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Waterstone Mortgage reported a second consecutive quarter of profitability, although management at its parent company cautioned about
For the second quarter, Waterstone Financial's mortgage segment had net income of $1.3 million, building on first quarter profits of $298,000. Waterstone Mortgage lost $1.2 million during the second quarter of 2023, part of a streak of
Gross gain on sale of 393 basis points was 17 basis points lower than the first quarter but a 20 basis point improvement over the year prior.
"The results this quarter reflect our continued efforts over the past year to improve efficiencies at the mortgage banking segment," said William Bruss, Waterstone Financial CEO, in a press release. "While our results have improved, we continue to face many challenges within the segment, as the mortgage banking industry continues to face unknown variables driven by
The Wauwatosa, Wisconsin-based bank,
Origination volume during the period was the best for Waterstone Mortgage since the third quarter of 2022, when it produced just shy of $730 million.
During the quarter, Waterstone sold mortgage servicing rights with unpaid principal balance of $233.1 million and a book value of $2 million for $2.1 million resulting in a gain on sale of $152,000. It did not sell any MSRs in the year ago quarter.
Volume of $634.1 million topped the first quarter's $485.1 million and $623.3 million one year prior.
While purchases made up 92.7% of volume, the share of refinancings doubled on a year-over-year basis, to 7.3% from 3.6%.
The increase in refi activity is in line with recent reports from Optimal Blue that found
The Mortgage Bankers Association attributed
Waterstone Financial is the parent company of WaterStone Bank SSB and the mortgage company is a subsidiary of the bank.
In the second quarter Waterstone Financial had net income of $5.7 million, up from $4 million in the prior period but down from $6.2 million a year ago.
"The community banking segment continues to deal with margin pressure, as short-term funding rates remain elevated due to the