Westbury Bancorp (WBBW) 10-Q 2016 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________

FORM 10-Q

____________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2016

Or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from              to             

Commission File Number 001-35871

Westbury Bancorp, Inc.

(Exact Name of Registrant as Specified in Charter)

____________________________________________

Maryland	46-1834307
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification Number)
200 South Main Street, West Bend, Wisconsin	53095
(Address of Principal Executive Officers)	(Zip Code)

(262) 334-5563

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

____________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  o.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No  x

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock as of the latest practicable date.

There were 4,115,035 shares of Common Stock, par value $.01 per share, outstanding as of May 2, 2016.

WESTBURY BANCORP, INC.

Form 10-Q Quarterly Report 

Table of Contents 

PART I  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS	2
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
ITEM 4. CONTROLS AND PROCEDURES	46
PART II  OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	48
ITEM 1A. RISK FACTORS	48
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	48
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	48
ITEM 4. MINE SAFETY DISCLOSURES	48
ITEM 5. OTHER INFORMATION	49
ITEM 6. EXHIBITS	49
INDEX TO EXHIBITS	51

PART I

ITEM 1.FINANCIAL STATEMENTS

Westbury Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets

March 31, 2016 and September 30, 2015

(In Thousands, except share data)

	March 31, 2016			September 30, 2015
	(Unaudited)
Assets
Cash and due from banks	$	9,594		$	9,963
Interest-earning deposits	6,752			6,525
Cash and cash equivalents	16,346			16,488
Securities available-for-sale	81,936			80,286
Securities held to maturity, at amortized cost ($2,499 and $2,490 fair value at March 31, 2016 and September 30, 2015, respectively)	2,459			2,459
Loans held for sale, at lower of cost or fair value	608			431
Loans, net of allowance for loan losses of $4,863 and $4,598 at March 31, 2016 and September 30, 2015, respectively	508,800			493,425
Federal Home Loan Bank stock, at cost	3,350			3,350
Foreclosed real estate	—			283
Real estate held for investment	1,836			2,047
Real estate held for sale	808			882
Office properties and equipment, net	13,625			13,867
Cash surrender value of bank-owned life insurance	14,024			13,167
Mortgage servicing rights	1,064			1,210
Deferred tax asset	6,112			7,546
Other assets	4,139			3,488
Total assets	$	655,107		$	638,929
Liabilities and Stockholders’ Equity
Liabilities
Deposits	$	550,217		$	531,020
Short-term advances from Federal Home Loan Bank	—			18,000
Long-term advances from Federal Home Loan Bank	20,000			—
Advance payments by borrowers for property taxes and insurance	1,861			5,382
Other liabilities	4,421			5,715
Total liabilities	576,499			560,117
Stockholders’ Equity
Preferred stock $0.01 par value, 50,000,000 shares authorized; none issued or outstanding	—			—
Common stock $0.01 par value, 100,000,000 shares authorized; 5,347,412 and 5,341,114 shares issued at March 31, 2016 and September 30, 2015, respectively	53			53
Additional paid-in capital	50,755			50,145
Retained earnings	50,626			48,714
Unearned Employee Stock Ownership Plan (ESOP) shares	(3,394		)	(3,548		)
Accumulated other comprehensive gain	714			352
Less common stock repurchased, 1,182,741 and 1,012,109 shares at cost, at March 31, 2016 and September 30, 2015, respectively	(20,146		)	(16,904		)
Total stockholders’ equity	78,608			78,812
Total liabilities and stockholders’ equity	$	655,107		$	638,929

See Notes to Unaudited Consolidated Financial Statements.

2

Westbury Bancorp, Inc and Subsidiary
Consolidated Statements of Operations
Three and Six Months Ended March 31, 2016 and 2015 (Unaudited)
(In Thousands, except per share data)
	Three Months Ended   March 31,					Six Months Ended   March 31,
	2016		2015			2016		2015
Interest and dividend income:
Loans	$	5,166	$	4,685		$	10,283	$	9,144
Investments - nontaxable	8		15			23		32
Investments - taxable	494		404			931		796
Interest bearing deposits	37		16			63		28
Total interest and dividend income	5,705		5,120			11,300		10,000
Interest expense:
Deposits	579		446			1,137		871
Short-term advances from the Federal Home Loan Bank	15		14			23		18
Long-term advances from the Federal Home Loan Bank	47		—			71		—
Total interest expense	641		460			1,231		889
Net interest income before provision for loan losses	5,064		4,660			10,069		9,111
Provision for loan losses	125		300			275		650
Net interest income after provision for loan losses	4,939		4,360			9,794		8,461
Noninterest income:
Service fees on deposit accounts	947		999			2,025		2,155
Gain on sales of loans, net	109		174			210		243
Servicing fee income, net of amortization and impairment	17		6			54		43
Insurance and securities sales commissions	59		98			132		156
Gain on sales of securities	9		3			11		73
Gain on sales of branches and other assets	1		(12		)	1		6
Increase in cash surrender value of bank-owned life insurance	110		128			220		230
Rental income from real estate operations	113		148			226		276
Other income	86		67			177		103
Total noninterest income	1,451		1,611			3,056		3,285
Noninterest expenses:
Salaries and employee benefits	2,494		2,439			4,810		4,820
Commissions	48		71			96		126
Occupancy	321		385			619		698
Furniture and equipment	122		125			243		228
Data processing	772		792			1,519		1,573
Advertising	59		44			100		104
Real estate held for investment	105		120			203		223
Net loss from operations and sale of foreclosed real estate	—		31			13		179
FDIC insurance premiums	103		107			207		212
Valuation loss on real estate held for sale	—		—			47		—
Other expenses	928		1,108			1,880		2,164
Total noninterest expenses	4,952		5,222			9,737		10,327
Income before income tax expense	1,438		749			3,113		1,419
Income tax expense	565		265			1,201		488
Net income	$	873	$	484		$	1,912	$	931
Earnings per share:
Basic	$	0.23	$	0.11		$	0.51	$	0.21
Diluted	$	0.23	$	0.11		$	0.50	$	0.21

See Notes to Unaudited Consolidated Financial Statements.

3

Westbury Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income

Three and Six Months Ended March 31, 2016 and 2015

(Unaudited)

(In Thousands)

	Three Months Ended   March 31,						Six Months Ended   March 31,
	2016			2015			2016			2015
Net income	$	873		$	484		$	1,912		$	931
Other comprehensive income, before tax:
Unrealized gains on available-for-sale securities	1,574			620			605			875
Reclassification adjustment for realized gains included in net income	(9		)	(3		)	(11		)	(73		)
Other comprehensive income, before tax	1,565			617			594			802
Income tax expense related to items of other comprehensive income	(613		)	(242		)	(232		)	(315		)
Other comprehensive income, net of tax	952			375			362			487
Comprehensive income	$	1,825		$	859		$	2,274		$	1,418

See Notes to Unaudited Consolidated Financial Statements.

4

Westbury Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended March 31, 2016 and 2015

(Unaudited)

(In Thousands, except share data)

	Preferred Stock		Common Stock		Additional Paid In Capital		Retained Earnings		Unearned ESOP Shares			Accumulated Other Comprehensive Income (Loss)			Common Stock Repurchased			Total
Balance, September 30, 2015	$	—	$	53	$	50,145	$	48,714	$	(3,548	)	$	352		$	(16,904	)	$	78,812
Net income	—		—		—		1,912		—			—			—			1,912
Other comprehensive income, net of tax	—		—		—		—		—			362			—			362
Repurchase of 170,632 shares of common stock	—		—		—		—		—			—			(3,242		)	(3,242		)
Exercise of 4,298 stock options	—		—		64		—		—			—			—			64
Stock based compensation expense	—		—		417		—		—			—			—			417
Allocation, or commitment to be allocated, of 15,427 shares by ESOP	—		—		129		—		154			—			—			283
Balance, March 31, 2016	$	—	$	53	$	50,755	$	50,626	$	(3,394	)	$	714		$	(20,146	)	$	78,608
Balance, September 30, 2014	$	—	$	53	$	49,164	$	45,190	$	(3,754	)	$	(46	)	$	(4,120	)	$	86,487
Net income	—		—		—		931		—			—			—			931
Other comprehensive income, net of tax	—		—		—		—		—			487			—			487
Repurchase of 546,861 shares of common stock	—		—		—		—		—			—			(9,369		)	(9,369		)
Stock based compensation expense	—		—		402		—		—			—			—			402
Allocation,or commitment to be allocated, of 10,284 shares by ESOP	—		—		95		—		103			—			—			198
Balance, March 31, 2015	$	—	$	53	$	49,661	$	46,121	$	(3,651	)	$	441		$	(13,489	)	$	79,136

See Notes to Unaudited Consolidated Financial Statements.

5

Westbury Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows
Six Months Ended March 31, 2016 and 2015 (Unaudited)
(In Thousands)
	Six Months Ended   March 31,
	2016			2015
Cash Flows From Operating Activities
Net income	$	1,912		$	931
Adjustments to reconcile net income to net cash used in operating activities:
Provision for loan losses	275			650
Depreciation and amortization	383			317
Depreciation on real estate held for investment	44			66
Net amortization of securities premiums and discounts	205			272
Amortization and impairment of mortgage servicing rights	146			215
Gain on sales of available-for-sale securities	(11		)	(73		)
Gain on sales of branches and other assets	(1		)	(6		)
Write-down of real estate held-for-sale	47			—
(Gain) loss on sale of foreclosed real estate	(21		)	20
Write-down of foreclosed real estate	26			57
Loans originated for sale	(17,004		)	(14,510		)
Proceeds from sale of loans	17,037			13,485
Gain on sale of loans, net	(210		)	(243		)
ESOP compensation expense	283			198
Stock based compensation expense	417			402
Deferred income taxes	1,202			488
Increase in cash surrender value of life insurance	(220		)	(230		)
Net change in:
Other assets	(650		)	(107		)
Other liabilities and advance payments by borrowers for property taxes and insurance	(4,815		)	(4,317		)
Net cash used in operating activities	(955		)	(2,385		)
Cash Flows From Investing Activities
Purchases of securities available-for-sale	(16,272		)	(10,287		)
Proceeds from sales of securities available-for-sale	8,740			17,536
Proceeds from maturities, prepayments, and calls of securities available-for-sale	6,282			5,819
Purchases of securities held to maturity	—			(3,025		)
Purchases of real estate held for investment	(18		)	—
Proceeds from sale of real estate held for investment	185			—
Purchase of FHLB stock	—			(680		)
Net increase in loans	(15,650		)	(51,648		)
Purchase of bank-owned life insurance	(637		)	—
Purchases of office properties and equipment	(141		)	(486		)
Proceeds from sales of real estate held-for-sale	27			—
Proceeds from sales of foreclosed real estate	278			603
Net cash used in investing activities	(17,206		)	(42,168		)
Cash Flows From Financing Activities
Net increase in deposits	19,197			57,119
Proceeds from long-term Federal Home Loan Bank advances	20,000			—
Net repayment of short-term Federal Home Loan Bank advances	(18,000		)	(4,000		)
Proceeds from exercise of stock options	64			—
Repurchase of common stock	(3,242		)	(9,369		)
Net cash provided by financing activities	18,019			43,750
Net decrease in cash and cash equivalents	(142		)	(803		)
Cash and cash equivalents at beginning	16,488			17,608
Cash and cash equivalents at end	$	16,346		$	16,805
Supplemental Disclosures of Cash Flow Information
Interest paid (including amounts credited to deposits)	$	1,231		$	888
Supplemental Schedules of Non-cash Investing Activities
Loans receivable transferred to foreclosed real estate	$	—		$	425

See Notes to Unaudited Consolidated Financial Statements.

6

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Note 1.Basis of Presentation

 The accompanying unaudited consolidated financial statements of Westbury Bancorp, Inc. and its wholly-owned subsidiary, Westbury Bank, (the "Bank", and collectively, the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X.  Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates used in the preparation of the financial statements are based on various factors including the current interest rate environment and the general strength of the local economy.  Changes in the overall interest rate environment can significantly affect the Company’s net interest income and the value of its recorded assets and liabilities.  Actual results could differ from those estimates used in the preparation of the financial statements.  Certain prior period amounts have been reclassified to conform to current period presentation.  These reclassifications did not result in any changes to previously reported net income or stockholders’ equity.

In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company’s financial condition as of March 31, 2016 and September 30, 2015 and the results of operations and cash flows for the interim periods ended March 31, 2016 and 2015.  All interim amounts are unaudited, and the results of operations for the interim periods herein are not necessarily indicative of the results of operations to be expected for the year.  These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended September 30, 2015 filed with the U.S. Securities and Exchange Commission as part of Westbury Bancorp, Inc.’s Annual Report on Form 10-K for the year ended September 30, 2015.

