10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

[ü] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 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 Executive Offices)	Zip Code

(330) 264-5767

(Registrant’s telephone number)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.10 per share	The NASDAQ Stock Market LLC

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES  £  NO  S

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES  £  NO  S 

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 twelve months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days. YES  S  NO  £ 

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).       YES S   NO  £

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. £

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 and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one.)

Large accelerated filer  £ Accelerated filer  £  Non-accelerated filer  £  Smaller Reporting Company S

Indicate by check mark whether the Registrant is shell company (as defined in Rule 12b-2 of the Exchange Act). YES £ NO S

As of March 22, 2012, the latest practicable date, there were 3,004,113 issued and outstanding shares of the Registrant’s Common Stock. The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the last closing price on June 30, 2011, as reported on the Nasdaq Global Market, was approximately $22.1 million.

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to Wayne Savings Bancshares, Inc.’s Annual Report on Form 10-K (the “Form 10-K”) for the period ended December 31, 2011, originally filed with the Securities and Exchange Commission on March 23, 2012, is to amend Exhibit 101 to the Form 10-K to remove references from the original XBRL (eXtensible Business Reporting Language) files which contained the word “unaudited.”

No other changes have been made to the Form 10-K. This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K, 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-K.

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.

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:	March 23, 2012	By:	/s/Rod C. Steiger
			Rod C. Steiger
			President and Chief Executive Officer
Date:	March 23, 2012	By:	/s/Myron Swartzentruber
			Myron Swartzentruber
			Senior Vice President and
			Chief Financial Officer

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Commitments and Credit Risk

9 Months Ended

Dec. 31, 2011

Commitments And Credit Risk

Commitments and Credit Risk

Note 18:Commitments and Credit Risk

Total commercial and commercial real estate loans made up 34% and 32% of the loan portfolio at December 31, 2011 and March 31, 2011, respectively, with most of these loans secured by commercial real estate and business assets mainly in Ohio. Installment loans account for approximately 1% of the loan portfolio in both fiscal periods ending December 31, 2011 and March 31, 2011. These loans are secured by consumer assets including automobiles, which account for 38% and 48%, respectively, of the installment loan portfolio. Real estate loans comprise 64% and 67% of the loan portfolio as of December 31, 2011 and March 31, 2011, respectively, and primarily include first mortgage loans on residential properties and home equity lines of credit. Included in cash and due from banks as of December 31, 2011 and March 31, 2011, is $2.6 million and $3.0 million, respectively, of uninsured deposits in the form of branch cash on hand.

Commitments to Originate Loans

Commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate.

At December 31, 2011 and March 31, 2011, the Company had outstanding commitments to originate fixed rate loans aggregating approximately $731,000 and $434,000, respectively. The commitments extended over varying periods of time with the majority being disbursed within a one-year period.

Mortgage loans in the process of origination represent amounts that the Company plans to fund within a normal period of one year. Total mortgage loans in the process of origination amounted to approximately $330,000 and $100,000 at December 31, 2011 and March 31, 2011, respectively.

The Company had undisbursed amounts of residential loans of $320,000, nonresidential of $250,000 and commercial loans of $66,000 at December 31, 2011. The Company had undisbursed amounts of residential loans of $204,000, nonresidential loans of $139,000 and $5,000 in land loans at March 31, 2011.

Standby Letters of Credit

Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. Fees for letters of credit are initially recorded by the Company as deferred revenue and are included in earnings at the termination of the respective agreements.

Should the Company be obligated to perform under the standby letters of credit, the Company may seek recourse from the customer for reimbursement of amounts paid.

The Company had total outstanding standby letters of credit amounting to $145,000 and $172,000, at December 31, 2011 and March 31, 2011, respectively, with terms not exceeding eleven months. At both December 31, 2011 and March 31, 2011, the Company had no deferred revenue under standby letter of credit agreements.

Lines of Credit

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments.

At December 31, 2011, the Company had granted unused lines of credit to borrowers aggregating approximately $11.3 million and $17.7 million for commercial lines and open-end consumer lines, respectively. At March 31, 2011, unused lines of credit to borrowers aggregated approximately $12.0 million for commercial lines and $16.9 million for open-end consumer lines, respectively.

Leases

The Company currently leases two branch banking facilities under an operating lease. The first lease originated in fiscal 2000 for a ten year term and two five year renewal options of which the Company committed to another five year renewal ending in April 2014. The Company’s second operating lease commenced in fiscal 2001 for an original five year term with 3 five year renewal options and has currently renewed the third option to expire in April 2016. The minimum annual lease payments over the current lease term are as follows:

Fiscal year ended		(In thousands)
2012	$	60
2013		61
2014		41
2015		31
2016		10
Total	$	203

The Company incurred rental expense under operating leases totaling approximately $50,000 and $91,000 for the fiscal periods ended December 31, 2011 and March 31, 2011, respectively.

There were no other material commitments or contingencies at December 31, 2011.

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Restriction on Cash and Due From Banks

9 Months Ended

Dec. 31, 2011

Restriction On Cash And Due From Banks

Restriction on Cash and Due From Banks

Note 2:Restriction on Cash and Due From Banks

The Company is required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. The reserve required at December 31, 2011, was $2.1 million.

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Quarterly Financial Data (Unaudited)

9 Months Ended

Dec. 31, 2011

Quarterly Financial Data

Quarterly Financial Data (Unaudited)

Note 21:Quarterly Financial Data (Unaudited)

The following table summarizes the Company’s quarterly results of operations for the nine month period ended December 31, 2011 and the year ended March 31, 2011:

	Three Months Ended
Nine month Period Ended December 31, 2011:	June 30,		September 30,		December 31,
	(In thousands, except per share data)
Total interest income	$	4,372	$	4,212	$	4,024
Total interest expense		1,090		1,027		862
Net interest income		3,282		3,185		3,162
Provision for loan losses		70		442		294
Noninterest income		441		534		515
Noninterest expense		3,002		2,952		2,791
Income before income taxes		651		325		592
Federal income taxes		136		16		82
Net income	$	515	$	309	$	510
Earnings per share
Basic	$	0.18	$	0.10	$	0.18
Diluted	$	0.18	$	0.10	$	0.18

	Three Months Ended
Year ended March 2011:	June 30,		September 30,		December 31,		March 31,
	(In thousands, except per share data)
Total interest income	$	4,707	$	4,601	$	4,381	$	4,296
Total interest expense		1,435		1,367		1,248		1,164
Net interest income		3,272		3,234		3,133		3,132
Provision for loan losses		190		120		120		122
Noninterest income		492		487		484		368
Noninterest expense		2,741		2,714		2,908		2,904
Income before income taxes		833		887		589		474
Federal income taxes		190		213		113		69
Net income	$	643	$	674	$	476	$	405
Earnings per share
Basic	$	0.22	$	0.23	$	0.16	$	0.14
Diluted	$	0.22	$	0.23	$	0.16	$	0.14

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Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2011

Nature Of Operations And Summary Of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

Note 1:Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

The Company’s revenues, operating income and assets are almost exclusively derived from banking. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment. Customers are mainly located in Wayne, Holmes, Ashland, Medina and Stark Counties the surrounding localities in northeastern Ohio, and include a wide range of individuals, businesses and other organizations. Wayne has historically conducted its business through its main office in Wooster, Ohio.

