Wayne Savings Bancshares, Inc. Announces Earnings for the First Quarter 2023

WOOSTER, Ohio, April 20, 2023 (GLOBE NEWSWIRE) -- Wayne Savings Bancshares, Inc. (OTCQX: WAYN), (the “Company”), the holding company parent of Wayne Savings Community Bank, reported net income (unaudited) of $2.3 million, or $1.04 per common share, for the quarter ended March 31, 2023, an increase of $212,000, or 10.3%, compared to $2.1 million, or $0.87 per common share, for the quarter ended March 31, 2022. The increase in net income was due to an increase in net interest income, partially offset with a decrease in non-interest income, and an increase in non-interest expenses. The return on average equity and return on average assets for the first quarter of 2023 was 19.58% and 1.23%, respectively, compared to 15.44% and 1.28%, respectively, for the same period in 2022.

President and CEO James R. VanSickle commented “We are pleased to report excellent operating results for the first quarter of 2023. Our high level of profitability, strong loan growth and superb team of community bankers have Wayne Savings well positioned to successfully manage through the current environment and the longer term.”

“Credit quality remains outstanding as a result of our strong credit culture and diverse customer mix. We remain optimistic about our opportunities to grow as an organization and promote shareholder value today, tomorrow, and years to come.”

2023 Select Business Highlights

• Wayne Savings Bancshares, Inc. and Main Street Financial Services Corporation announce a merger of equals transaction on February 23, 2023. The combined company will have a pro forma assets exceeding $1.3 billion and 18 branches from Wooster, Ohio to Wheeling, West Virginia.
  

• Wayne Savings Bancshares, Inc., the holding company parent of Wayne Savings Community Bank, announced on January 30, 2023, that it was named to the 2023 OTCQX Best 50. In January 2023, OTCQX ranked Wayne Savings Bancshares, Inc. 28th on its 2023 OTCQX Best 50. Companies in the 2023 OTCQX Best 50 were ranked based on their performance during the 2022 calendar year.
  

• Net loan balances increased to $620.1 million at March 31, 2023, compared to $476.6 million at March 31, 2022, or 30.1% growth, comprised mainly of $93.4 million of commercial loans secured by real estate and $46.9 million of one-to-four residential mortgage loans.
  

• Wayne Savings deposits increased $67.1 million, or 11.9%, to $629.7 million at March 31, 2023, compared to $562.6 million at March 31, 2022, primarily due to the growth in certificates of deposits of $97.5 million, partially offset by a decrease in demand deposits of $29.3 million.
  

• Wayne Savings Bancshares, Inc. declared a cash dividend $0.23 per share for the quarter ending March 31, 2023, on March 30, 2023. The quarterly cash dividend will be paid on May 3, 2023, to the stockholders of record as of April 19, 2023.
  

First Quarter 2023 Financial Highlights

• Net interest income was $5.9 million for the quarter ended March 31, 2023, an increase of $898,000, or 18.1%, compared to the quarter ended March 31, 2022. The net interest margin increased from 3.22% for the quarter ended March 31, 2022, to 3.29% for the comparable period of 2023. Interest income on loans increased by $2.3 million, or 45.8%, primarily related to the $145.6 million increase in average loan balances to $607.5 million for the quarter ended March 31, 2023, from $461.9 million for the same period of the prior year. Yields on investment securities and interest-earning cash balances increased 105 basis points from 1.40% to 2.45% at March 31, 2023. The average balances on investment securities and interest-earning deposits decreased $48.6 million.
  

• Provision for credit losses was $218,000 in the first quarter of 2023 under the newly adopted ASU 2016-13 Current Expected Credit Losses (CECL) method the Bank adopted on January 1, 2023. The adoption of CECL required a $113,000 adjustment to equity, net of taxes. In 2022 the Provision for loan losses for the first quarter was $174,000 using the incurred loss method.
  

• Noninterest income totaled $603,000, a decrease of $262,000, or 30.3%, from $865,000 for the quarter ended March 2022, caused by a gain of $229,000 on the sale of foreclosed assets held for sale in the 2022 quarter.
  

