Waterstone Financial, Inc. (WSBF) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Waterstone Financial, Inc. (WSBF) Financial Services Profile

Waterstone Financial, Inc., operating as WaterStone Bank SSB, delivers community and mortgage banking solutions in southeastern Wisconsin. With a focus on traditional banking and residential mortgages, WSBF distinguishes itself through local market expertise and a commitment to community banking values within a competitive regional banking landscape.

What Is the Investment Thesis for WSBF?

With a P/E ratio of 12.42 and a dividend yield of 3.31%, WSBF offers potential value for investors seeking stable returns. The company's diversified revenue streams from community and mortgage banking segments provide resilience against market fluctuations. Growth catalysts include expanding its digital banking services and increasing its market share in residential mortgages. However, potential risks include interest rate sensitivity and competition from larger regional and national banks. The company's ability to maintain its profit margin of 14.2% and capitalize on growth opportunities will be crucial for long-term success.

Based on FMP financials and quantitative analysis

WSBF Key Highlights

Market capitalization of $386M, reflecting its position as a regional bank.

• P/E ratio of 12.42, suggesting a potentially undervalued stock compared to industry peers.
• Profit margin of 14.2%, indicating efficient operations and profitability.
• Gross margin of 72.4%, highlighting strong revenue generation relative to the cost of goods sold.
• Dividend yield of 3.31%, offering an attractive income stream for investors.

Who Are WSBF's Competitors?

WSBF is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are WSBF's Key Strengths?

Strong local presence in southeastern Wisconsin.

• Diversified revenue streams from community and mortgage banking.
• Experienced management team.
• Solid capital base.

What Are WSBF's Weaknesses?

Limited geographic reach compared to larger regional banks.

• Reliance on interest income, making it vulnerable to interest rate fluctuations.
• Smaller scale may limit its ability to invest in technology and innovation.
• Competition from larger banks and fintech companies.

What Could Drive WSBF Stock Higher?

Expansion of digital banking services to attract younger customers and improve customer retention.

• Increasing market share in residential mortgages through competitive rates and personalized service.
• Strategic partnerships with local businesses to drive growth in the community banking segment.
• Potential acquisitions of smaller community banks in southeastern Wisconsin to expand its market presence.
• Leveraging data analytics to improve customer service and identify new business opportunities.

What Are the Key Risks for WSBF?

Financial-distress signal — its Altman Z-Score of -0.42 sits in the distress zone (elevated bankruptcy risk).

• Interest rate fluctuations could negatively impact net interest margin and profitability.
• Increasing competition from larger banks and fintech companies.
• Regulatory changes could increase compliance costs and limit business activities.
• Economic downturn in southeastern Wisconsin could lead to increased loan losses.
• Cybersecurity threats could compromise customer data and disrupt operations.

What Are the Growth Opportunities for WSBF?

• Growth opportunity 1: Expanding digital banking services represents a significant growth opportunity for Waterstone Financial. Investing in user-friendly online and mobile banking platforms can attract younger customers and improve customer retention. The digital banking market is projected to reach $9.0 trillion in transaction value by 2027, offering a substantial market for WSBF to capture. Timeline: Ongoing.
• Growth opportunity 2: Increasing market share in residential mortgages is another key growth driver. By offering competitive rates and personalized service, Waterstone Financial can attract more homebuyers in southeastern Wisconsin. The U.S. mortgage market is expected to reach $2.5 trillion in 2026, providing ample opportunity for WSBF to expand its mortgage portfolio. Timeline: Ongoing.
• Growth opportunity 3: Strategic partnerships with local businesses can drive growth in the community banking segment. By offering tailored financial solutions and building strong relationships, Waterstone Financial can become the preferred bank for small and medium-sized enterprises in the region. The small business lending market is estimated at $800 billion annually. Timeline: Ongoing.
• Growth opportunity 4: Expanding wealth management services can attract high-net-worth individuals and generate additional revenue streams. By offering financial planning, investment management, and trust services, Waterstone Financial can cater to the growing demand for wealth management solutions. The global wealth management market is projected to reach $145 trillion by 2030. Timeline: Upcoming.
• Growth opportunity 5: Leveraging data analytics to improve customer service and identify new business opportunities is crucial for long-term growth. By analyzing customer data, Waterstone Financial can personalize its offerings, optimize its marketing efforts, and identify underserved segments in the market. The data analytics market in the financial services industry is expected to reach $50 billion by 2028. Timeline: Ongoing.

What Are WSBF's Competitive Advantages?

• Strong local presence and brand recognition in southeastern Wisconsin.
• Established customer relationships and community ties.
• Diversified revenue streams from community and mortgage banking.
• Experienced management team with deep knowledge of the regional market.