The Company’s primary deposit products are checking, savings, money market and term certificate accounts. Wayne Savings Community Bank’s primary lending products are residential mortgage, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by both residential and commercial real estate. Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Company can be significantly influenced by a number of environmental factors, such as governmental monetary policy, that are outside of management’s control.

Principles of Consolidation

The consolidated financial statements include the accounts of Wayne Savings Bancshares, Inc. (“Wayne” or the “Company”) and its wholly-owned subsidiary, Wayne Savings Community Bank (the “Bank”). All intercompany transactions and balances have been eliminated.

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.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowance for loan losses and the valuation of foreclosed assets held for sale, management obtains independent appraisals for significant properties.

Cash Equivalents

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.

Pursuant to legislation enacted in 2010, the FDIC will fully insure all noninterest-bearing transaction accounts beginning December 31, 2010 through December 31, 2012, at all FDIC-insured institutions.

From time to time, the Company’s interest-bearing cash accounts may exceed the FDIC’s insured limit of $250,000. Management considers the risk of loss to be very low.

Securities

Certain debt securities that management has the positive intent and ability to hold to maturity are classified as “held-to-maturity” and recorded at amortized cost. Securities not classified as held-to- maturity are classified as “available-for-sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

For debt securities with fair value below carrying value when the Company does not intend to sell a debt security, and it is more likely than not, the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of an other-than-temporary impairment recorded in other comprehensive income for the noncredit portion of a previous other-than-temporary impairment is amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security.

Loans Held for Sale

Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income. Gains and losses on loan sales are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of the loan. At December 31, 2011 and March 31, 2011, the Company did not have any loans held for sale.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.

The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is determined based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current for a period of six months and future payments are reasonably assured.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

Premises and Equipment

Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets. An accelerated method is used for tax purposes. Leasehold improvements are also stated at cost less accumulated depreciation and are depreciated using the straight line method over the estimated useful lives of the assets or the term of the lease, whichever is shorter.

Federal Home Loan Bank Stock

The Company is required as a condition of membership in the Federal Home Loan Bank of Cincinnati (“FHLB”) to maintain an investment in FHLB common stock. The required investment in the common stock is based on a predetermined formula. The stock is redeemable at par and, therefore, its cost is equivalent to its redemption value. At December 31, 2011, the FHLB placed no restrictions on redemption of shares in excess of a member’s required investment in the stock.

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 less estimated selling costs, 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. Revenue and expenses from operations and changes in the valuation allowance are included in net income or expense from foreclosed assets.

Bank-Owned Life Insurance

The Bank has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at its cash surrender value, or the amount that can be realized.

Goodwill and Intangible Assets

The composition of goodwill and other intangible assets, all of which is core deposit intangible, at December 31, 2011 and March 31, 2011:

	December 31, 2011			March 31, 2011
	(In thousands)
Goodwill	$	1,719		$	1,719
Other intangible assets - gross		974			974
Other intangible assets - amortization		(755	)		(687	)
Total	$	1,938		$	2,006

The Company recorded amortization relative to intangible assets totaling $91,000 for the fiscal year ended March 31, 2011 and $68,000 for the fiscal period ended December 31, 2011. The Company anticipates $91,000 of amortization for each of fiscal 2012, 2013 and $37,000 for 2014. Such amortization is derived using the straight line method for the core deposit asset over ten years. Pursuant to FASB ASC 350, the Company is required to annually test goodwill and other intangible assets for impairment. The Company’s testing of goodwill and other intangible assets in the current fiscal year indicated there was no impairment in the carrying value of these assets.

Mortgage Servicing Rights

Mortgage servicing assets are recognized separately when rights are acquired through sale of financial assets. Under the servicing assets and liabilities accounting guidance (ASC 860-50), servicing rights resulting from the sale or securitization of loans originated by the Company are initially measured at fair value at the date of transfer. The Company subsequently measures each class of servicing asset using the amortization method. Under the amortization method, servicing rights are amortized in proportion to and over the period of estimated net servicing income. The amortized assets are assessed for impairment based on fair value at each reporting date.

Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. These variables change from quarter to quarter as market conditions and projected interest rates change, and may have an adverse impact on the value of the mortgage servicing right and may result in a reduction to noninterest income.

Each class of separately recognized servicing assets subsequently measured using the amortization method are evaluated and measured for impairment. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type and investor type. Impairment, if necessary, is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the carrying amount of the servicing assets for that tranche. The valuation allowance is adjusted to reflect changes in the measurement of impairment after the initial measurement of impairment. Changes in valuation allowances are reported in the income statement. Fair value in excess of the carrying amount of servicing assets for that stratum is not recognized. 

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income.

Treasury Stock

Common stock shares repurchased are recorded at cost. Cost of shares retired or reissued is determined using the first-in, first-out method.

Stock Options

The Company has a stock-based employee compensation plan, which is described more fully in Note 15.

The Company accounts for the plan in accordance with the fair value recognition provisions of FASB ASC 718-10, “Stock Compensation.”

Income Taxes

The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Uncertain tax positions are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest and penalties on income taxes as a component of income tax expense. The Company files consolidated income tax returns with its subsidiary. With a few exceptions, the Company is no longer subject to tax authorities for years before 2008.

Earnings Per Share

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during each period. Diluted earnings per share reflects additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

Treasury stock shares and unearned ESOP shares are not deemed outstanding for earnings per share calculations.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income, net of applicable income taxes. Other comprehensive income includes unrealized appreciation (depreciation) on available-for-sale securities and changes in the funded status of the defined benefit pension plan.

Current Economic Conditions

The current economic environment presents all financial institutions with unprecedented circumstances and challenges which in some cases have resulted in large declines in the fair values of investments and other assets, constraints on liquidity and significant credit quality problems, including severe volatility in the valuation of real estate and other collateral supporting loans. Thus far, these trends have only modestly affected the Company. The financial statements have been prepared using values and information currently available to the Company. Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the allowance for loan losses and capital that could negatively impact the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.

Advertising

Advertising costs are expensed as incurred. The Company’s advertising expense totaled $75,000 for the fiscal period ended December 31, 2011 and $37,000 for the fiscal year ended March 31, 2011.

Reclassifications

Certain reclassifications have been made to the prior years’ financial statements to conform to the 2011 financial statement presentation. These reclassifications had no effect on net income.

