NEWS RELEASE
FOR RELEASE: IMMEDIATELY
WAYNE SAVINGS BANCSHARES, INC. ANNOUNCES EARNINGS FOR THE QUARTER ENDED JUNE 30, 2009
Wooster, Ohio (July 22, 2009) – Wayne Savings Bancshares, Inc. (NASDAQ:WAYN), the stock holding company parent of Wayne Savings Community Bank, reported net income of $532,000 or $0.18 per diluted share for the first fiscal quarter ended June 30, 2009, compared to $531,000 or $0.18 per diluted share for the first fiscal quarter ended June 30, 2008. While net income was essentially unchanged, there were significant changes in the composition of net income between the current quarter and the year ago period, reflecting a much lower interest rate environment and a more difficult economic environment.
Net interest income increased $403,000 for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008. Interest income decreased $290,000 during the 2009 quarter mainly as a result of lower overall market interest rates during the 2009 quarter compared to the 2008 quarter and the corresponding impact on new loan originations and existing adjustable rate loans. Interest expense decreased $693,000 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 increased $72,000, due primarily to $63,000 in gains on sale of mortgage loans. Noninterest expense increased by $390,000, or 15.5%, mainly due to a $330,000 increase in federal deposit insurance expense that includes an increase in the deposit insurance premium rate schedule, the 5 basis point special assessment, which was assessed on all FDIC insured institutions, and will be collected on September 30, 2009, and the absence of deposit insurance credits in the 2009 quarter that reduced costs for the 2008 quarter. Other noninterest expenses, excluding deposit insurance expense, increased $60,000 or 2.3% for the 2009 quarter compared to the 2008 quarter.
A provision for loan losses of $165,000 was recorded for the 2009 quarter compared to $61,000 recorded during the 2008 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 2008 quarter to the 2009 quarter. Non-performing assets to total assets amounted to 1.31% at June 30, 2009 compared to 0.63% at June 30, 2008.
According to Phillip E. Becker, President and Chief Executive Officer, “The increasing ratio of non-performing assets to total assets and the economic environment continue to be a challenge for the Company. The Company continues to focus on the matters important to maintaining and building shareholder value in this environment, which include underwriting of new credit and timely and careful work with borrowers to maintain credit performance while minimizing losses to the Company. The Company also continues to focus on discipline in the pricing of loans and deposits and in the management of the noninterest expenses within its control.”
At June 30, 2009, Wayne Savings Bancshares, Inc. reported total assets of $404.1 million, down from total assets of $404.4 million at March 31, 2009. The modest decrease in assets was primarily due to decreases in loans and investment securities, partially offset by an increase in cash balances. Deposits were $308.0 million at June 30, 2009, a decrease of $1.5 million, or 0.5% from $309.5 million at March 31, 2009. The decrease in deposits was primarily due to management’s continuing strategy to not compete aggressively with high rate retail CDs offered by competitors in the Company’s market area. The Company borrowed funds at a cost lower than retail deposit rates to offset the decrease in deposits.
Stockholders’ equity amounted to $35.0 million, or 8.65% of total assets at June 30, 2009, compared to $34.4 million, or 8.51% of total assets, at March 31, 2009, an increase of $0.6 million, primarily due to the addition of net income and an increase in accumulated other comprehensive income to reflect the increase in the fair value of available for sale securities, partially offset by the payment of dividends.
