UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 11-K
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2005
OR
[_] 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
Statements 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).....10
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Trustees
Wayne Savings 401(k) Retirement Plan
We have audited the accompanying statements of net assets available for benefits
of Wayne Savings 401(k) Retirement Plan (the Plan) as of December 31, 2005 and
2004, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2005. 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform an audit of internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes 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, as well as 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 Plan as of
December 31, 2005 and 2004, and the changes in net assets available for benefits
for the year ended December 31, 2005, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for purposes of additional analysis and 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. This supplemental schedule has been subjected to the auditing procedures
applied in the audit 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/GRANT THORNTON LLP
Cincinnati, Ohio
June 9, 2006
3
Wayne Savings 401(k) Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2005 and 2004
ASSETS 2005 2004
Investments at fair value (Note C) $1,993,127 $1,299,483
Participant loans 7,521 6,722
Cash -- --
---------- ----------
2,000,648 1,306,205
Receivables:
Employer contributions -- --
Accrued income 389 4,335
---------- ----------
Net assets available for benefits $2,001,037 $1,310,540
========== ==========
The accompanying notes are an integral part of these statements.
4
Wayne Savings 401(k) Retirement Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 2005
Additions to net assets attributed to:
Participant contributions $ 585,747
Employer contributions 150,325
Interest and dividends on investments 57,674
Net depreciation on investment securities (Note C) (20,192)
Realized loss on sale of securities (2,056)
-----------
Total additions 771,498
Deductions from net assets attributed to:
Benefits paid to participants 66,688
Administrative fees 14,313
-----------
Total deductions 81,001
Increase in net assets available for benefits 690,497
Net assets available for benefits:
Beginning of year 1,310,540
-----------
End of year $ 2,001,037
===========
The accompanying notes are an integral part of these statements.
5
Wayne Savings 401(k) Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE A - DESCRIPTION OF PLAN
The following description of the Wayne Savings 401(k) Retirement Plan
("Plan") provides only general information. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
1. General
-------
The Plan is a defined contribution plan covering all employees of Wayne
Savings Community Bank (the "Company") who have one year of service with a
minimum of 1,000 hours worked and have attained age 21. It was established
for the purpose of providing retirement and profit sharing benefits to all
eligible employees of the Company. Effective January 1, 2004, the Plan was
amended to a "safe harbor" plan with the Plan transferring recordkeeping and
trustee responsibilities to the Huntington National Bank. It is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
2. Contributions
-------------
Each year, participants may contribute up to 50% of pretax annual
compensation, as defined in the Plan, subject to an overall $14,000
limitation in 2005. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans. Participants direct the investment of their contributions into
various investment options offered by the Plan. The Plan currently offers
mutual funds, common/collective trust funds and stock of Wayne Savings
Bancshares, Inc. as investment options for participants. The 401(k) matching
Company contribution is invested as directed by the participants. Additional
profit sharing amounts may be contributed at the option of the Company's
management and are invested in a portfolio of investments as directed by the
participants. Contributions are subject to certain limitations.
The Company contributes on behalf of the participants a matching
contribution of 100% of the first 4% of base compensation that a participant
contributes to the Plan and 50% of the next 2%, thereby providing for a
match of 5% on the first 6% of an employee's contribution.
3. Participant Accounts
--------------------
Each participant's account is credited with the participant's contribution
and allocations of (a) the Company's contribution, (b) Plan earnings and (c)
nonvested forfeitures. Allocations are based on each participant's account
at the end of the year. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
4. Payment of Benefits
-------------------
Upon termination of service due to death, disability or retirement, a
participant may elect to receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account. Any nonvested amounts
are forfeited to the Plan and used to offset any future employer matching
contributions.
6
Wayne Savings 401(k) Retirement Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005 and 2004
NOTE A - DESCRIPTION OF PLAN (continued)
5. Vesting
-------
Participants are immediately vested in their own contributions and the
Company's contributions plus actual earnings thereon.
6. Participant Loans
-----------------
Participants may borrow up to 50% of their 401(k) contributions. The minimum
loan amount is $1,000 and the maximum loan amount is $50,000. Participants
may have only two outstanding loans at anytime. The interest rate is the
prime rate plus 1% and is determined when the participant applies for the
loan. Principal and interest are repaid directly to the participants account
through payroll deduction.
7. Forfeitures
-----------
For the year ended December 31, 2005, there were $4,711 in unallocated
forfeitures arising from prior vesting schedules. Forfeitures may be used by
the Plan to reduce future employer matching contributions.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
1. Basis of Accounting
-------------------
The financial statements of the Plan are prepared under the accrual method
of accounting.