Fiscal Year Change

As of April 2011, the Company decided to change its fiscal year end to December 31 to facilitate consistency with regulatory reporting. The prior regulatory reporting was reported on a quarter-to-date basis under the OTS. However, as of March 31, 2012 the Company will be reporting to the FDIC on a calendar year-to-date period. The result of the fiscal year end change was a nine month period ended December 31, 2011.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Mar. 31, 2011
Statement of Financial Position [Abstract]
Cash and due from banks	$ 14,215	$ 4,833
Interest-bearing demand deposits	5,601	3,438
Cash and cash equivalents	19,816	8,271
Available-for-sale securities	130,637	131,956
Held-to-maturity securities	1,679	591
Loans, net of allowance for loan losses of $3,854 and $3,203 at December 31, 2011 and March 31, 2011, respectively	232,099	239,993
Premises and equipment	7,165	6,892
Federal Home Loan Bank stock	5,025	5,025
Foreclosed assets held for sale, net	1,283	2,214
Accrued interest receivable	1,314	1,647
Bank-owned life insurance	7,193	7,003
Goodwill	1,719	1,719
Other intangible assets	219	287
Prepaid Federal Deposit Insurance Corporation premiums	868	1,087
Other assets	1,026	1,045
Prepaid federal income taxes	54	8
Total assets	410,097	407,738
Demand	76,750	63,208
Savings and money market	108,934	105,086
Time	148,164	151,778
Total deposits	333,848	320,072
Other short-term borrowings	5,278	6,373
Federal Home Loan Bank advances	26,597	39,507
Interest payable and other liabilities	3,751	2,646
Deferred federal income taxes	908	861
Total liabilities	370,382	369,459
Commitments and Contingencies
Preferred stock, 500,000 shares of $.10 par value authorized; no shares issued
Common stock, $.10 par value; authorized 9,000,000 shares; 3,978,731 shares issued	398	398
Additional paid-in capital	35,986	35,997
Retained earnings	16,635	15,828
Shares acquired by ESOP	(655)	(719)
Accumulated other comprehensive income, net of tax effects	1,881	1,305
Treasury stock, at cost - Common: 974,618 shares	(14,530)	(14,530)
Total stockholders' equity	39,715	38,279
Total liabilities and stockholders' equity	$ 410,097	$ 407,738

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Shares Acquired By ESOP	Treasury Stock	Accumulated Other Comprehensive Income	Total
Beginning balance at Mar. 31, 2010	$ 398	$ 36,012	$ 14,332	$ (807)	$ (14,530)	$ 1,590	$ 36,995
Net income			2,198				2,198
Unrealized losses on securities designated as available for sale, net of related taxes						(295)	(295)
Change in unrecognized net loss in net periodic pension cost, net of related taxes						10	10
Total comprehensive income							1,913
Cash dividends			(702)				(702)
Amortization of expense related to ESOP		(15)		88			73
Ending balance at Mar. 31, 2011	398	35,997	15,828	(719)	(14,530)	1,305	38,279
Net income			1,334				1,334
Unrealized losses on securities designated as available for sale, net of related taxes						824	824
Change in unrecognized net loss in net periodic pension cost, net of related taxes						(248)	(248)
Total comprehensive income							1,910
Cash dividends			(527)				(527)
Amortization of expense related to ESOP		(11)		64			53
Ending balance at Dec. 31, 2011	$ 398	$ 35,986	$ 16,635	$ (655)	$ (14,530)	$ 1,881	$ 39,715

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Stock Option Plan

9 Months Ended

Dec. 31, 2011

Stock Option Plan

Stock Option Plan

Note 15:Stock Option Plan

The Company’s Share Option Plan (the Plan), which was approved by stockholders, permits the grant of up to 204,081 share options to its employees. The Company believes that such awards better align the interests of its employees with those of its stockholders. Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. All outstanding options are fully exercisable. Certain option and share awards provide for accelerated vesting if there is a change in control (as defined in the Plan). There was no compensation cost recognized in the income statement for share-based payment arrangements during the fiscal periods ended December 31, 2011 and March 31, 2011.

A summary of option activity under the Plan for the fiscal year ended December 31, 2011 is presented below:

	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, beginning of period		83,816	$	13.95
Granted		–		–
Exercised		–		–
Forfeited or expired		20,408	$	13.95
Outstanding, end of period		63,408	$	13.95		1.75	$	–
Exercisable, end of period		63,408	$	13.95		1.75	$	–

As of December 31, 2011 and March 31, 2011, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. The cost was recognized in fiscal year ended March 31, 2005 when the Company accelerated full vesting of all the stock options at that time.

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Disclosures about Fair Value of Assets and Liabilities

9 Months Ended

Dec. 31, 2011

Disclosures About Fair Value Of Assets And Liabilities

Disclosures about Fair Value of Assets and Liabilities

Note 17:Disclosures about Fair Value of Assets and Liabilities

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 accompanying balance sheets, as well as the general classification of such assets 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, quoted prices of securities with similar characteristics or discounted cash flows. 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.

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets 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 December 31, 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)
December 31, 2011
U.S. government agencies	$	1,584	$	—	$	1,584	$	—
Mortgage-backed securities of government sponsored entities		101,328		—		101,328		—
Private-label collateralized mortgage obligations		1,741		—		1,741		—
State and political subdivisions		25,984		—		25,984		—
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		—

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

Impaired Loans (Collateral Dependent)

At December 31, 2011, collateral dependent impaired loans consisted primarily of loans secured by multi-family residential real estate, nonresidential and commercial real estate. 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 foreclosed assets held for sale primarily through evaluations of appraisals performed, and current and past offers for the 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 December 31, 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)
December 31, 2011					(In thousands)
Impaired loans	$	3,468	$	—	$	—	$	3,468
Foreclosed assets held for sale		1,283		—		—		1,283
March 31, 2011
Impaired loans	$	4,766	$	—	$	—	$	4,766
Foreclosed assets held for sale		1,710		—		—		1,710

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.

	December 31, 2011				March 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Financial assets
Cash and cash equivalents	$	19,816	$	19,816	$	8,271	$	8,271
Available-for-sale securities		130,637		130,637		131,956		131,956
Held-to-maturity securities		1,679		1,695		591		603
Loans, net of allowance for loan losses		232,099		239,983		239,993		244,500
Federal Home Loan Bank stock		5,025		5,025		5,025		5,025
Interest receivable		1,314		1,314		1,647		1,647
Financial liabilities
Deposits		333,848		332,222		320,072		313,888
Other short-term borrowings		5,278		5,278		6,373		6,373
Federal Home Loan Bank advances		26,597		27,717		39,507		40,215
Advances from borrowers for taxes and insurance		941		941		559		559
Interest payable		66		66		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.

Held-to-Maturity Securities

Fair value is based on quoted market prices if available. If quoted market prices are not available, fair value is estimated based on quoted market prices of similar securities.

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.

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 December 31, 2011 and March 31, 2011.

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Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)	9 Months Ended	12 Months Ended
	Dec. 31, 2011	Mar. 31, 2011
Statement of Stockholders' Equity [Abstract]
Cash dividends	$ 0.18	$ 0.24

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2011	Mar. 31, 2011
Statement of Financial Position [Abstract]
Loans receivable, allowance for loan losses	$ 3,854	$ 3,203
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	9,000,000	9,000,000
Common stock, shares issued	3,978,731	3,978,731
Treasury stock, shares	974,618	974,618

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Income Taxes

9 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

Note 10:Income Taxes

The provision for income taxes includes these components:

	December 31, 2011			March 31, 2011
	(In thousands)
Taxes currently payable	$	483		$	907
Deferred income taxes		(249	)		(322	)
Income tax expense	$	234		$	585

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:

	December 31, 2011			March 31, 2011
	(In thousands)
Computed at the statutory rate (34%)	$	533		$	946
Increase (decrease) resulting from
Tax exempt interest		(222	)		(302	)
Earnings on bank-owned life insurance		(85	)		(79	)
Other		8			20
Actual tax expense	$	234		$	585

The tax effects of temporary differences related to deferred taxes shown on the balance sheets were:

	December 31, 2011			March 31, 2011
	(In thousands)
Deferred tax assets
Deferred loan origination fees	$	139		$	143
Allowance for loan losses		1,310			1,089
Real estate owned valuation		388			226
Pension adjustment		349			221
Reserve for uncollected interest		109			64
Benefit plan expenses		116			140
Total deferred tax assets		2,411			1,883
Deferred tax liabilities
Prepaid pension		(119	)		(130	)
Federal Home Loan Bank stock dividends		(1,217	)		(1,217	)
Book/tax depreciation differences		(423	)		(235	)
Financed loan fees		(85	)		(83	)
Unrealized gains on securities available-or-sale		(1,317	)		(893	)
Mortgage servicing rights		(84	)		(88	)
Purchase price adjustments – net		(74	)		(98	)
Total deferred tax liabilities		(3,319	)		(2,744	)
Net deferred tax liability	$	(908	)	$	(861	)

Prior to fiscal 1997, Wayne Savings was allowed a special bad debt deduction based on a percentage of earnings, generally limited to 8% of otherwise taxable income and subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. This cumulative percentage of earnings bad debt deduction totaled approximately $2.7 million as of December 31, 2011. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than bad debt losses, including distributions in liquidation, such distributions will be subject to federal income taxes at the then current corporate income tax rate. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $918,000 at December 31, 2011.

