effective rate of 19.7% of pretax income.

Current wording

Income tax expense totaled $1.6 million for the three months ended March 31, 2026 compared to $845,000 during the three months ended March 31, 2025. The increase was primarily due to the increase in pre-tax income. Income tax expense was recognized on the statement of income during the three months ended March 31, 2026 at an effective rate of 20.6% of pretax income compared to the three months ended March 31, 2025 at an effective rate of 21.8% of pretax income.

Previous wording

Cash and Cash Equivalents** – **Cash and cash equivalents increased $14.0 million, or 35.2%, to $53.8 million at September 30, 2025, compared to $39.8 million at December 31, 2024. The increase in cash and cash equivalents primarily reflects the increase of funding sources from deposits, borrowings, and advance payments by borrowers for taxes.

Current wording

Cash and Cash Equivalents** – **Cash and cash equivalents decreased $26.5 million, or 37.2%, to $44.7 million at March 31, 2026, compared to $71.1 million at December 31, 2025. The decrease in cash and cash equivalents primarily reflects the increase in loans receivable and securities available for sale.

Previous wording

Securities Available for Sale – Securities available for sale increased $17.9 million to $226.4 million at September 30, 2025. The increase was primarily due to the purchases of securities exceeding paydowns and maturities and an increase in fair value as longer term interest rates decreased compared to the prior year period.

Current wording

Securities Available for Sale – Securities available for sale increased $6.2 million to $237.0 million at March 31, 2026. The increase was primarily due to the purchases of securities exceeding paydowns and maturities offset by a decrease in fair value as longer term interest rates increased compared to prior year end.

Previous wording

Loans Held for Sale - Loans held for sale decreased $233,000 to $135.7 million at September 30, 2025 due to a decrease primarily due to seasonal slowdown as year end approaches.

Current wording

Loans Held for Sale - Loans held for sale decreased $707,000 to $144.4 million at March 31, 2026.

Previous wording

Loans Receivable - Loans receivable held for investment increased $34.3 million to $1.71 billion at September 30, 2025. The increase in total loans receivable was primarily attributable to increases in each of the multi-family, commercial real estate, and construction loan categories offset by a decrease in the one-to-four family loan category.

Current wording

Loans Receivable - Loans receivable held for investment increased $8.8 million to $1.68 billion at March 31, 2026. The increase in total loans receivable was primarily attributable to increases in each of the multi-family, commercial real estate, construction, and commercial loan categories offset by a decrease in the one-to-four family loan category.

Previous wording

Allowance for Credit Losses - Loans** -** The allowance for credit losses decreased to $17.7 million at September 30, 2025. There was a $599,000 negative provision for credit losses - loans for the nine months ended September 30, 2025. The negative provision for credit losses related to loans decreased primarily due to a decrease in historical losses used in the calculation and decreases in certain qualitative factors. See Note 3 - Loans Receivable of the notes to unaudited consolidated financial statements for further discussion on the allowance for credit losses. Additionally, net recoveries totaled $22,000 for the nine months ended September 30, 2025.

Current wording

Allowance for Credit Losses - Loans** -** The allowance for credit losses increased to $17.7 million at March 31, 2026. There was a $264,000 provision for credit losses - loans for the three months ended March 31, 2026. The provision for credit losses related to loans was primarily due to increases in multi-family and construction loan balances along with an increase in multifamily external qualitative factors. The provision for credit losses related to unfunded loan commitments for the quarter ended March 31, 2026 was due primarily to an increase in the loan pipeline balance at quarter end. See Note 3 - Loans Receivable of the notes to unaudited consolidated financial statements for further discussion on the allowance for credit losses. Additionally, net recoveries totaled $11,000 for the three months ended March 31, 2026.

Previous wording

Prepaid expenses and other assets – Total prepaid expenses and other assets decreased $8.4 million to $39.8 million at September 30, 2025. The decrease was primarily due to decreases in back-to-back loan swap fair value adjustment and the deferred tax asset for unrealized losses as long term interest rates decreased.

