UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 11-K
(Mark One):
ý | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2011
OR
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________ to ___________
Commission file number: 0-23433
A. | Full title of the plan and address of the plan, if different from that of the issuer named below: |
Wayne Savings 401(k) Retirement Plan
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
Wayne Savings Bancshares, Inc.
151 North Market Street
Wooster, Ohio 44691
REQUIRED INFORMATION
Financial Statements. The following financial statements and schedule are filed as part of this annual report for the Wayne Savings 401(k) Retirement Plan (the "Plan"):
Page No. | ||
Report of Independent Registered Public Accounting Firm | 3 | |
Financial Statements | ||
Statements of Net Assets Available for Benefits | 4 | |
Statement of Changes in Net Assets Available for Benefits | 5 | |
Notes to Financial Statements | 6 | |
Supplemental Schedule | ||
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) | 14 |
2 |
Report of Independent Registered Public Accounting Firm
Administrative Committee
Wayne Savings 401(k) Retirement Plan
Wooster, Ohio
We have audited the accompanying statements of net assets available for benefits of the Wayne Savings 401(k) Retirement Plan (the “Plan”) as of December 31, 2011 and 2010, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audits included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Wayne Savings 401(k) Retirement Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information as listed in the table of contents is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
/s/ BKD, LLP |
Cincinnati, Ohio
June 22, 2012
Federal Employer Identification Number: 44-0160260
3 |
Wayne Savings 401(k) Retirement Plan
Statements of Net Assets Available for Benefits
December 31, 2011 and 2010
Assets | 2011 |
2010 | ||||||
Investments, At Fair Value | $ | 3,404,712 | $ | 3,397,165 | ||||
Receivables | ||||||||
Notes receivable from participants | 92,782 | 37,598 | ||||||
Employee contribution | 8,992 | 9,403 | ||||||
Employer contribution | 6,769 | 6,238 | ||||||
Accrued interest and dividends | 1,270 | 1,941 | ||||||
Net Assets Available for Benefits | $ | 3,514,525 | $ | 3,452,345 | ||||
The Accompanying Notes are an Integral Part of These Statements
4 |
Wayne Savings 401(k) Retirement Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2011 and 2010
2011 | 2010 | |||||||
Investment (loss) income | ||||||||
Net appreciation (depreciation) in fair value of investments | $ | (173,683 | ) | $ | 454,027 | |||
Interest | 466 | 869 | ||||||
Dividends | 81,945 | 66,249 | ||||||
Net investment (loss) income | (91,272 | ) | 521,145 | |||||
Interest Income from Participant Loans | 2,763 | 1,972 | ||||||
Contributions | ||||||||
Employer | 156,421 | 165,171 | ||||||
Participants | 267,639 | 301,794 | ||||||
Rollovers | 217,865 | 17,799 | ||||||
641,925 | 484,764 | |||||||
Total | 553,416 | 1,007,881 | ||||||
Deductions | ||||||||
Benefits paid directly to participants | 485,072 | 314,147 | ||||||
Administrative expenses | 6,164 | 3,781 | ||||||
Total | 491,236 | 317,928 | ||||||
Net Increase | 62,180 | 689,953 | ||||||
Net Assets Available for Benefits, Beginning of Year | 3,452,345 | 2,762,392 | ||||||
Net Assets Available for Benefits, End of Year | $ | 3,514,525 | $ | 3,452,345 | ||||
The Accompanying Notes are an Integral Part of These Statements
5 |
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2011 and 2010
Note 1: Description of the Plan
The following description of Wayne Savings 401(k) Retirement Plan (Plan) provides only general information. Participants should refer to the Plan document and Summary Plan Description for a more complete description of the Plan’s provisions, which are available from the Plan Administrator.
General
The Plan is a defined contribution plan sponsored by Wayne Savings Community Bank (Company) for the benefit of its employees who are age 21 or older. Employees begin receiving the Company match after one year of employment and 1,000 or more employment hours. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Huntington National Bank is the trustee and custodian of the Plan.