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Document and Entity Information (USD $)

9 Months Ended

Dec. 31, 2011

Mar. 22, 2012

Jun. 30, 2011

Document And Entity Information

Entity Registrant Name

WAYNE SAVINGS BANCSHARES INC /DE/

Entity Central Index Key

0001036030

Document Type

10-K

Document Period End Date

Dec. 31, 2012

Amendment Flag

true

Amendment Description

The sole purpose of this Amendment No. 1 to Wayne Savings Bancshares, Inc.’s Annual Report on Form 10-K (the “Form 10-K”) for the period ended December 31, 2011, originally filed with the Securities and Exchange Commission on March 23, 2012, is to amend Exhibit 101 to the Form 10-K to remove references from the original XBRL (eXtensible Business Reporting Language) files which contained the word "unaudited".

No other changes have been made to the Form 10-K. This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K, 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-K.

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.

Current Fiscal Year End Date

--12-31

Is Entity a Well-known Seasoned Issuer?

No

Is Entity a Voluntary Filer?

No

Is Entity's Reporting Status Current?

Yes

Entity Filer Category

Smaller Reporting Company

Entity Public Float

$ 22,100,000

Entity Common Stock, Shares Outstanding

3,004,113

Document Fiscal Period Focus

FY

Document Fiscal Year Focus

2012

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Dec. 31, 2011

Accumulated Other Comprehensive Income Loss

Accumulated Other Comprehensive Income (Loss)

Note 11:Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income, included in stockholders’ equity, are as follows:

	December 31, 2011			March 31, 2011
	(In thousands)
Net unrealized gain on securities available-for-sale	$	3,876		$	2,627
Net unrealized loss for unfunded status of defined benefit plan liability		(1,026	)		(651	)
		2,850			1,976
Tax effect		(969	)		(671	)
Net-of-tax amount	$	1,881		$	1,305

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2011	Mar. 31, 2011
Interest and Dividend Income
Loans	$ 9,209	$ 13,182
Securities	3,230	4,576
Dividends on Federal Home Loan Bank stock and other	169	227
Total interest and dividend income	12,608	17,985
Interest Expense
Deposits	2,220	3,721
Other short term borrowings	10	27
Federal Home Loan Bank advances	749	1,466
Total interest expense	2,979	5,214
Net Interest Income	9,629	12,771
Provision for Loan Losses	806	552
Net Interest Income After Provision for Loan Losses	8,823	12,219
Noninterest Income
Gain on loan sales	102	162
Gain (loss) on disposal of real estate acquired through foreclosure	6	52
Trust income	221	220
Earnings on bank-owned life insurance	199	232
Service fees, charges and other operating	962	1,165
Total noninterest income	1,490	1,831
Noninterest Expense
Salaries and employee benefits	4,588	5,929
Net occupancy and equipment expense	1,402	1,799
Federal deposit insurance premiums	240	486
Franchise taxes	281	355
Provision for impairment on foreclosed assets held for sale	681	758
Amortization of intangible assets	68	91
Other	1,485	1,849
Total noninterest expense	8,745	11,267
Income Before Federal Income Taxes	1,568	2,783
Provision for Federal Income Taxes	234	585
Net Income	1,334	2,198
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities	1,248	(447)
Change in defined benefit plan unrecognized net less loss	(402)	(22)
Amortization of net loss included in net periodic pension cost	27	35
Components of other comprehensive income (loss), before tax effect	873	(434)
Tax (expense) benefit	(297)	149
Other comprehensive income (loss)	576	(285)
Accumulated other comprehensive income	$ 1,881	$ 1,305
Basic Earnings Per Share	$ 0.46	$ 0.75
Diluted Earnings Per Share	$ 0.46	$ 0.75

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Premises and Equipment

9 Months Ended

Dec. 31, 2011

Premises And Equipment

Premises and Equipment

Note 5:Premises and Equipment

Major classifications of premises and equipment, stated at cost, are as follows:

	December 31, 2011		March 31, 2011
	(In thousands)
Land and improvements	$	1,748	$	1,723
Office buildings and improvements		7,861		7,692
Furniture, fixtures and equipment		3,409		3,092
Leasehold improvements		350		356
		13,368		12,863
Less accumulated depreciation		6,203		5,971
	$	7,165	$	6,892

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Loans and Allowance for Loan Losses

9 Months Ended

Dec. 31, 2011

Loans And Allowance For Loan Losses

Loans and Allowance for Loan Losses

Note 4:Loans and Allowance for Loan Losses

Categories of loans as of the following dates:

	December 31, 2011		March 31, 2011
	(In thousands)
One-to-four family residential	$	153,064	$	162,435
Multi-family residential		8,589		8,308
Construction		753		160
Nonresidential real estate and land		62,864		62,508
Commercial		10,526		8,204
Consumer and other		2,257		2,414
		238,053		244,029
Less:
Undisbursed portion of loans in process		1,691		413
Deferred loan origination fees		409		420
Allowance for loan losses		3,854		3,203
Total loans	$	232,099	$	239,993

Activity in the allowance for loan losses for the fiscal periods ended December 31, 2011 and March 31, 2011, was as follows:

	December 31, 2011			March 31, 2011
	(In thousands)
Balance, beginning of period	$	3,203		$	2,826
Provision charged to expense		806			552
Losses charged off		(157	)		(199	)
Recoveries		2			24
Balance, end of period	$	3,854		$	3,203

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 Company 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.

Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. At December 31, 2011, the Company had $3.0 million of residential mortgages, $5.5 million of nonresidential mortgages and land and $57,000 of commercial loans that were modified in troubled debt restructurings. Included in these amounts, the Company had troubled debt restructurings that were performing in accordance with their modified terms of $2.4 million in residential mortgage loans, nonresidential real estate and land loans of $2.8 million and $40,000 of commercial loans at December 31, 2011. 

At December 31, 2011 and March 31, 2011, there were no accruing loans delinquent 90 days or more.

