NEWS RELEASE
FOR RELEASE: IMMEDIATELY
WAYNE SAVINGS BANCSHARES, INC. ANNOUNCES EARNINGS FOR THE QUARTER ENDED SEPTEMBER 30, 2007
Wooster, Ohio (October 25, 2007) – Wayne Savings Bancshares, Inc. (NASDAQ:WAYN), the stock holding company parent of Wayne Savings Community Bank, reported net earnings of $547,000 or $.18 per diluted share for the second fiscal quarter ended September 30, 2007, compared to $484,000 or $.15 per diluted share for the second fiscal quarter ended September 30, 2006. The increase in net earnings was primarily due to a decrease in general, administrative and other expense.
Net interest income increased $2,000 for the quarter ended September 30, 2007, compared to the quarter ended September 30, 2006. Interest income increased $215,000 for the 2007 quarter, compared to the same quarter in 2006, primarily due to a shift in balance sheet composition from investment securities and residential mortgage loans toward higher yielding commercial and non-residential real estate loans, and the reinvestment of maturing investment securities and mortgage-backed securities cashflows into higher yielding securities. Interest expense increased $213,000 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 and borrowed funds. A provision for losses on loans of $25,000 was made during the quarter ended September 30, 2007 compared to a provision of $30,000 during the quarter ended September 30, 2006, based on management’s evaluation of the portfolio performance indicators, growth in the commercial loan portfolio and economic conditions in our market area. Other income increased $7,000, due primarily to increases in income on bank owned life insurance and trust department income, partially offset by a decrease in other fee income. General, administrative and other expense decreased by $39,000 primarily due to severance expenses associated with a restructuring of the branch management organization recognized in the September 2006 quarter that did not recur in the September 2007 quarter, partially offset by the effects of normal merit payroll increases and increased costs of employee benefits during the September 2007 quarter compared to the September 2006 quarter. Tax expense decreased by $10,000 mainly due to the beneficial effect of additional tax advantaged investments.
For the six month period ended September 30, 2007, net earnings totaled $1,070,000 or $0.35 per diluted share, compared to net earnings of $1,077,000, or $0.33 per diluted share for the six months ended September 30, 2006.
Net interest income decreased $137,000 for the six months ended September 30, 2007 compared to the six months ended September 30, 2006. Interest income increased $478,000 for the 2007 six month period compared to the same period in 2006, as a result of a shift in portfolio composition from investment securities and residential mortgage loans toward commercial and non-residential real estate loans and the reinvestment of maturing investment securities and mortgage-backed securities into higher yielding securities. Interest expense increased $615,000 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 certificates of deposit and borrowed funds. A provision for losses on loans of $55,000 was made during the six months ended September 30, 2007 compared to a provision of $60,000 for the six months ended September 30, 2006, based on management’s evaluation of the portfolio performance indicators, growth in the commercial loan portfolio and economic conditions in our market area.
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Other income increased $29,000, due primarily to increases in trust and income on bank owned life insurance, partially offset by a decrease in other fee income. General, administrative and other expense decreased by $32,000 primarily due to severance expenses associated with a restructuring of the branch management organization recognized in the September 2006 period that did not recur in the September 2007 period, partially offset by the effects of normal merit payroll increases and increased costs of employee benefits during the September 2007 period compared to the September 2006 period. Tax expense decreased by $64,000 mainly due to the beneficial effect of additional tax advantaged investments.
According to Phillip E. Becker, President and Chief Executive Officer, “the Company continues to focus on discipline in the pricing of loans and deposits to manage the net interest margin while carefully underwriting loan applications to manage the inherent risk in the Company’s loan portfolio. Regional economic conditions and intense competition for both loans and deposits continue as themes that limit the Company’s ability to grow assets and net income. Management continues to work in a deliberate fashion to offset these economic and competitive conditions through control and reduction of non-interest expense while positioning the Company to better serve its customer base in the future.”
At September 30, 2007, Wayne Savings Bancshares, Inc. reported total assets of $398.9 million, down from total assets of $405.7 million at March 31, 2007. Deposits decreased $10.9 million, or 3.3%, to $322.6 million from $333.5 million at March 31, 2007. Stockholders’ equity at September 30, 2007 amounted to $34.1 million, or 8.54% of total assets, compared to $34.4 million and 8.49% at March 31, 2007. The $365,000 decrease in stockholders’ equity was primarily due to the purchase of treasury shares and payment of dividends, partially offset by net earnings.
