NEWS RELEASE
FOR RELEASE: IMMEDIATELY
WAYNE SAVINGS BANCSHARES, INC. ANNOUNCES EARNINGS FOR THE QUARTER ENDED JUNE 30, 2008
Wooster, Ohio (July 24, 2008) – Wayne Savings Bancshares, Inc. (NASDAQ:WAYN), the stock holding company parent of Wayne Savings Community Bank, reported net earnings of $531,000 or $0.18 per diluted share for the first fiscal quarter ended June 30, 2008, compared to $523,000 or $.17 per diluted share for the first fiscal quarter ended June 30, 2007. The increase in earnings was primarily due to an increase in net interest income, resulting from decreased interest expense on deposits, partially offset by decreased interest income on loans and investments.
Net interest income increased $63,000 for the quarter ended June 30, 2008, compared to the quarter ended June 30, 2007. Interest income decreased $267,000 during the 2008 quarter mainly as a result of lower overall market interest rates during the 2008 quarter compared to the 2007 quarter and the corresponding impact on new originations and existing adjustable rate loans. Interest expense decreased $330,000 during the quarter as a result of lower deposit balances and lower market interest rates being reflected in rates paid on certificates of deposit, money market deposit accounts and advances from the Federal Home Loan Bank of Cincinnati, partially offset by a higher volume of borrowings used to replace decreased deposit balances. Noninterest income decreased $19,000, due primarily to a one-time trust administration fee received in the 2007 quarter that was not repeated in the 2008 quarter. Noninterest expense increased by $21,000, or 0.8%, mainly due to increased occupancy expense. Compensation expense decreased by $1,000 during the quarter, as full time equivalent staff decreased from 115 at June 30, 2007 to 109 at June 30, 2008, offsetting annual merit compensation increases implemented during the quarter.
A provision for loan losses of $61,000 was made for the 2008 quarter compared to $30,000 provided during the 2007 quarter, based on management’s assessment of probable incurred losses in the portfolio. The increase was mainly due to management’s analysis of economic factors in the Company’s market area and the negative change in those factors from the 2007 quarter to the 2008 quarter.
According to Phillip E. Becker, President and Chief Executive Officer, “During a continuing difficult economic environment characterized by significant stress in the financial markets, the Company has continued its focus on the factors that are within its control, namely the underwriting of credit to maintain strong credit performance while serving customer needs and the management of non-interest expense. In addition, the Company has continued to focus on discipline in the pricing of deposits in the face of very strong competition from national competitors seeking to meet their liquidity needs though the acquisition of high rate retail deposits.”
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At June 30, 2008, Wayne Savings Bancshares, Inc. reported total assets of $399.7 million, down from total assets of $401.6 million at March 31, 2008. The decrease in assets was primarily due to a decrease in cash balances, partially offset by increases in loans and investment securities. Deposits at June 30, 2008 were $315.4 million, a decrease of $2.3 million, or 0.7% from $317.7 million at March 31, 2008. The decrease in deposits was primarily due to management’s decision to not compete aggressively with high rate retail CDs offered by competitors in the Company’s market area. Borrowed funds at a cost lower than retail deposit rates were used to cover the decrease in deposits
Stockholders’ equity at June 30, 2008 amounted to $32.5 million, or 8.13% of total assets, compared to $34.1 million at March 31, 2008, a decrease of $1.6 million, primarily due to an increase in accumulated other comprehensive loss to reflect the decline in the value of available for sale securities, and, to a lesser extent, the payment of dividends, the completion of the Company’s stock buyback program, and the adoption of the EITF 06-4 accounting standard, requiring a reduction of equity and recognition of a liability for post-retirement split dollar life insurance benefits, all of which were 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. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Dollars in thousands, except per share data) |