December 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, March 31, 2011	$	1,073		$	1,967	$	158	$	5	$	—	$	3,203
Provision charged to expense		212			580		11		3		—		806
Losses charged off		(157	)		—		—		—		—		(157	)
Recoveries		—			—		—		2		—		2
Balance, December 31, 2011	$	1,128		$	2,547	$	169	$	10	$	—	$	3,854
Ending balance:  individually evaluated for impairment	$	320		$	1,941	$	53	$	—	$	—	$	2,314
Ending balance:  collectively evaluated for impairment	$	808		$	606	$	116	$	10	$	—	$	1,540
Loans:
Ending balance	$	153,064		$	72,206	$	10,526	$	2,257			$	238,053
Ending balance:  individually evaluated for impairment	$	3,744		$	6,955	$	92	$	—			$	10,791
Ending balance:  collectively evaluated for impairment	$	149,320		$	65,251	$	10,434	$	2,257			$	227,262

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

The following table presents the credit risk profile of the Bank’s loan portfolio based on rating category and payment activity as of December 31, 2011 and March 31, 2011:

December 31, 2011	One-to-four family residential		All other mortgage loans		Commercial business loans		Consumer loans
			(In thousands)
Rating *
Pass (Risk 1-4)	$	145,061	$	61,970	$	10,268	$	2,257
Special Mention (Risk 5)		2,979		3,281		166		—
Substandard (Risk 6)		5,024		6,955		92		—
Total	$	153,064	$	72,206	$	10,526	$	2,257

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. In accordance with regulatory guidance, this category is generally regarded as temporary, as successful remedial actions will either successfully move the credit back up to Risk 4 or unsuccessful remedial actions will result in the credit being downgraded to Risk 6.

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.

Risk 7 or “Doubtful” loans are significantly under protected by the current net worth and paying capacity of the borrower or of the collateral pledged. This risk category contains loans that are likely to experience a loss of some magnitude, but where the amount of the expected loss is not known with enough certainty to allow for an accurate calculation of a loss amount for charge off. This category is considered to be temporary until a charge off amount can be reasonably determined.

The following table presents the Bank’s loan portfolio aging analysis as of December 31, 2011 and March 31, 2011:

December 31, 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	$	1,513	$	280	$	844	$	2,637	$	150,427	$	153,064	$	—
All other mortgage loans		903		—		1,905		2,808		69,398		72,206		—
Commercial business loans		17		—		35		52		10,474		10,526		—
Consumer loans		17		9		—		26		2,231		2,257		—
Total	$	2,450	$	289	$	2,784	$	5,523	$	232,530	$	238,053	$	—

March 31, 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	$	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 December 31, 2011 and March 31, 2011:

	December 31, 2011		March 31, 2011
Nonaccrual
	(In thousands)
One-to-four family residential loans	$	2,433	$	2,739
Nonresidential real estate loans		3,271		2,292
All other mortgage loans		—		70
Commercial business loans		92		33
Consumer loans		12		23
Total	$	5,808	$	5,157

The following table presents impaired loans as of and for the year ended December 31, 2011 and March 31, 2011:

December 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	$	1,613	$	1,613	$	—	$	1,966	$	35
All other mortgage loans		1,771		1,771		—		1,345		52
Loans with a specific valuation allowance
One-to-four family residential loans		250		250		224		557		15
All other mortgage loans		5,184		5,184		1,941		5,142		75
Commercial business loans		92		92		53		76		—
Total:
One-to-four family residential loans	$	1,863	$	1,863	$	224	$	2,523	$	50
All other mortgage loans		6,955		6,955		1,941		6,487		127
Commercial business loans		92		92		53		76		—
	$	8,910	$	8,910	$	2,218	$	9,086	$	177

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

	Quarter-to-Date						Year-to-Date
December 31, 2011	Number of loans		Pre- modification Unpaid Principal Balance		Post- modification Unpaid Principal Balance		Number of loans		Pre- modification Unpaid Principal Balance		Post- modification Unpaid Principal Balance
Troubled Debt Restructurings	(dollars in thousands)
One-to-four family residential loans		2	$	205	$	205		2	$	205	$	205
All other mortgage loans		1		1,051		1,051		2		1,366		1,366
Commercial business loans		—		—		—		2		162		162

All the above TDR classifications occurred due to an effective interest rate below  the market interest rate of similar debt.  Each TDR has been individually evaluated for impairment with the appropriate specific valuation allowance included in the allowance for loan losses calculation. 

There were no TDR classifications which defaulted during fiscal period ended December 31, 2011.

As a result of adopting the amendments in Accounting Standards Update No. 2011-02 (the ASU), the Company reassessed all restructurings occurring on or after the beginning of its current fiscal year (April 1, 2011) for identification of TDRs. The Company identified no additional TDRs for which an allowance for credit losses had previously been measured under a general allowance for credit losses methodology.

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Earnings Per Share

9 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Earnings Per Share

Note 16:Earnings Per Share

Earnings per share (EPS) were computed as follows:

	Nine Month Period Ended December 31, 2011
	Net Income		Weighted-Average Shares		Per Share Amount
	(In thousands)
Net income	$	1,334
Basic earnings per share
Income available to common stockholders				2,930,106	$	0.46
Effect of dilutive securities
Stock options				–
Diluted earnings per share
Income available to common stockholders and assumed conversions	$	1,334		2,930,106	$	0.46

	12 Month Period Ended March 31, 2011
	Net Income		Weighted-Average Shares		Per Share Amount
	(In thousands)
Net income	$	2,198
Basic earnings per share
Income available to common stockholders				2,923,637	$	0.75
Effect of dilutive securities
Stock options				–
Diluted earnings per share
Income available to common stockholders and assumed conversions	$	2,198		2,923,637	$	0.75

Options to purchase 63,408 shares of common stock at an exercise price of $13.95 per share were outstanding at December 31, 2011 and 83,816 at March 31, 2011, but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares in both years.

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Regulatory Matters

9 Months Ended

Dec. 31, 2011

Regulatory Matters

Regulatory Matters

Note 12: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.

The Bank must give notice to the Federal Reserve Bank of Cleveland prior to declaring a dividend to the Company and 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 total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined). Management believes, as of December 31, 2011, that the Bank met all capital adequacy requirements to which it is subject.

As of December 31, 2011, based on the computations for the 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 December 31, 2011 that management believes have changed the Bank’s capital classification.

The Bank’s actual capital amounts and ratios as of December 31, 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 December 31, 2011
Tangible capital	$	35,132		8.7	%	$	6,074		1.5	%	$	20,248		5.0	%
Core capital		35,132		8.7			16,198		4.0			24,297		6.0
Risk-based capital		38,070		16.2			18,802		8.0			23,503		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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Other Short-Term Borrowings

9 Months Ended

Dec. 31, 2011

Other Short-Term Borrowings

Other Short-Term Borrowings

Note 8:Other Short-Term Borrowings

Short-term borrowings included at the following dates:

	December 31, 2011		March 31, 2011
	(In thousands)
Securities sold under repurchase agreements	$	5,278	$	6,373

Securities sold under agreements to repurchase consist of obligations of the Bank to other parties. The obligations are secured by available-for-sale securities and such collateral is held by the Bank. The maximum amount of outstanding agreements at any month end during fiscal period ended December 31, 2011 and March 31, 2011 totaled $6.2 million and $8.4 million, respectively, and the average daily balance totaled $5.6 million and $7.3 million for fiscal periods ended December 31, 2011 and March 31, 2011, respectively. The agreements at December 31, 2011, mature daily.