• Noninterest expense totaled $3.4 million for the three-month period ended March 31, 2023, an increase of $293,000, or 9.4%, compared to the three months ended March 31, 2022, primarily due to increased salaries and employee benefits as the Company added additional sales and sales support staff to facilitate loan and deposit growth and increased occupancy and equipment expense as the Company continues to expand into new market areas. The Company’s efficiency ratio was 52.6% for the three-month period ended March 31, 2023, compared to 53.3% for the same period in 2022.
  

March 31, 2023 Financial Condition

At March 31, 2023, the Company had total assets of $752.6 million, an increase of $22.9 million, from December 31, 2022. The growth in total assets includes a $25.2 million increase in net loans, partially offset by a decrease of $3.7 million in cash and cash equivalents, as compared to December 31, 2022.

The allowance for loan losses was $7.0 million at March 31, 2023, compared to $6.7 million at December 31, 2022. The allowance for loan losses and the related provision for loan losses is based on management’s judgment and evaluation of the loan portfolio. Management believes the current allowance for loan losses is adequate, however, changing economic and other conditions may require future adjustments to the allowance for loan losses.

Total nonperforming loans declined to $718,000, or 0.11% of gross loans, from $805,000, or 0.13% of gross loans, at December 31, 2022. Past due loan balances of 30 days and more decreased from $4.3 million, or 0.71% of gross loans, at December 31, 2022, to $2.3 million, or 0.37% of gross loans, at March 31, 2023, mainly due to decreased one-to-four residential mortgage loan delinquencies.

Total liabilities increased $19.7 million due to an increase in deposits accounts of $23.9 million.   Deposit accounts increased primarily due to increased certificates of deposit of $60.1 million, mainly due to brokered certificate of deposits, while the demand deposits decreased by $26.4 million.

Total stockholders’ equity increased by $3.2 million during the quarter ended March 31, 2023. The Company earned $2.3 million of net income for the period ended March 31, 2023, exceeding 2022 by 10.3%. The Company paid $505,000 in dividends during the quarter. Accumulated other comprehensive loss decreased by $1.5 million mainly due to a decrease in gross unrealized losses on securities available for sale as market interest rates decreased.

Established in 1899, Wayne Savings Community Bank, the wholly owned subsidiary of Wayne Savings Bancshares, Inc., has thirteen full-service banking locations in the communities of Wooster, Ashland, Millersburg, Rittman, Lodi, North Canton, Creston, Fredericksburg, Washingtonville and Dalton, Ohio. Additional information about Wayne Savings Community Bank is available at www.waynesavings.com.

Forward-Looking-Statements
This release contains forward-looking statements that are not historical facts and that are intended to be “forward-looking statements” as that term is defined by the Private Securities Litigation Reform Act of 1995.  These forward-looking statements may include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions and other statements contained in this release that are not historical facts and pertain to the Company’s future operating results.  When used in this release, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are generally intended to identify forward-looking statements.  Actual results may differ materially from the results discussed in these forward-looking statements, because such statements are inherently subject to significant assumptions, risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control.  These include but are not limited to: the possibility of adverse economic developments that may, among other things, increase default and delinquency risks in the Company’s loan portfolios; shifts in interest rates; shifts in the rate of inflation; shifts in the demand for the Company’s loan and other products; unforeseen increases in costs and expenses; lower-than-expected revenue or cost savings in connection with acquisitions; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment.  Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:
Myron Swartzentruber
Senior Vice President Chief Financial Officer
(330) 264-5767