The Jumpstart Our Business Startups Act (the "JOBS Act"), which was signed into law on April 5, 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.0 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” The Company qualifies as an “emerging growth company” and believes that it will continue to qualify as an “emerging growth company” until five years from the completion of the Company's initial public stock offering in April 2013.

As an “emerging growth company,” the Company has elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the financial statements may not be comparable to the financial statements of companies that comply with such new or revised accounting standards.

Note 2.Recent Accounting Developments

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is intended to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP. ASU 2014-09 is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. Adoption by the Company is not expected to have a material impact on the consolidated financial statements and related disclosures.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718) - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. ASU 2014-12 is intended to clarify the accounting for the timing of expense recognition related to employee share-based payments in which a performance target that effects vesting could be achieved after the requisite service period. ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Adoption by the Company is not expected to have a material impact on the consolidated financial statements and related disclosures.

7

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

In August 2014, the FASB issued ASU 2014-14, Receivables - Troubled Debt Restructuring by Creditors (Topic 310) - Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure. ASU 2014-14 is intended to clarify the accounting for and improve the consistency of balance sheet classification of certain foreclosed mortgage loans that are either fully or partially guaranteed under government programs. Greater consistency in classification of such mortgage loans upon foreclosure is expected to provide more decision-useful information about a creditor's foreclosed mortgage loans that are expected to be recovered, at least in part, through government guarantees. ASU 2014-14 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Adoption by the Company is not expected to have a material impact on the consolidated financial statements and related disclosures.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods beginning after December 15, 2019. Adoption by the Company is not expected to have a material impact on the consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company is evaluating the potential impact of ASU 2016-02 on the consolidated financial statements and related disclosures.

Note 3.Earnings Per Share

Earnings per common share is computed using the two-class method. Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding, adjusted for weighted average unallocated ESOP shares, during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards to the extent holders of these securities are entitled to receive non-forfeitable dividends or dividend equivalents at the same rate as holders of the Company's common stock. Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method.

The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share (in thousands, except share and per share data).

	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Net income	$	873		$	484		$	1,912		$	931
Basic potential common shares:
Weighted average shares outstanding	4,073,133			4,657,638			4,118,040			4,746,438
Weighted average unallocated ESOP shares	(346,266		)	(368,549		)	(349,713		)	(371,149		)
Basic weighted average shares outstanding	3,726,867			4,289,089			3,768,327			4,375,289
Dilutive effect of equity awards	53,290			33,670			47,662			28,971
Diluted weighted average shares outstanding	3,780,157			4,322,759			3,815,989			4,404,260
Basic income per share	$	0.23		$	0.11		$	0.51		$	0.21
Diluted income per share	$	0.23		$	0.11		$	0.50		$	0.21

8

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Note 4.Investment Securities

The amortized cost and fair value of investment securities are summarized as follows:

	March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale
U.S. Government and agency securities	$	24	$	1	$	—		$	25
U.S. Government agency residential mortgage-backed securities	38,908		506		(77		)	39,337
U.S. Government agency collateralized mortgage obligations	1,770		15		(22		)	1,763
U.S. Government agency commercial mortgage-backed securities	13,557		172		(21		)	13,708
Municipal securities	22,624		535		—			23,159
Corporate securities	3,879		69		(4		)	3,944
Total Available for Sale	80,762		1,298		(124		)	81,936
Held to Maturity
Municipal securities	2,459		40		—			2,499
Total Investment Securities	$	83,221	$	1,338	$	(124	)	$	84,435
	September 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for Sale
U.S. Government and agency securities	$	24	$	1	$	—		$	25
U.S. Government agency residential mortgage-backed securities	39,380		456		(144		)	39,692
U.S. Government agency collateralized mortgage obligations	1,963		18		(40		)	1,941
U.S. Government agency commercial mortgage-backed securities	13,993		121		(15		)	14,099
Municipal securities	21,494		222		(49		)	21,667
Corporate securities	2,852		12		(2		)	2,862
Total Available for Sale	79,706		830		(250		)	80,286
Held to Maturity
Municipal securities	2,459		31		—			2,490
Total Investment Securities	$	82,165	$	861	$	(250	)	$	82,776

9

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The amortized cost and fair value of investment securities, by contractual maturity, at March 31, 2016 are shown in the following table.  Actual maturities differ from contractual maturities for mortgage-backed securities because the mortgages underlying the securities may be called or repaid without penalty.  Therefore, these securities are not presented in the maturity categories in the table below.

	March 31, 2016
	Amortized Cost		Fair Value
Available for sale:
Due in one year or less	$	912	$	913
Due after one year through five years	10,183		10,396
Due after five years through ten years	13,750		14,116
Due after ten years	1,682		1,703
U.S. Government agency collateralized mortgage obligations	1,770		1,763
U.S. Government agency residential mortgage-backed securities	38,908		39,337
U.S. Government agency commercial mortgage-backed securities	13,557		13,708
	80,762		81,936
Held to maturity:
Due in one year or less	166		166
Due after one year through five years	690		694
Due after five years through ten years	954		974
Due after ten years	649		665
	2,459		2,499
Total	$	83,221	$	84,435

Proceeds from sales of investment securities during the three months ended March 31, 2016 and 2015, were $3,521 and $5,452, respectively. Gross realized gains, during the three months ended March 31, 2016 and 2015, on these sales amounted to $11 and $14, respectively. Gross realized losses on these sales were $2 and $11, during the three months ended March 31, 2016 and 2015, respectively.

Proceeds from sales of investment securities during the six months ended March 31, 2016 and 2015, were $8,740 and $17,536, respectively. Gross realized gains, during the six months ended March 31, 2016 and 2015, on these sales amounted to $23 and $125, respectively. Gross realized losses on these sales were $12 and $52, during the six months ended March 31, 2016 and 2015, respectively.

There were no investment securities that were pledged to secure deposits or for other purposes required or permitted by law at March 31, 2016 and September 30, 2015.

10

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows:

	March 31, 2016
	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Government and agency securities	$	—	$	—		$	—	$	—		$	—	$	—
U.S. Government agency residential mortgage-backed securities	3,302		(6		)	6,477		(71		)	9,779		(77		)
U.S. Government agency collateralized mortgage obligations	—		—			620		(22		)	620		(22		)
U.S Government agency commercial mortgage-backed securities	4,130		(21		)	—		—			4,130		(21		)
Municipal securities	—		—			—		—			—		—
Corporate securities	246		(4		)	—		—			246		(4		)
	$	7,678	$	(31	)	$	7,097	$	(93	)	$	14,775	$	(124	)

	September 30, 2015
	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Government and agency securities	$	—	$	—		$	—	$	—		$	—	$	—
U.S. Government agency residential mortgage-backed securities	7,270		(59		)	6,168		(85		)	13,438		(144		)
U.S. Government agency collateralized mortgage obligations	—		—			627		(40		)	627		(40		)
U.S. Government agency commercial mortgage-backed securities	3,511		(15		)	—		—			3,511		(15		)
Municipal securities	3,661		(45		)	151		(4		)	3,812		(49		)
Corporate securities	510		(2		)	—		—			510		(2		)
	$	14,952	$	(121	)	$	6,946	$	(129	)	$	21,898	$	(250	)

At March 31, 2016, the Company's investment portfolio included 9 securities available-for-sale which had been in an unrealized loss position for more than twelve months and 8 securities available-for-sale which had been in an unrealized loss position for less than twelve months. These securities are considered to be acceptable credit risks.  Based upon an evaluation of the available evidence, including recent changes in market rates, credit rating information and information obtained from regulatory filings, management believes the decline in fair value for these securities is temporary.  The Company does not have any current requirement to sell and does not currently intend to sell these securities prior to any anticipated recovery in fair value.

At September 30, 2015, the investment portfolio included 9 securities available-for-sale which had been in an unrealized loss position for greater than twelve months and 22 securities available-for-sale which had been in an unrealized loss position for less than twelve months.

11

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Note 5.Loans

A summary of the balances of loans follows:

	March 31, 2016		September 30, 2015
Real estate:
Single family	$	152,492	$	153,141
Multifamily	121,140		105,750
Commercial real estate	166,067		162,957
Construction and land development	17,250		18,831
Total real estate	456,949		440,679
Commercial business	38,110		38,200
Consumer:
Home equity lines of credit	14,679		14,881
Education	3,748		4,106
Other	420		523
Total consumer	18,847		19,510
Total loans	513,906		498,389
Less:
Net deferred loan fees	243		366
Allowance for loan losses	4,863		4,598
Net loans	$	508,800	$	493,425

The following tables present the contractual aging of the Company's recorded investment in past due loans by class of loans as of March 31, 2016 and September 30, 2015:

March 31, 2016	Current		30-59 Days Past Due		60-89 Days Past Due		Loans Past Due 90 Days or More		Total
Single family	$	151,651	$	477	$	24	$	340	$	152,492
Multifamily	121,140		—		—		—		121,140
Commercial real estate	166,067		—		—		—		166,067
Construction and land development	17,246		—		—		4		17,250
Commercial business	38,110		—		—		—		38,110
Consumer and other:
Home equity lines of credit	14,652		—		—		27		14,679
Education	3,643		40		25		40		3,748
Other	420		—		—		—		420
	$	512,929	$	517	$	49	$	411	$	513,906

12

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

September 30, 2015	Current		30-59 Days Past Due		60-89 Days Past Due		Loans Past Due 90 Days or More		Total
Single family	$	152,245	$	473	$	83	$	340	$	153,141
Multifamily	105,750		—		—		—		105,750
Commercial real estate	162,957		—		—		—		162,957
Construction and land development	18,827		4		—		—		18,831
Commercial business	38,200		—		—		—		38,200
Consumer and other:
Home equity lines of credit	14,691		—		—		190		14,881
Education	3,782		79		—		245		4,106
Other	523		—		—		—		523
	$	496,975	$	556	$	83	$	775	$	498,389

There were no loans past due ninety days or more and still accruing interest as of March 31, 2016 and September 30, 2015.

The following table presents the recorded investment in nonaccrual loans by class of loans as of March 31, 2016 and September 30, 2015:

	March 31, 2016		September 30, 2015
Single family	$	340	$	340
Multifamily	—		—
Commercial real estate	—		—
Construction and land development	4		—
Commercial business	—		—
Consumer and other:
Home equity lines of credit	38		203
Education	65		260
Other	—		—
	$	447	$	803

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt and comply with various terms of their underlying loan agreements.  The Company considers current financial information, historical payment experience, credit documentation, public information and current economic trends when classifying its loans into risk categories.  Generally, all sizable credits receive a financial review no less than annually to monitor and adjust, if necessary, the credit’s risk profile.  Credits classified as special mention, substandard or doubtful generally receive a review more frequently than annually.

The Company categorizes performing, potential problem, and problem loans into the following risk categories based on relevant information about the ability of borrowers to service their debt:

Pass — A pass asset is well protected by the current worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less costs to acquire and sell in a timely manner, of any underlying collateral.

Watch — A watch asset has potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Watch assets are a sub-category of Pass which do not expose the Company to sufficient risk to warrant further classification.

13

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Special Mention — A special mention asset has characteristics of deterioration in quality exhibited by any number of well-defined weaknesses requiring significant corrective action.  The repayment ability of the borrower has not been validated, or has become marginal or weak, and the loan may have exhibited some overdue payments or payment extensions and/or renewals.

Substandard — A substandard asset is an asset with a well-defined weakness that jeopardizes repayment, in whole or in part, of the debt.  These credits are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged.  These assets are characterized by the distinct possibility that the Company will or has sustained some loss of principal and/or interest if the deficiencies are not corrected.

Doubtful — A doubtful asset is an asset that has all the weaknesses inherent in the substandard classification with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.  These credits have a high probability for loss, yet because certain important and reasonably specific pending factors may work toward the strengthening of the asset, its classification of loss is deferred until its more exact status can be determined.

Homogeneous loan types are assessed for credit quality based on the contractual aging status of the loan and payment activity.  In certain cases, based upon payment performance, the loan being related with another commercial type loan or for other reasons, a loan may be categorized into one of the risk categories noted above, unless such loan carries private mortgage insurance (PMI).  Such assessment is completed at the end of each reporting period.