| | | June 30, 2008 | | | March 31, 2008 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Cash and cash equivalents | | $ | 6,211 | | | $ | 13,063 | |
| Investment securities, net (1) | | | 124,470 | | | | 121,410 | |
| Loans receivable, net | | | 244,651 | | | | 242,255 | |
| Federal Home Loan Bank stock | | | 4,958 | | | | 4,892 | |
| Premises & equipment | | | 7,942 | | | | 8,012 | |
| Foreclosed assets held for sale, net | | | 121 | | | | 93 | |
| Other assets | | | 11,305 | | | | 11,859 | |
| TOTAL ASSETS | | $ | 399,658 | | | $ | 401,584 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Deposit accounts | | $ | 315,451 | | | $ | 317,731 | |
| Other short-term borrowings | | | 8,393 | | | | 7,287 | |
| Federal Home Loan Bank Advances | | | 40,150 | | | | 38,500 | |
| Accrued interest payable and other liabilities | | | 3,172 | | | | 3,962 | |
| TOTAL LIABILITIES | | | 367,166 | | | | 367,480 | |
| | | | | | | | | |
| | | | | | | | | |
| Common stock (3,978,731 shares of $.10 par value issued) | | | 398 | | | | 398 | |
| Additional paid-in capital | | | 36,135 | | | | 36,127 | |
| Retained earnings | | | 12,172 | | | | 12,450 | |
| Shares acquired by ESOP | | | (1,097 | ) | | | (1,097 | ) |
| Treasury Stock, at cost (974,618 and 969,627 shares at June 30, 2008 and | | | | | | | | |
| March 31, 2008, respectively) | | | (14,529 | ) | | | (14,481 | ) |
| Accumulated other comprehensive income (loss) | | | (587 | ) | | | 707 | |
| TOTAL STOCKHOLDERS' EQUITY | | | 32,492 | | | | 34,104 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 399,658 | | | $ | 401,584 | |
| (1) Includes held to maturity classifications. | | | | | | | | |
| WAYNE SAVINGS BANCSHARES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (Dollars in Thousands, except per share data -- unaudited) |
| | | | | | | |
| | | | | | | |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Interest income | | $ | 5,432 | | | $ | 5,699 | |
| Interest expense | | | 2,587 | | | | 2,917 | |
| Net interest income | | | 2,845 | | | | 2,782 | |
| Provision for loan losses | | | 61 | | | | 30 | |
| Net interest income after provision for loan losses | | | 2,784 | | | | 2,752 | |
| Noninterest income | | | 429 | | | | 448 | |
| Noninterest expense | | | 2,515 | | | | 2,494 | |
| Income before federal income taxes | | | 698 | | | | 706 | |
| Provision for federal income taxes | | | 167 | | | | 183 | |
| Net income | | $ | 531 | | | $ | 523 | |
| | | | | | | | | |
| Earnings per share | | | | | | | | |
| Basic | | $ | 0.18 | | | $ | 0.17 | |
| Diluted | | $ | 0.18 | | | $ | 0.17 | |
| | | | | | | | | |
| Dividends per share | | $ | 0.12 | | | $ | 0.12 | |
| WAYNE SAVINGS BANCSHARES, INC. | |
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |
| (Dollars in thousands, except per share data - unaudited) | |
| �� | | | | | | |
| | | For the Three Months | |
| | | ended June 30, | |
| | | | | | | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Quarterly Results | | | | | | |
| | | | | | | |
| Net Interest Income | | $ | 2,845 | | | $ | 2,782 | |
| Net Income | | $ | 531 | | | $ | 523 | |
| Earnings Per Share: | | | | | | | | |
| Basic | | $ | 0.18 | | | $ | 0.17 | |
| Diluted | | $ | 0.18 | | | $ | 0.17 | |
| Return on Average Assets (Annualized) | | | 0.53 | % | | | 0.53 | % |
| Return on Average Equity (Annualized) | | | 6.37 | % | | | 6.10 | % |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | June 30, | | | March 31, | |
| | | 2008 | | | 2008 | |
| | | | | | | | | |
| End of Period Data | | | | | | | | |
| | | | | | | | | |
| Total Assets | | $ | 399,658 | | | $ | 401,584 | |
| Stockholders' Equity to Total Assets | | | 8.13 | % | | | 8.49 | % |
| Shares Outstanding | | | 3,004,113 | | | | 3,009,104 | |
| Book Value Per Share | | $ | 10.82 | | | $ | 11.33 | |
