WOOSTER, Ohio, Jan. 22 /PRNewswire-FirstCall/ -- Wayne Savings Bancshares,
Inc. (Nasdaq: WAYN), the stock holding company parent of Wayne Savings
Community Bank, reported net income of $584,000 or $0.20 per diluted share for
the third fiscal quarter ended December 31, 2008, compared to $446,000 or
$0.14 per diluted share for the third fiscal quarter ended December 31, 2007.
The increase in net income was primarily due to an increase in net interest
income, resulting from decreased interest expense on deposits, partially
offset by decreased interest income on loans and investments.
Net interest income increased $322,000 for the quarter ended December 31,
2008, compared to the quarter ended December 31, 2007. Interest income
decreased $418,000 during the 2008 quarter mainly as a result of lower overall
market interest rates during the 2008 quarter compared to the 2007 quarter and
the corresponding impact on new originations and existing adjustable rate
loans. However, interest expense decreased $740,000 during the quarter as a
result of lower deposit balances and lower market interest rates being
reflected in rates paid on certificates of deposit, money market deposit
accounts and advances from the Federal Home Loan Bank of Cincinnati, partially
offset by a higher volume of borrowings used to replace decreased deposit
balances. Noninterest income decreased $37,000, due primarily to lower
service charges. Noninterest expense increased by $25,000, or 1%, mainly due
to increased compensation, deposit insurance and state franchise tax expense,
partially offset by lower other operating expense.
A provision for loan losses of $185,000 was made for the 2008 quarter
compared to $140,000 provided during the 2007 quarter, based on management's
assessment of probable incurred losses in the loan portfolio. The increase
was mainly due to management's analysis of economic factors in the Company's
market area and the negative change in those factors from the 2007 quarter to
the 2008 quarter.
For the nine month period ended December 31, 2008, net income totaled
$1,716,000 or $0.59 per diluted share, compared to net income of $1,516,000 or
$0.49 per diluted share for the nine months ended December 31, 2007.
Net interest income increased $617,000 for the nine months ended December
31, 2008 compared to the nine months ended December 31, 2007. Interest income
decreased $1,046,000 for the 2008 nine month period compared to the same
period in 2007, as a result of lower overall market interest rates during the
2008 period compared to the 2007 period and the corresponding impact on new
originations and existing adjustable rate loans. However, interest expense
decreased $1,663,000 compared to the prior year period as a result of
decreased balances and rates paid on certificates of deposit, money market
deposit accounts and advances from the Federal Home Loan Bank of Cincinnati,
partially offset by a higher volume of borrowings used to replace decreased
deposit balances.
Noninterest income decreased $65,000, due primarily to a $21,000 reduction
in gain on sale of real estate acquired through foreclosure and a $32,000
decrease in service charges and other income. Noninterest expense increased
by $101,000, or 1%, primarily due to increased compensation, occupancy,
deposit insurance and franchise tax expense, partially offset by lower other
operating expense.
A provision for loan losses of $346,000 was made during the nine months
ended December 31, 2008 compared to $195,000 provided during the 2007 period.
The increase was due to management's analysis of economic factors in the
Company's market area and the negative change in those factors from the 2007
period to the 2008 period.
According to Phillip E. Becker, President and Chief Executive Officer,
"The economic environment has continued to deteriorate, which presents
additional challenges to all institutions. In this environment, selection of
credit risks has taken on increased importance, along with the management of
delinquent credits to assist borrowers as much as possible while minimizing
credit losses. The Company continues to exercise discipline in the management
of noninterest expenses and the pricing of deposits in the face of continued
strong competition from competitors seeking to meet their liquidity needs
though the acquisition of high rate retail deposits. During the past quarter,
the Company elected to not participate in the government's Troubled Asset
Relief Program (the "TARP") based on our assessment of the Company's capital
position and economic conditions in our market area. The Company is
participating in the liquidity guarantee programs of the FDIC to provide
additional assurances to our depositors regarding the safety of their
deposits."
At December 31, 2008, Wayne Savings Bancshares, Inc. reported total assets
of $405.4 million, up from total assets of $401.6 million at March 31, 2008.
The increase in assets was primarily due to an increase in loans, partially
offset by decreases in cash and investment securities. Deposits at December
31, 2008 were $310.8 million, a decrease of $6.9 million, or 2.2% from $317.7
million at March 31, 2008. The decrease in deposits was primarily due to
management's decision to not compete aggressively with high rate retail CDs
offered by competitors in the Company's market area. Borrowed funds at a cost
lower than retail deposit rates were used to partially offset the decrease in
deposits.
Stockholders' equity at December 31, 2008 amounted to $34.1 million, or
8.41% of total assets, compared to $34.1 million, or 8.49% of total assets, at
March 31, 2008. During this period, net income was offset by cash dividends
and a decrease in accumulated other comprehensive income.
Established in 1899, Wayne Savings Community Bank, the wholly owned
subsidiary of Wayne Savings Bancshares, Inc., has eleven full-service banking
locations in the communities of Wooster, Ashland, Millersburg, Rittman, Lodi,
North Canton, and Creston, Ohio.
Statements contained in this news release which are not historical facts
may be forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those currently anticipated due to a number of factors.
Factors which could result in material variations include, but are not limited
to, changes in interest rates which could affect net interest margins and net
interest income, competitive factors which could affect net interest income
and noninterest income, changes in demand for loans, deposits and other
financial services in the Company's market area; changes in asset quality,
general economic conditions as well as other factors discussed in documents
filed by the Company with the Securities and Exchange Commission from time to
time. The Company undertakes no obligation to update these forward-looking
statements to reflect events or circumstances that occur after the date on
which such statements were made.
SOURCE Wayne Savings Bancshares Inc.