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 FINANCIAL HIGHLIGHTS | |
| (Dollars in thousands, except per share data - unaudited) | |
| | | | | | | |
| | | For the Three Months | |
| | | ended June 30, | |
| | | | | | | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Quarterly Results | | | | | | |
| | | | | | | |
| Net Interest Income | | $ | 3,248 | | | $ | 2,845 | |
| Net Income | | $ | 532 | | | $ | 531 | |
| Earnings Per Share: | | | | | | | | |
| Basic | | $ | 0.18 | | | $ | 0.18 | |
| Diluted | | $ | 0.18 | | | $ | 0.18 | |
| Return on Average Assets (Annualized) | | | 0.52 | % | | | 0.53 | % |
| Return on Average Equity (Annualized) | | | 6.13 | % | | | 6.37 | % |
| | | | | | | | | |
| | | | | | | | | |
| | | June 30, | | | March 31, | |
| | | 2009 | | | 2009 | |
| | | | | | | | | |
| End of Period Data | | | | | | | | |
| | | | | | | | | |
| Total Assets | | $ | 404,079 | | | $ | 404,421 | |
| Stockholders' Equity to Total Assets | | | 8.65 | % | | | 8.51 | % |
| Shares Outstanding | | | 3,004,113 | | | | 3,004,113 | |
| Book Value Per Share | | $ | 11.64 | | | $ | 11.46 | |
| | | | | | | | | |
| WAYNE SAVINGS BANCSHARES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (Dollars in Thousands, except per share data -- unaudited) |
| | | | | | | |
| | | | | | | |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Interest income | | $ | 5,142 | | | $ | 5,432 | |
| Interest expense | | | 1,894 | | | | 2,587 | |
| Net interest income | | | 3,248 | | | | 2,845 | |
| Provision for loan losses | | | 165 | | | | 61 | |
| Net interest income after provision for loan losses | | | 3,083 | | | | 2,784 | |
| Noninterest income | | | 501 | | | | 429 | |
| Noninterest expense | | | 2,905 | | | | 2,515 | |
| Income before federal income taxes | | | 679 | | | | 698 | |
| Provision for federal income taxes | | | 147 | | | | 167 | |
| Net income | | $ | 532 | | | $ | 531 | |
| | | | | | | | | |
| Earnings per share | | | | | | | | |
| Basic | | $ | 0.18 | | | $ | 0.18 | |
| Diluted | | $ | 0.18 | | | $ | 0.18 | |
| | | | | | | | | |
| Dividends per share | | $ | 0.05 | | | $ | 0.12 | |
| WAYNE SAVINGS BANCSHARES, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Dollars in thousands, except per share data) |
| | | | | | | |
| | | June 30, 2009 | | | March 31, 2009 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Cash and cash equivalents | | $ | 11,525 | | | $ | 6,790 | |
| Investment securities, net (1) | | | 115,037 | | | | 118,685 | |
| Loans receivable, net | | | 251,562 | | | | 254,326 | |
| Federal Home Loan Bank stock | | | 5,025 | | | | 5,025 | |
| Premises & equipment | | | 7,649 | | | | 7,553 | |
| Foreclosed assets held for sale, net | | | 926 | | | | 594 | |
| Other assets | | | 12,355 | | | | 11,448 | |
| TOTAL ASSETS | | $ | 404,079 | | | $ | 404,421 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Deposit accounts | | $ | 308,013 | | | $ | 309,534 | |
| Other short-term borrowings | | | 10,229 | | | | 10,154 | |
| Federal Home Loan Bank Advances | | | 47,000 | | | | 46,000 | |
| Accrued interest payable and other liabilities | | | 3,874 | | | | 4,320 | |
| TOTAL LIABILITIES | | | 369,116 | | | | 370,008 | |
| | | | | | | | | |
| | | | | | | | | |
| Common stock (3,978,731 shares of $.10 par value issued) | | | 398 | | | | 398 | |
| Additional paid-in capital | | | 36,023 | | | | 36,028 | |
| Retained earnings | | | 13,107 | | | | 12,726 | |
| Shares acquired by ESOP | | | (875 | ) | | | (899 | ) |
| Treasury Stock, at cost (974,618 shares at both June 30, 2009 and | | | | | |
| March 31, 2009) | | | (14,530 | ) | | | (14,530 | ) |
| Accumulated other comprehensive income | | | 840 | | | | 690 | |
| TOTAL STOCKHOLDERS' EQUITY | | | 34,963 | | | | 34,413 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 404,079 | | | $ | 404,421 | |
| (1) Includes held to maturity classifications. | | | | | | | | |
