10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q/A

(Amendment No 1)

(Mark One)                                                                                                                           

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

[   ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _______________

Commission File No. 0-23433

WAYNE SAVINGS BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Delaware	31-1557791
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
151 North Market Street
Wooster, Ohio	44691
(Address of principal	(Zip Code)
executive office)

Registrant’s telephone number, including area code: (330) 264-5767

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  ý Yes  o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer o    Accelerated filer o    Non-accelerated filer  o    Smaller reporting company   ý  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.).

Yes o   No   ý  

As of August 5, 2011, the latest practicable date, 3,004,113 shares of the registrant’s common stock, $.10 par value, were issued and outstanding.

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to Wayne Savings Bancshares, Inc.’s Quarterly Report on Form 10-Q (the “Form 10-Q”) for the period ended June 30, 2011, originally filed with the Securities and Exchange Commission on August 8, 2011, is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

ITEM 6.       Exhibits

EX-31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350*
EX-31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350*
EX-32	Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350*
101	The following material from Wayne Savings Bancshares, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statement of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Comprehensive Income, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text. **

______________

*           Previously filed

**            Furnished, not filed, herewith

SIGNATURES

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 thereunto duly authorized.

Date:	August 25, 2011	By:	/s/Rod C. Steiger
			Rod C. Steiger
			President and Chief Executive Officer
Date:	August 25, 2011	By:	/s/Myron Swartzentruber
			Myron Swartzentruber
			Senior Vice President and
			Chief Financial Officer

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Mar. 31, 2011
ASSETS
Loans receivable, allowance for loan losses	$ 3,221	$ 3,203
Stockholders' Equity
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized (in shares)	500,000	500,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	9,000,000	9,000,000
Common stock, share issued (in shares)	3,978,731	3,978,731
Treasury stock, shares (in shares)	974,618	974,618

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data	3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Interest and Dividend Income
Loans	$ 3,137	$ 3,434
Securities	1,177	1,216
Dividends on Federal Home Loan Bank stock and other	58	57
Total interest and dividend income	4,372	4,707
Interest Expense
Deposits	792	1,012
Other short-term borrowings	5	7
Federal Home Loan Bank advances	293	416
Total interest expense	1,090	1,435
Net Interest Income	3,282	3,272
Provision for Loan Losses	70	190
Net Interest Income After Provision for Loan Losses	3,212	3,082
Noninterest Income
Gain on loan sales	18	67
Gain on sale of foreclosed assets held for sale	0	14
Trust income	72	48
Earnings on bank-owned life insurance	57	58
Service fees, charges and other operating	294	305
Total noninterest income	441	492
Noninterest Expense
Salaries and employee benefits	1,569	1,524
Net occupancy and equipment expense	452	452
Federal deposit insurance premiums	85	122
Franchise taxes	94	87
Provision for impairment on foreclosed assets held for sale	287	46
Amortization of intangible assets	23	23
Other	492	487
Total noninterest expense	3,002	2,741
Income Before Federal Income Taxes	651	833
Provision for Federal Income Taxes	136	190
Net Income	$ 515	$ 643
Basic Earnings Per Share (in dollars per share)	$ 0.18	$ 0.22
Diluted Earnings Per Share (in dollars per share)	$ 0.18	$ 0.22
Dividends Per Share (in dollars per share)	$ 0.06	$ 0.06

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Document And Entity Information (USD $) In Millions, except Share data	3 Months Ended
	Jun. 30, 2011	Aug. 05, 2011	Mar. 31, 2011
Entity Registrant Name	WAYNE SAVINGS BANCSHARES INC /DE/
Entity Central Index Key	0001036030
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 20
Entity Common Stock, Shares Outstanding		3,004,113
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011

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Regulatory Matters

3 Months Ended

Jun. 30, 2011

Regulatory Matters [Abstract]

Regulatory Matters

Note 5: Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory–and possibly additional discretionary–actions by regulators that, if undertaken, could have a direct material effect on the Company's and the Bank's financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

As of June 30, 2011, the Bank had approval from the OTS for the payment of an amount sufficient to cover the quarterly dividend declared and payable as of that date.  With the dissolution of the OTS on July 21, 2011, the Bank believes that further notices or applications for dividends are not required to be made but that it is subject to existing regulatory guidance where, in general, a dividend is permissible without regulatory approval if the institution is considered to be “well capitalized” and the dividend does not exceed current year to date net income plus the change in retained earnings for the previous two calendar years.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of risk-based capital (as defined in the regulations) to risk-weighted assets (as defined), and of tangible and core capital (as defined) to adjusted total assets (as defined).  As of June 30, 2011, the Bank met all capital adequacy requirements to which it was subject.

