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WAYNE SAVINGS BANCSHARES, INC.

(WAYN)
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Wayne Savings Bancshares, Inc. Announces Earnings for the second quarter 2021

07/15/2021 | 04:06pm EDT

WOOSTER, Ohio, July 15, 2021 (GLOBE NEWSWIRE) -- Wayne Savings Bancshares, Inc. (OTCQX: WAYN), (the “Company”), the holding company parent of Wayne Savings Community Bank, reported net income (unaudited) of $1,802,000 or $0.73 per common share for the quarter ended June 30, 2021, an increase of $151,000 or 9.1%, compared to $1,651,000 or $0.64 per common share for the quarter ended June 30, 2020. The increase in net income was due to an increase in net interest income and a decrease in provision for loan losses partially offset with an increase in non-interest expense and an increase in provision for federal income taxes. The return on average equity and return on average assets for the second quarter of 2021 was 13.53% and 1.15%, respectively, compared to 13.27% and 1.25%, respectively, for the same period in 2020.

President and CEO James R. VanSickle commented, “Wayne Savings continues to concentrate on the financial needs of our customers. We have been able to attract a number of new sales and sales support staff to our team in 2021. They have fit right into our customer service focus and helped us achieve excellent loan and deposit growth in the first half of 2021. Our loan pipeline is robust and we hope to sustain this momentum throughout the remainder of 2021.”

Second Quarter 2021 Business Highlights

Net interest income was $4.7 million for the quarter ended June 30, 2021, an increase of $479,000, or 11.3%, compared to the quarter ended June 30, 2020. The net interest margin decreased from 3.39% for the quarter ended June 30, 2020, to 3.17% for the comparable period of 2021. Interest income on loans increased by $272,000, or 5.9%, as average loan yields increased 9 bps to 4.76% for the quarter ending June 30, 2021 compared to 4.67% for same period in 2020, due to deferred fees recognized as interest income on the Paycheck Protection Program loans. Interest income on investment securities and interest earning cash balances increased by $53,000 as the average balances increased $80.2 million to $183.4 million at June 30, 2021. Average yields declined from 1.52% in 2020 compared to the current yields of 0.97%, due to the continued low interest rate environment. Interest expense decreased $154,000 as the quarterly average cost of funds declined to 0.44% for June 30, 2021 from 0.66% at June 30, 2020.

  • Provision for loan losses was $278,000 in the second quarter of 2021 compared to $467,000 for the period ending June 30, 2020. This decrease in provision for loan losses expense was mainly due to the economic impact of the COVID-19 virus on the local economy and additional specific reserves required during the June 30, 2020 quarter on loans evaluated for impairment.
  • Noninterest income totaled $737,000, a decrease of $109,000, or 12.9%, mainly due to a decrease in the gain on sale of loans. Mortgage loan originations were higher in 2020 than in 2021, causing fewer loan sales in 2021 as mortgage loan rates continued at historic low levels during both years.
  • Noninterest expense totaled $3.0 million for the three-month period ended June 30, 2021, an increase of $340,000, or 12.9%, compared to the three months ended June 30, 2020, primarily due to increased salaries and employee benefits as the Company added additional sales and sales support staff to facilitate loan growth. The Company’s efficiency ratio was 54.4% as of June 2021 compared to 51.7% as of June 30, 2020.  

The Company reported net income (unaudited) of $3.7 million or $1.49 per common share for the six months ended June 30, 2021, an increase of $721,000 or 24.3%, compared to $3.0 million or $1.15 per common share for the same period ended June 30, 2020. The increase in net income was due to an increase in net interest income and a decrease in provision for loan losses, partially offset by an increase in non-interest expense and an increase in provision for federal income taxes. The return on average equity and return on average assets for the six months ended June 30, 2021, was 13.88% and 1.20%, respectively, compared to 11.97% and 1.17%, respectively, for the same period in 2020.

2021 Year-to-Date Business Highlights

Net interest income was $9.4 million for the six-month period ended June 30, 2021, an increase of $994,000, or 11.8%, compared to the same period in 2020 as the six-month average net loan balances increased $14.5 million from the June 30, 2020 period. Net interest margin for the six months ended June 30, 2021 and 2020, declined by 25 basis points to 3.23% as the average yield on interest-earning assets decreased 50 basis points and the average rate on interest-bearing liabilities declined by 25 basis points due to the persistence of the market’s low interest rates. Interest income on loans increased by $537,000, or 5.8%, as loan yields increased 9 bps to 4.84% at June 30, 2021 compared to 3.73% for same period in the prior year caused by the deferred fees recognized as interest income on the Paycheck Protection Program loans. Interest income on investment securities and interest earning cash balances increased by $90,000 as the average balance increased $85.0 million to $180.7 million at June 30, 2020.   Average yields declined from 1.80% for the six-month period ending June 30, 2020 to 1.05% for the 2021 period, due to the continued low interest rate environment.