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, 2007 | March 31, 2007 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash, cash equivalents, & investment securities (1) | $ | 54,592 | $ | 71,908 | ||||
Mortgage-backed securities, net (1) | 74,368 | 69,065 | ||||||
Loans receivable, net | 245,443 | 240,049 | ||||||
Federal Home Loan Bank stock | 4,829 | 4,829 | ||||||
Office premises & equipment, net | 8,113 | 8,179 | ||||||
Real estate acquired through foreclosure | 7 | - | ||||||
Other assets | 11,566 | 11,707 | ||||||
TOTAL ASSETS | $ | 398,918 | $ | 405,737 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deposit accounts | $ | 322,631 | $ | 333,540 | ||||
Advances from Federal Home Loan Bank | 39,000 | 34,500 | ||||||
Advances by borrowers for taxes & insurance | 656 | 616 | ||||||
Accounts payable on mortgage loans serviced for others | 178 | 197 | ||||||
Other liabilities | 2,385 | 2,451 | ||||||
TOTAL LIABILITIES | 364,850 | 371,304 | ||||||
Common stock (3,978,731 shares of $.10 par value issued at | ||||||||
June 30, 2007 and March 31, 2007) | 398 | 398 | ||||||
Additional paid-in capital | 36,106 | 36,106 | ||||||
Retained earnings | 12,292 | 11,982 | ||||||
Less required contributions for shares acquired by Employee Stock Ownership Plan | (1,158 | ) | (1,158 | ) | ||||
Less Treasury Stock (835,409 shares at September 30, 2007 and | ||||||||
784,622 shares at March 31, 2007) | (13,062 | ) | (12,419 | ) | ||||
Accumulated other comprehensive loss | (508 | ) | (476 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY | 34,068 | 34,433 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 398,918 | $ | 405,737 | ||||
(1) Includes available for sale classifications. |
WAYNE SAVINGS BANCSHARES, INC. | ||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||
(Dollars in thousands, except for per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
September 30, | ||||||||
2007 | 2006 | |||||||
Interest income | $ | 5,793 | $ | 5,578 | ||||
Interest expense | 2,975 | 2,762 | ||||||
Net interest income | 2,818 | 2,816 | ||||||
Provision for losses on loans | 25 | 30 | ||||||
Net interest income after provision for loan losses | 2,793 | 2,786 | ||||||
Other income | 438 | 431 | ||||||
General, administrative, and other expense | 2,499 | 2,538 | ||||||
Earnings before federal income taxes | 732 | 679 | ||||||
Federal income taxes | 185 | 195 | ||||||
Net earnings | $ | 547 | $ | 484 | ||||
Earnings per share | ||||||||
Basic | $ | 0.18 | $ | 0.15 | ||||
Diluted | $ | 0.18 | $ | 0.15 | ||||
Dividends per share | $ | 0.12 | $ | 0.12 | ||||
Six Months Ended | ||||||||
September 30, | ||||||||
2007 | 2006 | |||||||
Interest income | $ | 11,492 | $ | 11,014 | ||||
Interest expense | 5,892 | 5,277 | ||||||
Net interest income | 5,600 | 5,737 | ||||||
Provision for losses on loans | 55 | 60 | ||||||
Net interest income after provision for loan losses | 5,545 | 5,677 | ||||||
Other income | 886 | 857 | ||||||
General, administrative, and other expense | 4,993 | 5,025 | ||||||
Earnings before federal income taxes | 1,438 | 1,509 | ||||||
Federal income taxes | 368 | 432 | ||||||
Net earnings | $ | 1,070 | $ | 1,077 | ||||
Earnings per share | ||||||||
Basic | $ | 0.35 | $ | 0.33 | ||||
Diluted | $ | 0.35 | $ | 0.33 | ||||
Dividends per share | $ | 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, | ||||||||
2007 | 2006 | |||||||
Quarterly Results | ||||||||
Net Interest Income | $ | 2,818 | $ | 2,816 | ||||
Net Earnings | $ | 547 | $ | 484 | ||||
Earnings Per Share: | ||||||||
Basic | $ | 0.18 | $ | 0.15 | ||||
Diluted | $ | 0.18 | $ | 0.15 | ||||
Average Assets | $ | 394,654 | $ | 400,198 | ||||
Average Equity | $ | 33,989 | $ | 35,825 | ||||
Return on Average Assets (Annualized) | 0.55 | % | 0.48 | % | ||||
Return on Average Equity (Annualized) | 6.44 | % | 5.40 | % |
For the Six Months | ||||||||
ended September 30, | ||||||||
2007 | 2006 | |||||||
Six Month Results | ||||||||
Net Interest Income | $ | 5,600 | $ | 5,737 | ||||
Net Earnings | $ | 1,070 | $ | 1,077 | ||||
Earnings Per Share: | ||||||||
Basic | $ | 0.35 | $ | 0.33 | ||||
Diluted | $ | 0.35 | $ | 0.33 | ||||
Average Assets | $ | 395,817 | $ | 399,333 | ||||
Average Equity | $ | 34,135 | $ | 35,731 | ||||
Return on Average Assets (Annualized) | 0.54 | % | 0.54 | % | ||||
Return on Average Equity (Annualized) | 6.27 | % | 6.03 | % |
September 30, | March 31, | |||||||
2007 | 2007 | |||||||
End of Period Data | ||||||||
Total Assets | $ | 398,918 | $ | 405,737 | ||||
Stockholders' Equity | $ | 34,068 | $ | 34,433 | ||||
Stockholders' Equity to Total Assets | 8.54 | % | 8.49 | % | ||||
Shares Outstanding | 3,143,322 | 3,194,109 | ||||||
Book Value Per Share | $ | 10.84 | $ | 10.78 |