As of June 30, 2011, based on the computations for the OTS Thrift Financial Report (TFR) the Bank is classified as well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well-capitalized, the Bank must maintain capital ratios as set forth in the table below.  There are no conditions or events since June 30, 2011 that management believes have changed the Bank's category.

The Bank's actual capital amounts and ratios as of June 30, 2011 and March 31, 2011 are presented in the following table.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of June 30, 2011
Tangible capital	$	34,464		8.5	%	$	6,097		1.5	%	$	20,323		5.0	%
Core capital		34,464		8.5			16,258		4.0			24,387		6.0
Risk-based capital		36,275		15.4			18,845		8.0			23,556		10.0
As of March 31, 2011
Tangible capital	$	34,051		8.4	%	$	6,053		1.5	%	$	20,176		5.0	%
Core capital		34,051		8.4			16,141		4.0			24,212		6.0
Risk-based capital		35,888		15.1			19,023		8.0			23,779		10.0

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Basis of Presentation

3 Months Ended

Jun. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

Note 1: Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of June 30, 2011 and for the three months ended June 30, 2011 and 2010, were prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America.  Accordingly, these condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Wayne Savings Bancshares, Inc. (the “Company”) included in the Annual Report on Form 10-K for the year ended March 31, 2011.  Reference is made to the accounting policies of the Company described in the Notes to the Consolidated Financial Statements contained in its Annual Report on Form 10-K.

In the opinion of management, all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the unaudited financial statements have been included.  The results of operations for the three months ended June 30, 2011, are not necessarily indicative of the results which may be expected for the entire fiscal year.  The condensed consolidated balance sheet of the Company as of March 31, 2011, has been derived from the consolidated balance sheet of the Company as of that date.

Critical Accounting Policies – The Company's critical accounting policies relate to the allowance for loan losses and goodwill.  The Company has established a systematic method of periodically reviewing the credit quality of the loan portfolio in order to establish a sufficient allowance for loan losses.  The allowance for loan losses is based on management's current judgments about the credit quality of individual loans and segments of the loan portfolio.  The allowance for loan losses is established through a provision, and considers all known internal and external factors that affect loan collectibility as of the reporting date.  Such evaluation, which includes a review of all loans on which full collectibility may not be reasonably assured, considers among other matters, the estimated net realizable value or the fair value of the underlying collateral, economic conditions, historical loan loss experience, management's knowledge of inherent risks in the portfolio that are probable and reasonably estimable and other factors that warrant recognition in providing an appropriate loan loss allowance.  Management has discussed the development and selection of this critical accounting policy with the audit committee of the Board of Directors.  The Company recorded all assets and liabilities acquired in prior purchase acquisitions, including goodwill and other intangibles, at fair value as required.  Goodwill is subject, at a minimum, to annual tests for impairment.  Other intangible assets are amortized over their estimated useful lives using the straight-line method, and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount.  The initial goodwill and other intangibles recorded and subsequent impairment analysis requires management to make subjective judgments concerning estimates of how the acquired asset will perform in the future.  Events and factors that may significantly affect the estimates include, among others, customer attrition, changes in revenue growth trends, specific industry conditions and changes in competition.

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 assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

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Securities

3 Months Ended

Jun. 30, 2011

Securities [Abstract]

Securities

Note 7: Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
June 30, 2011:
U.S. government agencies	$	1,818	$	82	$	1	$	1,899
Mortgage-backed securities of government sponsored entities		104,174		3,216		15		107,375
Private-label collateralized mortgage obligations		2,122		67		-		2,189
State and political subdivisions		23,600		675		86		24,189
Totals	$	131,714	$	4,040	$	102	$	135,652
March 31, 2011:
U.S. government agencies	$	1,938	$	71	$	1	$	2,008
Mortgage-backed securities of government sponsored entities		99,779		2,597		118		102,258
Private-label collateralized mortgage obligations		2,282		56		-		2,338
State and political subdivisions		25,330		350		328		25,352
Totals	$	129,329	$	3,074	$	447	$	131,956