  • Net loan balances increased from $391.4 million at December 31, 2020, to $417.5 million, an increase of $26.1 million, or 13.3% of annualized growth in mainly commercial real estate loans.

  • Provision for loan losses was $441,000 for the six-month period ending June 30, 2021, compared to $1.1 million for the prior year. This decrease in provision for loan losses expense was mainly due to the economic impact of the COVID-19 virus on the local economy in 2020 and additional specific reserve required on loans evaluated for impairment for the June 30, 2020 period.
  • Noninterest income totaled $1.4 million, a decrease of 3.6%, mainly due to the reduction of gain on sale of loans. This is a result of the volume of the single-family mortgage loan sales declining to $9.4 million in 2021 from $12.8 million in 2020.
  • Noninterest expense totaled $5.8 million for the six-month period ended June 30, 2021, an increase of $651,000, or 12.7%, compared to the June 30, 2020 six-month period. This increase was primarily due to an increase in salaries and employee benefits and net occupancy and equipment expense.   These increases were mainly the result of additional sales and sales support staff to facilitate loan growth. The Company’s efficiency ratio was 53.6% for the six-month period ended June 30, 2021 compared to 52.1% for the same period ended June 2020.

June 30, 2021 Financial Condition

At June 30, 2021, the Company had total assets of $628.7 million, an increase of $37.1 million, from total assets at December 31, 2020. The growth in total assets includes a $26.1 million increase in net loans, primarily due to commercial loan additions, and increase in securities of $28.8 million, partially offset by a $17.9 million decrease in cash and cash equivalents compared to December 31, 2020.  

The allowance for loan losses increased from $4.7 million at December 31, 2020, to $5.1 million at June 30, 2021. 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 $711,000 from $1.4 million at December 31, 2020, as the Bank received proceeds from a foreclosure sale and a loan was transferred into foreclosed asset held for sale. Past due loan balances of 30 days and more decreased slightly from $3.0 million at December 31, 2020, to $2.8 million at June 30, 2021, mainly due to decreased commercial loan delinquencies.

Total liabilities increased $37.2 million mainly due to an increase in deposits accounts of $44.6 million caused mainly by organic growth coupled with economic impact stimulus payments and the Paycheck Protection Program. The Company is continuing to enhance its deposit products in an effort to serve its customers and increase deposit balances.

Total stockholders’ equity declined by $91,000 in the first half of 2021. The Company earned $3.7 million of net income for the six months ended June 30, 2021. The Company’s earnings was offset with the repurchase of treasury shares of $2.2 million and an additional $1.0 million was used to pay dividends.

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, Creston, and Fredericksburg, Ohio. The Bank also has a loan production office in Washingtonville, 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)
         
         
  June March December September
   2021   2021   2020   2020 
         
Interest and dividend income $5,364  $5,352  $5,168  $5,099 
Interest expense  630   670   716   771 
Net interest income  4,734   4,682   4,452   4,328 
Provision for loan losses  278   163   134   69 
Net interest income after provision for loan losses  4,456   4,519   4,318   4,259 
Non-interest income  737   615   742   890 
Non-interest expense  2,975   2,795   2,848   2,753 
Income before federal income taxes 2,218   2,339   2,212   2,396 
Provision for federal income taxes  416   452   439   447 
Net income $1,802  $1,887  $1,773  $1,949 
         
Earnings per share - basic $0.73  $0.76  $0.71  $0.77 
Earnings per share - diluted $0.72  $0.76  $0.68  $0.77 
Dividends per share $0.21  $0.21  $0.20  $0.20 
Return on average assets  1.15%  1.26%  1.25%  1.42%
Return on average equity  13.53%  14.22%  13.69%  15.38%
Shares outstanding  2,401,411   2,477,391   2,482,886   2,493,706 
Book value per share $21.66  $21.14  $20.99  $20.39 
         