The following tables present the risk category of loans evaluated by internal asset classification based on the most recent analysis performed by the Company and the contractual aging as of March 31, 2016 and September 30, 2015:

March 31, 2016	Pass		Watch		Special Mention		Substandard		Doubtful		Total
Single family	$	150,147	$	802	$	—	$	1,543	$	—	$	152,492
Multifamily	115,563		5,577		—		—		—		121,140
Commercial real estate	163,374		1,992		403		298		—		166,067
Construction and land development	17,199		—		—		51		—		17,250
Commercial business	38,048		—		—		62		—		38,110
Consumer and other:
Home equity lines of credit	14,541		—		—		138		—		14,679
Education	3,748		—		—		—		—		3,748
Other	420		—		—		—		—		420
Total	$	503,040	$	8,371	$	403	$	2,092	$	—	$	513,906

September 30, 2015	Pass		Watch		Special Mention		Substandard		Doubtful		Total
Single family	$	150,421	$	1,135	$	—	$	1,585	$	—	$	153,141
Multifamily	103,117		2,633		—		—		—		105,750
Commercial real estate	159,104		3,136		410		307		—		162,957
Construction and land development	18,831		—		—		—		—		18,831
Commercial business	36,561		—		—		1,639		—		38,200
Consumer and other:
Home equity lines of credit	14,636		—		—		245		—		14,881
Education	4,106		—		—		—		—		4,106
Other	523		—		—		—		—		523
	$	487,299	$	6,904	$	410	$	3,776	$	—	$	498,389

14

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The following tables provide additional detail of the activity in the allowance for loan losses, by portfolio segment, for the three months ended March 31, 2016 and 2015:

Three Months Ended March 31, 2016	Single Family			Multifamily			Commercial Real Estate		Construction and Land Development			Commercial Business		Consumer and Other			Total
Allowance for loan losses:
Beginning balance	$	1,031		$	1,340		$	1,652	$	344		$	302	$	78		$	4,747
Provision for loan losses	44			(160		)	148		(9		)	113		(11		)	125
Loans charged-off	(30		)	—			—		—			—		—			(30		)
Recoveries	13			—			1		—			5		2			21
Ending balance	$	1,058		$	1,180		$	1,801	$	335		$	420	$	69		$	4,863
Period-ended amount allocated for:
Individually evaluated for impairment	$	3		$	—		$	—	$	—		$	—	$	54		$	57
Collectively evaluated for impairment	1,055			1,180			1,801		335			420		15			4,806
Ending balance	$	1,058		$	1,180		$	1,801	$	335		$	420	$	69		$	4,863
Loans:
Individually evaluated for impairment	$	1,736		$	1,789		$	—	$	—		$	—	$	92		$	3,617
Collectively evaluated for impairment	150,756			119,351			166,067		17,250			38,110		18,755			510,289
Ending balance	$	152,492		$	121,140		$	166,067	$	17,250		$	38,110	$	18,847		$	513,906

Three Months Ended March 31, 2015	Single Family			Multifamily		Commercial Real Estate			Construction and Land Development			Commercial Business			Consumer and Other		Total
Allowance for loan losses:
Beginning balance	$	1,025		$	932	$	1,388		$	367		$	412		$	100	$	4,224
Provision for loan losses	86			93		124			(6		)	(2		)	5		300
Loans charged-off	(47		)	—		(14		)	—			—			—		(61		)
Recoveries	—			—		9			—			5			6		20
Ending balance	$	1,064		$	1,025	$	1,507		$	361		$	415		$	111	$	4,483
Period-ended amount allocated for:
Individually evaluated for impairment	$	40		$	—	$	—		$	—		$	—		$	57	$	97
Collectively evaluated for impairment	1,024			1,025		1,507			361			415			54		4,386
Ending balance	$	1,064		$	1,025	$	1,507		$	361		$	415		$	111	$	4,483
Loans:
Individually evaluated for impairment	$	1,683		$	1,874	$	1,085		$	—		$	—		$	278	$	4,920
Collectively evaluated for impairment	148,419			90,320		154,036			20,941			34,569			19,046		467,331
Ending balance	$	150,102		$	92,194	$	155,121		$	20,941		$	34,569		$	19,324	$	472,251

15

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The following tables provide additional detail of the activity in the allowance for loan losses, by portfolio segment, for the six months ended March 31, 2016 and 2015:

Six Months Ended March 31, 2016	Single Family			Multifamily		Commercial Real Estate		Construction and Land Development		Commercial Business			Consumer and Other			Total
Allowance for loan losses:
Beginning balance	$	1,073		$	1,013	$	1,604	$	330	$	498		$	80		$	4,598
Provision for loan losses	2			167		195		5		(87		)	(7		)	275
Loans charged-off	(30		)	—		—		—		—			(10		)	(40		)
Recoveries	13			—		2		—		9			6			30
Ending balance	$	1,058		$	1,180	$	1,801	$	335	$	420		$	69		$	4,863
Period-ended amount allocated for:
Individually evaluated for impairment	$	3		$	—	$	—	$	—	$	—		$	54		$	57
Collectively evaluated for impairment	1,055			1,180		1,801		335		420			15			4,806
Ending Balance	$	1,058		$	1,180	$	1,801	$	335	$	420		$	69		$	4,863
Loans:
Individually evaluated for impairment	$	1,736		$	1,789	$	—	$	—	$	—		$	92		$	3,617
Collectively evaluated for impairment	150,756			119,351		166,067		17,250		38,110			18,755			510,289
Ending Balance	$	152,492		$	121,140	$	166,067	$	17,250	$	38,110		$	18,847		$	513,906

Six Months Ended March 31, 2015	Single Family			Multifamily		Commercial Real Estate			Construction and Land Development		Commercial Business			Consumer and Other			Total
Allowance for loan losses:
Beginning balance	$	1,072		$	757	$	1,412		$	301	$	454		$	76		$	4,072
Provision for loan losses	189			268		139			60		(36		)	30			650
Loans charged-off	(208		)	—		(62		)	—		(14		)	(2		)	(286		)
Recoveries	11			—		18			—		11			7			47
Ending balance	$	1,064		$	1,025	$	1,507		$	361	$	415		$	111		$	4,483
Period-ended amount allocated for:
Individually evaluated for impairment	$	40		$	—	$	—		$	—	$	—		$	57		$	97
Collectively evaluated for impairment	1,024			1,025		1,507			361		415			54			4,386
Ending balance	$	1,064		$	1,025	$	1,507		$	361	$	415		$	111		$	4,483
Loans:
Individually evaluated for impairment	$	1,683		$	1,874	$	1,085		$	—	$	—		$	278		$	4,920
Collectively evaluated for impairment	148,419			90,320		154,036			20,941		34,569			19,046			467,331
Ending balance	$	150,102		$	92,194	$	155,121		$	20,941	$	34,569		$	19,324		$	472,251

16

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The following tables present additional detail of impaired loans, segregated by segment, as of and for the three and six month periods ended March 31, 2016 and 2015.  The unpaid principal balance represents the recorded balance prior to any partial charge-offs on the loans.  The recorded investment represents customer balances net of any partial charge-offs recognized on the loans.  The interest income recognized column represents all interest income on a loan reported on either a cash or accrual basis after the loan became impaired.

							Three months ended				Six months ended
March 31, 2016	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Single family	$	1,573	$	1,425	$	—	$	1,310	$	14	$	1,267	$	28
Multifamily	1,854		1,789		—		1,803		19		1,812		38
Commercial real estate	—		—		—		—		—		—		—
Construction and land development	—		—		—		—		—		—		—
Commercial business	—		—		—		—		—		—		—
Consumer and other	116		38		—		39		—		82		—
With an allowance recorded:
Single family	311		311		3		361		3		378		7
Multifamily	—		—		—		—		—		—		—
Commercial real estate	—		—		—		—		—		—		—
Construction and land development	—		—		—		—		—		—		—
Commercial business	—		—		—		—		—		—		—
Consumer and other	54		54		54		55		1		55		2
	$	3,908	$	3,617	$	57	$	3,568	$	37	$	3,594	$	75

							Three months ended				Six months ended
March 31, 2015	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Single family	$	1,569	$	1,367	$	—	$	1,258	$	12	$	1,310	$	21
Multifamily	1,970		1,874		—		1,884		20		1,894		40
Commercial real estate	1,179		1,085		—		822		15		703		25
Construction and land development	—		—		—		—		—		—		—
Commercial business	—		—		—		—		—		—		—
Consumer and other	301		221		—		262		1		223		2
With an allowance recorded:
Single family	316		316		40		355		4		343		7
Multifamily	—		—		—		—		—		—		—
Commercial real estate	—		—		—		—		—		55		—
Construction and land development	—		—		—		—		—		—		—
Commercial business	—		—		—		—		—		—		—
Consumer and other	57		57		57		58		1		58		1
	$	5,392	$	4,920	$	97	$	4,639	$	53	$	4,586	$	96

17

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The following is a summary of troubled debt restructured loans (TDRs) at March 31, 2016 and September 30, 2015:

	March 31, 2016		September 30, 2015
Troubled debt restructurings - accrual	$	3,078	$	3,134
Troubled debt restructurings - nonaccrual	—		—
	$	3,078	$	3,134

Modifications of loan terms as a TDR are generally in the form of an extension of payment terms or lowering of the interest rate, although occasionally the Company has reduced the outstanding principal balance.

There were no loans modified as a TDR during the three or six months ended March 31, 2016 and 2015.

There were no re-defaults of TDRs that occurred during the three or six months ended March 31, 2016 and 2015.

Certain of the Bank’s executive officers, directors, and their associates are loan customers of the Bank.  As of March 31, 2016 and September 30, 2015, loans of approximately $3,357 and $3,334, respectively, were outstanding to such parties.  These loans were underwritten to the same standards as those used for comparable transactions with other persons and do not involve more than the normal risk of collectability.

An analysis of such loans is as follows:

	Six Months Ended March 31, 2016
Balance, beginning	$	3,334
New loans originated	—
Draws on lines of credit	72
Principal repayments	(418		)
Other1	369
Balance, ending	$	3,357

¹Officer, with existing loan, was promoted to executive officer position during the period.

18

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Note 6.Deposits

The following table presents the composition of deposits as of:

	March 31, 2016				September 30, 2015
	Amount		Percent		Amount		Percent
Checking Accounts:
Noninterest bearing	$	98,396	17.88	%	$	101,486	19.11	%
Interest bearing	135,022		24.54	%	131,968		24.85	%
	233,418		42.42	%	233,454		43.96	%
Passbook and Statement Savings	131,066		23.82	%	127,431		24.00	%
Variable Rate Money Market Accounts	55,059		10.01	%	47,876		9.02	%
Certificates of Deposit	130,674		23.75	%	122,259		23.02	%
	$	550,217	100.00	%	$	531,020	100.00	%

Certificates of deposit over one hundred thousand dollars totaled $72,869 and $64,155 as of March 31, 2016 and September 30, 2015, respectively. Of these amounts, $10,757 and $8,775 are equal to or greater than two hundred fifty thousand dollars as of March 31, 2016 and September 30, 2015, respectively.

Note 7.Regulatory Capital

The federal banking agencies have adopted regulations that substantially amend the capital regulations currently applicable to us. These regulations implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act.

Effective January 1, 2015 (with some changes transitioned into full effectiveness over two to four years), the Bank became subject to new capital requirements adopted by the Office of the Comptroller of the Currency ("OCC"). These new requirements (1) create a new required capital ratio for common equity Tier 1 ("CETI") capital, (2) increase the leverage and Tier 1 capital ratios, (3) change the risk weight of certain assets for purposes of the risk-based capital ratios, (4) create an additional capital conservation buffer over the required capital ratios and (5) change what qualifies as capital for purposes of meeting these various capital requirements. Beginning in 2016, failure to maintain the required capital conservation buffer limits the ability of the Bank to pay dividends, repurchase shares or pay discretionary bonuses. The Company is exempt from consolidated capital requirements as those requirements do not apply to certain small savings and loan holding companies with assets under $1 billion.

Under the new capital regulations, the initial minimum capital ratios are: (1) CETI capital ratio of 4.5% of risk-weighted assets; (2) a Tier 1 capital ratio of 6.0% of risk-weighted assets; (3) a total capital ratio of 8.0% of risk-weighted assets; and (4) a leverage ratio of 4.0%. CETI generally consists of common stock and retained earnings, subject to applicable regulatory adjustments and deductions.

In addition to the minimum CETI, Tier 1 and total capital ratios, the Bank will have to maintain a capital conservation buffer consisting of additional CETI capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. This new capital conservation buffer requirement is being phased in for the Bank beginning in January 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented in January 2019.

There are a number of changes imposed under the new regulations in what constitutes regulatory capital, some of which are subject to transition periods. These changes include the phasing-out of certain instruments as qualifying capital. The Bank does not use any of these instruments. Under the new requirements for total capital, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of CETI will be deducted from capital. The Bank has elected to

19

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

permanently opt-out of the inclusion of accumulated other comprehensive income in our capital calculations, as permitted by the regulations. We believe this opt-out will reduce the impact of market volatility on our regulatory capital levels.

The new requirements also include changes in the risk-weights of assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (increased from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and for non-residential mortgage loans that are 90 days past due or otherwise in non-accrual status; a 20% (increased from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable; a 250% risk weight (increased from 100%) for mortgage servicing and deferred tax assets that are not deducted from capital; and increased risk weights (0% to 600%) for equity exposures.