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
June 30, 2011:
U.S. government agencies	$	150	$	––	$	1	$	149
Mortgage-backed securities of government sponsored entities		409		15		––		424
State and political subdivisions		14		1		––		15
	$	573	$	16	$	1	$	588
March 31, 2011:
U.S. government agencies	$	153	$	––	$	1	$	152
Mortgage-backed securities of government sponsored entities		417		12		––		429
State and political subdivisions		21		1		––		22
	$	591	$	13	$	1	$	603

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Amortized cost and fair value of available-for-sale securities and held-to-maturity securities at June 30, 2011 by contractual maturity, are shown below.  Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	764	$	791	$	14	$	15
One to five years		2,125		2,192		-		-
Five to ten years		7,479		7,775		––		––
After ten years		15,050		15,330		150		149
		25,418		26,088		164		164
Mortgage-backed securities of government sponsored entities		104,174		107,375		409		424
Private-label collateralized mortgage obligations		2,122		2,189		-		-
Totals	$	131,714	$	135,652	$	573	$	588

The carrying value of securities pledged as collateral to secure public deposits and for other purposes was $52.8 million and $55.7 million at June 30, 2011 and March 31, 2011, respectively.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost.  The total fair value of these investments at June 30, 2011 and March 31, 2011, was $9.2 million and $28.6 million, which represented approximately 7% and 22%, respectively, of the Company's aggregate available-for-sale and held-to-maturity investment portfolio.  These declines resulted primarily from changes in market interest rates.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these government agency, mortgage-backed and state and political subdivision securities are temporary at June 30, 2011.

Should the impairment of any of these government agency, mortgage-backed and state and political subdivision securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.  The following table shows the Company's investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2011
	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(In thousands)
U.S. government agencies	$	-	$	-	$	324	$	2	$	324	$	2
Mortgage-backed securities of government sponsored entities		3,716		15		-		-		3,716		15
State and political subdivisions		4,426		64		762		22		5,188		86
Total temporarily impaired securities	$	8,142	$	79	$	1,086	$	24	$	9,228	$	103

March 31, 2011
	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(In thousands)
U.S. government agencies	$	-	$	-	$	329	$	2	$	329	$	2
Mortgage-backed securities of government sponsored entities		17,150		118		-		-		17,150		118
State and political subdivisions		10,403		304		761		24		11,164		328
Total temporarily impaired securities	$	27,553	$	422	$	1,090	$	26	$	28,643	$	448

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Fair Value Measurements

3 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 8: Fair Value Measurements

The Company accounts for fair value measurements in accordance with FASB ASC 820-10.  FASB ASC 820-10 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

FASB ASC 820-10 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.  FASB ASC 820-10 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 assets measured at fair value on a recurring basis and recognized in the Company's balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.  If quoted market prices are not available, then fair values are estimated by using pricing models that contain market pricing and information, quoted prices of securities with similar characteristics or discounted cash flows that use credit adjusted discount rates.  Level 2 securities include U.S. Government agencies, mortgage-backed securities, certain collateralized mortgage obligations and certain municipal securities.  In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include other less liquid securities.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents the fair value measurements of assets measured at fair value on a recurring basis and the level within the FASB ASC 820-10 fair value hierarchy in which the fair value measurements fall at June 30, 2011 and March 31, 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)
	(In thousands)
June 30, 2011
U.S. government agencies	$	1,899	$	––	$	1,899	$	––
Mortgage-backed securities of government sponsored entities		107,375		––		107,375		––
Private-label collateralized mortgage obligations		2,189		-		2,189		-
State and political subdivisions		24,189		––		24,189		––
March 31, 2011
U.S. government agencies	$	2,008	$	––	$	2,008	$	––
Mortgage-backed securities of government sponsored entities		102,258		––		102,258		––
Private-label collateralized mortgage obligations		2,338		-		2,338		-
State and political subdivisions		25,352		––		25,352		––

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the Company's balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Impaired Loans (Collateral Dependent)

Impaired loans consisted primarily of loans secured by nonresidential real estate and secured commercial loans.  Management has determined fair value measurements on impaired loans primarily through evaluation of appraisals performed.

