EX-99 2 ex99.htm EX-99 EX-99
NEWS RELEASE     
FOR RELEASE: IMMEDIATELY

WAYNE SAVINGS BANCSHARES, INC. ANNOUNCES EARNINGS FOR THE QUARTER ENDED SEPTEMBER 30, 2006

Wooster, Ohio (October 27, 2006) - Wayne Savings Bancshares, Inc. (NASDAQ:WAYN), the stock holding company parent of Wayne Savings Community Bank, reported net earnings of $484,000 or $.15 per diluted share for the second fiscal quarter ended September 30, 2006, compared to $467,000 or $.14 per share for the quarter ended September 30, 2005. The increase in earnings was primarily due to a significant decrease in general, administrative and other expense, partially offset by a decrease in net interest income and an increased provision for losses on loans.

Net interest income before provision for loan losses decreased $16,000 for the quarter ended September 30, 2006, compared to the quarter ended September 30, 2005. Interest income increased $780,000 for the 2006 quarter compared to the same quarter in 2005 as a result of prime rate increases, a shift in balance sheet composition from investment securities and residential mortgage loans toward higher yielding commercial loans, and the reinvestment of maturing investment securities and mortgage-backed securities cashflows into higher yielding securities. Interest expense increased $796,000 compared to the prior year period as a result of increased rates paid on certificates of deposit and a shift in deposit composition from savings and checking deposits to higher rate certificates of deposit. A provision for losses on loans of $30,000 was made during the quarter ended September 30, 2006 compared to no provision during the quarter ended September 30, 2005 as a result of the growth in the commercial loan portfolio and the more challenging economic conditions in our market area. Other income decreased $15,000, due primarily to decreases in income on bank owned life insurance and management’s decision to retain fixed-rate mortgage loans in the loan portfolio instead of selling those loans into the secondary market, which was partially offset by an increase in other fee income. General, administrative and other expense decreased by $114,000 primarily due to a reduction in staff through attrition, partially offset by severance expenses associated with a restructuring of the branch management organization. Full time equivalent staff was 114 at September 30, 2006 compared to 128 at September 30, 2005.

For the six month period ended September 30, 2006, net earnings totaled $1,077,000, or $0.33 per diluted share, compared to net earnings of $907,000, or $0.27 per diluted share for the six months ended September 30, 2005.

Net interest income before provision for loan losses increased $106,000 for the six months ending September 30, 2006 compared to the six months ended September 30, 2005. Interest income increased $1,535,000 for the six month period compared to the same period in 2005 as a result of prime rate increases and a shift in portfolio composition from investment securities and mortgage loans toward commercial loans and the reinvestment of maturing investment securities and mortgage-backed securities into higher yielding securities. Interest expense increased $1,429,000 compared to the prior year period as a result of increased rates paid on certificates of deposit and a shift in portfolio composition from savings and checking deposits to certificates of deposit. A provision for losses on loans of $60,000 was made during the six months ended September 30, 2006 compared to no provision for the six months ended September 30, 2005 to reflect the growth in the commercial loan portfolio and the more challenging economic conditions in our market area.

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Other income increased $3,000, due primarily to increases in trust and other fee income partially offset by decreases in other income due to a decrease in income on bank owned life insurance and management’s decision to retain fixed rate mortgage loans in the loan portfolio instead of selling those loans into the secondary market. General, administrative and other expense decreased by $246,000 primarily due to a reduction in staff through attrition, which was partially offset by severance expenses associated with a restructuring of the branch management organization.

According to Phillip E. Becker, President and Chief Executive Officer, “the Company is experiencing compression in its net interest margin due to a flat yield curve, regional economic conditions and intense competition for both loans and deposits. Management is working in a deliberate fashion to offset this margin compression through control and reduction of non-interest expense while positioning the Company to better serve its customer base in the future. The restructuring of the branch management organization during the fiscal second quarter represents an important step in this ongoing process.”

At September 30, 2006, Wayne Savings Bancshares, Inc. reported total assets of $405.8 million, up from total assets of $403.7 million at March 31, 2006. Deposits decreased $5.1 million, or 1.5% to $327.5 million from $332.6 million at March 31, 2006. Stockholders’ equity at September 30, 2006 and March 31, 2006 amounted to $35.7 million and $35.5 million, respectively, or 8.80% of total assets for both periods.

Established in 1899, Wayne Savings Community Bank, the wholly owned subsidiary of Wayne Savings Bancshares, Inc., has eleven full-service banking locations in the communities of Wooster, Ashland, Millersburg, Rittman, Lodi, North Canton, and Creston, Ohio.

Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Factors which could result in material variations include, but are not limited to, changes in interest rates which could affect net interest margins and net interest income, competitive factors which could affect net interest income and noninterest income, changes in demand for loans, deposits and other financial services in the Company's market area; changes in asset quality, general economic conditions as well as other factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

CONTACT PERSON:
H. STEWART FITZ GIBBON III
 
EXECUTIVE VICE PRESIDENT
 
CHIEF FINANCIAL OFFICER
 
(330) 264-5767

 
 
 
 

WAYNE SAVINGS BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands, except per share data)
   
September 30, 2006
  
March 31, 2006
  
   
(Unaudited)
  
 
  
ASSETS
          
           
Cash, cash equivalents, & investment securities
  
$
75,265
  
$
87,430
  
Mortgage-backed securities, net (1)
    
68,507
    
55,731
  
Loans receivable, net (1)
    
236,299
    
235,312
  
Federal Home Loan Bank stock
    
4,758
    
4,623
  
Office premises & equipment, net
    
8,388
    
8,557
  
Real estate acquired through foreclosure
    
97
    
156
  
Other assets
    
12,487
    
11,870
  
TOTAL ASSETS
  
$
405,801
  
$
403,679
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Deposit accounts
 
$
327,476
  
$
332,570
  
Advances from Federal Home Loan Bank
    
38,900
    
32,750
  
Advances by borrowers for taxes & insurance
    
338
    
521
  
Accounts payable on mortgage loans serviced for others
    
221
    
225
  
Other liabilities
    
3,153
    
2,097
  
TOTAL LIABILITIES
    
370,088
    
368,163
  
               
Common stock (3,954,874 and 3,934,874 shares of $.10 par value issued at
              
September 30, 2006 and March 31, 2006 respectively)
    
395
    
393
  
Additional paid-in capital
    
35,881
    
35,604
  
Retained earnings
    
11,672
    
11,394
  
Less required contributions for shares acquired by Employee Stock Ownership Plan
    
(1,199
)
  
(1,239
)
Less Treasury Stock (650,822 and 595,322 shares at September 30, 2006 and
              
March 31, 2006 respectively)
    
(10,461
)
  
(9,625
)
Accumulated other comprehensive loss
    
(575
)
  
(1,011
)
TOTAL STOCKHOLDERS' EQUITY
    
35,713
    
35,516
  
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
405,801
  
$
403,679
  
(1) Includes available for sale classifications.


 
 
 

 

WAYNE SAVINGS BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Thousands -- unaudited)
                   
                   
   
Three Months Ended
  
Six Months Ended
  
   
September 30,
  
September 30,
  
   
2006
  
2005
  
2006
  
2005
  
                   
Interest income
  
$
5,578
  
$
4,798
  
$
11,014
  
$
9,479
  
Interest expense
    
2,762
   
1,966
   
5,277
   
3,848
 
Net interest income
    
2,816
   
2,832
   
5,737
   
5,631
 
Provision for losses on loans
    
30
   
0
   
60
   
0
 
Net interest income after provision for loan losses
    
2,786
   
2,832
   
5,677
   
5,631
 
Other income
    
431
   
446
   
857
   
854
 
General, administrative, and other expense
    
2,538
   
2,652
   
5,025
   
5,271
 
Earnings before federal income taxes
   
679
   
626
   
1,509
   
1,214
 
Federal income taxes
   
195
   
159
   
432
   
307
 
Net earnings
 
$
484
  
$
467
  
$
1,077
  
$
907
  
                           
Earnings per share
                          
Basic
  
$
0.15
  
$
0.14
  
$
0.33
  
$
0.27
  
Diluted
  
$
0.15
  
$
0.14
  
$
0.33
  
$
0.27
  
                           
Dividends per share
  
$
0.12
  
$
0.12
  
$
0.24
  
$
0.24
  
 
 
 
 
 
 

 
WAYNE SAVINGS BANCSHARES, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data - unaudited)
           
   
For the Three Months
  
   
ended September 30,
  
           
   
2006
  
2005
  
           
Quarterly Results
              
               
Net Interest Income
  
$
2,816
  
$
2,832
  
Net Earnings
  
$
484
  
$
467
  
Earnings Per Share:
              
Basic
    
0.15
    
0.14
  
Diluted
    
0.15
    
0.14
  
Return on Average Assets (Annualized)
    
.48
%
  
.48
%
Return on Average Equity (Annualized)
    
5.4
%
  
5.0
%
 
   
For the Six Months
  
   
ended September 30,
  
   
2006
  
2005
  
           
Year to Date Results
              
               
Net Interest Income
  
$
5,737
  
$
5,631
  
Net Earnings
  
$
1,077
  
$
907
  
Earnings Per Share:
              
Basic
    
0.33
    
0.27
  
Diluted
    
0.33
    
0.27
  
Return on Average Assets (Annualized)
    
.54
%
  
.46
%
Return on Average Equity (Annualized)
    
6.0
%
  
4.7
%
 
   
September 30,
  
March 31,
  
   
2006
  
2006
  
           
End of Period Data
              
               
Total Assets
  
$
405,801
  
$
403,679
  
Stockholders' Equity to Total Assets
    
8.80
%
  
8.80
%