Additionally, the OCC's prompt corrective action standards changed effective January 1, 2015. Under the new standards, in order to be considered well-capitalized, the Bank must have a CETI ratio of 6.5% (new), a Tier 1 ratio of 8.0% (increased from 6.0%), a total risk-based capital ratio of 10.0% (unchanged) and a leverage ratio of 5.0% (unchanged). As of March 31, 2016 the Bank met all these new requirements, including the full capital conservation buffer of 2.5%.

The Bank’s actual capital amounts and ratios and those required by the regulatory standards are presented as follows. For March 31, 2016, we have included the 0.625% increase for 2016 in our minimum capital adequacy ratios in the table below.

At March 31, 2016	Actual				For Capital Adequacy Purposes				For Capital Adequacy Purposes with Capital Buffer			To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount	Ratio		Amount		Ratio
CETI capital (to risk-weighted assets) - Westbury Bank	$	65,888	12.26	%	$	24,184	4.500	%	27,543	5.125	%	$	34,932	6.50	%
Tier 1 capital (to risk-weighted assets) - Westbury Bank	65,888		12.26	%	32,245		6.000	%	35,604	6.625	%	42,994		8.00	%
Total capital (to risk-weighted assets) - Westbury Bank	70,751		13.17	%	42,977		8.000	%	46,335	8.625	%	53,721		10.00	%
Leverage (to adjusted total assets) - Westbury Bank	65,888		9.90	%	26,621		4.000	%	N/A	N/A		33,277		5.00	%

At September 30, 2015	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
CET1 capital (to risk-weighted assets) - Westbury Bank	$	64,155	12.25	%	$	23,567	4.50	%	$	34,041	6.50	%
Tier 1 capital (to risk-weighted assets) - Westbury Bank	64,155		12.25	%	31,423		6.00	%	41,897		8.00	%
Total capital (to risk-weighted assets) - Westbury Bank	68,753		13.12	%	41,923		8.00	%	52,403		10.00	%
Leverage (to adjusted total assets) - Westbury Bank	64,155		10.01	%	25,636		4.00	%	32,045		5.00	%

20

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The following table reconciles the Bank’s stockholder's equity to regulatory capital as of March 31, 2016 and September 30, 2015:

	March 31, 2016			September 30, 2015
Stockholder's equity of the Bank	$	71,679		$	70,976
Less: Unrealized gain on securities	(714		)	(352		)
Disallowed investment in subsidiary	(3,296		)	(3,296		)
Disallowed deferred tax assets	(1,781		)	(3,173		)
Tier 1, CETI and leverage capital	65,888			64,155
Plus: Allowable general valuation allowances	4,863			4,598
Total capital	$	70,751		$	68,753

Note 8.Commitments

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include commitments to extend credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying consolidated balance sheets.  The contractual amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit is represented by the contractual amount of those instruments.  The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Company management has determined that the following instruments were outstanding, whose contract amounts represent credit risk:

	March 31, 2016		September 30, 2015
Commitments to extend mortgage credit:
Fixed rate	$	1,863	$	8,443
Adjustable rate	2,050		9,929
Unused commercial loan lines of credit	79,411		54,225
Unused home equity line of credit	26,199		26,164
Standby letters of credit	611		884
Commitment to sell loans	608		431

Commitments to extend credit are agreements to lend funds to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  As some such commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  The Company evaluates each customer’s creditworthiness on a case-by-case basis.  The Company generally extends credit only on a secured basis.  Collateral obtained varies but consists primarily of single family residences.

Unfunded commitments under lines of credit are commitments for possible future extensions of credit to existing customers.  These lines of credit may be uncollateralized and ultimately may not be drawn upon to the total extent to which the Company is committed.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party.  Those letters of credit are primarily issued to support public and private borrowing arrangements, and, generally,

21

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

have terms of one year or less.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.  The Company holds collateral supporting those commitments if deemed necessary.  In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment.  The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount shown in the summary above.  If the commitment is funded, the Company would be entitled to seek recovery from the customer.  At March 31, 2016 and September 30, 2015, no amounts have been recorded as liabilities for the Company’s potential obligations under these guarantees.

Commitments to sell loans are commitments to sell single family mortgage loans to investors on the secondary market.

Note 9.Fair Value Measurements

ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  ASC Topic 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach.  Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.  Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  In that regard, ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1:  Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2:  Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3:  Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the fair value hierarchy, is set forth below.

Securities available-for-sale:  The fair value of the Company’s securities available-for-sale is determined using Level 2 inputs, which are derived from readily available pricing sources and third-party pricing services for comparable instruments.  The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, treasury yield curves, trading levels, credit information and credit terms, among other factors. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the fair value hierarchy.

Derivatives:  The fair values of the Company’s embedded derivatives related to certain certificates of deposit are determined using inputs that are observable or that can be corroborated by observable market data (such as the S&P 500 Index and the 10- year U.S. Treasury rate) and, therefore, are classified within Level 2 of the fair value hierarchy.

Assets and liabilities recorded at fair value on a recurring basis:  The following table summarizes assets measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value as of:

22

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

			Fair Value Measurements
March 31, 2016	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Securities available-for-sale
U.S. Government and agency securities	$	25	$	—	$	25	$	—
U.S. Government agency residential mortgage-backed securities	39,337		—		39,337		—
U.S. Government agency collateralized mortgage obligations	1,763		—		1,763		—
U.S. Government agency commercial mortgage-backed securities	13,708		—		13,708		—
Municipal securities	23,159		—		23,159		—
Corporate securities	3,944		—		3,944		—
Total securities available-for-sale	$	81,936	$	—	$	81,936	$	—
Derivatives	$	95	$	—	$	95	$	—
Liabilities
Derivatives	$	95	$	—	$	95	$	—

			Fair Value Measurements
September 30, 2015	Total		Quoted Prices in Active Markets  for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Securities available-for-sale
U.S. Government and agency securities	$	25	$	—	$	25	$	—
U.S. Government agency residential mortgage-backed securities	39,692		—		39,692		—
U.S. Government agency collateralized mortgage obligations	1,941		—		1,941		—
U.S. Government agency commercial mortgage-backed securities	14,099		—		14,099		—
Municipal securities	21,667		—		21,667		—
Corporate securities	2,862		—		2,862		—
Total securities available-for-sale	$	80,286	$	—	$	80,286	$	—
Derivatives	$	110	$	—	$	110	$	—
Liabilities
Derivatives	$	110	$	—	$	110	$	—

The Company did not have any transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the six months ended March 31, 2016.  The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and, therefore, result in a transfer between levels.

23

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Assets recorded at fair value on a nonrecurring basis:  The Company may be required, from time to time, to measure certain instruments at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles.

Impaired loans:  The Company does not record loans at fair value on a recurring basis.  The specific reserves for collateral-dependent impaired loans are based on the fair value of the collateral less estimated costs to sell. The fair value of collateral is determined based on appraisals.  In some cases, adjustments were made to the appraised values due to various factors including age of the appraisal, age of comparables included in the appraisal, and known changes in the market and in the collateral.  When significant adjustments were based on unobservable inputs, the resulting fair value measurement has been categorized as a Level 3 measurement.  Impaired loans with a carrying amount of $365 and $467 had a valuation allowance of $57 and $77 included in the allowance for loan losses to reflect their fair value as of March 31, 2016 and September 30, 2015, respectively.

Foreclosed real estate:  The Company does not record foreclosed real estate owned at fair value on a recurring basis.  The fair value of foreclosed real estate was determined using Level 3 inputs based on appraisals or broker pricing opinions.  In some cases, adjustments were made to these values due to various factors including the age of the appraisal, age of comparables included in the appraisal, and known changes in the market and in collateral.  Foreclosed real estate is measured at fair value less estimated costs to sell at the date of foreclosure.  Subsequent to foreclosure, additional writedowns may be recorded based on changes to the fair value of the assets.

Mortgage servicing rights:  Mortgage servicing rights ("MSRs") do not trade in an active, open market with readily observable prices.  While sales of MSRs do occur, the precise terms and conditions typically are not readily available.  Accordingly, the Company estimates the fair value of MSRs using discounted cash flow models incorporating numerous assumptions from the perspective of market participants including servicing income, servicing costs, market discount rates, prepayments speeds, and default rates.  Due to the nature of the valuation inputs, MSRs are classified within Level 3 of the valuation hierarchy.  As of March 31, 2016, mortgage servicing rights with a carrying amount of $1,169 had a valuation allowance of $105 to reflect their fair value of $1,064.  As of September 30, 2015, mortgage servicing rights with a carrying amount of $1,315 had a valuation allowance of $105 to reflect their fair value of $1,210.

Real estate held for sale: The Company does not record real estate held for sale at fair value on a recurring basis. The fair value of real estate held for sale was determined using Level 3 inputs based on appraisals or broker pricing opinions. In some cases, adjustments were made to these values due to various factors including the age of the appraisal, age of comparables included in the appraisal, and known changes in the market. Real estate held for sale is measured at fair value less estimated costs to sell at the time of transfer. Subsequent to transfer, additional writedowns may be recorded based on changes to the fair value of the assets.

			Fair Value Measurements
March 31, 2016	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Impaired loans	$	308	$	—	$	—	$	308
Foreclosed real estate	—		—		—		—
Mortgage servicing rights	1,064		—		—		1,064
Real estate held for sale	808		—		—		808

24

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

			Fair Value Measurements
September 30, 2015	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Impaired loans	$	390	$	—	$	—	$	390
Foreclosed real estate	283		—		—		283
Mortgage servicing rights	1,210		—		—		1,210
Real estate held for sale	882		—		—		882

Disclosure of fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the accompanying consolidated balance sheets.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments.  Certain financial instruments with a fair value that is not practicable to estimate and all non-financial instruments are excluded from the disclosure requirements.  Accordingly, the aggregate fair value amounts presented herein do not necessarily represent the underlying value of the Company for assets and liabilities not previously described.  The Company, in estimating its fair value disclosures for financial instruments not described above, used the following methods and assumptions:

Cash and cash equivalents:  The carrying amounts of cash and cash equivalents reported in the accompanying consolidated balance sheets approximate those assets’ fair values.

Securities held to maturity: The fair values of securities held to maturity are based on quoted market prices for similar securities, adjusted for differences in security characteristics.

Loans:  For variable-rate mortgage loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying values.  The fair values for fixed rate residential mortgage loans are based on quoted market prices for similar loans sold in conjunction with sale transactions, adjusted for differences in loan characteristics.  The fair values for commercial real estate loans, rental property mortgage loans, and consumer and other loans are estimated using discounted cash flow analyses and using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Loans held for sale:  Fair value of loans held for sale are based on commitments on hand from investors or prevailing market prices.

Federal Home Loan Bank stock:  The carrying amount of FHLB stock approximates its fair value based on the redemption provisions of the FHLB.

Accrued interest receivable and payable:  The carrying amounts of accrued interest receivable and payable approximate their fair values.

Deposits:  The fair value disclosed for interest-bearing and non-interest-bearing checking accounts, savings accounts, and money market accounts are equal to the amount payable on demand at the reporting date (i.e., their carrying amounts).  The fair values of fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities of the outstanding certificates of deposit.

Advances from the Federal Home Loan Bank:  The fair values of FHLB advances are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

Advance payments by borrowers for property taxes and insurance:  The carrying amounts of the advance payments by borrowers for property taxes and insurance approximate their fair values.

25

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Mortgage banking derivatives:  The fair value of commitments to originate mortgage loans held for sale is estimated by comparing the Company’s cost to acquire mortgages and the current price for similar mortgage loans, taking into account the terms of the commitments and the credit worthiness of the counterparties.  The fair value of forward commitments to sell residential mortgage loans is the estimated amount that the Bank would receive or pay to terminate the forward delivery contract at the reporting date based on market prices for similar financial instruments.  The fair value of these derivative financial instruments was not material at March 31, 2016 and September 30, 2015.