Foreclosed Assets Held for Sale

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value (based on current appraised value) at the date of foreclosure, establishing a new cost basis.  Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell.  Management has determined fair value measurements on other real estate owned primarily through evaluations of appraisals performed, and current and past offers for the other real estate under evaluation.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the FASB ASC 820-10 fair value hierarchy in which the fair value measurements fall at June 30, 2011 and March 31, 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)
	(In thousands)
June 30, 2011
Impaired loans	$	1,166	$	––	$	––	$	1,166
Foreclosed assets		1,832		––		––		1,832
March 31, 2011
Impaired loans	$	4,766	$	––	$	––	$	4,766
Foreclosed assets		1,710		––		––		1,710

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents estimated fair values of the Company's financial instruments.  The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties.  Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.  Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

	June 30, 2011				March 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	13,721	$	13,721	$	8,271	$	8,271
Available-for-sale securities		135,652		135,652		131,956		131,956
Held-to-maturity securities		573		588		591		603
Loans, net of allowance for loan losses		235,126		240,350		239,993		244,500
Federal Home Loan Bank stock		5,025		5,025		5,025		5,025
Interest receivable		1,369		1,369		1,647		1,647
Financial liabilities
Deposits		327,813		323,751		320,072		313,888
Other short-term borrowings		5,959		5,959		6,373		6,373
Federal Home Loan Bank advances		35,037		36,057		39,507		40,215
Advances from borrowers for taxes and insurance		112		112		559		559
Interest payable		111		111		123		123

The following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and Cash Equivalents, Interest Receivable and Federal Home Loan Bank Stock

The carrying amount approximates fair value.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.  Loans with similar characteristics were aggregated for purposes of the calculations.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

Held-to-maturity securities

The fair value of held-to-maturity securities was estimated by using pricing models that contain market pricing and information, quoted prices of securities with similar characteristics or discounted cash flows that use credit adjusted discount rates.

Deposits

Deposits include savings accounts, checking accounts and certain money market deposits.  The carrying amount approximates fair value.  The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Interest Payable, Other Short-Term Borrowings and Advances From Borrowers for Taxes and Insurance

The carrying amount approximates fair value.

Federal Home Loan Bank Advances

Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

Commitments to Originate Loans, Letters of Credit and Lines of Credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties.  For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.  The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.  Fair values of commitments were not material at June 30, 2011 and March 31, 2011.

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Recent Accounting Developments

3 Months Ended

Jun. 30, 2011

Recent Accounting Developments [Abstract]

Recent Accounting Developments

Note 6: Recent Accounting Developments

FASB Accounting Standards Update (ASU) 2010-28 “Intangibles – Goodwill and Other” (Topic 350), issued in December 2010, concerns when to perform step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.  The guidance clarifies the circumstances under which step 2 of the goodwill impairment test must be performed.  The guidance is effective for fiscal years beginning after December 15, 2010 (April 1, 2011 for the Company), and for interim periods within those fiscal years.  The adoption of FASB ASC 2010-28 did not have a material effect on the Company's financial condition or results of operations.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

FASB Accounting Standards Update (ASU) 2011-02 “Receivables:  A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring” (Topic 310), issued on April 5, 2011, concerns the clarification of the accounting principles applied to loan modification and addresses the recording of an impairment loss.  The guidance is effective for fiscal quarters and years beginning after June 15, 2011 (July 1, 2011 for the Company).  Early adoption is permitted.  The adoption of FASB ASU 2011-02 is not expected to have a material effect on the Company's financial condition or results of operations.

FASB Accounting Standards Update (ASU) 2011-03 “Reconsideration of Effective Control for Repurchase Agreements” (Topic 860), issued on April 29, 2011, concerns the improvement of accounting for repurchase agreements (repos) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity by amending the criteria for determining effective control of collateral.  The guidance is effective for fiscal quarters and years beginning on or after December 15, 2011 (January 1, 2012 for the Company).  Early adoption is not permitted.  The adoption of FASB ASU 2011-03 is not expected to have a material effect on the Company's financial condition or results of operations.

