SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 2002
Wayne Savings Bancshares, Inc.
(Exact name of registrant as specified in its charter)
United States 0-23433 31-1557791
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
Registrant's telephone number, including area code: (330) 264-5767
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On May 1, 2002, Wayne Savings Bankshares, MHC (the "MHC"), the mutual
holding company of Wayne Savings Bancshares, Inc. (the "Registrant"), filed with
the Office of Thrift Supervision ("OTS") its second amendment to Form AC in
connection with its conversion to a capital stock corporation. The MHC is a
federally chartered mutual holding company that owns approximately 52.6 % of the
outstanding shares of common stock of the Registrant, which in turn owns 100% of
the issued and outstanding shares of capital stock of Wayne Savings Community
Bank, an Ohio savings and loan association (the "Bank"). As part of the
conversion transaction, a new Delaware corporation, also named Wayne Savings
Bancshares, Inc. (the "Company"), will be formed as the holding company for the
Bank.
The second amendment included an updated independent valuation, dated as
of April 19, 2002, of the estimated pro forma market value of the Company. This
updated valuation ranged from a low of $33.1 million to a high of $44.8 million,
with a mid-point of $39.0 million. This represents an increase of approximately
14% in the Registrant's appraised value since the November 30, 2001 appraisal
contained in the MHC's first amendment. Based on this updated valuation, shares
held by the public stockholders of the Registrant will be exchanged for shares
of the Company at an exchange ratio estimated to be between 1.2901 and 1.7454,
with a mid-point of 1.5177. Both the pro forma market value of the Company and
the exchange ratio are subject to a 15% increase based on market conditions and
other factors.
In connection with the conversion, the Company will conduct an offering
of an estimated 1,742,500 shares (at the minimum) to 2,357,500 shares (at the
maximum), with the mid-point of 2,050,000 shares. The offering, too, is subject
to a 15% increase.
In connection with its review of the MHC's conversion application, the
OTS requested, and the Registrant agreed, to expense certain operating costs in
its financial statements that were previously paid by, reimbursed or allocated
to the MHC. The inclusion of these intercompany operating costs in the
Registrant's consolidated statements of earnings would result in an after-tax
reduction in previously reported net earnings for the nine months ended December
31, 2001 and 2000 and the fiscal years ended March 31, 2001, 2000 and 1999, of
$23,000, $99,000, $99,000, $148,000 (including $122,000 in previously allocated
organization costs) and $11,000, respectively. The $281,000 cumulative downward
effect of these intercompany adjustments on stockholders' equity at December 31,
2001 would be substantially offset by the reversal of $258,000 in dividends
previously paid by the Registrant to the MHC. The reversal of the dividend
payment was also requested by the OTS. The MHC and the Registrant will be merged
coincident with the conversion and, therefore, these intercompany adjustments
will have no effect on the Company's pro forma stockholders' equity.
Additionally, the OTS requested and the Company agreed to reduce the
estimated lives assigned to its office premises. The effect of this adjustment
would result in a $22,000, $22,000 and $30,000 reduction in previously reported
net earnings for the nine months ended December 31, 2001 and 2000, and the
fiscal year ended March 31, 2001, respectively.
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The combined effect of the two expense adjustments described above would
result in a $.02, $.03, $0.5, and $0.6 reduction in the Registrant's diluted
earnings per share for the nine months ended December 31, 2001 and 2000, and the
fiscal years ended March 31, 2001 and 2000, respectively. There would be no
effect of such adjustments on diluted earnings per share for the fiscal year
ended March 31, 1999. The cumulative effect of these adjustments would result in
a $74,000 and $30,000 reduction in stockholders' equity at December 31, 2001 and
March 31, 2001, respectively, from the amounts previously reported in the
Registrant's Form 10-QSB and Form 10-KSB filed for the periods ended on those
respective dates.
The foregoing adjustments were included in the MHC's second amendment
and are currently under review by the OTS staff. Upon completion of the OTS
review of these adjustments, the Registrant intends to restate its consolidated
financials statements contained in reports previously filed pursuant to the
Securities Exchange Act of 1934 by amending such reports.
The conversion and the associated offering are subject to receipt of
regulatory approvals and approval of the conversion plan by members of the MHC
and public stockholders. The independent valuation and the corresponding
exchange ratio, both of which are subject to further update, could change
significantly as a result of regulatory review or as a result of market
conditions and other factors. The MHC anticipates clearance from the OTS to
commence the offering in June 2002.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
WAYNE SAVINGS BANCSHARES, INC.
DATE: May 2, 2002 By: /s/ Charles F. Finn
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Charles F. Finn
President and Chief Executive
Officer
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