Current wording

Prepaid expenses and other assets – Total prepaid expenses and other assets increased $4.4 million to $42.3 million at March 31, 2026. The increase was primarily due to increases in mortgage investor receivables, accounts receivable, and the deferred tax asset for unrealized losses as long term interest rates increased.

Previous wording

Deposits – Total deposits increased $26.1 million to $1.39 billion at September 30, 2025. The increase was driven by increases of $5.5 million in demand deposits and $23.5 million in money market and savings deposits offset by a decrease of $2.9 million in time deposits.

Current wording

Deposits – Total deposits increased $1.5 million to $1.44 billion at March 31, 2026. The increase was driven by increases of $6.2 million in demand deposits and $13.5 million in money market and savings deposits offset by a decrease of $18.1 million in time deposits.

Previous wording

Borrowings – Total borrowings increased $22.5 million, or 5.0%, to $469.1 million at September 30, 2025. The community banking segment increased its FHLB long-term borrowings by $100.0 million, decreased its short-term FHLB borrowings by $43.4 million, and paid off $40.0 million in long-term FHLB borrowings. External short-term borrowings at the mortgage banking segment increased a total of $5.9 million at September 30, 2025 from December 31, 2024.

Current wording

Borrowings – Total borrowings increased $800,000, or 0.2%, to $413.0 million at March 31, 2026. The community banking segment increased its FHLB long-term borrowings by $83.0 million, decreased its short-term FHLB borrowings by $52.2 million, and paid off $30.0 million in long-term FHLB borrowings. External short-term borrowings at the mortgage banking segment decreased by a total of $30,000 at March 31, 2026 from December 31, 2025.

Previous wording

Advance Payments by Borrowers for Taxes - Advance payments by borrowers for taxes increased $21.4 million to $27.0 million at September 30, 2025. The increase was the result of payments received from borrowers for their real estate taxes and is seasonally normal, as balances increase during the course of the calendar year until real estate tax obligations are paid in the fourth quarter.

Current wording

Advance Payments by Borrowers for Taxes - Advance payments by borrowers for taxes increased $8.1 million to $11.1 million at March 31, 2026. The increase was the result of payments received from borrowers for their real estate taxes and is seasonally normal, as balances increase during the course of the calendar year until real estate tax obligations are paid in the fourth quarter.

Previous wording

Other Liabilities - Other liabilities decreased $16.8 million to $41.6 million at September 30, 2025. Other liabilities decreased primarily due to a seasonal decrease in outstanding checks related to advance payments by borrowers for taxes. The Company receives payments from borrowers for their real estate taxes during the course of the calendar year until real estate tax obligations are paid in the fourth quarter. At the time at which the disbursements are made, the outstanding checks are classified as other liabilities in the statements of financial condition, and these amounts remain classified as other liabilities until settled. The decrease was also due to decrease in back-to-back loan swap fair value adjustment as long-term interest rates decreased.

Current wording

Other Liabilities - Other liabilities decreased $17.5 million to $40.1 million at March 31, 2026. Other liabilities decreased primarily due to a seasonal decrease in outstanding checks related to advance payments by borrowers for taxes. The Company receives payments from borrowers for their real estate taxes during the course of the calendar year until real estate tax obligations are paid in the fourth quarter. At the time at which the disbursements are made, the outstanding checks are classified as other liabilities in the statements of financial condition, and these amounts remain classified as other liabilities until settled.

Previous wording

Shareholders’** Equity** – Shareholders' equity increased $6.4 million to $345.5 million at September 30, 2025. Shareholders' equity increased primarily due increases in net income and the fair value of the securities portfolio.

Current wording

Shareholders’** Equity** – Shareholders' equity decreased $1.2 million to $348.2 million at March 31, 2026. Shareholders' equity decreased primarily due to decreases in the fair value of securities, shares repurchased, and dividends declared during the period.

Previous wording

Total non-accrual loans increased by $331,000, or 5.8%, to $6.0 million as of September 30, 2025 compared to $5.7 million as of December 31, 2024. The ratio of non-accrual loans to total loans receivable was 0.35% at September 30, 2025 and 0.34% at December 31, 2024. During the nine months ended September 30, 2025, $3.6 million in loans were placed on non-accrual status. Offsetting this activity, $2.1 million in loans returned to accrual status and $1.2 million in principal payments were received during the nine months ended September 30, 2025.

