Waterstone Financial 8-K Results of Operations and Financial Condition

Exhibit 99.1

Waterstone Financial, Inc. Announces Results of Operations for the Quarter Ended March 31, 2013.

WAUWATOSA, WI – 4/30/2013 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income for the first quarter of 2013 of $4.6 million, compared to $2.2 million for the first quarter of 2012.  Income before income taxes was $7.5 million for the first quarter of 2013, compared to $2.2 million for the first quarter of 2012. Net income per diluted share was $0.15 for the first quarter of 2013 as compared to $0.07 per diluted share for the first quarter of 2012.

"I am pleased to report net income at the Bank for the fifth consecutive quarter," said Doug Gordon, President and Chief Executive Officer of the Company. "These results demonstrate the strength of our core businesses, the positive effect of our efforts to diversify our earnings stream and the hard work of our dedicated employees."

The Waterstone mortgage banking segment reported net income of $2.6 million for the quarter ended March 31, 2013 compared to $1.2 million for the quarter ended March 31, 2012.  The increase in mortgage banking income was the result of an increase in the volume of loans originated and sold and in the margins earned on the transactions in 2013 compared to 2012.  The community banking segment net income for the quarter ended March 31, 2013 totaled $1.9 million compared to $704,000 for the first quarter of 2012.  Community banking operations were positively impacted by a $1.9 million decline in its provision for loan losses from $3.7 million in the first quarter of 2012 to $1.8 million in the first quarter of 2013 and by a $1.3 million decline in real estate owned expense from $1.4 million in the first quarter of 2012 to $141,000 in the first quarter of 2013.

Credit quality continued its steady pace of improvement in the first quarter.  Total nonperforming assets as a percentage of total assets declined to 5.94% at March 31, 2013 from 6.66% at December 31, 2012 and from 8.70% at March 31, 2012.  Nonaccrual loans declined by 11.7% to  $66.0 million at March 31, 2013 from $74.7 million at December 31, 2012 while real estate owned declined by 14.4% to $30.8 million from $36.0 million.  This equates to a decline in total nonperforming assets of 12.5% to $96.8 million at March 31, 2013 from $110.6 million at December 31, 2012.  Nonaccrual loans declined by 28.2% to  $66.0 million at March 31, 2013 from $91.8 million at March 31, 2012 while real estate owned declined by 45.0% to $30.8 million from $56.0 million.  This equates to a decline in total nonperforming assets of 34.6% to $96.8 million at March 31, 2013 from $147.8 million at March 31, 2012.  Total delinquent loans declined during the quarter ended March 31, 2013 by 4.4% to $71.2 million from $74.5 million at December 31, 2012.  Total delinquent loans declined by 19.1% to $71.2 million at March 31, 2013 from $88.0 million at March 31, 2012.

About Waterstone Financial, Inc.

Waterstone Financial, Inc. (NASDAQ: WSBF) is a single-bank, thrift holding company headquartered in Wauwatosa, WI.  With $1.63 billion in assets at March 31, 2013, Waterstone has eight community bank branches in the metropolitan Milwaukee market and mortgage banking offices in eleven states around the country.  Additional financial detail related to WaterStone Bank, SSB can be found on the FDIC web site (www.fdic.gov) under the "Industry Analysis" tab.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as "may," "expects," "anticipates," "estimates" or "believes."  Such statements are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements.  These factors include (i) exposure to the deterioration in the commercial and residential real estate markets which could result in increased charge-offs and increases in the allowance for loan losses,  (ii) various other factors, including changes in economic conditions affecting borrowers, new information regarding outstanding loans and identification of additional problem loans, which could require an increase in  the allowance for loan losses, (iii) Waterstone's ability to maintain required levels of capital and other current and future regulatory requirements, (iv) the impact of recent and future legislative initiatives on the financial markets, and (v) those factors referenced in Item 1A. Risk Factors in Waterstone's Annual Report on Form 10-K for the year ended December 31, 2012 and as may be described from time to time in Waterstone's subsequent SEC filings, which factors are incorporated herein by reference.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only Waterstone's belief as of the date of this press release.

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WATERSTONE FINANCIAL, INC.

