Waterstone Financial, Inc. (Waterstone Financial) and its subsidiaries, including WaterStone Bank, is engaged in attracting deposits from the general public in the areas surrounding its eight banking offices and nine automated teller machines (ATM), including stand-alone ATM facilities, located in Milwaukee, Washington and Waukesha counties, Wisconsin. The Company invests those deposits, together with funds generated from operations, primarily in residential real estate mortgage loans. As of December 31, 2011, residential real estate mortgage loans comprised 88.5% of its total loans receivable. The residential real estate mortgage loan portfolio was comprised of first mortgage loans secured by one-to four-family residences (39.7%), and over four-family residences (44.0%). The residential real estate mortgage loans consisted of home equity loans and lines of credit (4.8%) secured by a junior position on one-to four-family residences.