Contributions
The Plan permits eligible employees through a salary deferral election to have the Company make annual contributions of up to 50% of eligible compensation, as defined in the plan, subject to an overall $16,500 limitation for 2011. Employee rollover contributions are also permitted. The Company makes matching contributions of 100% of employees’ salary deferral amounts up to 4% and 50% of the next 2% of the employees’ compensation and profit-sharing contributions. Company profit-sharing contributions are discretionary as determined by the Company’s Board of Directors. Contributions are subject to certain limitations. There are no forfeitures as the employer contributions vest immediately.
Participant Investment Account Options
Investment account options available include various funds. Each participant has the option of directing his or her contributions into any of the separate investment accounts and may change the allocation daily.
Participant Accounts
Each participant’s account is credited with the participant’s contribution, the Company’s contribution and plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Vesting
Participants are immediately vested in both their voluntary contributions plus earnings thereon and the Company’s contribution portion of their accounts plus earnings thereon.
6 |
Wayne Savings 401(k) Retirement Plan |
Payment of Benefits
Upon termination of service, an employee may elect to receive a lump-sum amount equal to the value of his or her account. At December 31, 2011 and 2010, no plan assets were allocated to accounts of terminated or retired participants who have elected to withdraw from the Plan but have not yet been paid.
Notes Receivable from Participants
The Plan Document includes provisions authorizing loans from the Plan to active eligible participants. Loans are made to any eligible participant demonstrating a qualifying need. The minimum amount of a loan shall be $1,000. The maximum amount of a participant’s loans is determined by the available loan balance restricted to the lesser of $50,000 or 50% of the participant’s vested account balance. All loans are covered by demand notes and are repayable over a period not to exceed five years (except for loans for the purchase of a principal residence) through payroll withholdings unless the participant is paying the loan in full. Interest on the loans is based on the prime rate plus 1%.
Notes receivable from participants are reported at amortized principal balance. After a note receivable is 90 days delinquent, the loan is treated as a deemed distribution and the borrower will receive a 1099-R.
Plan Termination
Although it has not expressed an intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA.
Note 2: Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets and changes in net assets and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
7 |
Wayne Savings 401(k) Retirement Plan |
Valuation of Investments and Income Recognition
Quoted market prices, if available, are used to value investments. Common stocks are valued at closing price reported on the active market on which the individual securities are traded. Mutual funds are valued at the net asset value (NAV) of shares of shares held by the Plan at year end.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net (depreciation) appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
Plan Tax Status
The Plan operates under a standardized adoption agreement in connection with a prototype 401(k) profit-sharing plan and trust. This prototype plan document has been filed with the appropriate agency and has obtained a determination letter from the Internal Revenue Service stating that the prototype constitutes a qualified plan under Section 401 of the Internal Revenue Code and that the related trust was tax exempt. The Plan has been amended since receiving the determination letter. However, the plan Administrator believes that the Plan and related trust are currently designed and operated in compliance with the applicable requirements of the Internal Revenue Code.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
Administrative Expenses
Administrative expenses may be paid by the Company or the Plan, at the Company’s discretion.