Current wording

Total non-accrual loans increased by $1.3 million, or 21.2%, to $7.5 million as of March 31, 2026 compared to $6.2 million as of December 31, 2025. The ratio of non-accrual loans to total loans receivable was 0.44% at March 31, 2026 and 0.37% at December 31, 2025. During the three months ended March 31, 2026, $2.7 million in loans were placed on non-accrual status. Offsetting this activity, $692,000 in loans returned to accrual status and $664,000 in principal payments were received during the three months ended March 31, 2026.

Previous wording

Of the $6.0 million in total non-accrual loans as of September 30, 2025, $4.3 million in loans have been specifically reviewed to assess whether a specific valuation allowance is necessary. A specific valuation allowance is established for an amount equal to the impairment when the carrying value of the loan exceeds the present value of expected future cash flows, discounted at the loan's original effective interest rate or the fair value of the underlying collateral with an adjustment made for costs to dispose of the asset. Based upon these specific reviews, no charge-offs have been recorded over the life of these loans and there were no specific reserves as of September 30, 2025. The remaining $1.7 million of non-accrual loans were reviewed on an aggregate basis as of September 30, 2025.

Current wording

Of the $7.5 million in total non-accrual loans as of March 31, 2026, $5.1 million in loans have been specifically reviewed to assess whether a specific valuation allowance is necessary. A specific valuation allowance is established for an amount equal to the impairment when the carrying value of the loan exceeds the present value of expected future cash flows, discounted at the loan's original effective interest rate or the fair value of the underlying collateral with an adjustment made for costs to dispose of the asset. Based upon these specific reviews, no charge-offs have been recorded over the life of these loans and there were no specific reserves as of March 31, 2026. The remaining $2.4 million of non-accrual loans were reviewed on an aggregate basis as of March 31, 2026.

Previous wording

The outstanding principal balance of our five largest non-accrual loans as of September 30, 2025 totaled $2.7 million, which represents 45.0% of total non-accrual loans as of that date. The loans held for investment at the mortgage segment were reviewed on an aggregate basis.

Current wording

The outstanding principal balance of our five largest non-accrual loans as of March 31, 2026 totaled $3.2 million, which represents 42.6% of total non-accrual loans as of that date. The loans held for investment at the mortgage segment were reviewed on an aggregate basis.

Previous wording

Past due loans decreased by $6.6 million, or 43.7%, to $8.5 million at September 30, 2025 from $15.1 million at December 31, 2024. Loans past due less than 90 days decreased by $6.8 million, or 61.1%, primarily due to a decrease in the one-to four-family loan category. Loans past due 90 days or more increased by $199,000, or 5.0%, primarily in the multi-family loan category during the nine months ended September 30, 2025.

Current wording

Past due loans decreased by $4.6 million, or 32.1%, to $9.8 million at March 31, 2026 from $14.4 million at December 31, 2025. Loans past due less than 90 days decreased by $5.5 million, or 57.1%, primarily due to a decrease in the one-to four-family loan category. Loans past due 90 days or more increased by $844,000, or 17.5%, primarily in the one-to four-family loan category during the three months ended March 31, 2026.

Previous wording

The allowance for credit losses - loans was $17.7 million at September 30, 2025 and $18.2 million at December 31, 2024. During the nine months ended September 30, 2025, there was a $599,000 negative provision for credit losses. Additionally, net recoveries totaled $22,000 for the nine months ended September 30, 2025.

Current wording

The allowance for credit losses - loans was $17.7 million at March 31, 2026 and $17.5 million at December 31, 2025. During the three months ended March 31, 2026, there was a $264,000 provision for credit losses. Additionally, net recoveries totaled $11,000 for the three months ended March 31, 2026.

