Waterstone Mortgage accomplished a third consecutive quarter of pretax and net profitability, with year-over-year improvements in production and gain on sale.
Fourth quarter pretax income of $900,000 and net income of $656,000 for the mortgage banking segment of Waterstone Financial compared with $1.3 million and $948,000
For the full year, Waterstone Mortgage had a marked turnaround in its performance from the fourth quarter of 2024 through the most recent period, said Jeff McGuiness, its president and CEO, in an interview.
"Despite the continued market headwinds, we've maintained our focus on our customers, we've improved our efficiencies and our margin management," McGuiness said. "Equally, we've had a very strong recruiting year for new talent, new originators coming in that we know will make an impact for us in 2026."
Waterstone Mortgage is an independent mortgage banker, which
The first quarter is roughest for the mortgage market, he noted. In its forecasts which were laid out for its parent bank, Waterstone Mortgage added it would make its money in the other three quarters.
Total volume was $534.6 million for the fourth quarter, a slight decline from the third quarter's $539.4 million, but improved over the $470.7 million for the final three months of 2024.
JPMorgan Chase, which the analysts at Keefe, Bruyette & Woods see as
Fannie Mae's January forecast estimated a 12% industry-wide gain in originations in the fourth quarter over the period ended Sept. 30. Over the same time, refinance share grew to 39% from 24%.
Waterstone's production in the fourth quarter was split 78.9% purchase and 21.1% refi; in the third quarter, it was 90.0% and 9.1%. The purchase business typically has higher revenue.
Even with the shift, in the fourth quarter Waterstone Mortgage benefitted from home purchasers coming off of the sidelines, as consumers captured this dip in rates, McGuiness said. This has continued through early January.
Its gain on sale of 380 basis points was lower than the third quarter's 387 basis points. But it was an improvement over the 374 basis points for the final three months of 2024.
At Chase, gain on sale declined 6 basis points quarter-to-quarter and was 36 basis points below where it was for the prior year.
Parent company Waterstone Financial, which also has a community bank subsidiary, had net income of $7.7 million for the fourth quarter, down from $7.9 million in the third quarter but up from $5.2 million one year prior.