SUMMARY OF KEY QUARTERLY FINANCIAL DATA (unaudited)

(dollars in thousands)

	2013			2012
		Q1			Q4			Q3			Q2			Q1
Performance Ratios:
Return on average assets		1.14	%		4.28	%		2.00	%		1.45	%		0.52	%
Return on average equity		9.14	%		37.42	%		18.26	%	��	14.12	%		5.24	%
Net interest margin		2.66	%		2.67	%		2.67	%		2.65	%		2.62	%
Efficiency ratio		71.95	%		80.64	%		72.42	%		77.44	%		76.75	%
Condensed Income Data:
Net interest income	$	10,146		$	10,256		$	10,635		$	10,628		$	10,426
Provision for loan losses		1,760			1,200			2,000			1,425			3,675
Total noninterest income		23,033			25,174			27,775			23,252			15,002
Total noninterest expense		23,871			28,570			27,817			26,236			19,515
Income before income taxes		7,548			5,660			8,593			6,219			2,238
Income tax expense (benefit)		2,923			(12,420	)		145			41			30
Net income	$	4,625		$	18,080		$	8,448		$	6,178		$	2,208
Asset Quality Data:
Allowance for loan losses	$	29,298		$	31,043		$	30,967		$	32,658		$	33,047
Net charge-offs		3,505			1,124			3,691			1,793			3,058
Total past due loans		71,192			74,450			77,858			84,381			88,015
Impaired loans		90,981			94,971			107,725			118,226			121,673
Real estate owned		30,799			35,974			43,837			47,815			56,010
Average Balance Sheet Data:
Total assets		1,647,387			1,682,241			1,676,685			1,708,021			1,692,219
Loans receivable and held for sale		1,248,893			1,265,624			1,270,414			1,275,192			1,294,031
Mortgage-related securities		143,628			157,187			151,162			140,792			103,039
Total interest-earning assets		1,548,494			1,591,149			1,580,611			1,611,163			1,595,336
Interest-bearing deposits		887,252			936,121			949,174			1,009,215			1,018,616
Borrowings		485,259			483,445			487,078			472,052			457,658
Total interest-bearing liabilities		1,372,511			1,419,566			1,436,252			1,481,267			1,476,274
Total shareholders' equity		205,297			192,231			183,534			175,537			169,059
Capital Ratios:
Equity to total assets at end of the period		12.72	%		12.20	%		11.00	%		10.46	%		9.94	%
Tier I capital to average assets (bank)		11.79	%		11.13	%		10.50	%		9.82	%		9.60	%
Tier I capital to risk-weighted assets (bank)		17.49	%		16.07	%		14.37	%		13.84	%		13.42	%
Total capital to risk-weighted assets (bank)		18.75	%		17.34	%		15.64	%		15.11	%		14.69	%

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WATERSTONE FINANCIAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

       (Unaudited)

	March 31,			December 31,
	2013			2012
ASSETS
Cash and cash equivalents	$	64,114		$	71,469
Securities available for sale (at fair value)		220,471			205,017
Loans held for sale (at fair value)		104,168			133,613
Loans receivable, net of allowance for loan losses		1,095,639			1,102,629
Office properties and equipment		26,844			26,935
Real estate owned		30,799			35,974
Other assets		86,719			85,439
Total assets	$	1,628,754		$	1,661,076
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits	$	914,919		$	939,513
Borrowings		479,324			479,888
Other		27,406			39,041
Total liabilities		1,421,649			1,458,442
Common stock and additional paid-in capital		110,799			110,831
Retained earnings		141,112			136,487
Unearned ESOP shares		(1,494	)		(1,708	)
Accumulated other comprehensive income, net of taxes		1,949			2,285
Treasury shares, at cost		(45,261	)		(45,261	)
Total shareholders' equity		207,105			202,634
Total liabilities and shareholders' equity	$	1,628,754		$	1,661,076

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WATERSTONE FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(in thousands, except per share data)

	For the Three Months Ended
	March 31,		Dec. 31,			March 31,
	2013		2012			2012
Interest income:
Loans	$	15,213	$	15,484		$	16,572
Mortgage-related securities		437		667			863
Debt securities and short-term investments		536		491			707
Total interest income		16,186		16,642			18,142
Interest expense:
Deposits		1,466		1,673			3,204
Borrowings		4,574		4,713			4,512
Total interest expense		6,040		6,386			7,716
Net interest income		10,146		10,256			10,426
Provision for loan losses		1,760		1,200			3,675
Net interest income after provision for loan losses		8,386		9,056			6,751
Noninterest income:
Mortgage banking income		21,988		23,999			14,201
Other		1,045		1,175			801
Total noninterest income		23,033		25,174			15,002
Noninterest expense:
Compensation and employee benefits		16,482		20,081			10,637
Occupancy, office furniture and equipment		1,916		1,739			1,721
Advertising		824		627			555
Real estate owned		141		2,481			1,435
FDIC insurance premiums		673		660			941
Other		3,835		2,980			4,226
Total noninterest expense		23,871		28,570			19,515
Income before income taxes		7,548		5,660			2,238
Income taxes (benefit)		2,923		(12,420	)		30
Net income	$	4,625	$	18,080		$	2,208
Income per share:
Basic	$	0.15	$	0.58		$	0.07
Diluted		0.15		0.58			0.07
Weighted average shares outstanding
Basic		31,123,857		31,085,390			31,024,139
Diluted		31,334,490		31,184,934			31,036,711

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