EX-99 2 ex99.htm

EXHIBIT 99


WAYNE SAVINGS BANCSHARES, INC. ANNOUNCES QUARTERLY EARNINGS	NEWS RELEASE NASDAQ SYMBOL: WAYN RELEASE DATE: November 2, 2004 CONTACT PERSONS: CHARLES F. FINN CHAIRMAN AND CEO MICHAEL C. ANDERSON CFO (330) 264-5767

FOR IMMEDIATE RELEASE

WOOSTER, OHIO—Wayne Savings Bancshares, Inc. (NASDAQ: WAYN), the stock holding company parent of Wayne Savings Community Bank, reported net earnings of $489,000 or $.13 per diluted share for the quarter ended September 30, 2004, compared to net earnings of $613,000 or $.16 per diluted share for the quarter ended September 30, 2003.

Net interest income increased $67,000 to a total of $2.7 million in the quarter ended September 30, 2004 compared to the same quarter last year, and other income increased $14,000 to a total of $493,000. Net interest income includes the addition of Stebbins National Bank net interest income for the quarter ended September 30, 2004. The increase in net interest income and other income in the 2004 quarter were more than offset by a $309,000 increase in general, administrative and other expense. The expense increases were mainly due to higher franchise taxes from the full stock conversion completed in 2003, increases in occupancy and equipment expense from the conversion to a new computer operating system in May 2004 and higher employee compensation from normal merit increases and increased benefit plan costs, which includes the effect of the Stebbins National Bank acquisition completed on June 1, 2004.

For the six month period ended September 30, 2004, net earnings totaled $951,000, or $.26 per diluted share, compared to net earnings of $1,344,000 or $.36 per diluted share for the six months ended September 30, 2003. The decrease in net earnings was primarily attributable to a decrease in net interest income of $105,000, mainly due to the Company’s current strategy of keeping assets with a shorter average life to protect its interest rate risk position. Net interest income includes the addition of Stebbins National Bank net interest income for the six months ended September 30, 2004. Other income decreased $91,000 and general, administrative and other expense increased $466,000. The overall expense increase in the six month period was again related mainly to franchise tax expense, occupancy and equipment expense from the data processing conversion, and increases in compensation and benefits expense which includes the effect of the Stebbins National Bank acquisition.

According to Charles Finn, Chairman and CEO, the Company has maintained its strategy of aggressively managing interest rate risk by shortening investment maturities rather than reaching for higher yields through extended maturities. Finn said, “This strategy has negatively affected earnings for the first six months of this fiscal year, but management believes the Company is well-positioned to take advantage of a rising interest rate environment.”

At September 30, 2004, Wayne Savings Bancshares, Inc. reported total assets of $381.5 million, total deposits of $311.9 million, and stockholders’ equity of $41.9 million, resulting in a capital-to-assets ratio of 10.97%.

Established in 1899, Wayne Savings Community Bank, the wholly-owned subsidiary of Wayne Savings Bancshares, Inc., has eleven full-service banking locations in Wayne, Holmes, Ashland, Medina, and Stark counties, Ohio.

WAYNE SAVINGS BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands, except per share data)

	September 30, 2004			March 31, 2004
	(Unaudited)
ASSETS

Cash, cash equivalents, & investment securities	$	71,288		$	51,469
Mortgage-backed securities, net (1)		69,785			88,428
Loans receivable, net (1)		213,757			205,443
Federal Home Loan Bank stock		4,292			4,205
Office premises & equipment, net		9,171			8,742
Real estate acquired through foreclosure		141			100
Other assets		13,084			10,620

TOTAL ASSETS	$	381,518		$	369,007


LIABILITIES AND STOCKHOLDERS' EQUITY

Deposit accounts	$	311,910		$	291,830
Advances from Federal Home Loan Bank		25,000			30,000
Advances by borrowers for taxes & insurance		565			617
Accounts payable on mortgage loans serviced for others		40			118
Other liabilities		2,148			2,881

TOTAL LIABILITIES		339,663			325,446

Common stock (3,907,318 shares of $.10 par value issued at both
September 30, 2004 and March 31, 2004 respectively)		391			391
Additional paid-in capital		34,377			34,365
Retained earnings		12,799			12,727
Less required contributions for shares acquired by Employee Stock Ownership Plan		(1,380	)		(1,456	)
Shares acquired by Management Recognition Plan		(913	)		(1,142	)
Less Treasury Stock		(3,565	)		(1,803	)
Accumulated other comprehensive income		146			479

TOTAL STOCKHOLDERS' EQUITY		41,855			43,561


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	381,518		$	369,007

(1) Includes available for sale classifications.

CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Thousands)

	Three Months Ended September 30,				Six Months Ended September 30,
	2004 unaudited		2003		2004 unaudited		2003

Interest income	$	4,381	$	4,501	$	8,625	$	9,224
Interest expense		1,609		1,796		3,234		3,728

Net interest income		2,772		2,705		5,391		5,496
Provision for losses on loans		15		31		30		63

Net interest income after provision for losses on loans		2,757		2,674		5,361		5,433
Other income		493		479		898		989
General, administrative, and other expense		2,580		2,271		4,949		4,483

Earnings before federal income taxes		670		882		1,310		1,939

Federal income taxes		181		269		359		595

Net earnings	$	489	$	613	$	951	$	1,344

CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)

	For the Three Months ended Sept 30,
	(Unaudited) 2004			2003
Quarterly Results
Net Interest Income	$	2,772		$	2,705
Net Earnings	$	489		$	613
Earnings Per Share:
Basic		0.13			0.16
Diluted		0.13			0.16
Return on Average Assets (Annualized)		0.51	%		0.66	%

	For the Six Months ended Sept 30,
	(Unaudited) 2004			2003
Year to Date Results
Net Interest Income	$	5,391		$	5,496
Net Earnings	$	951		$	1,344
Earnings Per Share:
Basic		0.26			0.36
Diluted		0.26			0.36
Return on Average Assets (Annualized)		0.51	%		0.72	%

	September 30, 2004 (Unaudited)			March 31, 2004
End of Period Data
Total Assets	$	381,518		$	369,007
Stockholders' Equity to Total Assets		10.97	%		11.80	%