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Loan Servicing

9 Months Ended

Dec. 31, 2011

Loan Servicing

Loan Servicing

Note 6:Loan Servicing

The Company has recognized servicing rights for residential mortgage loans sold with servicing retained. Residential mortgage loans serviced for others are subject to credit, prepayment and interest rate risks.

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others was $28.9 million and $29.9 million at December 31, 2011 and March 31, 2011, respectively. Contractually specified servicing fees, late fees and ancillary fees of approximately $17,000 and $20,000 are included in loan servicing fees in the income statement at December 31, 2011 and March 31, 2011, respectively.

Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in demand deposits, were approximately $595,000 and $152,000 at December 31, 2011 and March 31, 2011, respectively.

Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value.

Activity in the balance of servicing assets was as follows:

	December 31, 2011		March 31, 2011
	(In thousands)
Carrying amount, beginning of period	$	261	$	265
Additions
Servicing obligations that result from transfers of financial assets		31		48
Subtractions
Amortization		43		52
Carrying amount, end of period	$	249	$	261

The fair value of servicing rights subsequently measured using the amortization method was as follows:

Fair value, beginning of period	$	319	$	307
Fair value, end of period	$	249	$	319

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Interest-bearing Time Deposits

9 Months Ended

Dec. 31, 2011

Interest-Bearing Time Deposits

Interest-bearing Time Deposits

Note 7:Interest-bearing Time Deposits

Interest-bearing time deposits in denominations of $100,000 or more were $55.2 million at December 31, 2011, and $49.8 million at March 31, 2011.

At December 31, 2011, the scheduled maturities of time deposits are as follows:

Due during the year ending December 31,		(In thousands)
2012	$	81,613
2013		28,478
2014		13,090
2015		16,565
2016		5,597
Thereafter		2,821
	$	148,164

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Federal Home Loan Bank Advances

9 Months Ended

Dec. 31, 2011

Federal Home Loan Bank Advances

Federal Home Loan Bank Advances

Note 9:Federal Home Loan Bank Advances

At December 31, 2011, advances from the Federal Home Loan Bank were as follows:

Interest rate range	Maturing year ending December 31,
	(In thousands)
1.92%-1.97%		2012	$	5,500
1.07%-2.60%		2013		5,000
2.63%-2.86%		2014		9,000
2.44%-3.96%		2015		7,500
			$	27,000

At December 31, 2011, required annual principal payments on Federal Home Loan Bank advances were as follows:

For the year ended December 31,		(In thousands)
2012	$	5,500
2013		5,000
2014		9,000
2015		7,500
		27,000
Deferred prepayment penalty, net of amortization		(403	)
	$	26,597

Each advance is payable at its maturity date and has a prepayment penalty if repaid prior to maturity. During the quarter ended December 31, 2010, the Company prepaid $8.5 million of Federal Home Loan Bank advances which resulted in a prepayment penalty of $526,000. The Company replaced these advances with lower rate advances of $8.5 million whose present value, based on a discount rate equal to the cost of funds rate of the original advances, was not substantially different than the value of the original advances immediately prior to prepayment. As such, the Company was required to defer the $526,000 penalty over the life of the new advances. As of December 31, 2011, the Bank had $403,000 in unamortized prepayment penalties.

Additionally, as a member of the Federal Home Loan Bank system at December 31, 2011, the Bank had the ability to obtain up to $77.1 million in additional borrowings. Borrowings from the FHLB are secured by a blanket pledge of the one-to-four family residential real estate loan portfolio. The Bank’s borrowing capacity can be further increased by the pledge of additional collateral, including additional types of loans from the Bank’s loan portfolio and unpledged investment securities.

At December 31, 2011, the Bank had a cash management line of credit with the Federal Reserve Bank in the amount of $21.8 million, none of which was drawn. The Bank had approximately $22.1 million of state and political subdivision bonds pledged as collateral for this line of credit.

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Employee Benefit Plans

9 Months Ended

Dec. 31, 2011

Employee Benefit Plans

Employee Benefit Plans

Note 14:Employee Benefit Plans

Pension and Other Postretirement Benefit Plans

The Company has a frozen noncontributory defined benefit pension plan covering all employees who met the eligibility requirements prior to December 31, 2003. Compensation and service accruals were frozen at the same date. The Company’s funding policy is to make the minimum annual contribution that is required by applicable regulations, plus such amounts as the Company may determine to be appropriate from time to time.

The Company expects to contribute approximately $5,000 to the plan in fiscal 2012.

The Company uses a December 31 measurement date for the plan. Information about the plan’s funded status and pension cost follows:

	Pension Benefits
	December 31, 2011			March 31, 2011
	(In thousands)
Change in benefit obligation
Beginning of year	$	1,386		$	1,272
Interest cost		58			76
Actuarial loss		315			56
Benefits paid		(15	)		(18	)
Settlements		(47	)		—
End of year		1,697			1,386
Change in fair value of plan assets
Beginning of year		1,116			1,034
Actuarial return on plan assets		(39	)		94
Employer contribution		5			6
Benefits paid		(15	)		(18	)
Settlements		(47	)		—
End of year		1,020			1,116
Funded status at end of year	$	(677	)	$	(270	)

Amounts recognized in accumulated other comprehensive income not yet recognized as components of net periodic benefit cost consist of:

		Pension Benefits
		December 31, 2011			March 31, 2011
		(In thousands)
Net loss	$	(1,026	)	$	(651	)

The estimated net loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is approximately $62,000.

The accumulated benefit obligation for the defined benefit pension plan was $1.7 million and $1.4 million at December 31, 2011 and March 31, 2011, respectively.

	December 31, 2011			March 31, 2011
	(In thousands)
Components of net periodic benefit cost
Interest cost	$	59		$	76
Expected return on plan assets		(49	)		(60	)
Amortization of net loss		27			35
Net periodic benefit cost	$	37		$	51

Plan assets are held by a bank-administered trust fund, which invests the plan assets in accordance with the provisions of the plan agreement. The plan agreement permits investment in mutual funds that may invest in common stocks, corporate bonds and debentures, U.S. Government securities, certain insurance contracts, real estate and other specified investments, based on certain target allocation percentages.

Asset allocation is primarily based on a strategy to provide stable earnings while still permitting the plan to recognize potentially higher returns through an investment in equity securities. The target asset allocation percentages for 2011 are as follows:

SMID-Cap stocks	30-70%
Fixed income investments	30-70%
Cash	0-15%

At December 31, 2011 and March 31, 2011, the fair value of plan assets as a percentage of the total was invested in the following:

	December 31, 2011			March 31, 2011
Equity securities		61	%		60	%
Debt securities		32			25
Cash and cash equivalents		7			15
		100	%		100	%

Benefit payments expected to be paid from the plan as of December 31, 2011 are as follows:

		(In thousands)
2012	$	37
2013		40
2014		40
2015		51
2016		58
Thereafter		451
	$	677

Significant assumptions include:

	Pension Benefits
	December 31, 2011			March 31, 2011
Weighted-average assumptions used to determine benefit obligation:
Discount rate		4.40	%		5.75	%
Rate of compensation increase (frozen)		N/A			N/A
Weighted-average assumptions used to determine benefit cost:
Discount rate		5.75	%		6.14	%
Expected return on plan assets		6.00	%		6.00	%
Rate of compensation increase (frozen)		N/A			N/A

The Company has estimated the long-term rate of return on plan assets based primarily on historical returns on plan assets, adjusted for changes in target portfolio allocations and recent changes in long-term interest rates based on publicly available information.

