EXHIBIT 99.1
NEWS RELEASE
FOR RELEASE: IMMEDIATELY
WAYNE SAVINGS BANCSHARES, INC. ANNOUNCES EARNINGS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2007
Wooster, Ohio (April 26, 2007) – Wayne Savings Bancshares, Inc. (NASDAQ:WAYN), the stock holding company parent of Wayne Savings Community Bank, reported net earnings for the fiscal year ended March 31, 2007 of $2.2 million, or $0.68 per diluted share, compared to net earnings of $1.6 million, or $0.50 per diluted share for the fiscal year ended March 31, 2006. The increase in earnings for the fiscal year was primarily due to a decrease in general, administrative and other expense and the provision for losses on loans, partially offset by decreases in net interest income and other income and an increase in federal income tax expense.
Net interest income decreased $196,000 for fiscal 2007 compared to fiscal 2006. Interest income increased $2.7 million during fiscal 2007 from fiscal 2006, as a result of prime rate increases and a shift in balance sheet composition from lower yielding investment securities and residential mortgage loans toward higher yielding commercial real estate loans and mortgage-backed securities. Interest expense increased $2.9 million during fiscal 2007 from fiscal 2006 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. Other income decreased $111,000, due primarily to the absence in the fiscal 2007 period of a $153,000 non-recurring gain on Bank Owned Life Insurance (BOLI) and cyclical gains of $67,000 on sale of loans that were included in the fiscal 2006 period, partially offset by an increase of $50,000 in trust fees and an increase of $60,000 in other service charges.
General, administrative and other expense for fiscal 2007 decreased by $1.1 million due primarily to staff reductions during the period, the absence of non-recurring pension expense incurred during fiscal 2006 due to the death of the Company’s former chairman, president, and chief executive officer in November 2005, and refunds of franchise tax expense. Federal income tax expense increased by $415,000 due to increased pre-tax income and an increasing proportion of taxable income due to the maturity of tax exempt securities in the investment portfolio and the reduction of BOLI income due to death benefits received in the 2006 period.
For the fourth fiscal quarter ended March 31, 2007, net earnings were $521,000, or $0.17 per diluted share, compared to $562,000 or $.18 per diluted share for the quarter ended March 31, 2006. The decrease in earnings was primarily due to decreases in net interest income and other income, combined with an increase in federal income tax expense, partially offset by a decrease in general, administrative and other expense.
Net interest income decreased $162,000 for the quarter ended March 31, 2007, compared to the quarter ended March 31, 2006. Interest income increased $489,000 during the 2007 quarter as a result of prime rate increases and a shift in balance sheet composition from lower yielding investment securities and residential mortgage loans toward higher yielding commercial real estate loans and mortgage-backed securities.
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Interest expense increased $651,000 during the quarter 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. The provision for losses on loans decreased by $181,000 due to a decrease in loan volume, a decrease in the level of charge-offs, and a stable level of non-performing loans year to year. Other income decreased $80,000, mainly due to a non-recurring gain on Bank Owned Life Insurance (BOLI) in the 2006 period and an increase in the amortization of mortgage servicing rights, partially offset by an increase of $11,000 in trust fees. General, administrative and other expense decreased $55,000 for the quarter ended March 31, 2007 compared to the quarter ended March 31, 2006 primarily due to staff reductions and a refund of franchise tax overpayments, partially offset by increased pension expense due to lump sum settlements paid to participants exiting the pension plan during the 2007 quarter. Federal income tax expense increased $35,000 as the proportion of taxable income increased due to a decreasing proportion of tax exempt securities in the investment portfolio and a reduced BOLI portfolio due to the receipts of death benefits in the 2006 period.
According to Phillip E. Becker, President and Chief Executive Officer, “the Company has continued its strategic initiatives of growing the commercial lending and trust businesses while putting additional focus on controlling non-interest expense to offset the increasing interest expense brought on by a flat to inverted yield curve and increased competition for consumer and commercial deposit accounts.”
At March 31, 2007, Wayne Savings Bancshares, Inc. reported total assets of $405.9 million, an increase of $2.2 million or 0.5%, from total assets of $403.7 million at March 31, 2006. Deposits increased $970,000 or 0.3% to $333.5 million from $332.6 million at March 31, 2006. Stockholders’ equity at March 31, 2007 amounted to $34.6 million, or 8.52% of total assets, compared to $35.5 million, or 8.80% of total assets at March 31, 2006. The decrease in stockholders’ equity was due to the $2.8 million repurchase of shares and the payment of dividends, partially offset by the addition of the net income discussed above and a decrease in accumulated other comprehensive loss.