Previous wording

We had net recoveries of $22,000, or less than 0.01% of average loans annualized, for the nine months ended September 30, 2025, compared to net recoveries of $88,000, or 0.01% of average loans annualized, for the nine months ended September 30, 2024.

Current wording

We had net recoveries of $11,000, or less than 0.01% of average loans annualized, for the three months ended March 31, 2026, compared to net recoveries of $12,000, or less than 0.01% of average loans annualized, for the three months ended March 31, 2025.

Previous wording

During the nine months ended September 30, 2024, primary uses of cash and cash equivalents included: $1.66 billion in funding loans held for sale, $31.1 million to fund loans held for investment, $10.8 million for purchases of mortgage related securities, $12.2 million for purchases of debt securities, $2.3 million for FHLB stock, $145.0 million for payoffs of long-term borrowings, $55.9 million for payoffs of short-term borrowings, $8.5 million for cash dividends paid, and $12.1 million for purchases of common stock.

Current wording

During the three months ended March 31, 2026, primary uses of cash and cash equivalents included: $505.5 million in funding loans held for sale, $8.7 million to fund loans receivable, $8.7 million for purchases of mortgage related securities, $8.6 million for purchases of debt securities, $52.2 million for payoffs of short-term borrowings, $30.0 million for payoffs of long-term borrowings, $2.6 million for cash dividends paid, and $4.4 million for purchases of our common stock.

Previous wording

During the nine months ended September 30, 2025, primary sources of cash and cash equivalents included: $1.57 billion in proceeds from the sale of loans held for sale, $130.0 million in long-term borrowings, $18.6 million in principal repayments on mortgage related securities, $26.1 million for increase in deposits, $9.0 million in maturities of debt securities, $2.3 million in proceeds from exercised stock options, and $18.7 million in net income.

Current wording

During the three months ended March 31, 2026, primary sources of cash and cash equivalents included: $524.9 million in proceeds from the sale of loans held for sale, $83.0 million in long-term borrowings, $6.5 million in principal repayments on mortgage related securities, $2.4 million in sales of FHLB stock, $1.5 million for increase in deposits, $120,000 in maturities of debt securities, $548,000 in proceeds from exercised stock options, and $6.0 million in net income.

Previous wording

A portion of our liquidity consists of cash and cash equivalents, which are a product of our operating, investing and financing activities. At September 30, 2025 and 2024, respectively, $53.8 million and $41.4 million of our assets were invested in cash and cash equivalents. At September 30, 2025, cash and cash equivalents were comprised of the following: $50.1 million in cash held at the Federal Reserve Bank and other depository institutions and $3.7 million in federal funds sold and short-term investments. Our primary sources of cash are principal repayments on loans, proceeds from the calls and maturities of debt and mortgage-related securities, increases in deposit accounts, advances from the FHLB and the Federal Reserve, and repurchase agreements from other institutions.

Current wording

A portion of our liquidity consists of cash and cash equivalents, which are a product of our operating, investing and financing activities. At March 31, 2026 and 2025, respectively, $44.7 million and $43.3 million of our assets were invested in cash and cash equivalents. At March 31, 2026, cash and cash equivalents were comprised of the following: $38.8 million in cash held at the Federal Reserve Bank and other depository institutions and $5.9 million in federal funds sold and short-term investments. Our primary sources of cash are principal repayments on loans, proceeds from the calls and maturities of debt and mortgage-related securities, increases in deposit accounts, advances from the FHLB and the Federal Reserve, and repurchase agreements from other institutions.

Previous wording

Liquidity management is both a daily and longer-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLB which provide an additional source of funds. At September 30, 2025, we had $210.0 million in long term advances from the FHLB with contractual maturity dates in 2027, 2028, 2029, and 2030. See Note 6 - Borrowings of the notes to unaudited consolidated financial statements for additional information about the remaining call option details of our FHLB long-term debt.

Current wording

Liquidity management is both a daily and longer-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLB which provide an additional source of funds. At March 31, 2026, we had $243.0 million in long term advances from the FHLB with contractual maturity dates in 2027, 2028, 2029, 2030, and 2031. See Note 6 - Borrowings of the notes to unaudited consolidated financial statements for additional information about the remaining call option details of our FHLB long-term debt.