What Does WSBF Do?

Waterstone Financial, Inc., established in 1921 and headquartered in Wauwatosa, Wisconsin, functions as the bank holding company for WaterStone Bank SSB. The bank provides a comprehensive suite of financial services to individuals and businesses throughout southeastern Wisconsin. Waterstone Financial operates through two primary segments: Community Banking and Mortgage Banking. The Community Banking segment offers a range of services, including deposit accounts, online banking, credit and debit cards, and various lending products such as residential mortgages, home equity loans, personal loans, and business loans. The Mortgage Banking segment focuses on originating residential mortgage loans for sale into the secondary market. WaterStone Bank SSB operates 14 full-service banking offices, 1 drive-through office, and 14 automated teller machines across Milwaukee, Washington, and Waukesha Counties, Wisconsin. The company's investment portfolio includes mortgage-backed securities, government-sponsored enterprise bonds, and municipal obligations. Waterstone Financial was formerly known as Wauwatosa Holdings, Inc., changing its name in August 2008. The company's long-standing presence in the Wisconsin market underscores its commitment to local communities and its focus on building lasting customer relationships. Waterstone Financial aims to provide personalized financial solutions and contribute to the economic well-being of the region it serves.

What Products and Services Does WSBF Offer?

• Provides community banking services in southeastern Wisconsin.
• Offers deposit and transactional solutions, including checking accounts and online banking.
• Provides investable funds solutions, such as savings accounts and certificates of deposit.
• Offers residential mortgages, home equity loans, and personal loans.
• Provides business loans and lines of credit.
• Offers fixed and variable annuities and insurance products.
• Provides trust and investment management accounts.
• Originates residential mortgage loans for sale in the secondary market.

How Does WSBF Make Money?

• Generates revenue from interest income on loans and investments.
• Earns fees from deposit accounts, online banking, and other services.
• Profits from the sale of residential mortgage loans in the secondary market.
• Manages investment portfolios and earns fees from trust and investment management accounts.

What Industry Does WSBF Operate In?

Waterstone Financial operates within the regional banking sector, which is characterized by increasing competition from larger national banks and fintech companies. The industry is influenced by interest rate fluctuations, regulatory changes, and economic conditions. The regional banking sector is experiencing consolidation, with larger banks acquiring smaller institutions to expand their market presence. Waterstone Financial's focus on community banking and mortgage services positions it to cater to local customers, but it must adapt to evolving technology and customer preferences to remain competitive.

Who Are WSBF's Key Customers?

• Individual consumers in southeastern Wisconsin.
• Small and medium-sized businesses in the region.
• Homebuyers seeking residential mortgages.
• High-net-worth individuals seeking wealth management services.

Company Profile

Waterstone Financial, Inc. operates in the Banks - Regional industry within the Financial Services sector. It is headquartered in Wauwatosa, US. The company is led by CEO William F. Bruss. WSBF has traded publicly since 2005.

Waterstone Financial, Inc. Financial Trajectory

Waterstone Financial, Inc. (WSBF) reported $7.3M in revenue for Q2 FY2026, a decline of 85.2% compared to the prior quarter. The company recorded net income of $8.5M, with diluted EPS of $0.49. Revenue has contracted over three consecutive quarters, which investors in this small-cap Financial Services stock should monitor closely. Across the four most recent quarters, WSBF averaged $0.43 in diluted EPS.

How Waterstone Financial, Inc. Is Valued

Waterstone Financial, Inc. carries a market capitalization of $386M, placing it in the small-cap category. Relative to its peer group, WSBF's quantitative score of 81/100 is roughly in line with the peer average of 87/100.

Return on equity for Waterstone Financial, Inc. stands at 8.6%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 1.3%, showing how much profit it generates from its asset base. WSBF trades at a trailing price-to-earnings ratio of 12.42, below the Financial Services sector average of ~17.50x. Its free cash flow yield is 11.1%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.15 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 8.2%, the inverse of the P/E and a quick read on earnings relative to price.

Waterstone Financial, Inc.'s Piotroski F-Score is 6/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of -0.42 places it in the distress zone, a signal of elevated financial risk.

Waterstone Financial, Inc. has beaten Wall Street's EPS estimate in 6 of its last 8 reported quarters — a consistent record of delivering on expectations. Reported results have landed about 21.7% above estimates on average.

Over the past six months, Waterstone Financial, Inc. insiders filed 8 SEC Form 4 transactions — 6 sales and 2 purchases. On net that is roughly 18K shares disposed (about $356K), a signal worth weighing alongside the fundamentals.

WSBF Financials

WSBF Latest News

WSBF Analyst Consensus

WSBF MoonshotScore

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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