FASB Accounting Standards Update (ASU) 2011-04 “Fair Value Measurement” (Topic 820), issued on May 12, 2011, concerns the establishment of a global standard for applying fair value measurement and clarifies three points in topic 820.  First, only non-financial assets should be valued via a determination of their best use.  Second, an instrument in shareholder's equity should be measured from the perspective of an investor or trader who owns that instrument.  Third, data will need to be provided and methods disclosed for assets valued in level 3 of the fair value hierarchy. The guidance is effective for fiscal quarters and years beginning on or after December 15, 2011 (January 1, 2012 for the Company).  Early adoption is not permitted.  The adoption of FASB ASU 2011-04 is not expected to have a material effect on the Company's financial condition or results of operations.

FASB Accounting Standards Update (ASU) 2011-05 “Comprehensive Income” (Topic 220), issued on June 16, 2011, concerns the presentation of comprehensive income in financial statements.  An entity has the option to present the total comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  The guidance is effective for fiscal quarters and years beginning on or after December 15, 2011 (January 1, 2012 for the Company).  Early adoption is permitted.  The adoption of FASB ASU 2011-05 is not expected to have a material effect on the Company's financial condition or results of operations.

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands	3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Other comprehensive income:
Unrealized holding gains on securities, taxes	$ 445	$ 256

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Principles of Consolidation

3 Months Ended

Jun. 30, 2011

Principles of Consolidation [Abstract]

Principles of Consolidation

Note 2: Principles of Consolidation

The accompanying condensed consolidated financial statements include Wayne Savings Bancshares, Inc. and the Company's wholly-owned subsidiary, Wayne Savings Community Bank (“Wayne Savings” or the “Bank”).

Wayne Savings has eleven full-service offices in Wayne, Holmes, Ashland, Medina and Stark counties.  All significant intercompany transactions and balances have been eliminated in the consolidation.

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Earnings Per Share

3 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

Note 3: Earnings Per Share

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the Company's Employee Stock Ownership Plan (“ESOP”) that are unallocated and not committed to be released.  Diluted earnings per common share include the dilutive effect of all additional potential common shares issuable under the Company's stock option plan.  The computations are as follows:

	For the three months ended June 30,
	2011		2010
Weighted-average common shares outstanding (basic)		2,930,075		2,921,174
Dilutive effect of assumed exercise of stock options		––		––
Weighted-average common shares outstanding (diluted)		2,930,075		2,921,174

None of the outstanding options were included in the diluted earnings per share calculation for the three months ended June 30, 2011 and 2010, as the average fair value of the shares was less than the option exercise prices.

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Stock Option Plan

3 Months Ended

Jun. 30, 2011

Stock Option Plan [Abstract]

Stock Option Plan

Note 4: Stock Option Plan

In fiscal 2004, the Company adopted a Stock Option Plan that provided for the issuance of 142,857 incentive options and 61,224 non-incentive options with respect to authorized common stock.  As of June 30, 2011, all options under the 2004 Plan have been granted and (excluding forfeited options), are subject to exercise at the discretion of the grantees, and will expire in fiscal 2014 unless otherwise exercised or forfeited.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The Company accounts for the stock option plan in accordance with the provisions of FASB ASC 718-10.  FASB ASC 718-10 requires the recognition of compensation expense related to stock option awards based on the fair value of the option award at the grant date.  Compensation cost is then recognized over the vesting period.  There were no options granted during the three months ended June 30, 2011 and 2010.  There was no compensation expense recognized for the stock option plan during the three months ended June 30, 2011 and 2010, as all options were fully vested prior to these periods.

A summary of the status of the Company's stock option plan as of and for the three months ended June 30, 2011, and for the years ended March 31, 2011 and 2010, is presented below:

	Three months ended June 30,					Year ended  March 31,
	2011					2011					2010
	Shares			Weighted Average exercise price		Shares			Weighted Average exercise price		Shares		Weighted Average exercise price
Outstanding at beginning of period		83,816		$	13.95		94,020		$	13.95		94,020	$	13.95
Granted		––			––		––			––		––		––
Exercised		––			––		––			––		––		––
Forfeited		(20,408	)		13,.95		(10,204	)		13.95		-		-
Outstanding at end of period		63,408		$	13.95		83,816		$	13.95		94,020	$	13.95
Options exercisable at period-end		63,408		$	13.95		83,816		$	13.95		94,020	$	13.95