8 |
Wayne Savings 401(k) Retirement Plan |
Note 3: Investments
The Plan’s investments are held by a bank-administered trust fund. The Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in fair value as follows:
2011 | ||||||||
Net Depreciation in Fair Value During Year | Fair Value at End of Year | |||||||
Mutual funds | $ | (111,840 | ) | $ | 3,034,180 | |||
Wayne Savings Bancshares, Inc. Common Stock | (61,843 | ) | 370,532 | |||||
$ | (173,683 | ) | $ | 3,404,712 |
2010 | ||||||||
Net Appreciation in Fair Value During Year | Fair Value at End of Year | |||||||
Mutual funds | $ | 305,707 | $ | 2,953,777 | ||||
Wayne Savings Bancshares, Inc. Common Stock | 148,320 | 443,388 | ||||||
$ | 454,027 | $ | 3,397,165 | |||||
9 |
Wayne Savings 401(k) Retirement Plan |
The fair value of individual investments that represented 5% or more of the Plan’s net assets available for benefits were as follows:
2011 | 2010 | |||||||
American Century Growth Fund – Class I | $ | 487,040 | $ | ** | ||||
Wayne Savings Bancshares, Inc. common stock | 370,532 | 443,388 | ||||||
Huntington Conservative Deposit | 306,887 | 285,087 | ||||||
American Century Heritage Fund – Institutional Class | 259,338 | ** | ||||||
Vanguard Small 500 Index Fund-Signal Shares | 232,879 | ** | ||||||
Vanguard Target Retirement 2035 Fund | 200,023 | ** | ||||||
American Century Heritage Fund – Investors Class | ** | 294,816 | ||||||
Dreyfus S&P 500 Index Fund | ** | 227,902 | ||||||
American Century Growth Fund – Class R | ** | 519,554 | ||||||
**Investment represents less than 5% of the plans net assets at specified date
Note 4: Disclosures about Fair Value of Financial Instruments
Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This topic also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 | Quoted prices in active markets for identical assets or liabilities | |
Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities | |
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities |
Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy.
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy and include mutual funds, interest-bearing cash and Wayne Savings Bancshares, Inc. Common Stock. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. In certain cases where Level 1 or Level 2 inputs are not available, investments are classified within Level 3 of the hierarchy. The Plan has no level 2 or 3 investments.
10 |
Wayne Savings 401(k) Retirement Plan |
The following tables present the fair value measurements of assets recognized in the accompanying statements of net assets measured at fair value on a recurring basis and the level within the ASC 820-10 fair value hierarchy in which the fair value measurements fall at December 31, 2011 and 2010:
2011 | Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Money Market Funds and interest-bearing cash | $ | 315,182 | $ | 315,182 | $ | — | $ | — | ||||||||
Fixed Income Mutual Funds | 288,513 | 288,513 | — | — | ||||||||||||
Equity Mutual Funds | 2,430,485 | 2,430,485 | — | — | ||||||||||||
Wayne Savings Bancshares, Inc. Common Stock | 370,532 | 370,532 | — | — | ||||||||||||
$ | 3,404,712 | $ | 3,404,712 | $ | — | $ | — |
2010 | Fair Value Measurements Using | |||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Money Market Funds and interest-bearing cash | $ | 291,472 | $ | 291,472 | $ | — | $ | — | ||||||||
Fixed Income Mutual Funds | 344,225 | 344,225 | — | — | ||||||||||||
Equity Mutual Funds | 2,318,080 | 2,318,080 | — | — | ||||||||||||
Wayne Savings Bancshares, Inc. Common Stock | 443,388 | 443,388 | — | — | ||||||||||||
$ | 3,397,165 | $ | 3,397,165 | $ | — | $ | — |
11 |
Wayne Savings 401(k) Retirement Plan |
Note 5: Party-in-Interest Transactions
Party-in-interest transactions include those with fiduciaries or employees of the Plan, any person who provides services to the Plan, an employer whose employees are covered by the Plan, an employee organization whose members are covered by the Plan, a person who owns 50 percent or more of such an employer or employee association, or relatives of such persons.
The Plan invests in certain funds of the Plan trustee and common stock of the Plan Sponsor. The Plan paid $6,164 and $3,781 of recordkeeping fees to Huntington National Bank during 2011 and 2010. The Company provides certain administrative services at no cost to the Plan.
Note 6: Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the participants’ account balances and the amounts reported in the statements of net assets available for benefits.
Note 7: Economic Conditions
The current protracted economic decline continues to present retirement plans with difficult circumstances and challenges, which in some cases have resulted in large and unanticipated declines in the fair value of investments. The financial statements have been prepared using values and information currently available to the Plan.
Given the volatility of current economic conditions, the values of assets recorded in the financial statements could change rapidly, resulting in material future adjustments in investment values that could negatively impact the Plan.