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) | ||||||||
March 31, 2007 | March 31, 2006 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash, cash equivalents, & investment securities (1) | $ | 71,908 | $ | 87,430 | ||||
Mortgage-backed securities, net (1) | 69,065 | 55,731 | ||||||
Loans receivable, net | 240,049 | 235,312 | ||||||
Federal Home Loan Bank stock | 4,829 | 4,623 | ||||||
Office premises & equipment, net | 8,179 | 8,557 | ||||||
Real estate acquired through foreclosure | 0 | 156 | ||||||
Other assets | 11,846 | 11,870 | ||||||
TOTAL ASSETS | $ | 405,876 | $ | 403,679 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deposit accounts | $ | 333,540 | $ | 332,570 | ||||
Advances from Federal Home Loan Bank | 34,500 | 32,750 | ||||||
Advances by borrowers for taxes & insurance | 616 | 521 | ||||||
Accounts payable on mortgage loans serviced for others | 197 | 225 | ||||||
Other liabilities | 2,447 | 2,097 | ||||||
TOTAL LIABILITIES | 371,300 | 368,163 | ||||||
Common stock (3,978,731 and 3,934,874 shares of $.10 par value issued at | ||||||||
March 31, 2007 and March 31, 2006, respectively) | 398 | 393 | ||||||
Additional paid-in capital | 36,249 | 35,604 | ||||||
Retained earnings | 11,982 | 11,394 | ||||||
Less required contributions for shares acquired by Employee Stock Ownership Plan | (1,158 | ) | (1,239 | ) | ||||
Less Treasury Stock (784,622 and 595,322 shares at March 31, 2007 and | ||||||||
March 31, 2006, respectively) | (12,419 | ) | (9,625 | ) | ||||
Accumulated other comprehensive loss | (476 | ) | (1,011 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY | 34,576 | 35,516 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 405,876 | $ | 403,679 | ||||
(1) Includes available for sale classifications. | ||||||||
WAYNE SAVINGS BANCSHARES, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||
(Dollars in Thousands -- unaudited) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Interest income | $ | 5,717 | $ | 5,228 | $ | 22,410 | $ | 19,688 | ||||||||
Interest expense | 2,966 | 2,315 | 11,198 | 8,280 | ||||||||||||
Net interest income | 2,751 | 2,913 | 11,212 | 11,408 | ||||||||||||
Provision for losses on loans | 30 | 211 | 100 | 211 | ||||||||||||
Net interest income after provision for loan losses | 2,721 | 2,702 | 11,112 | 11,197 | ||||||||||||
Other income | 376 | 456 | 1,666 | 1,777 | ||||||||||||
General, administrative, and other expense | 2,387 | 2,442 | 9,767 | 10,899 | ||||||||||||
Earnings before federal income taxes | 710 | 716 | 3,011 | 2,075 | ||||||||||||
Federal income taxes | 189 | 154 | 850 | 435 | ||||||||||||
Net earnings | $ | 521 | $ | 562 | $ | 2,161 | $ | 1,640 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.17 | $ | 0.18 | $ | 0.68 | $ | 0.50 | ||||||||
Diluted | $ | 0.17 | $ | 0.18 | $ | 0.68 | $ | 0.50 | ||||||||
Dividends per share | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.48 |
WAYNE SAVINGS BANCSHARES, INC. | ||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||
(Dollars in thousands, except per share data - unaudited) | ||||||||
For the Three Months | ||||||||
ended March 31, | ||||||||
2007 | 2006 | |||||||
Quarterly Results | ||||||||
Net Interest Income | $ | 2,751 | $ | 2,913 | ||||
Net Earnings | $ | 521 | $ | 562 | ||||
Earnings Per Share: | ||||||||
Basic | 0.17 | 0.18 | ||||||
Diluted | 0.17 | 0.18 | ||||||
Return on Average Assets (Annualized) | 0.51 | % | 0.56 | % | ||||
Return on Average Equity (Annualized) | 5.97 | % | 5.90 | % | ||||
For the Twelve Months | ||||||||
ended March 31, | ||||||||
2007 | 2006 | |||||||
Year to Date Results | ||||||||
Net Interest Income | $ | 11,212 | $ | 11,408 | ||||
Net Earnings | $ | 2,161 | $ | 1,640 | ||||
Earnings Per Share: | ||||||||
Basic | 0.68 | 0.50 | ||||||
Diluted | 0.68 | 0.50 | ||||||
Return on Average Assets | 0.53 | % | 0.42 | % | ||||
Return on Average Equity | 6.17 | % | 4.42 | % | ||||
March 31, | March 31, | |||||||
2007 | 2006 | |||||||
End of Period Data | ||||||||
Total Assets | $ | 405,876 | $ | 403,679 | ||||
Stockholders' Equity to Total Assets | 8.52 | % | 8.80 | % |