EX-99 2 ex99.txt 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%