The following information applies to options outstanding at June 30, 2011:

Number outstanding	63,408
Exercise price on all remaining options outstanding	$13.95
Weighted-average remaining contractual life	2.75 years

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands	3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net Income	$ 515	$ 643
Other comprehensive income:
Unrealized holding gains on securities, net of related taxes of $445 and $256 during the respective periods	864	497
Comprehensive income	1,379	1,140
Accumulated other comprehensive income	$ 2,169	$ 2,087

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating Activities
Net income	$ 515	$ 643
Items not requiring (providing) cash
Depreciation and amortization	130	138
Provision for loan losses	70	190
Amortization of premiums and discounts on securities - net	278	178
Amortization of mortgage servicing rights	7	5
Amortization of deferred loan origination fees	(18)	(16)
Amortization of intangible assets	23	23
Increase in value of bank owned life insurance	(61)	(61)
Amortization expense of stock benefit plan	18	23
Provision for impairment on foreclosed assets held for sale	287	46
Gain on sale of foreclosed assets held for sale	0	(14)
Net gain on sale of loans	(18)	(67)
Proceeds from sale of loans in secondary market	513	1,703
Origination of loans for sale in the secondary market	(495)	(1,636)
Deferred income taxes	(23)	(49)
Changes in
Accrued interest receivable	278	225
Other assets	164	199
Prepaid federal deposit insurance premiums	77	114
Interest payable and other liabilities	(87)	(132)
Net cash provided by operating activities	1,658	1,512
Investing Activities
Purchase of available-for-sale securities	(11,663)	(17,594)
Proceeds from maturities of available-for-sale securities	9,000	10,402
Proceeds from maturities of held-to-maturity securities	16	46
Net change in loans	4,410	2,981
Purchase of premises and equipment	(303)	(53)
Proceeds from the sale of foreclosed assets	98	633
Net cash provided by (used in) investing activities	1,558	(3,585)
Financing Activities
Net change in deposits	7,741	1,885
Net change in other short-term borrowings	(414)	908
Proceeds from Federal Home Loan Bank advances	0	4,500
Repayments of Federal Home Loan Bank advances	(4,470)	(6,500)
Advances by borrowers for taxes and insurance	(447)	(419)
Cash dividends paid	(176)	(175)
Net cash provided by financing activities	2,234	199
Increase (Decrease) in Cash and Cash Equivalents	5,450	(1,874)
Cash and Cash equivalents, Beginning of period	8,271	9,875
Cash and Cash equivalents, End of period	13,721	8,001
Cash Paid For:
Interest on deposits and borrowings	1,102	1,469
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale	341	169
Unrealized gains on securities designated as available-for-sale, net of related tax effects	864	497
Dividends payable	$ 180	$ 180

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Credit Quality of Loans and the Allowance for Loan Losses

3 Months Ended

Jun. 30, 2011

Credit Quality of Loans and the Allowance for Loan Losses [Abstract]

Credit Quality of Loans and the Allowance for Loan Losses

Note 9: Credit Quality of Loans and the Allowance for Loan Losses

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2011 and March 31, 2011:

June 30, 2011	One-to-four family residential			All other mortgage loans			Commercial business loans		Consumer  loans		Unallocated		Total
	(In thousands)
Allowance for loan losses:
Balance, beginning of year	$	1,073		$	1,967		$	158	$	5	$	-	$	3,203
Provision charged to expense		55			(127	)		137		5		-		70
Losses charged off		(53	)		-			-		-		-		(53	)
Recoveries		1			-			-		-		-		1
Balance, end of year	$	1,076		$	1,840		$	295	$	10	$		$	3,221
Ending balance:  individually evaluated for impairment	$	134		$	1,114		$	162	$	-	$	-	$	1,410
Ending balance:  collectively evaluated for impairment	$	942		$	726		$	133	$	10	$	-	$	1,811
Loans:
Ending balance	$	157,952		$	68,947		$	9,659	$	2,456			$	239,014
Ending balance:  individually evaluated for impairment	$	3,156		$	7,077		$	203	$	-			$	10,436
Ending balance:  collectively evaluated for impairment	$	154,796		$	61,870		$	9,456	$	2,456			$	228,578