The estimated fair values and related carrying amounts of the Company’s financial instruments as of the dates noted below were as follows:

	March 31, 2016
	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	16,346	$	16,346	$	16,346	$	—	$	—
Securities available for sale	81,936		81,936		—		81,936		—
Securities held to maturity	2,459		2,499		—		2,499		—
Loans, net	508,800		509,472		—		—		509,472
Loans held for sale, net	608		608		—		608		—
Federal Home Loan Bank stock	3,350		3,350		—		—		3,350
Mortgage servicing rights	1,064		1,064		—		—		1,064
Accrued interest receivable	2,113		2,113		2,113		—		—
Derivative asset	95		95		—		95		—
Financial liabilities:
Deposits	550,217		528,205		98,396		—		429,809
Short-term advances from Federal Home Loan Bank	—		—		—		—		—
Long-term advances from Federal Home Loan Bank	20,000		19,875		—		—		19,875
Advance payments by borrowers for property taxes and insurance	1,861		1,861		1,861		—		—
Accrued interest payable	5		5		5		—		—
Derivative liability	95		95		—		95		—

26

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

	September 30, 2015
	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	16,488	$	16,488	$	16,488	$	—	$	—
Securities available for sale	80,286		80,286		—		80,286		—
Securities held to maturity	2,459		2,490		—		2,490		—
Loans, net	493,425		493,480		—		—		493,480
Loans held for sale, net	431		431		—		431		—
Federal Home Loan Bank stock	3,350		3,350		—		—		3,350
Mortgage servicing rights	1,210		1,210		—		—		1,210
Accrued interest receivable	1,965		1,965		1,965		—		—
Derivative asset	110		110		—		110		—
Financial liabilities:
Deposits	531,020		508,339		101,486		—		406,853
Short-term advances from Federal Home Loan Bank	18,000		18,000		—		18,000		—
Long-term advances from Federal Home Loan Bank	—		—		—		—		—
Advance payments by borrowers for property taxes and insurance	5,382		5,382		5,382		—		—
Accrued interest payable	5		5		5		—		—
Derivative liability	110		110		—		110		—

27

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Note 10.Employee Stock Ownership Plan

The Bank maintains a leveraged employee stock ownership plan ("ESOP") that covers all employees meeting certain minimum age and service requirements. The ESOP was established in conjunction with the Company's stock offering completed in April 2013 and operates on a plan year ending December 31. The ESOP initially borrowed $4.1 million from the Company and used those funds to acquire 411,403 shares, or 8.0% of the total number of shares issued by the Company in its initial public offering. The shares were acquired at a price of $10.00 per share. The Bank makes annual contributions to the ESOP equal to the ESOP's debt service. Additional principal payments, which serve to pay down the debt and accelerate the release of ESOP shares, may be made by the Bank at the discretion of its Board of Directors. The ESOP shares were pledged as collateral for its debt obligations to the Company. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. The debt repayment and release of shares generally occurs at December 31, the plan year end date. The Company accounts for its ESOP in accordance with ASC 718-40. Accordingly, because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the accompanying balance sheet. Total ESOP shares may be reduced as a result of employees leaving the Company as shares that have previously been released to those exiting employees may be removed from the ESOP and transferred to that employee. As shares are committed to be released from collateral, the Company reports compensation expense equal to the current market price of the released shares, and the released shares become outstanding for EPS computations. During each of the three months ended March 31, 2016 and 2015, 10,285 and 5,142 shares were committed to be released, respectively. The total ESOP compensation expense recorded for the three months ended March 31, 2016 and 2015 was $192 and $86, respectively. During each of the six months ended March 31, 2016 and 2015, 15,427 and 10,284 shares were committed to be released, respectively, 5,142 of which were released and available for allocation at December 31, 2015 and 2014, respectively, concurrent with the payment of the annual debt service on the ESOP loan. The total ESOP compensation expense recorded for the six months ended March 31, 2016 and 2015 was $283 and $198, respectively.

The ESOP shares as of March 31, 2016 and September 30, 2015 were as follows (in thousands, except share data):

	March 31, 2016		September 30, 2015
Allocated shares to active participants	53,521		34,132
Shares committed to be released	10,285		15,428
Unallocated shares	339,435		354,835
Total ESOP shares	403,241		404,395
Fair value of unallocated shares	$	6,449	$	6,323

Note 11. Equity Compensation Plans

The following table summarizes the impact of the Company's share-based payment plans in the financial statements for the periods shown:

	Three Months Ended March 31,				Six Months Ended March 31,
	2016		2015		2016		2015
Total cost of stock grant plan during the period	$	151	$	155	$	302	$	310
Total cost of stock option plan during the period	58		46		115		92
Total cost of share-based payment plans during the period	$	209	$	201	$	417	402
Amount of related income tax benefit recognized in income	$	82	$	79	$	164	$	158

The Company adopted the Westbury Bancorp Inc 2014 Equity Incentive Plan (the "Plan") in 2014. In June 2014, the Company's stockholders approved the Plan which authorized the issuance under the Plan of up to 203,665 restricted stock

28

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

awards and up to 509,162 stock options. As of March 31, 2016 there were 3,092 restricted stock awards and 100,753 options available for future grants under the Plan.

Annual equity-based incentive awards are typically granted to selected officers and employees mid-year. Options are granted with an exercise price equal to no less than the market price of the Company's common shares at the date of grant: those option awards generally vest pro-rata over five years of service and have 10-year contractual terms. Restricted shares typically vest pro-rata over a five year period. Equity awards may also be granted at other times throughout the year in connection with the recruitment and retention of officers and employees.

ASC Topic 718 requires that the grant date fair value of equity awards to employees be recognized as compensation expense over the period during which an employee is required to provide service in exchange for such award.

The following table summarizes stock options outstanding for the three and six months ended March 31, 2016:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Options outstanding as of December 31, 2015	403,111	$	15.69
Granted	1,000	18.40
Exercised	—	—
Expired or canceled	—	—
Forfeited	—	—
Options outstanding as of March 31, 2016	404,111	$	15.69	8.46	$	1,336
Options exercisable as of March 31, 2016	60,946	$	15.20	8.25	$	232

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Options outstanding as of September 30, 2015	406,409	$	15.68
Granted	2,000	18.00
Exercised	4,298	15.20
Expired or canceled	—	—
Forfeited	—	—
Options outstanding as of March 31, 2016	404,111	$	15.69	8.46	$	1,336
Options exercisable as of March 31, 2016	60,946	$	15.20	8.25	$	232

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model based on certain assumptions made by Company management. Expected volatility is based on historical volatility and the expectations of future volatility of Company shares. The risk free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options is estimated based on historical employee behavior and represents the period of time that options granted are expected to remain outstanding.

29

Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

The following assumptions were used for options granted during the six months ended March 31:

	2016			2015
Risk-free interest rate	1.71		%	—		%
Expected volatility of Company's stock	7.73		%	—		%
Expected dividend yield	—		%	—		%
Expected life of options (years)	7.5			0.0
Weighted average fair value per option of options granted during the period	$	2.76		$	—

The total intrinsic value of options exercised during each of the six months ended March 31, 2016 and 2015 was $10 and $0. There were no options exercised during the three months ended March 31, 2016 and 2015.

The following is a summary of changes in restricted shares for the three and six months ended March 31, 2016:

	Number of Shares	Weighted Average Grant Date Fair Value
Shares Outstanding at December 31, 2015	159,052	$	15.22
Granted	1,000	18.40
Vested	—	—
Forfeited	—	—
Shares Outstanding at March 31, 2016	160,052	$	15.23

	Number of Shares	Weighted Average Grant Date Fair Value
Shares Outstanding at September 30, 2015	158,052	$	15.20
Granted	2,000	18.00
Vested	—	—
Forfeited	—	—
Shares Outstanding at March 31, 2016	160,052	$	15.23

The total intrinsic value of restricted shares that vested during the three and six months ended March 31, 2016 and 2015 was $0.

As of March 31, 2016, there was $2.9 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements (including share option and nonvested share awards) granted under the Plan. At March 31, 2016, the weighted-average period over which the unrecognized compensation expense is expected to be recognized was approximately 3.4 years.

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Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Note 12. Condensed Parent Company Financial Information

The condensed financial statements of Westbury Bancorp, Inc. (parent company only) are presented below:

Balance Sheets
	March 31,		September 30,
	2016		2015
Assets
Cash and interest bearing deposits	$	950	$	1,440
Investments	75		115
Loan to ESOP	3,620		3,778
Investment in subsidiary	74,621		74,201
Other assets	2,386		2,660
Total assets	$	81,652	$	82,194
Liabilities and Stockholders' Equity
Total liabilities	$	101	$	157
Stockholders' equity	81,551		82,037
Total liabilities and stockholders' equity	$	81,652	$	82,194

Statements of Operations
	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Interest and other income	$	33		$	63		$	65		$	126
Interest and other expense	130			165			251			349
Loss before income tax benefit and equity in undistributed net income of subsidiary	(97		)	(102		)	(186		)	(223		)
Income tax benefit	(21		)	(24		)	(39		)	(54		)
Loss before equity in undistributed net income of subsidiary	(76		)	(78		)	(147		)	(169		)
Equity in undistributed net income of subsidiary	949			562			2,059			1,100
Net income	$	873		$	484		$	1,912		$	931

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Westbury Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

(Dollars in Thousands, except per share data)

Statements of Cash Flows
	For Six Months Ended March 31,
	2016			2015
Cash Flows From Operating Activities
Net income	$	1,912		$	931
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in undistributed net income of subsidiary	(2,059		)	(1,100		)
Net change in other liabilities	(56		)	16
Net change in other assets	693			100
Net cash provided by (used in) operating activities	490			(53		)
Cash Flows From Investing Activities
Purchase of securities	—			(728		)
Sales and maturities of securities	40			5,894
Payments received on ESOP loan	158			153
Dividend received from bank subsidiary	2,000			—
Net cash provided by investing activities	2,198			5,319
Cash Flows From Financing Activities
Stock options exercised	64			—
Repurchase of common stock	(3,242		)	(9,369		)
Net cash used in financing activities	(3,178		)	(9,369		)
Net decrease in cash	(490		)	(4,103		)
Cash
Beginning of period	1,440			6,878
End of period	$	950		$	2,775

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “intend,” “target” and words of similar meaning.  These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the asset quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control.  In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.  We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Quarterly Report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• our ability to manage our operations under current economic conditions nationally and in our market area;

• adverse changes in the financial industry, securities, credit and national and local real estate markets (including real estate values);

• significant increases in our loan losses, including as a result of our inability to resolve classified loans, and changes in management’s assumptions in determining the adequacy of the allowance for loan losses;

• credit risks of lending activities, including changes in the level and trend of loan delinquencies and charge-offs and in our allowance for loan losses and provision for loan losses;

• competition among depository and other financial institutions;

• our success in increasing our commercial business, commercial real estate and multifamily lending while maintaining our asset quality;

• our success in introducing new financial products;

• our ability to attract and maintain deposits;

• our ability to retain customer accounts, achieve increased operating efficiencies and enhance profitability following the closing of underperforming branch offices;

• changes in interest rates generally, including changes in the relative differences between short term and long term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources;

• fluctuations in the demand for loans, which may be affected by the number of unsold homes, land and other properties in our market areas and by declines in the value of real estate in our market area;

• changes in consumer spending, borrowing and savings habits;

• further declines in the yield on our assets resulting from the current low interest rate environment;

• risks related to a high concentration of loans secured by real estate located in our market area;

• the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our allowance for loan losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits;

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• changes in the level of government support of housing finance;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• changes in consumer spending, borrowing and savings habits;

• changes in laws or government regulations or policies affecting financial institutions, including changes in the regulations implementing the Dodd-Frank Act, the JOBS Act and similar future laws, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements (particularly the new Basel III capital regulations), and regulatory fees and compliance costs;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

• changes in our compensation and benefit plans;

• our ability to retain key members of our senior management team and to address staffing needs to respond to demand or to implement our strategic plans;

• loan delinquencies and changes in the underlying cash flows of our borrowers;

• our ability to control costs and expenses, particularly those associated with operating as a publicly traded company;

• changes in the financial condition or future prospects of issuers of securities that we own;

• the ability of third-party service providers to perform their obligations to us;

• the availability, effectiveness and security of our information technology systems and our ability to secure confidential information through the use of our computer and other technology systems and networks;

• other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing, products and services described elsewhere in this annual report; and

• the impact of reputational risk created by any of the foregoing developments on such matters such as business generation and retention, funding and liquidity.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

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Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in Westbury Bancorp, Inc.’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

Overview

Our Business. The Company is a Maryland corporation and the savings and loan holding company for Westbury Bank, which was formed in connection with the mutual-to-stock conversion of the Bank's former mutual holding company, WBSB Bancorp, MHC, in 2013. Westbury Bank is a federally-chartered savings bank headquartered in West Bend, Wisconsin.

We provide financial services to individuals, families and businesses through our eight banking offices located in Washington County, Wisconsin and Waukesha County, Wisconsin. We also operate a loan production office in Appleton, Wisconsin, located in Outagamie County. Although our current operations are not focused in Milwaukee County, Wisconsin, we are affected by conditions in Milwaukee County because our loan portfolio includes a significant number of loans that are secured by real estate or that have borrowers located in Milwaukee County. In addition, a number of our customers who reside in Washington or Waukesha Counties are employed in Milwaukee County, and the operations of our commercial customers depend in part on sales of products and services to individuals or other businesses located in Milwaukee County.