The fair value of the Company’s pension plan assets at December 31, 2011, by asset category are as follows:

December 31, 2011			Fair Value Measurements Using
Asset Category	Total 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)
Mutual funds-Equity
Mid Cap Blend (a)	$	46	$	46	$	—	$	—
Large Cap Value (b)		32		32		—		—
Intn’l Large Cap Blend (c)		91		91		—		—
Mid Cap Blend (d)		57		57		—		—
Natural Resources  (e)		20		20		—		—
Mutual funds-Fixed Income
Short-Term Bond (f)		36		36		—		—
Cash
Cash Mgm’t Funds-Taxable		66		66		—		—
Cash Receivable		3		3		—		—
Fixed Income Securities
US Government Obligations		65		65		—		—
US Government Agencies		50		50
Corporate Obligations		216		216		—		—
Equity Securities
Common Stock		313		313		—		—
Common Stock-Foreign		25		25		—		—
Total	$	1,020	$	1,020	$	—	$	—

(a)This category seeks long-term capital appreciation by investing primarily in equity securities of mid-cap companies.

(b)This category contains primarily companies which seek total return on investment, with dividend income as an important component of that return.

(c)This category seeks total return by investing in equities of large cap international companies. The focus of the category’s investments is in companies that have demonstrated the ability to grow the value of the enterprise at a higher rate than the cost of capital.

(d)This category pursues primarily mid cap companies with goals of long-term capital appreciation. It invests in a strategic combination of U.S. and foreign companies whose situs, or geographical locations, gives them a competitive advantage and the potential to outperform.

(e)This category’s objective is to reduce risk related to inflation and diversify into investments which are less correlated to U.S. stocks and Bonds.

(f)This category’s objective is to invest in high quality corporate bonds, U.S. Treasuries and government agencies to increase income without assuming a great deal of risk.

March 31, 2011			Fair Value Measurements Using
Asset Category	Total 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)
Mutual funds-Equity
Mid Cap Blend (a)	$	50	$	50	$	—	$	—
Mid Cap Value (b)		32		32		—		—
Intn’l Large Cap Blend (c)		105		105		—		—
Small Cap Blend (d)		43		43		—		—
Large Cap Blend (e)		13		13		—		—
Cash
Cash Mgm’t Funds-Taxable		167		167		—		—
Accrued Income		3		3		—		—
Fixed Income Securities
US Government Obligations		65		65		—		—
Corporate Obligations		216		216		—		—
Equity Securities
Common Stock		375		375		—		—
Common Stock-Foreign		47		47		—		—
Total	$	1,116	$	1,116	$	—	$	—

(a)This category seeks long-term capital appreciation by investing primarily in equity securities of mid-cap companies.

(b)This category contains primarily mid-cap companies and seeks total return on investment, with dividend income as an important component of that return.

(c)This category seeks total return by investing in equities of large cap international companies. The focus of the category’s investments is in companies that have demonstrated the ability to grow the value of the enterprise at a higher rate than the cost of capital.

(d)This category pursues primarily small cap companies with goals of long-term capital appreciation. It invests in a strategic combination of U.S. and foreign companies whose situs, or geographical locations, gives them a competitive advantage and the potential to outperform.

(e)This category’s objective is to seek total return consisting of capital appreciation and income from large cap blend stocks.

The Company has an Employee Stock Ownership Plan (“ESOP”) covering substantially all employees of the Company. The ESOP acquired 163,265 shares of Company common stock at $10.00 per share in 2003 with funds provided by a loan from the Company. Accordingly, $1.6 million of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity. Shares are released to participants proportionately as the loan is repaid. Dividends on allocated shares are recorded as dividends and charged to retained earnings. Compensation expense is recorded equal to the average fair market value of the stock during the year when contributions, which are determined annually by the Board of Directors of the Company, are made to the ESOP.

ESOP expense for the nine month period ended December 31, 2011 and the year ended March 31, 2011, was $67,000 and $93,000, respectively.

Share information for the ESOP is as follows at December 31, 2011 and March 31, 2011:

	December 31, 2011		March 31, 2011
Allocated shares		97,812		89,227
Shares released for allocation		—		2,150
Unearned shares		65,453		71,888
Total ESOP shares		163,265		163,265
Fair value of unearned shares at end of period	$	507,915	$	615,361

At December 31, 2011, the fair value of the 97,812 allocated shares held by the ESOP was approximately $759,000.

In addition to the defined benefit plan and ESOP, the Company has a 401(k) plan covering substantially all employees. The Company’s 401(k) matching percentage was 100% of the first 4% contributed by the employee and 50% of the employees’ next 2% of contributions. Expense related to the 401(k) plan totaled $112,000 and $163,000 for the fiscal periods ended December 31, 2011 and March 31, 2011, respectively.

Finally, the Company provides post-retirement benefits to certain officers of the Company under split-dollar life insurance policies. The Company accounts for the policies in accordance with ASC 715-60, which requires companies to recognize a liability and related compensation costs for endorsement split-dollar life insurance policies that provide a benefit to an employee extending to postretirement periods. The liability is recognized based on the substantive agreement with the employee. During the fiscal period ended December 31, 2011, the Company recorded income of $51,000 based on an actuarial adjustment and expense of $27,000 during the period ended March 31, 2011, for the split-dollar life postretirement insurance benefits.

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Recent Accounting Developments

9 Months Ended

Dec. 31, 2011

Recent Accounting Developments

Recent Accounting Developments

Note 19: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.

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). The adoption of FASB ASU 2011-02 did not 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 did not 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 did not 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 did not have a material effect on the Company’s financial condition or results of operations.

FASB Accounting Standards Update (ASU) 2011-08 Intangibles – Goodwill and Other” (Topic 350), issued on September 15, 2011, concerns the cost and complexity of performing the first step of the two step goodwill impairment test. The amendments in this update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in the original ASU topic 350. 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 2011-08 did not have a material effect on the Company’s financial condition or results of operations.

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2011	Mar. 31, 2011
Operating Activities
Net income	$ 1,334	$ 2,198
Items not requiring (providing) cash
Depreciation and amortization	426	523
Provision for loan losses	806	552
Amortization of premiums and discounts on securities	1,169	1,151
Amortization of mortgage servicing rights	43	52
Amortization of deferred loan origination fees	(56)	(78)
Amortization of intangible assets	68	91
Deferred income taxes	(249)	(322)
Net gain on sale of loans	(102)	(162)
Proceeds from sale of loans in secondary market	2,605	4,114
Origination of loans for sale in the secondary market	(2,503)	(3,952)
Amortization expense of stock benefit plan	53	73
Provision for impairment on foreclosed assets held for sale	681	758
Gain on sale of foreclosed assets held for sale	(6)	(52)
Increase in value of bank owned life insurance	(190)	(249)
Changes in
Accrued interest receivable	333	(45)
Prepaid federal deposit insurance premiums	219	454
Other assets	(69)	287
Interest payable and other liabilities	347	(179)
Net cash provided by operating activities	4,909	5,214
Investing Activities
Purchase of available-for-sale securities	(28,499)	(55,059)
Purchases of held-to-maturity securities	(1,136)
Proceeds from maturities of available-for-sale securities	29,898	41,369
Proceeds from maturities of held-to-maturity securities	47	106
Net change in loans	6,570	5,353
Purchase of premises and equipment	(699)	(124)
Proceeds from the sale of foreclosed assets	830	1,155
Net cash provided by (used in) investing activities	7,011	(7,200)
Financing Activities
Net change in deposits	13,776	8,138
Net change in other short-term borrowings	(1,095)	(1,081)
Proceeds from Federal Home Loan Bank advances		18,750
Repayments of Federal Home Loan Bank advances	(12,910)	(24,743)
Advances by borrowers for taxes and insurance	382	20
Cash dividends paid	(527)	(702)
Net cash provided by (used in) by financing activities	(374)	382
Increase in Cash and Cash Equivalents	11,545	(1,604)
Cash and Cash equivalents, Beginning of period	8,271	9,875
Cash and Cash equivalents, End of period	19,816	8,271
Supplemental Cash Flows Information Cash Paid For:
Interest paid on deposits and borrowings	3,036	5,304
Federal income taxes paid	530	745
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale	511	1,187
Unrealized gains on securities designated as available-for- sale, net of related tax effects	824	(295)
Minimum pension liability adjustment, net of related tax effects	248	10
Recognition of mortgage servicing rights	31	48
Dividends payable	$ 180	$ 180