March 31, 2011	One-to-four family residential			All other mortgage loans			Commercial business loans			Consumer loans			Unallocated		Total
	(In thousands)
Allowance for loan losses:
Balance, beginning of year	$	1,140		$	1,469		$	209		$	8		$	-	$	2,826
Provision charged to expense		37			488			30			(3	)		-		552
Losses charged off		(112	)		(5	)		(81	)		(1	)				(199	)
Recoveries		8			15			-			1			-		24
Balance, end of year	$	1,073		$	1,967		$	158		$	5		$	-	$	3,203
Ending balance:  individually evaluated for impairment	$	149		$	1,158		$	59		$	-		$	-	$	1,366
Ending balance:  collectively evaluated for impairment	$	924		$	809		$	99		$	5		$	-	$	1,837
Loans:
Ending balance	$	162,435		$	70,976		$	8,204		$	2,414				$	244,029
Ending balance:  individually evaluated for impairment	$	3,183		$	6,017		$	123		$	-				$	9,323
Ending balance:  collectively evaluated for impairment	$	159,252		$	64,959		$	8,081		$	2,414				$	234,706

Total loans in above tables do not include deferred loan origination fees of $402,000 and $420,000 or loans in process of $265,000 and $413,000 for June 30, 2011 and March 31, 2011, respectively.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present the credit risk profile of the Bank's loan portfolio based on rating category and payment activity as of June 30, 2011 and March 31, 2011:

June 30, 2011	One-to-four  family residential		All other mortgage loans		Commercial business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	152,848	$	59,273	$	9,326	$	2,452
Special Mention (Risk 5)		125		2,597		130		-
Substandard (Risk 6)		4,979		7,077		203		4
Total	$	157,952	$	68,947	$	9,659	$	2,456

March 31, 2011	One-to-four  family residential		All other mortgage loans		Commercial  business loans		Consumer loans
	(In thousands)
Rating *
Pass (Risk 1-4)	$	156,866	$	58,341	$	7,917	$	2,391
Special Mention (Risk 5)		834		6,601		164		-
Substandard (Risk 6)		4,735		6,034		123		23
Total	$	162,435	$	70,976	$	8,204	$	2,414

* Ratings are generally assigned to consumer and residential mortgage loans on a “pass” or “fail” basis, where “fail” results in a substandard classification.  Commercial loans, both secured by real estate or other assets or unsecured are analyzed in accordance with an analytical matrix codified in the Bank's loan policy that produces a risk rating as described below.

Risk 1 is unquestioned credit quality for any credit product.  Loans are secured by cash and near cash collateral with immediate access to proceeds.

Risk 2 is very low risk with strong credit and repayment sources.  Borrower is well capitalized in a stable industry, financial ratios exceed peers and financial trends are positive.

Risk 3 is very favorable risk with highly adequate credit strength and repayment sources.  Borrower has good overall financial condition and adequate capitalization.

Risk 4 is acceptable, average risk with adequate credit strength and repayment sources.  Collateral positions must be within Bank policies.

Risk 5 or “Special Mention,” also known as “watch,” has potential weakness that deserves Management's close attention.  This risk includes loans where the borrower has developed financial uncertainties or are resolving them.  Bank credits have been secured or negotiations will be ongoing to secure further collateral.

Risk 6 or “Substandard” loans are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged.  This risk category contains loans that exhibit a weakening of the borrower's credit strength with limited credit access and all non-performing loans.

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

The following tables present the Bank's loan portfolio aging analysis for June 30, 2011 and  March 31, 2011:

June 30, 2011	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing
	(In thousands)
One-to-four family residential loans	$	288	$	157	$	814	$	1,259	$	156,693	$	157,952	$	-
All other mortgage loans		637		342		1,384		2,363		66,584		68,947		-
Commercial business loans		64		-		-		64		9,595		9,659		-
Consumer loans		11		-		16		27		2,429		2,456		-
Total	$	1,000	$	499	$	2,214	$	3,713	$	235,301	$	239,014	$	-

