2012 Return: +312.7%
Russell 3000 Rank: 6
When a stock increases by more than 300% in one calendar year and yet it still trades for less than $8, you can be sure it wasn’t worth much when it started out.
WaterStone Financial (NASDAQ:WSBF) was operating under an FDIC consent order put in place in November 2009 that required WSBF to get its financial house in shape.
Once known as the Wauwatosa Savings Bank, it de-mutualized in 2005, reorganizing under a financial holding company structure. Three years after its demutualization, Wauwatosa Savings became WaterStone Bank SSB to better reflect the additional communities it served. But the good news didn’t last. Real estate loans for multifamily housing turned south, and the FDIC was forced to take action.
However, in December — after three years of hard work by bank employees — the FDIC terminated the consent order without comment. The community-focused bank is back making money for the first time since 2007. It’s doing so thanks to a 26% reduction in nonperforming loans over the past 24 months.
WaterStone Financial traded as high as $19 in September 2006. It looks like it’s on its way back there. Again, just exercise some caution — WSBF is even more illiquid than PATK at just 50,000 shares traded daily.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.