Exhibit 99
Exhibit 99
NASDAQ SYMBOL: WAYN
_________________________________________ RELEASE DATE: MAY 5, 2005
WAYNE SAVINGS BANCSHARES, INC. CONTACT PERSON:CHARLES F. FINN
ANNOUNCES STRATEGIC INITIATIVES CHAIRMAN AND CEO
AND RESULTS OF OPERATIONS FOR MICHAEL C. ANDERSON
FISCAL 2005 EVP/CFO
(330) 264-5767
FOR IMMEDIATE RELEASE
WOOSTER, OHIO- Wayne Savings Bancshares, Inc. (NASDAQ: WAYN), the parent of
Wayne Savings Community Bank, today reported its results of operations for the
fiscal year ended March 31, 2005.
Chairman and Chief Executive Officer Charles F. Finn stated, "Fiscal 2005
was a transitional year that provided a solid foundation for continuing Wayne
Savings' mission as the premier independent community bank in our market area.
As previously announced, we have implemented strategic initiatives to broaden
products and services. Specifically, a Chief Lending Officer has been hired to
expand the commercial, mortgage, and consumer loan portfolios, a trust
department staffed by a team of qualified, experienced trust professionals has
been established and licensed, and electronic services are in the process of
being expanded through the introduction of an internet banking program with
online bill pay. In view of these initiatives, we undertook several cost
reduction measures to improve our efficiency ratio."
Finn continued, "First, in recognition of the mandatory accounting rule
change to expense stock options, we accelerated vesting and expensed the related
stock options at a pre-tax cost of $650,000. This will save the Company
approximately $200,000 per annum over the next several years. Further, the
Company accelerated the vesting of previous share grants under the restricted
stock plan at a pre-tax cost of $760,000. The elimination of the restricted
stock plan, coupled with other vesting adjustments in the Company's benefit
plans, will result in approximate annual pre-tax savings of $425,000 over each
of the next four years. Combined, these annual cost savings total $625,000,
which will result in a 11% reduction in pro forma compensation expense for
fiscal 2006. While these transactions reduced fiscal year earnings, they had no
effect on Stockholders' Equity. At March 31, 2005, Stockholders' Equity amounted
to $40.2 million resulting in a capitol-to-assets ratio of 9.96%.
Additionally, because of the growth in our commercial loan portfolio and a
tightening of the loan grading process related to those loans, we added
approximately $360,000 to our loan loss reserve."
Due in part to these actions, the Company reported net earnings of
$381,000, or $.11 per diluted share for fiscal 2005, as compared to net earnings
of $2.7 million, or $.72 per diluted share in fiscal 2004. The effect of these
charges on fourth quarter operations resulted in a net loss of $1.0 million, or
$.27 per basic share, compared to net earnings of $800,000, or $.21 per diluted
share for the comparable quarter in fiscal 2004.
Concluding, Finn stated, "We believe the corporate direction during fiscal
2005 has provided a sound financial underpinning for our strategic initiatives
into commercial lending, trust services, and internet banking. Moreover, we are
pleased with the market response to these expanded product offerings as
evidenced by our asset growth of $34.6 million, or 9.4% to the unprecedented
total of $403.6 million at March 31, 2005. As a result of such growth, which as
continued to date, Wayne Savings Community Bank maintains our market position as
the largest independent community bank headquartered in our five Ohio county
market area of Wayne, Holmes, Ashland, Medina, and Stark counties."
Forward-Looking Statement Disclosure
------------------------------------
This release contains certain forward-looking statements related to the
future performance and condition of Wayne Savings Bancshares, Inc. These
statements, which are subject to numerous risks and uncertainties, are presented
in good faith based on the company's current condition and management's
understanding, expectations, and assumptions regarding its future prospects as
of this release. Actual results could differ materially from those projected or
implied by the statements contained herein. The factors that could affect the
company's future results are set forth in the periodic reports and registration
statement filed by the company with the Securities and Exchange Commission.
WAYNE SAVINGS BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands, except per share data)
March 31, 2005 March 31, 2004
-------------- --------------
(Unaudited)
ASSETS
Cash, cash equivalents, & investment securities $ 102,798 $ 51,469
Mortgage-backed securities, net (1) 60,352 88,428
Loans receivable, net (1) 213,627 205,443
Federal Home Loan Bank stock 4,386 4,205
Office premises & equipment, net 8,922 8,742
Real estate acquired through foreclosure 35 100
Other assets 13,459 10,620
--------- ---------
TOTAL ASSETS $ 403,579 $ 369,007
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 320,586 $ 291,830
Advances from Federal Home Loan Bank 40,000 30,000
Advances by borrowers for taxes & insurance 612 617
Accounts payable on mortgage loans serviced for others 231 118
Other liabilities 1,951 2,881
--------- ---------
TOTAL LIABILITIES 363,380 325,446
Common stock (3,907,318 shares of $.10 par value issued at both
December 31, 2004 and March 31, 2004 respectively) 391 391
Additional paid-in capital 35,133 34,365
Retained earnings 11,371 12,727
Less required contributions for shares acquired by Employee Stock Ownership Plan (1304.00) (1456.00)
Shares acquired by Management Recognition Plan (1142.00)
Less Treasury Stock (4600.00) (1803.00)
Accumulated other comprehensive loss (792) 479
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 40,199 43,561
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 403,579 $ 369,007
========= =========
(1) Includes available for sale classifications.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in Thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
2005 2004 2005 2004
-------- -------- -------- --------
unaudited unaudited
Interest income 4,542 4,630 17,632 18,216
Interest expense 1,771 1,683 6,716 7,147
-------- -------- -------- --------
Net interest income 2,771 2,947 10,916 11,069
Provision for losses on loans 385 110 430 173
-------- -------- -------- --------
Net interest income after provision for loan losses 2,386 2,837 10,486 10,896
Other income 397 454 1,684 1,933
General, administrative, and other expense 4,333 2,173 11,875 8,971
-------- -------- -------- --------
Earnings before federal income taxes (1,550) 1,118 296 3,858
Federal income taxes (577.00) 318 (85) 1,154
-------- -------- -------- --------
Net earnings (973.00) $ 800 $ 381 $ 2,704
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
For the Three Months
ended March 31,
---------------------------
(Unaudited)
2005 2004
---- ----
Quarterly Results
- -----------------
Net Interest Income $ 2,771 $ 2,947
Net Earnings ($973) $ 800
Earnings Per Share:
Basic (.27) 0.21
Diluted (.27) 0.21
Return on Average Assets (Annualized) (.98%) .86%
For the Twelve Months Ended
ended March 31,
---------------------------
(Unaudited)
2005 2004
Year to Date Results
- --------------------
Net Interest Income $ 10,916 $ 11,069
Net Earnings $ 381 $ 2,704
Earnings Per Share:
Basic 0.11 0.72
Diluted 0.11 0.72
Return on Average Assets (Annualized) .10% .73%
March 31, March 31,
2005 2004
------------ ------------
(Unaudited)
End of Period Data
- ------------------
Total Assets $ 403,579 $ 369,007
Stockholders' Equity to Total Assets 9.96% 11.80%