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Securities

9 Months Ended

Dec. 31, 2011

SecuritiesAbstract

Securities

Note 3: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:
December 31, 2011:
U.S. government agencies	$	1,559	$	26	$	1	$	1,584
Mortgage-backed securities of government sponsored entities		98,816		2,636		124		101,328
Private-label collateralized mortgage obligations		1,693		48		—		1,741
State and political subdivisions		24,694		1,315		25		25,984
	$	126,762	$	4,025	$	150	$	130,637
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
	$	129,329	$	3,074	$	447	$	131,956

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
December 31, 2011:
U.S. government agencies	$	145	$	—	$	—	$	145
Mortgage-backed securities of government sponsored entities		1,527		16		—		1,543
State and political subdivisions		7		—		—		7
	$	1,679	$	16	$	—	$	1,695
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

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities at December 31, 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	$	1,390	$	1,416	$	7	$	7
One to five years		1,519		1,578		—		—
Five to ten years		7,785		8,201		—		—
After ten years		15,559		16,373		145		145
		26,253		27,568		152		152
Mortgage-backed securities of        government sponsored entities		98,816		101,328		1,527		1,543
Private-label collateralized mortgage obligations		1,693		1,741		—		—
Totals	$	126,762	$	130,637	$	1,679	$	1,695

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $53.9 million and $55.7 million at December 31, 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 December 31, 2011 and March 31, 2011, was $17.7 million and $28.6 million, which represented approximately 14% 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 securities are temporary at December 31, 2011.

Should the impairment of any of these 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 at December 31, 2011 and March 31, 2011:

December 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	$	—	$	—	$	313	$	1	$	313		1
Mortgage-backed securities of government sponsored entities		16,624		124		—		—		16,624		124
State and political subdivisions		—		—		759		25		759		25
Total temporarily impaired securities	$	16,624	$	124	$	1,072	$	26	$	17,696	$	150

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

The unrealized losses on the Company’s investments in direct obligations of U.S. government agencies, mortgage-backed securities of government sponsored entities, private-label collateralized mortgage obligations and municipal securities were caused by changes in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2011.

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Condensed Financial Information (Parent Company Only)

9 Months Ended

Dec. 31, 2011

Financial Information Parent Company Only

Condensed Financial Information (Parent Company Only)

Note 20:Condensed Financial Information (Parent Company Only)

Presented below is condensed financial information as to financial position, results of operations and cash flows of the Company:

Condensed Balance Sheets

	December 31, 2011			March 31, 2011
	(In thousands)
Assets
Cash and due from banks	$	150		$	172
Notes receivable from the Bank		770			852
Investment in the Bank		38,974			37,387
Prepaid expenses and other assets		17			66
Total assets	$	39,911		$	38,477
Liabilities and Stockholders’ Equity
Accrued expenses and other liabilities	$	196		$	198
Stockholders’ equity
Common stock and additional paid-in capital		36,384			36,395
Retained earnings		16,635			15,828
Shares acquired by ESOP		(655	)		(719	)
Treasury stock – at cost		(14,530	)		(14,530	)
Accumulated other comprehensive income		1,881			1,305
Total stockholders’ equity		39,715			38,279
Total liabilities and stockholders’ equity	$	39,911		$	38,477

Condensed Statements of Income

	December 31, 2011			March 31, 2011
	9 months			12 months
	(In thousands)
Operating Income
Interest income	$	38		$	55
Dividends from the Bank		501			842
Total operating income		539			897
Noninterest Expense		206			227
Earnings before Federal Income Tax Benefits and equity in undistributed income of the Bank		333			670
Federal Income Tax Benefits		(56	)		(59	)
Income before equity in undistributed income of the Bank		389			729
Equity in undistributed income of the Bank		945			1,469
Net Income	$	1,334		$	2,198

Condensed Statements of Cash Flows

	December 31, 2011			March 31, 2011
	9 months			12 months
	(In thousands)
Operating Activities
Net income	$	1,334		$	2,198
Items not requiring (providing) cash
Equity in undistributed net income of the Bank		(945	)		(1,469	)
Increase (decrease) in cash due to changes in:
Prepaid expenses and other assets		35			(9	)
Accrued expenses and other liabilities		(1	)		1
Net cash provided by operating activities		423			721
Investing Activities
Repayment of ESOP loan		82			81
Net cash provided by investing activities		82			81
Financing Activities
Payment of dividends on common stock		(527	)		(702	)
Net cash used in financing activities		(527	)		(702	)
Net Change in Cash and Cash Equivalents		(22	)		100
Cash and Cash Equivalents at Beginning of Period		172			72
Cash and Cash Equivalents at End of Period	$	150		$	172

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Related Party Transactions

9 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions

Note 13:Related Party Transactions

At December 31, 2011 and March 31, 2011, the Bank had loans outstanding to executive officers, directors, and their affiliates (related parties). In management’s opinion, such loans and other extensions of credit and deposits were made in the ordinary course of business and were made on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons. Further, in management’s opinion, these loans did not involve more than normal risk of collectibility or present other unfavorable features. Such loans are summarized below.

	December 31, 2011			March 31, 2011
	(In thousands)
Aggregate balance – Beginning of period	$	2,377		$	2,439
New loans		—			—
Repayments		(37	)		(62	)
Aggregate balance – End of period	$	2,340		$	2,377

The Bank has undrawn lines of credit to certain directors totaling $217,000 and $706,000 as of December 31, 2011 and March 31, 2011, respectively.

Deposits from related parties held by the Bank at December 31, 2011 and March 31, 2011, totaled $515,000 and $523,000, respectively.

The Bank paid legal fees to a law firms of which a director of the Company is counsel. The amounts paid totaled approximately $7,000 and $42,000 for the periods ended December 31, 2011 and March 31, 2011, respectively.

The Bank leases an in-store retail branch from a corporation in which a director of the Company holds an interest. The current five year lease provides for renewal options through fiscal 2020 and payments totaling approximately $30,000 per year through fiscal 2014 and $10,000 for fiscal 2015. Rental expense for this lease was $21,000 and $29,000 for the periods ended December 31, 2011 and March 31, 2011, respectively.