Our principal business consists of attracting retail and commercial deposits from the general public in our market area and investing those deposits, together with funds generated from operations, and to a lesser extent, borrowings, in one- to four-family residential real estate loans, commercial and multi-family real estate loans, construction loans and commercial business loans, and, to a lesser extent, consumer loans, including home equity lines of credit and automobile loans. A significant majority of our deposits are transaction accounts, which we believe are less susceptible to large-scale withdrawals than certificates of deposit as a result of changes in interest rates, and which we believe have a lower cost of funds over various interest rate cycles. We also purchase investment securities consisting primarily of government-sponsored mortgage-backed securities, government-sponsored debentures, municipal securities and corporate securities.

Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities. Our results of operations also are affected by our provision for loan losses, non-interest income and non-interest expense. Non-interest income consists primarily of service charges on deposit accounts, loan servicing income, gain on sales of securities and loans, debit card income, income from bank-owned life insurance and miscellaneous other income. Non-interest expense consists primarily of expenses related to compensation and employee benefits, occupancy and equipment, data processing, federal deposit insurance premiums, ATM charges, professional fees, advertising and other operating expenses.

Our results of operations also may be affected significantly by general and local economic and competitive conditions (particularly in southeastern Wisconsin), changes in market interest rates, governmental policies and actions of regulatory authorities.

Comparison of Financial Condition at March 31, 2016 and September 30, 2015

Total Assets. Total assets increased by $16.2 million, or 2.5%, to $655.1 million at March 31, 2016 from $638.9 million at September 30, 2015.  The increase in total assets was primarily the result of an increase in net loans of $15.4 million, securities available for sale of $1.7 million and cash surrender value of life insurance of $857,000, offset by a decrease in deferred tax asset of $1.4 million.

Cash and Cash Equivalents. Cash and cash equivalents decreased by $142,000, or 0.9%, to $16.3 million at March 31, 2016 from $16.5 million at September 30, 2015. The decrease was the result of the use of cash to partially fund growth in the Bank's loan and investment portfolios.

Net Loans. Net loans increased by $15.4 million, or 3.1%, to $508.8 million at March 31, 2016 from $493.4 million at September 30, 2015.  Multifamily loans increased by $15.4 million and commercial real estate loans by $3.1 million, offset by a decrease in construction and land development loans of $1.6 million and single family loans of $649,000. The increase in multifamily loans and the decrease in construction and land development loans resulted from the transfer of several properties from construction upon completion of the projects during the period. The increase in commercial real estate loans resulted from our continued efforts to grow this segment of the portfolio, particularly loans secured by owner-occupied properties. The decrease in single family loans resulted from an increase in refinancing activity in the current low interest rate environment.

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Investment Securities. Investment securities available for sale increased $1.7 million, or 2.1%, to $81.9 million at March 31, 2016 from $80.3 million at September 30, 2015.  Municipal securities available for sale increased $1.5 million and corporate bonds increased $1.1 million, offset by a decrease in mortgage-backed securities and collateralized mortgage obligations of $924,000. These changes occurred as we invested new deposit balances and repositioned the portfolio through normal portfolio management.

Net unrealized gain on securities increased by $594,000 to $1.2 million at March 31, 2016 from a net unrealized gain of $580,000 at September 30, 2015, reflecting the effect of a decrease in market interest rates.  At March 31, 2016, investment securities classified as available-for-sale consisted entirely of government-sponsored enterprise mortgage-backed securities, municipal securities, and corporate bonds. At March 31, 2016, investment securities classified as held to maturity consisted entirely of municipal securities.

The outstanding balances of investment securities held to maturity were unchanged at March 31, 2016 from the balances at September 30, 2015.

Foreclosed Real Estate. Foreclosed real estate decreased $283,000, or 100.0%, to zero at March 31, 2016 from $283,000 at September 30, 2015, as we sold $257,000 of foreclosed properties and recorded valuation adjustments of $26,000 during the period.  At March 31, 2016, we held no foreclosed real estate.

Cash Surrender Value of Bank-Owned Life Insurance. Cash surrender value of bank-owned life insurance increased $857,000, or 6.5%, to $14.0 million at March 31, 2016 from $13.2 million at September 30, 2015, as we purchased single premium life insurance on our president and CEO for $637,000 in addition to regular income earned during the period.

Deferred Tax Asset. The deferred tax asset decreased $1.4 million, or 19.0%, to $6.1 million at March 31, 2016 from $7.5 million at September 30, 2015, as the asset was reduced by the accrual of income tax expense as a result of the Company recording taxable income for the period and due to a decrease in the deferred tax asset relating to unrealized gains and losses on investment securities available for sale incurred during the six months ended March 31, 2016.

Deposits. Deposits increased $19.2 million, or 3.6%, to $550.2 million at March 31, 2016 from $531.0 million at September 30, 2015.  Our core deposits, which we consider to be our non-interest bearing and interest bearing checking accounts, passbook and statement savings accounts, and variable rate money market accounts, increased $10.8 million, or 2.6%, to $419.5 million at March 31, 2016 from $408.8 million at September 30, 2015.  In particular, variable rate money market accounts increased by $7.2 million, or 15.0%, to $55.1 million at March 31, 2016 from $47.9 million at September 30, 2015 offset by a decrease in noninterest bearing deposits of $3.1 million, or 3.0%, to $98.4 million at March 31, 2016 from $101.5 million at September 30, 2015. Certificates of deposit increased $8.4 million, or 6.9%, to $130.7 million at March 31, 2016 from $122.3 million at September 30, 2015.   Growth in certificates of deposit was generated primarily through the use of Internet listing services to attract balances from other financial institutions.

Short Term Advances from FHLB. Short-term advances from the FHLB decreased by $18.0 million, or 100.0% to zero at March 31, 2016 from $18.0 million at September 30, 2015 as we paid down all overnight borrowings at quarter end. We anticipate continuing to use short term advances to fund a portion of our growth as needed.

Long Term Advances from FHLB. Long-term advances from the FHLB increased by $20.0 million to $20.0 million at March 31, 2016 from zero at September 30, 2015. In anticipation of a long term trend of rising interest rates as the Federal Open Market Committee began to raise the Fed Funds rate in December 2015, we locked in long-term advances with terms from three to eight years during the period.

Advance Payments By Borrowers For Property Taxes and Insurance. Advance payments by borrowers for property taxes and insurance decreased by $3.5 million, or 65.4%, to $1.9 million at March 31, 2016 from $5.4 million at September 30, 2015 due to seasonal disbursements to customers in December 2015 to enable the payment of mortgagees’ property taxes offset by ongoing monthly payments by borrowers. 

Total Stockholders' Equity. Total stockholders' equity decreased $204,000 to $78.6 million at March 31, 2016 from $78.8 million at September 30, 2015.  The decrease resulted primarily from the repurchase of 170,632 shares of common stock for $3.2 million, offset by net income of $1.9 million, stock based compensation expense of $417,000, allocation of ESOP shares of $283,000 and an increase in other comprehensive income of $362,000.

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Delinquent Loans

The following table sets forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated:

	30-59 Days			Loans Delinquent For 60-89 Days			90 Days and Over			Total
	Number	Amount		Number	Amount		Number	Amount		Number	Amount
	(Dollars in thousands)
At March 31, 2016:
Real estate loans:
One- to four-family	5	$	477	2	$	24	4	$	340	11	$	841
Multi-family	—	—		—	—		—	—		—	—
Commercial	—	—		—	—		—	—		—	—
Construction and land	—	—		—	—		1	4		1	4
Total real estate	5	477		2	24		5	344		12	845
Commercial business loans	—	—		—	—		—	—		—	—
Consumer loans:
Home equity lines of credit	—	—		—	—		1	27		1	27
Education	4	40		1	25		7	40		12	105
Other consumer loans	—	—		—	—		—	—		—	—
Total consumer loans	4	40		1	25		8	67		13	132
Total	9	$	517	3	$	49	13	$	411	25	$	977
At September 30, 2015:
Real estate loans:
One- to four-family	10	$	473	1	$	83	5	$	340	16	$	896
Multi-family	—	—		—	—		—	—		—	—
Commercial	—	—		—	—		—	—		—	—
Construction and land	1	4		—	—		—	—		1	4
Total real estate	11	477		1	83		5	340		17	900
Commercial business loans	—	—		—	—		—	—		—	—
Consumer loans:
Home equity lines of credit	—	—		—	—		3	190		3	190
Education	5	79		—	—		10	245		15	324
Other consumer loans	—	—		—	—		—	—		—	—
Total consumer loans	5	79		—	—		13	435		18	514
Total	16	$	556	1	$	83	18	$	775	35	$	1,414

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Classified Assets

The following table details the Company’s assets graded Substandard or Special Mention at the dates indicated:

	At March 31, 2016		At September 30, 2015
	(In thousands)
Classified Loans:
Doubtful	—		—
Substandard — performing:
Real estate loans:
One- to four-family	1,348		1,390
Multi-family	—		—
Commercial	298		307
Construction and land	47		—
Total real estate loans	1,693		1,697
Commercial business loans	62		1,639
Consumer loans:
Home equity lines of credit	111		55
Other consumer loans	—		—
Total consumer loans	111		55
Total substandard — performing	1,866		3,391
Substandard — Nonperforming:
Real estate loans:
One- to four-family	195		195
Multi-family	—		—
Commercial	—		—
Construction and land	4		—
Total real estate loans	199		195
Commercial business loans	—		—
Consumer loans:
Home equity lines of credit	27		190
Other consumer loans	—		—
Total consumer loans	27		190
Total substandard — nonperforming	226		385
Total classified loans	2,092		3,776
Foreclosed real estate	—		283
Total classified assets	$	2,092	$	4,059
Special mention:
Real estate loans:
One- to four-family	$	—	$	—
Multi-family	—		—
Commercial	403		410
Construction and land	—		—
Total real estate loans	403		410
Commercial business loans	—		—
Consumer loans:
Home equity lines of credit	—		—
Other consumer loans	—		—
Total consumer loans	—		—
Total special mention	403		410
Total classified assets and special mention loans	$	2,495	$	4,469

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Non-Performing Assets

The following table sets forth information regarding our non-performing assets and troubled debt restructurings at the dates indicated.  The information reflects net charge-offs but not specific reserves.  Troubled debt restructurings include loans where the borrower is experiencing financial difficulty and for which either a portion of interest or principal has been forgiven or an extension of term granted, or for loans modified at interest rates materially less than current market rates.

	At March 31, 2016			At September 30, 2015
	(Dollars in thousands)
Nonaccrual loans:
Real estate loans:
One- to four-family	$	340		$	340
Multi family	—			—
Commercial	—			—
Construction and land	4			—
Total real estate	344			340
Commercial business loans	—			—
Consumer loans:
Home equity lines of credit	38			203
Education	65			260
Other consumer loans	—			—
Total consumer loans	103			463
Total nonaccrual loans (1)	447			803
Loans greater than 90 days delinquent and still accruing:
Real estate loans:
One- to four-family	—			—
Multi-family	—			—
Commercial	—			—
Construction and land	—			—
Total real estate	—			—
Commercial business loans	—			—
Consumer loans:
Home equity lines of credit	—			—
Education	—			—
Other consumer loans	—			—
Total consumer loans	—			—
Total delinquent loans accruing	—			—
Total non-performing loans	447			803
Foreclosed assets:
One- to four-family	—			89
Multi-family	—			—
Commercial real estate	—			194
Construction and land	—			—
Home equity line of credit	—			—
Total foreclosed assets	—			283
Total nonperforming assets	$	447		$	1,086
Performing troubled debt restructurings	$	3,078		$	3,134
Ratios:
Nonperforming loans to total loans	0.09		%	0.16		%
Nonperforming assets to total assets	0.07		%	0.17		%
Nonperforming assets and troubled debt restructurings to total assets	0.54		%	0.66		%

_______________________

⁽¹⁾  There were no troubled debt restructurings that were on non-accrual status at March 31, 2016 or September 30, 2015.

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The decrease in delinquent loans and non-performing assets at March 31, 2016, from September 30, 2015, was primarily due to our ongoing collection efforts and the quality of our underwriting, which resulted in reductions in delinquent and non-performing loans. The reduction in classified assets between these same dates resulted primarily from the payoff of a performing Substandard commercial business relationship as a result of the customer refinancing the debt with another financial institution and paying us in full.

Interest income that would have been recorded for the three and six months ended March 31, 2016, had non-accruing loans been current according to their original terms, amounted to approximately $6,000 and $11,000, respectively.  There was no interest related to these loans included in interest income for the three and six months ended March 31, 2016.

Other Loans of Concern.   There were no other loans at March 31, 2016 that are not already disclosed where there is information about possible credit problems of borrowers available to our management that would cause management to have serious doubts about the ability of the borrowers to comply with present loan repayment terms and that are reasonably likely to result in disclosure of such loans in the future.

