-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 I+X5UV7gRufvV9yHEaf5lVcXZjkMqBXJ5u26WQbDcZz+Z2bHZTj+DWe7c48/bdHz
 /AqG9Ca9mGW2v7S/sPh93Q==

<SEC-DOCUMENT>0001140361-10-024102.txt : 20100603
<SEC-HEADER>0001140361-10-024102.hdr.sgml : 20100603
<ACCEPTANCE-DATETIME>20100603152402
ACCESSION NUMBER:		0001140361-10-024102
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20100525
FILED AS OF DATE:		20100603
DATE AS OF CHANGE:		20100603

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Egenhoefer Eric J
		CENTRAL INDEX KEY:			0001451668

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-51507
		FILM NUMBER:		10875710

	MAIL ADDRESS:	
		STREET 1:		11200 W PLANK COURT
		CITY:			WAUWATOSA
		STATE:			WI
		ZIP:			53226

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WATERSTONE FINANCIAL INC
		CENTRAL INDEX KEY:			0001329517
		STANDARD INDUSTRIAL CLASSIFICATION:	SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			WI
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		11200 WEST PLANK ROAD
		CITY:			WAUWATOSA
		STATE:			WI
		ZIP:			53226
		BUSINESS PHONE:		414-258-5880

	MAIL ADDRESS:	
		STREET 1:		11200 WEST PLANK ROAD
		CITY:			WAUWATOSA
		STATE:			WI
		ZIP:			53226

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Wauwatosa Holdings, Inc.
		DATE OF NAME CHANGE:	20050608
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>doc1.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2010-05-25</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001329517</issuerCik>
        <issuerName>WATERSTONE FINANCIAL INC</issuerName>
        <issuerTradingSymbol>WSBF</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001451668</rptOwnerCik>
            <rptOwnerName>Egenhoefer Eric J</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>11200 W PLANK COURT</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>WAUWATOSA</rptOwnerCity>
            <rptOwnerState>WI</rptOwnerState>
            <rptOwnerZipCode>53226</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Subsidiary President</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeHolding>
            <securityTitle>
                <value>common stock</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>8935</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2010-05-25</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1024</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>3.50</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>9959</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2010-06-01</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1976</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>3.50</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>11935</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes></footnotes>

    <remarks></remarks>

    <ownerSignature>
        <signatureName>Richard C. Larson, attorney in fact</signatureName>
        <signatureDate>2010-06-03</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----