12 |
Supplemental Schedule
13 |
Wayne Savings 401(k) Retirement Plan
Form 5500 E.I.N. 34-0606020 Plan No. 003
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2011
* Party in interest
Identity of Issuer (a)(b) | Description of Investment (c) | Current Value (e) | ||||||
Mutual funds | ||||||||
*Huntington Dividend Capture Fund IV | 4,264 shares | $ | 37,996 | |||||
*Huntington Situs Fund IV | 5,782 shares | 112,920 | ||||||
Fidelity Advisor Short Fixed Income Fund - Class T | 8 shares | 74 | ||||||
Pimco Low Duration Fund-Institutional Class | 8,437 shares | 86,816 | ||||||
Pimco Total Return Fund-Institutional Class | 10,085 shares | 109,626 | ||||||
Pimco Total Return Fund-Administrative Class | 40 shares | 433 | ||||||
Ridgeworth High Income Fund – Class I | 13,937 shares | 91,564 | ||||||
American Balanced Fund - Class R-5 | 6,088 shares | 110,915 | ||||||
American Century Growth Fund - Class I | 19,663 shares | 487,040 | ||||||
American Century Heritage Fund-Institutional Class | 12,915 shares | 259,338 | ||||||
American Capital World Growth and Income Fund – Class R5 | 3,609 shares | 115,907 | ||||||
American Fundamental Investors | 4,597 shares | 162,749 | ||||||
Prudential Jennison Mid Cap Growth Fund – Class Z | 374 shares | 10,760 | ||||||
Ridgeworth Large Cap Value Equity Fund – Class I | 3,918 shares | 48,746 | ||||||
Vanguard Target Retirement Income Fund | 1 share | 15 | ||||||
Vanguard Small-Cap Index Fund-Signal Shares | 1,329 shares | 39,964 | ||||||
Vanguard Small 500 Index Fund-Signal Shares | 2,435 shares | 232,879 | ||||||
Vanguard Target Retirement 2005 Fund | 4,016 shares | 48,107 | ||||||
Vanguard Target Retirement 2010 Fund | 188 shares | 4,223 | ||||||
Vanguard Target Retirement 2015 Fund | 11,641 shares | 143,187 | ||||||
Vanguard Target Retirement 2020 Fund | 1,884 shares | 40,860 | ||||||
Vanguard Target Retirement 2025 Fund | 12,023shares | 147,525 | ||||||
Vanguard Target Retirement 2030 Fund | 6,291 shares | 131,608 | ||||||
Vanguard Target Retirement 2035 Fund | 15,989 shares | 200,023 | ||||||
Vanguard Target Retirement 2040 Fund | 852 shares | 17,472 | ||||||
Vanguard Target Retirement 2045 Fund | 2,092 shares | 26,923 | ||||||
Vanguard Target Retirement 2050 Fund | 2,497 shares | 50,956 | ||||||
Vanguard Target Retirement 2055 Fund | 17 shares | 372 | ||||||
Common stocks | ||||||||
*Wayne Savings Bancshares, Inc | 47,749 shares | 370,532 | ||||||
Money market funds | ||||||||
*Huntington Conservative Deposit Account | 306,887 shares | 306,887 | ||||||
*Huntington Money Market Fund IV | 8,295 shares | 8,295 | ||||||
315,182 | ||||||||
*Participant loans | 4.25% to 8.25% | 92,782 | ||||||
$ | 3,497,494 |
14 |
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees for the Plan have duly caused this annual report to be signed by the undersigned hereunto duly authorized.
WAYNE SAVINGS 401(k) RETIREMENT PLAN | ||
June 22, 2012 | By: | /s/ H. Stewart Fitz Gibbon III |
H. Stewart Fitz Gibbon III | ||
Plan Administrator |
15 |
INDEX TO EXHIBITS
Number | Description | |
23 | Consent of Independent Registered Public Accounting Firm |