Previous wording

The Company had approximately $365.8 million of uninsured deposits for approximately 1,462 customers as of September 30, 2025. Uninsured deposit amounts are estimated based on the portions of customer account balances that exceed the FDIC insurance limits.

Current wording

The Company had approximately $383.2 million of uninsured deposits for approximately 1,509 customers as of March 31, 2026. Uninsured deposit amounts are estimated based on the portions of customer account balances that exceed the FDIC insurance limits.

Previous wording

At September 30, 2025, we had outstanding commitments to originate loans receivable of $44.7 million. In addition, at September 30, 2025, we had unfunded commitments under construction loans of $44.3 million, unfunded commitments under business lines of credit of $15.6 million and unfunded commitments under home equity lines of credit and standby letters of credit of $12.3 million. At September 30, 2025, certificates of deposit scheduled to mature in one year or less totaled $843.9 million. Based on prior experience, management believes that, subject to the Bank’s funding needs, a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits is not retained by us, we will have to utilize other funding sources, such as FHLB advances, in order to maintain our level of assets. However, we cannot assure that such borrowings would be available on attractive terms, or at all, if and when needed. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents and securities available-for-sale in order to meet funding needs. In addition, the cost of such deposits may be significantly higher if market interest rates are higher or there is an increased amount of competition for deposits in our market area at the time of renewal.

Current wording

At March 31, 2026, we had outstanding commitments to originate loans receivable of $36.0 million. In addition, at March 31, 2026, we had unfunded commitments under construction loans of $34.1 million, unfunded commitments under business lines of credit of $13.2 million and unfunded commitments under home equity lines of credit and standby letters of credit of $12.8 million. At March 31, 2026, certificates of deposit scheduled to mature in one year or less totaled $859.7 million. Based on prior experience, management believes that, subject to the Bank’s funding needs, a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits is not retained by us, we will have to utilize other funding sources, such as FHLB advances, in order to maintain our level of assets. However, we cannot assure that such borrowings would be available on attractive terms, or at all, if and when needed. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents and securities available-for-sale in order to meet funding needs. In addition, the cost of such deposits may be significantly higher if market interest rates are higher or there is an increased amount of competition for deposits in our market area at the time of renewal.

Previous wording

Waterstone Financial, Inc. is a separate legal entity from WaterStone Bank and must provide for its own liquidity to pay dividends to its shareholders, repurchase shares of its common stock, and for other corporate purposes. The primary source of liquidity for Waterstone Financial, Inc. is dividend payments from WaterStone Bank. The ability of WaterStone Bank to pay dividends is subject to regulatory restrictions. At September 30, 2025, Waterstone Financial, Inc. (on an unconsolidated basis) had liquid assets totaling $12.9 million.

Current wording

Waterstone Financial, Inc. is a separate legal entity from WaterStone Bank and must provide for its own liquidity to pay dividends to its shareholders, repurchase shares of its common stock, and for other corporate purposes. The primary source of liquidity for Waterstone Financial, Inc. is dividend payments from WaterStone Bank. The ability of WaterStone Bank to pay dividends is subject to regulatory restrictions. At March 31, 2026, Waterstone Financial, Inc. (on an unconsolidated basis) had liquid assets totaling $11.2 million.

Previous wording

The Company's Board of Directors authorized a 2,000,000 share stock repurchase program in the second quarter of 2024. As of September 30, 2025, the Company has approximately 643,000 shares remaining in the plan.

Current wording

The Company's Board of Directors authorized a 2,000,000 share stock repurchase program in the second quarter of 2024. As of March 31, 2026, the Company has approximately 223,000 shares remaining in the plan.

Previous wording

During the three months ended September 30, 2025, we entered into $39.0 million of new long-term debt, entered into $194.5 million of new short-term debt, and repaid $186.5 million in short-term debt.

Current wording

During the three months ended March 31, 2026, we entered into $83.0 million of new long-term debt, repaid $30.0 million of existing long-term debt, and repaid $52.2 million in short-term debt.