2. 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 available for plan benefits as of the date of the
financial statement and the reported amounts of changes in net assets
available for plan benefits during the reporting period. Actual results
could differ from those estimates.
3. Investment Valuation and Income Recognition
-------------------------------------------
The Plan's investments are stated at fair value based on quoted market
prices. Shares of mutual funds are valued at the net asset value of shares
held by the Plan at year-end. Participant loans are valued at their
outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on the settlement date.
4. Payment of Benefits
-------------------
Benefits are recorded when paid.
7
Wayne Savings 401(k) Retirement Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005 and 2004
NOTE C - INVESTMENTS
The following represents categories of investments that represent either
investments with parties-in-interest or investments that constitute 5
percent or more of the Plan's net assets at December 31:
2005 2004
Wayne Unitized Stock Fund * $654,801 $575,888
Huntington Funds - Equity Dividend Reinvestment Fund * 44,501 21,048
Huntington Funds - Fixed Dividend Reinvestment Fund * 24,300 19,696
Federated Capital Preservation Fund - Institutional Shares 105,257 --
T. Rowe Price High Yield - Advisor 103,557 --
American Balanced Fund - Class R-4 96,244 --
Columbia Small Cap Fund - Class A 42,646 --
Managers Special Equity Fund 18,849 --
Dreyfus S&P 500 Index Fund 244,004 148,705
Federated Capital Appreciation Fund - Class A 143,512 102,402
Fidelity Advisor Equity Growth Fund - Class T 313,980 205,182
Fidelity Advisor Mid-Cap - Class T 115,910 --
Franklin Templeton Growth Fund 70,481 --
* Denotes a party-in-interest
During 2005, the Plan's investments depreciated in value by $20,191.
NOTE D - PARTY-IN-INTEREST TRANSACTIONS
Participants may invest in stock of Wayne Savings Bancshares, Inc., the Plan
sponsor, and mutual funds of The Huntington National Bank. These
transactions qualify as party-in-interest transactions.
NOTE E - PLAN TERMINATION
Although it has not expressed any intent 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. In the event of Plan
termination, participants will become 100% vested in their employer
contributions.
NOTE F - TAX STATUS
The Internal Revenue Service has determined and informed the Company by an
opinion letter dated November 19, 2001, that the prototype plan and related
trust are designed in accordance with applicable sections of the Internal
Revenue Code (IRC). Although the prototype plan has been amended since
receiving the opinion letter, the Plan administrator believes the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
8
Wayne Savings 401(k) Retirement Plan
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005 and 2004
NOTE G - 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 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 participants' account balances and the amounts reported in
the statement of net assets available for benefits.
9
Wayne Savings 401(k) Retirement Plan
Form 5500 E.I.N. 34-0606020 Plan No. 003
Line 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2005
(a) (b) (c) (d)
Description of investment
including maturity date, rate
Identity of issue, borrower, of interest, collateral, par Current
lessor or similar party or maturity value value
* Stock Shares
------
Wayne Savings Bancshares, Inc. 43,079 $ 654,801
Mutual Funds
* Huntington Money Market Fund IV 15,474 15,474
* Huntington Dividend Capture Fund IV 3,988 43,312
* Huntington Income Equity Fund IV 38 1,189
* Huntington Short & Intermediate Fixed Income
Fund IV 1,269 24,300
Federated Capital Preservation Fund - Institutional Shares 10,526 105,257
T. Rowe Price High Yield - Advisor 15,008 103,557
American Balanced Fund - Class R-4 5,407 96,244
Columbia Small Cap Fund - Class A 2,331 42,646
Dreyfus S&P 500 Index Fund 6,713 244,004
Federated Capital Appreciation Fund - Class A 5,722 143,512
Fidelity Advisor Equity Growth Fund - Class T 6,530 313,980
Fidelity Advisor Mid-Cap Fund - Class T 4,776 115,910
Managers Special Equity Fund 217 18,849
Franklin Templeton Growth Fund 3,056 70,481
----------
Total Mutual Funds 1,338,715
* Participant Loans At an interest rate of 5.25% 7,521
----------
Total Investments $2,001,037
==========
* Denotes a party-in-interest
10
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 28, 2006 By: /s/H. Stewart Fitz Gibbon III
------------------------------------
H. Stewart Fitz Gibbon III
Trustee
INDEX TO EXHIBITS
Number Description
---------------- ---------------------------------------------------------
23 Consent of Independent Registered Public Accounting Firm