Comparison of Operating Results for the Three Months Ended March 31, 2016 and March 31, 2015

General.  Net income for the three months ended March 31, 2016 was $873,000 compared to $484,000 for the three months ended March 31, 2015. The increase in net income of $389,000 was due primarily to increases of $404,000 in net interest income and decreases in noninterest expenses of $270,000 and our provision for loan losses of $175,000 offset by a decrease in noninterest income of $160,000 and an increase in income tax expense of $300,000.

Interest and Dividend Income. Interest and dividend income increased $585,000, or 11.4%, to $5.7 million for the three months ended March 31, 2016 from $5.1 million for the three months ended March 31, 2015. This increase was attributable to an increase of $481,000 in interest income on loans receivable and $104,000 in interest and dividend income on investment securities and interest bearing deposits.

The average balance of interest-earning assets increased $47.8 million, or 8.7%, to $597.0 million for the three months ended March 31, 2016 from $549.2 million for the three months ended March 31, 2015. The yield on average interest-earning assets increased by 9 basis points to 3.82% for the three months ended March 31, 2016 from 3.73% for the three months ended March 31, 2015.

The average balance of loans increased $50.0 million to $504.8 million for the three months ended March 31, 2016 from $454.8 million for the three months ended March 31, 2015. The average yield on loans decreased by 3 basis points to 4.09% for the three months ended March 31, 2016 from 4.12% for the three months ended March 31, 2015.  This decrease in our average yield on loans reflected the growth in our loan portfolio at current market rates and the effects of downward pressure on loan pricing caused by the prolonged low interest rate environment.

The average balance of investment securities decreased by $1.3 million, or 1.6%, to $84.7 million for the three months ended March 31, 2016 from $86.1 million for the three months ended March 31, 2015, while the average yield on investment securities increased by 42 basis points to 2.37% for the three months ended March 31, 2016 from 1.95% for the three months ended March 31, 2015. This increase in the average yield on investment securities was due to the inclusion in the investment portfolio of commercial mortgage-backed securities and corporate securities for the three months ended March 31, 2016. These higher yielding types of securities were not part of the portfolio for the three months ended March 31, 2015.  

Interest Expense. Total interest expense increased $181,000, or 39.3%, to $641,000 for the three months ended March 31, 2016 from $460,000 for the three months ended March 31, 2015.  Interest expense on deposit accounts increased $133,000 to $579,000 for the three months ended March 31, 2016 from $446,000 for the three months ended March 31, 2015.

The average balance of deposits and interest-bearing liabilities increased $57.5 million, or 10.8%, to $589.3 million for the three months ended March 31, 2016 from $531.8 million for the three months ended March 31, 2015. The average cost of deposits and interest-bearing liabilities increased 9 basis points to 0.44% for the three months ended March 31, 2016 from 0.35% for the three months ended March 31, 2015.

The average balance of interest bearing deposits increased $42.5 million to $444.5 million for the three months ended March 31, 2016 from $401.9 million for the three months ended March 31, 2015, and the average cost of interest bearing deposits increased 8 basis points to 0.52% from 0.44%. This increase in the cost of interest bearing deposits was caused by a change in the composition of our interest bearing deposits, with the average balance of higher cost certificates of deposit

40

increasing by $27.3 million and the average balance of lower cost checking, savings and money market accounts increasing by only $15.2 million. Additionally, the average balance of non-interest bearing demand deposits increased by $21.0 million which helped hold the increase in our overall cost of deposits to only 5 basis points.

Interest expense on FHLB advances increased $48,000 to $62,000 for the three months ended March 31, 2016 from $14,000 for the three months ended March 31, 2015. The increase was due to an increase in the average cost of FHLB advances of 54 basis points to 0.67% for the three months ended March 31, 2016 from 0.13% for the three months ended March 31, 2015. The increase in the average cost was partially offset by a decrease in the average balance of FHLB advances of $6.0 million for the three months ended March 31, 2016. This increase in the average cost resulted from the addition of long-term FHLB advances to our borrowing mix during the current period.

Net Interest Income. Net interest income increased $404,000, or 8.7%, to $5.1 million for the three months ended March 31, 2016 from $4.7 million for the three months ended March 31, 2015.  Average interest-earning assets increased by $47.8 million, or 8.7%, to $597.0 million for the three months ended March 31, 2016, from $549.2 million for the three months ended March 31, 2016. Average deposits and interest-bearing liabilities increased by $57.5 million, or 10.8%, to $589.3 million for the three months ended March 31, 2016, from $531.8 million for the three months ended March 31, 2015.  Our net interest margin was unchanged at 3.39% for each of the three months ended March 31, 2016 and March 31, 2015.  Our net interest margin was impacted negatively by a decrease in the yield on our loan portfolio as a result of the growth in our loan portfolio at current market rates and the effects of downward pressure on loan pricing caused by the prolonged low interest rate environment. However, the change in asset mix with growth concentrated in the loan portfolio also positively impacted the margin between these periods as investment securities generally do not carry yields as high as those on loan products.

Provision for Loan Losses.  We recorded a provision for loan losses of $125,000 for the three months ended March 31, 2016 compared to $300,000 for the three months ended March 31, 2015.  The decrease in the provision resulted from the improvement in our charge-off experience compared to the prior year period and slower growth in the loan portfolio compared to the prior year period. The allowance for loan losses was $4.9 million, or 0.95% of total loans, at March 31, 2016, compared to $4.6 million, or 0.92% of total loans, at September 30, 2015, and $4.5 million, or 0.95% of total loans, at March 31, 2015. 

Total nonperforming loans were $447,000, or 0.09% of total loans, at March 31, 2016, compared to $803,000, or 0.16% of total loans, at September 30, 2015, and $1.1 million, or 0.23% of total loans, at March 31, 2015. As a percentage of nonperforming loans, the allowance for loan losses was 1087.9% at March 31, 2016, compared to 572.6% at September 30, 2015, and 412.0% at March 31, 2015. 

Total classified loans were $2.1 million at March 31, 2016, compared to $3.8 million at September 30, 2015, and $2.9 million at March 31, 2015.

The allowance for loan losses reflects the balance we believe to be appropriate to cover incurred probable losses which were inherent in the loan portfolio at March 31, 2016 and September 30, 2015.

Non-Interest Income. Non-interest income decreased $160,000, or 9.9%, to $1.5 million for the three months ended March 31, 2016 from $1.6 million for the three months ended March 31, 2015. This decrease was primarily related to decreases in service fees on deposit accounts of $52,000 and gains on sales of loans of $65,000. 

The decrease in service fees on deposit accounts resulted from lower interchange rates paid on debit card transactions and slightly reduced overdraft activity on our checking accounts. The decrease in gain on sales of loans resulted from a decrease in the volume of fixed rate mortgage loans sold on the secondary market during the quarter ended March 31, 2016.

Non-Interest Expense.  Non-interest expense decreased $270,000, or 5.2%, to $5.0 million for the three months ended March 31, 2016, from $5.2 million for the three months ended March 31, 2015. This decrease was primarily caused by decreases in each of other expense of $180,000, occupancy expense of $64,000 and net loss from operations and sale of foreclosed real estate of $31,000. These decreases were offset by an increase in salaries and employee benefits of $55,000 between the periods.

The decrease in other expense resulted primarily from the elimination of a service contract which was terminated in June 2015. The decrease in occupancy expense resulted from the closure of an underperforming branch office in June 2015. The decrease in net loss from operations and sale of foreclosed real estate resulted from the continued low level of foreclosed real estate. The increase in salaries and employee benefits resulted from an increase in the accrual for ESOP expense as we are contemplating making an additional principal payment on our ESOP loan at the end of the ESOP plan year on December 31, 2016.

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Provision for Income Taxes.  Income tax expense was $565,000 for the three months ended March 31, 2016, compared to $265,000 for the three months ended March 31, 2015.  The effective tax rate as a percent of pre-tax income was 39.3% and 35.4% for the three months ended March 31, 2016 and 2015, respectively. This increase in the effective tax rate resulted from tax-exempt income (primarily increases in cash surrender value of bank-owned life insurance and interest on tax-exempt securities) making up a smaller percentage of pretax income in the current year period compared to the prior year period.

Comparison of Operating Results for the Six Months Ended March 31, 2016 and March 31, 2015

General.  Net income for the six months ended March 31, 2016 was $1.9 million compared to $931,000 for the six months ended March 31, 2015. The increase in net income of $981,000 was due primarily to increases of $1.0 million in net interest income and decreases in noninterest expenses of $590,000 and our provision for loan losses of $375,000 offset by an increase in income tax expense of $713,000.

Interest and Dividend Income. Interest and dividend income increased $1.3 million, or 13.0%, to $11.3 million for the six months ended March 31, 2016 from $10.0 million for the six months ended March 31, 2015. This increase was primarily attributable to an increase of $1.1 million in interest income on loans receivable and $126,000 in interest and dividend income on investment securities. 

The average balance of interest-earning assets increased $58.5 million, or 11.0%, to $592.3 million for the six months ended March 31, 2016 from $533.8 million for the six months ended March 31, 2015. The yield on average interest-earning assets increased by 7 basis points to 3.82% for the six months ended March 31, 2016 from 3.75% for the six months ended March 31, 2015.

The average balance of loans increased $61.4 million to $500.2 million for the six months ended March 31, 2016 from $438.9 million for the six months ended March 31, 2015. The average yield on loans decreased by 6 basis points to 4.11% for the six months ended March 31, 2016 from 4.17% for the six months ended March 31, 2015.  This decrease in our average yield on loans reflected the growth in our loan portfolio at current market rates and the effects of downward pressure on loan pricing caused by the prolonged low interest rate environment.

The average balance of investment securities decreased by $1.2 million, or 1.4%, to $84.5 million for the six months ended March 31, 2016 from $85.7 million for the six months ended March 31, 2015, while the average yield on investment securities increased by 33 basis points to 2.26% for the six months ended March 31, 2016 from 1.93% for the six months ended March 31, 2015. This increase in the average yield on investment securities was due to the inclusion in the investment portfolio of commercial mortgage-backed securities and corporate securities for the six months ended March 31, 2016. These higher yielding types of securities were not part of the portfolio for the six months ended March 31, 2015.  

Interest Expense. Total interest expense increased $342,000, or 38.5%, to $1.2 million for the six months ended March 31, 2016 from $889,000 for the six months ended March 31, 2015.  Interest expense on deposit accounts increased $266,000 to $1.1 million for the six months ended March 31, 2016 from $871,000 for the six months ended March 31, 2015.

The average balance of deposits and interest-bearing liabilities increased $75.3 million, or 14.8%, to $582.5 million for the six months ended March 31, 2016 from $507.3 million for the six months ended March 31, 2015. The average cost of deposits and interest-bearing liabilities increased 7 basis points to 0.42% for the six months ended March 31, 2016 from 0.35% for the six months ended March 31, 2015.

The average balance of interest bearing deposits increased $34.6 million to $442.0 million for the six months ended March 31, 2016 from $407.4 million for the six months ended March 31, 2015, and the average cost of interest bearing deposits increased 8 basis points to 0.51% from 0.43%. This increase in the cost of interest bearing deposits was caused by a change in the composition of our interest bearing deposits, with the average balance of higher cost certificates of deposit increasing by $27.0 million and the average balance of lower cost checking, savings and money market accounts increasing by only $7.7 million. Additionally, the average balance of non-interest bearing demand deposits increased by $34.9 million which helped hold the increase in our overall cost of deposits to only 5 basis points.

Interest expense on FHLB advances increased $76,000 to $94,000 for the six months ended March 31, 2016 from $18,000 for the six months ended March 31, 2015. This increase was due to an increase in the average balance of FHLB advances of $5.7 million to $32.4 million for the six months ended March 31, 2016 compared to $26.6 million for the six months ended March 31, 2015. The cost of FHLB advances increased 44 basis points to 0.58% for the six months ended

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March 31, 2016 from 0.14% for the six months ended March 31, 2015. This increase in the average cost resulted from the addition of long-term FHLB advances to our borrowing mix during the current period.

Net Interest Income. Net interest income increased $1.0 million, or 10.5%, to $10.1 million for the six months ended March 31, 2016 from $9.1 million for the six months ended March 31, 2015.  Average interest-earning assets increased by $58.5 million, or 11.0%, to $592.3 million for the six months ended March 31, 2016, from $533.8 million for the six months ended March 31, 2015. Average deposits and interest-bearing liabilities increased by $75.3 million, or 14.8%, to $582.5 million for the six months ended March 31, 2016, from $507.3 million for the six months ended March 31, 2015.  Our net interest margin decreased 1 basis point to 3.40% for the six months ended March 31, 2016 from 3.41% for the six months ended March 31, 2015.  Our net interest margin was impacted negatively by a decrease in the yield on our loan portfolio as a result of the growth in our loan portfolio at current market rates and the effects of downward pressure on loan pricing caused by the prolonged low interest rate environment. However, the change in asset mix with growth concentrated in the loan portfolio also positively impacted the margin between these periods as investment securities generally do not carry yields as high as those on loan products.