         
  June March December September
   2020   2020   2019   2019 
         
Interest and dividend income $5,039  $5,050  $5,125  $5,130 
Interest expense  784   883   956   956 
Net interest income  4,255   4,167   4,169   4,174 
Provision for loan losses  467   620   5   181 
Net interest income after provision for loan losses  3,788   3,547   4,164   3,993 
Non-interest income  846   556   739   621 
Non-interest expense  2,635   2,484   2,785   2,667 
Income before federal income taxes 1,999   1,619   2,118   1,947 
Provision for federal income taxes  348   302   389   364 
Net income $1,651  $1,317  $1,729  $1,583 
         
Earnings per share - basic and diluted$0.64  $0.51  $0.66  $0.60 
Dividends per share $0.20  $0.20  $0.20  $0.20 
Return on average assets  1.25%  1.07%  1.40%  1.29%
Return on average equity  13.27%  10.65%  14.26%  13.14%
Shares outstanding  2,542,631   2,588,945   2,601,836   2,617,005 
Book value per share $19.75  $18.77  $18.60  $18.23 
         


WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data - unaudited)
         
         
 Three Months Ended  Six Months Ended
 June 30,  June 30,
 2021 2020  2021 2020
         
Interest income$5,364 $5,039  $10,716 $10,089
Interest expense 630  784   1,300  1,667
Net interest income 4,734  4,255   9,416  8,422
Provision for loan losses 278  467   441  1,087
Net interest income after provision for loan losses 4,456  3,788   8,975  7,335
Non-interest income 737  846   1,352  1,402
Non-interest expense        
Salaries and employee benefits 1,694  1,515   3,272  2,932
Net occupancy and equipment expense 486  424   972  845
Federal deposit insurance premiums 41  57   84  57
Franchise taxes 106  105   214  209
Advertising and marketing 36  37   67  66
Legal 26  23   37  53
Professional fees 72  50   132  94
ATM Network 102  67   193  137
Auditing and accounting 73  65   146  122
Stockholder expense 36  37   55  55
Other 303  256   598  549
Total non-interest expense 2,975  2,635   5,770  5,119
Income before federal income taxes 2,218  1,999   4,557  3,618
Provision for federal income taxes 416  348   868  650
Net income$1,802 $1,651  $3,689 $2,968
         
Earnings per share        
Basic$0.73 $0.64  $1.49 $1.15
Diluted$0.72 $0.64  $1.48 $1.15
         


WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data - unaudited)
 June 30, 2021 December 31, 2020
ASSETS   
    
Cash and cash equivalents$56,635  $74,490 
Securities, net (1) 127,579   98,826 
Loans held for sale 225   861 
Loans receivable, net 417,483   391,352 
Federal Home Loan Bank stock 4,226   4,226 
Premises & equipment, net 5,424   5,467 
Foreclosed assets held for sale, net 692   366 
Bank-owned life insurance 11,034   10,903 
Other assets 5,401   5,100 
TOTAL ASSETS$628,699  $591,591 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
    
Deposit accounts$529,175  $484,588 
Other short-term borrowings 20,953   23,075 
Federal Home Loan Bank advances 22,000   26,000 
Accrued interest payable and other liabilities 4,547   5,813 
TOTAL LIABILITIES 576,675   539,476 
    
    
Common stock (3,978,731 shares of $.10 par value issued) 398   398 
Additional paid-in capital 36,338   36,312 
Retained earnings 39,946   37,281 
Shares acquired by ESOP (12)  (24)
Treasury Stock, at cost - 1,577,320 shares and 1,495,845 shares at June 30, 2021 and December 31, 2020, respectively. (24,838)  (22,705)
Accumulated other comprehensive income 192   853 
TOTAL STOCKHOLDERS' EQUITY 52,024   52,115 
    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$628,699  $591,591 
    

(1) Includes available-for-sale and held-to-maturity classifications.
Note: The December 31, 2020 Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.



© GlobeNewswire 2021
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Financials (USD)
Sales 2020 18,9 M - -
Net income 2020 6,69 M - -
Net cash 2020 25,4 M - -
P/E ratio 2020 8,26x
Yield 2020 3,71%
Capitalization 63,0 M 63,0 M -
EV / Sales 2019 3,26x
EV / Sales 2020 1,46x
Nbr of Employees 106
Free-Float 62,7%
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Managers and Directors
James R. VanSickle President, Chief Executive Officer & Director
Myron L. Swartzentruber Chief Financial Officer, Co-Treasurer & Senior VP
Mark R. Witmer Executive Chairman
Matthew L. Hartzler Chief Risk Officer & Senior Operations Officer
Jonathan Ciccotelli Vice Chairman