WAYNE SAVINGS BANCSHARES, INC.
Selected Condensed Consolidated Financial Data
(Dollars in thousands, except share data - unaudited)
		March				December				September				June
			2023				2022				2022				2022
Interest and dividend income		$	7,901			$	7,518			$	6,892			$	5,889
Interest expense			2,050				1,248				670				564
Net interest income			5,851				6,270				6,222				5,325
Provision for credit losses*			218				381				410				257
Net interest income after
provision for credit losses*			5,633				5,889				5,812				5,068
Non-interest income			603				631				636				599
Non-interest expense			3,394				3,508				3,350				3,191
Income before federal income taxes			2,842				3,012				3,098				2,476
Provision for federal income taxes			563				603				589				457
Net income		$	2,279			$	2,409			$	2,509			$	2,019
Earnings per share - basic		$	1.04			$	1.09			$	1.14			$	0.88
Earnings per share - diluted		$	1.03			$	1.09			$	1.13			$	0.87
Dividends per share		$	0.23			$	0.23			$	0.23			$	0.23
Return on average assets			1.23	%			1.36	%			1.48	%			1.23	%
Return on average equity			19.58	%			22.87	%			22.85	%			17.37	%
Shares outstanding			2,196,457				2,192,738				2,191,338				2,185,688
Book value per share		$	21.82			$	20.40			$	18.94			$	19.33
		March				December				September				June
			2022				2021				2021				2021
Interest and dividend income		$	5,517			$	5,502			$	5,589			$	5,364
Interest expense			564				592				617				630
Net interest income			4,953				4,910				4,972				4,734
Provision for loan losses*			174				128				177				278
Net interest income after
provision for loan losses*			4,779				4,782				4,795				4,456
Non-interest income			865				598				663				737
Non-interest expense			3,101				3,156				3,057				2,975
Income before federal income taxes			2,543				2,224				2,401				2,218
Provision for federal income taxes			476				428				449				416
Net income		$	2,067			$	1,796			$	1,952			$	1,802
Earnings per share - basic		$	0.87			$	0.76			$	0.81			$	0.73
Earnings per share - diluted		$	0.86			$	0.75			$	0.80			$	0.72
Dividends per share		$	0.23			$	0.21			$	0.21			$	0.21
Return on average assets			1.28	%			1.12	%			1.23	%			1.15	%
Return on average equity			15.44	%			13.48	%			14.76	%			13.53	%
Shares outstanding			2,369,886				2,365,268				2,380,374				2,401,411
Book value per share		$	21.12			$	22.67			$	22.25			$	21.66
*Adopted ASU 2016-13 during the first quarter 2023: therefore, prior periods provision amount reflects the incurred loss method.

WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data - unaudited)
	Three Months Ended
	March 31,
	2023			2022
Interest income	$	7,901		$	5,517
Interest expense		2,050			564
Net interest income		5,851			4,953
Provision for credit losses *		218			174
Net interest income after provision for loan losses*		5,633			4,779
Non-interest income		603			865
Non-interest expense
Salaries and employee benefits		1,911			1,783
Net occupancy and equipment expense		584			478
Federal deposit insurance premiums		92			49
Franchise taxes		100			116
Advertising and marketing		55			41
Legal		12			21
Professional fees		94			113
ATM network		96			97
Auditing and accounting		57			61
Other		393			342
Total non-interest expense		3,394			3,101
Income before federal income taxes		2,842			2,543
Provision for federal income taxes		563			476
Net income	$	2,279		$	2,067
Earnings per share
Basic	$	1.04		$	0.87
Diluted	$	1.03		$	0.86
*Adopted ASU 2016-13 during the first quarter 2023: therefore, prior periods provision amount reflects the incurred loss method.

WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data - unaudited)
	March 31, 2023			December 31, 2022
ASSETS
Cash and cash equivalents	$	10,122		$	13,799
Securities, net (1)	91,931			91,769
Loans receivable, net	620,118			594,931
Federal Home Loan Bank stock	3,571			3,322
Premises & equipment, net	5,054			5,183
Bank-owned life insurance	11,499			11,434
Other assets	10,329			9,335
TOTAL ASSETS	$	752,624		$	729,773
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts	$	629,712		$	605,834
Other short-term borrowings	13,672			14,776
Federal Home Loan Bank advances	55,500			58,500
Accrued interest payable and other liabilities	5,812			5,933
TOTAL LIABILITIES	704,696			685,043
Common stock (3,978,731 shares of $.10 par value issued)	398			398
Additional paid-in capital	36,597			36,584
Retained earnings	51,306			49,645
Treasury Stock, at cost - 1,782,274 shares and 1,785,993 shares
at March 31, 2023 and December 31, 2022, respectively.	(30,400)			(30,459)
Accumulated other comprehensive loss	(9,973)			(11,438)
TOTAL STOCKHOLDERS' EQUITY	47,928			44,730
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	752,624		$	729,773
(1) Includes available-for-sale and held-to-maturity classifications.
Note: The December 31, 2022 Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.