Provision for Loan Losses.  We recorded a provision for loan losses of $275,000 for the six months ended March 31, 2016 compared to $650,000 for the six months ended March 31, 2015.  For additional information regarding our allowance for loan losses and certain related ratios at March 31, 2016, September 30, 2015 and March 31, 2015, see "--Comparison of Operating Results for the Three Months Ended March 31, 2016 and March 31, 2015--Provision for Loan Losses" above.

The allowance for loan losses reflects the balance we believe to be appropriate to cover incurred probable losses which were inherent in the loan portfolio at March 31, 2016 and September 30, 2015.

Non-Interest Income. Non-interest income decreased $229,000, or 7.0%, to $3.1 million for the six months ended March 31, 2016 from $3.3 million for the six months ended March 31, 2015. This decrease was primarily related to decreases in service fees on deposit accounts of $130,000, gains on sales of investment securities of $62,000, rental income from real estate operations of $50,000 and gains on sales of loans of $33,000, offset by an increase in other income of $74,000. 

The decrease in service fees on deposit accounts resulted from lower interchange rates paid on debit card transactions and slightly reduced overdraft activity on our checking accounts. The decrease in gains on sales of investment securities resulted from a lower level of sales during the current period as compared to the prior year period as slower loan growth reduced the need to sell securities to fund growth. The decrease in rental income from real estate operations resulted from a decrease in the level of our real estate holdings compared to the prior period. The decrease in gain on sales of loans resulted from a decrease in the volume of fixed rate mortgage loans sold on the secondary market during the six months ended March 31, 2016. The increase in other income resulted primarily from the receipt of a prepayment penalty on the payoff of a commercial real estate loan occurring during the current year period.

Non-Interest Expense.  Non-interest expense decreased $590,000, or 5.7%, to $9.7 million for the six months ended March 31, 2016, from $10.3 million for the six months ended March 31, 2015. This decrease was primarily caused by decreases in each of other expense of $284,000, net loss from operations and sale of foreclosed real estate of $166,000, occupancy expense of $79,000 and data processing of $54,000.

The decrease in other expense resulted primarily from the elimination of a service contract which was terminated in June 2015. The decrease in net loss from operations and sale of foreclosed real estate resulted from the continued low level of foreclosed real estate. The decrease in salaries and employee benefits resulted primarily from reductions in staffing due to branches closed during fiscal 2015. The decrease in occupancy expense also resulted from the 2015 branch closures. The decrease in data processing resulted from the termination of a subservicing contract for loans sold on the secondary market with servicing retained by the Bank.

Provision for Income Taxes.  Income tax expense was $1.2 million for the six months ended March 31, 2016, compared to $488,000 for the six months ended March 31, 2015.  The effective tax rate as a percent of pre-tax income was 38.6% and 34.4% for the six months ended March 31, 2016 and 2015, respectively. This increase in the effective tax rate resulted from tax-exempt income (primarily increases in cash surrender value of bank-owned life insurance and interest on tax-exempt securities) making up a smaller percentage of pretax income in the current year period compared to the prior year period.

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Analysis of Net Interest Income

Net interest income represents the difference between the income we earn on interest-earning assets and the interest expense we pay on interest-bearing liabilities. Net interest income also depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.  The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated.  Average balances are derived from daily average balances for all periods presented in the table.  Non-accrual loans were included in the computation of average balances, but have been reflected in the tables as loans carrying a zero yield. No tax equivalent yield adjustments have been made.  The yields set forth below include the effect of loan fees, discounts and premiums that are amortized or accreted to interest income.

		For the Three Months Ended March 31,
		2016						2015
		Average Outstanding Balance		Interest		Yield/Cost		Average Outstanding Balance		Interest		Yield/Cost
Assets:
Loans		$	504,800	$	5,166	4.09	%	$	454,759	$	4,685	4.12	%
Securities		84,706		502		2.37		86,053		419		1.95
Fed funds sold and other interest-earning deposits	��	7,502		37		1.97		8,347		16		0.77
Total interest-earning assets		597,008		5,705		3.82	%	549,159		5,120		3.73	%
Noninterest-earning assets		74,638						72,801
Total assets		$	671,646					$	621,960
Liabilities and stockholders' equity:
Noninterest-bearing demand deposits		$	107,568	$	—	—	%	$	86,610	$	—	—	%
Checking accounts		140,689		96		0.27		148,443		111		0.30
Passbook and statement savings		127,599		44		0.14		122,514		41		0.13
Variable rate money market		46,932		50		0.43		29,047		16		0.22
Certificates of deposit		129,256		389		1.20		101,925		278		1.09
Total interest bearing deposits		444,476		579		0.52		401,929		446		0.44
Total deposits		552,044		579		0.42		488,539		446		0.37
Short-term FHLB advances		21,758		15		0.28		43,283		14		0.13
Long-term FHLB advances		15,495		47		1.21		—		—		—
Total FHLB advances		37,253		62		0.67		43,283		14		0.13
Total deposits and interest-bearing liabilities		589,297		641		0.44	%	531,822		460		0.35	%
Other liabilities		5,231						4,787
Total liabilities		594,528						536,609
Stockholders' equity		77,118						85,351
Total liabilities and stockholders' equity		$	671,646					$	621,960
Net interest income				$	5,064					$	4,660
Net interest rate spread						3.39	%					3.38	%
Net interest-earning assets		$	7,711					$	17,337
Net interest margin						3.39	%					3.39	%
Average of interest-earning assets to interest-bearing liabilities						101.31	%					103.26	%

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	For the Six Months Ended March 31,
	2016						2015
	Average Outstanding Balance		Interest		Yield/Cost		Average Outstanding Balance		Interest		Yield/Cost
Assets:
Loans	$	500,246	$	10,283	4.11	%	$	438,866	$	9,144	4.17	%
Securities	84,536		954		2.26		85,742		828		1.93
Fed funds sold and other interest-earning deposits	7,471		63		1.69		9,142		28		0.61
Total interest-earning assets	592,253		11,300		3.82	%	533,750		10,000		3.75	%
Noninterest-earning assets	75,270						67,188
Total assets	$	667,523					$	600,938
Liabilities and stockholders' equity:
Noninterest-bearing demand deposits	$	108,147	$	—	—	%	$	73,263	$	—	—	%
Checking accounts	140,409		195		0.28		156,993		214		0.27
Passbook and statement savings	127,950		89		0.14		122,612		90		0.15
Variable rate money market	47,228		100		0.42		28,324		26		0.18
Certificates of deposit	126,437		753		1.19		99,456		541		1.09
Total interest bearing deposits	442,024		1,137		0.51		407,385		871		0.43
Total deposits	550,171		1,137		0.41		480,648		871		0.36
Short-term FHLB advances	21,169		23		0.22		26,637		18		0.14
Long-term FHLB advances	11,202		71		1.27		—		—		—
Total FHLB advances	32,371		94		0.58		26,637		18		0.14
Total deposits and interest-bearing liabilities	582,542		1,231		0.42	%	507,285		889		0.35	%
Other liabilities	7,180						7,422
Total liabilities	589,722						514,707
Stockholders' equity	77,801						86,231
Total liabilities and stockholders' equity	$	667,523					$	600,938
Net interest income			$	10,069					$	9,111
Net interest rate spread					3.40	%					3.40	%
Net interest-earning assets	$	9,711					$	26,465
Net interest margin					3.40	%					3.41	%
Average of interest-earning assets to interest-bearing liabilities					101.67	%					105.22	%

Liquidity and Capital Resources

Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, proceeds from maturities and calls of securities, Federal Home Loan Bank advances and, to a lesser extent, short-term borrowings from other financial institutions. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-earning demand deposits. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.  Net cash used in operating activities was $1.0 million and $2.4 million for the six months

45

ended March 31, 2016 and March 31, 2015, respectively.  Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on mortgage-backed securities, was $17.2 million and $42.2 million for the six months ended March 31, 2016 and March 31, 2015, respectively.  During the six months ended March 31, 2016, we purchased $16.3 million and sold $8.7 million in securities held as available-for-sale, and during the six months ended March 31, 2015, we purchased $10.3 million and sold $17.5 million in securities held as available-for-sale.  Net cash provided by financing activities was $18.0 million and $43.8 million for the six months ended March 31, 2016 and March 31, 2015, respectively, and consisted of increases in deposit accounts and FHLB borrowings offset by the purchase of Company stock.

At March 31, 2016, Westbury Bank exceeded all of its regulatory capital requirements with Tier 1 leverage capital of $65.9 million, or 9.90% of adjusted total assets, which is above the well-capitalized level of $33.3 million, or 5.00%; Common Equity Tier 1 capital of $65.9 million, or 12.26% of adjusted total assets, which is above the well-capitalized level of $34.9 million, or 6.50%; Tier 1 capital of $65.9 million, or 12.26% of risk-weighted assets, which is above the well-capitalized level of $43.0 million, or 8.00%; and total risk-based capital of $70.8 million, or 13.17% of risk-weighted assets, which is above the well-capitalized level of $53.7 million, or 10.00%.  Accordingly, Westbury Bank was categorized as well-capitalized at March 31, 2016 under all Prompt Corrective Action Provisions as determined by the OCC, our primary regulator. 

At March 31, 2016, we had outstanding commitments to originate loans of $3.9 million, unused commercial lines of credit of $79.4 million, unused home equity lines of credit of $26.2 million, and stand-by letters of credit of $611,000.  We anticipate that we will have sufficient funds available to meet our current loan origination commitments.  Certificates of deposit that are scheduled to mature in less than one year from March 31, 2016 totaled $56.1 million.  Management expects that a substantial portion of the maturing certificates of deposit will be renewed.  However, if a substantial portion of these deposits is not retained, we may utilize FHLB advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

Off-Balance Sheet Arrangements. In the normal course of operations, we engage in a variety of financial transactions that, in accordance with GAAP, are not recorded in our financial statements.  These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk.  Such transactions are used primarily to manage customers’ requests for funding and generally take the form of loan commitments, lines of credit and standby letters of credit. These arrangements are not likely to have a material impact on the Company's financial condition or results of operations. We have not engaged in any other off-balance-sheet transactions in the normal course of our lending activities.

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in accordance with GAAP which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.  The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosures of quantitative and qualitative market risk are not required by smaller reporting companies, such as the Company.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have designed our disclosure controls and procedures to reach a level of reasonable assurance of achieving the

desired control objectives.

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2016. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2016 at reaching a level of reasonable assurance.

During the quarter ended March 31, 2016, there have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at March 31, 2016, we were not involved in any legal proceedings, the outcome of which, in our reasonable opinion, would be material to our financial condition or results of operations.

ITEM 1A. RISK FACTORS

Disclosures of risk factors are not required by smaller reporting companies, such as the Company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered Sales of Equity Securities.  None.

(b) Use of Proceeds.  None.

(c) Repurchase of Equity Securities. 

On February 9, 2016, the Company announced that its Board of Directors had authorized the repurchase of up to 422,906 shares of the Company's common stock, representing 10.00% of the Company's then outstanding shares. In connection with this authorization, the Company announced the completion of the previous authorization (on May 21, 2015) to purchase 200,000 shares. The shares may be purchased under the current repurchase program in the open market or in privately negotiated transactions from time to time depending on market conditions and other factors. As of March 31, 2016, 65,389 shares had been purchased under the current plan.

The table below sets forth Westbury Bancorp Inc.'s common stock repurchases during the three months ended March 31, 2016.

Period	(a) Total number of shares purchased		(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum number of shares that may yet be purchased under the plans or programs
January 1 - January 31, 2016	77,249	(1)	$	19.46	77,249	—
February 1 - February 29, 2016	25,900	(2)	18.47		25,900	397,006
March 1 - March 31, 2016	39,489	(2)	18.99		39,489	357,517
Total	142,638		$	19.15	142,638

______________________________________________________________________

(1) All shares were repurchased pursuant to the May 21, 2015 authorization.

(2) All shares were repurchased pursuant to the February 9, 2016 authorization.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K are included with this Form 10-Q and are listed on the “Index to Exhibits” immediately following the Signatures.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Westbury Bancorp, Inc.

Date: May 2, 2016

/s/ Greg J. Remus

Greg J. Remus

President and Chief Executive Officer

/s/ Kirk J. Emerich

Kirk J. Emerich

Executive Vice President and Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit Number	Description
31.1	Certification of Greg J. Remus, President and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a)
31.2	Certification of Kirk J. Emerich, Executive Vice President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a)
32	Certification of Greg J. Remus, President and Chief Executive Officer, and Kirk J. Emerich, Executive Vice President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Changes in Stockholders' Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Unaudited Consolidated Financial Statements

_

* - This certification is not "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended.

______________________________________

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