March 31, 2011	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing
	(In thousands)
One-to-four family residential loans	$	1,306	$	113	$	1,782	$	3,201	$	159,234	$	162,435	$	-
All other mortgage loans		888		-		1,386		2,274		68,702		70,976		-
Commercial business loans		-		90		-		90		8,114		8,204		-
Consumer loans		-		-		20		20		2,394		2,414		-
Total	$	2,194	$	203	$	3,188	$	5,585	$	238,444	$	244,029	$	-

Non-accrual loans were comprised of the following at:

	June 30, 2011		March 31, 2011
	Nonaccrual		Nonaccrual
	(In thousands)		(In thousands)
One-to-four family residential loans	$	1,829	$	2,739
All other mortgage loans		2,672		2,362
Commercial business loans		203		33
Consumer loans		-		23
Total	$	4,704	$	5,157

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties.  These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.  Information with respect to the Company's impaired loans at June 30, 2011 and March 31, 2011 is presented below:

June 30, 2011	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
One-to-four family residential loans	$	2,886	$	2,886	$	-	$	2,603	$	28
All other mortgage loans		2,066		2,066		-		1,493		5
Loans with a specific valuation allowance
One-to-four family residential loans		270		270		134		567		5
All other mortgage loans		5,011		5,011		1,114		5,055		49
Commercial business loans		203		203		161		163		-
Total:
One-to-four family residential loans	$	3,156	$	3,156	$	134	$	3,170	$	33
All other mortgage loans		7,077		7,077		1,114		6,548		54
Commercial business loans		203		203		161		163		-
	$	10,436	$	10,436	$	1,409	$	9,085	$	87

Wayne Savings Bancshares, Inc.

Notes to Condensed Consolidated Financial Statements

March 31, 2011	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
One-to-four family residential loans	$	2,319	$	2,319	$	-	$	1,781	$	91
All other mortgage loans		919		919		-		839		38
Loans with a specific valuation allowance
One-to-four family residential loans		863		863		149		505		7
All other mortgage loans		5,099		5,099		1,158		3,503		128
Commercial business loans		123		123		59		131		6
Total:
One-to-four family residential loans	$	3,182	$	3,182	$	149	$	2,286	$	98
All other mortgage loans		6,018		6,018		1,158		4,342		166
Commercial business loans		123		123		59		131		6
	$	9,323	$	9,323	$	1,366	$	6,759	$	270

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Condensed Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Mar. 31, 2011
ASSETS
Cash and due from banks	$ 11,236	$ 4,833
Interest-bearing demand deposits	2,485	3,438
Cash and cash equivalents	13,721	8,271
Available-for-sale securities	135,652	131,956
Held-to-maturity securities	573	591
Loans receivable - net of allowance for loan losses of $3,221 and $3,203 at June 30, 2011 and March 31, 2011, respectively	235,126	239,993
Premises and equipment	7,065	6,892
Federal Home Loan Bank stock	5,025	5,025
Foreclosed assets held for sale - net	2,234	2,214
Accrued interest receivable	1,369	1,647
Bank-owned life insurance	7,064	7,003
Goodwill	1,719	1,719
Other intangible assets	264	287
Prepaid Federal Deposit Insurance Corporation premiums	1,010	1,087
Other assets	882	1,045
Prepaid federal income taxes	0	8
Total assets	411,704	407,738
Deposits
Demand	69,129	63,208
Savings and money market	105,685	105,086
Time	152,999	151,778
Total deposits	327,813	320,072
Other short-term borrowings	5,959	6,373
Federal Home Loan Bank advances	35,037	39,507
Accrued interest payable and other liabilities	1,960	2,646
Accrued federal income taxes	152	0
Deferred federal income taxes	1,283	861
Total liabilities	372,204	369,459
Commitments and Contingencies	0	0
Stockholders' Equity
Preferred stock, 500,000 shares of $.10 par value authorized; no shares issued	0	0
Common stock, $.10 par value; authorized 9,000,000 shares; 3,978,731 shares issued	398	398
Additional paid-in capital	35,993	35,997
Retained earnings	16,167	15,828
Shares acquired by ESOP	(697)	(719)
Accumulated other comprehensive income, net of tax effects	2,169	1,305
Treasury stock, at cost - 974,618 common shares	(14,530)	(14,530)
Total stockholders' equity	39,500	38,279
Total liabilities and stockholders' equity	$ 411,704	$ 407,738