GlobeNewswire Inc | Jan 20, 2022 04:32PM EST

January 20, 2022

WOOSTER, Ohio, Jan. 20, 2022 (GLOBE NEWSWIRE) -- Wayne Savings Bancshares, Inc. (OTCQX: WAYN), (the Company), the holding company parent of Wayne Savings Community Bank, reported record net income (unaudited) of $7.4 million or $3.06 per common share for the year ended December 31, 2021, an increase of $747,000 or 11.2%, compared to $6.7 million or $2.63 per common share for the same period ended December 31, 2020. The increase in net income was due to growth in net interest income and a decrease in provision for loan losses, partially offset by a decrease in non-interest income, 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 year ended December 31, 2021, was 14.00% and 1.19%, respectively, compared to 13.26% and 1.25% for the same period in 2020.

The Company reported net income (unaudited) of $1,796,000 or $0.76 per common share for the quarter ended December 31, 2021, an increase of $23,000 compared to $1,773,000 or $0.71 per common share for the quarter ended December 31, 2020. The increase in net income was due to growth in net interest income and a decrease in provision for loan losses, partially offset by a decrease in non-interest income and an increase in total non-interest expense. The return on average equity and return on average assets for the fourth quarter of 2021 was 13.48% and 1.12%, respectively, compared to 13.69% and 1.25% for the same period in 2020.

President and CEO James R. VanSickle commented, Wayne Savings is pleased to report record earnings for the year ended December 31, 2021. 2021 was an extraordinary year of growth for the Company. I am very proud of what our bank and our employees achieved during what has been a challenging year for all of us.

We remain excited about the opportunity to grow our business by increasing market share in existing locations and expanding to new markets. Wayne Savings is optimistic about our future and thankful for the continued support of our customers, employees and shareholders.

2021 Select Business Highlights

-- Net loan balances increased from $391.4 million at December 31, 2020, to $454.6 million for the year ended December 31, 2021, an increase of $63.2 million, or 16.2%, primarily as a result of an increase in non-residential real estate loans. The growth percentage excluding the impact of the Paycheck Protection Program (PPP) loans was 20.6%. Executive Chair of the Board of Directors Mark R. Witmer commented, Agriculture and small business continue to perform well and provide a strong foundation for our local economy. Wayne Savings believes in building strong relationships with our customers and within our communities. We would like to thank our new and longstanding customers for their confidence in Wayne Savings.

-- Wayne Savings Bancshares, Inc. announced the opening of a new branch in Washingtonville, Ohio during the second quarter of 2021. This is Wayne Savings Community Banks first branch in Columbiana County. As a full-service office, Wayne Savings offers Washingtonville and the surrounding communities an array of consumer and commercial products and services, as well as online and digital solutions to help address customer banking preferences. As of December 31, 2021, the Washingtonville branch had $23.8 million of loans and deposit balances of $6.0 million. Our new office in Washingtonville accounted for 38% of our 2021 loan growth.

-- Wayne Savings deposits increased $55.9 million, or 11.5%, in 2021 primarily due to $30.1 million of growth in our Platinum checking accounts. Personal platinum checking accounts increased from $93.2 million to $113.7 million during 2021, while business platinum checking accounts increased from $22.5 million to $32.1 million during the same period. Our Impact checking product, which pays a high rate of interest with the required debit card usage, increased $2.7 million during 2021.

-- Wayne Savings Bancshares, Inc. was named to the American Banker magazines Top 200 Publicly Traded Community Banks and Thrifts in its May 2021 issue. American Banker ranked Wayne Savings Bancshares, Inc. 50th on its Top 200 Publicly Traded Community Banks and Thrifts based on a three-year average return on equity as of December 31, 2020 (Source: Capital Performance Group).

Fourth Quarter 2021 Financial Highlights

-- Net interest income was $4.9 million for the quarter ended December 31, 2021, an increase of $458,000, or 10.3%, compared to the quarter ended December 31, 2020. The net interest margin decreased from 3.24% for the quarter ended December 31, 2020, to 3.19% for the comparable period of 2021. Interest income on loans increased by $303,000, or 6.4%, while average loan yields decreased 21 bps to 4.57% for the quarter ending December 31, 2021, compared to 4.78% for the same period of 2020. The increase in interest income was primarily related to deferred fees recognized on the PPP loans and $44.5 million of increased average loan balances for the quarter. Interest income on securities increased by $31,000 as average balances increased $44.4 million to $116.7 million at December 31, 2021. Average yields on securities declined from 2.01% in 2020 compared to the yields of 1.35% in 2021. Interest expense decreased $124,000 as the quarterly average cost of funds declined to 0.40% for the quarter ended December 31, 2021, from 0.56% for the same period in 2020.

-- Provision for loan losses was relatively unchanged at $128,000 in the fourth quarter of 2021 compared to $134,000 for the same period in 2020. -- Noninterest income totaled $598,000, a decrease of $144,000, or 19.4%, from $742,000 for the quarter ended December 2020, mainly due to a decrease in the gain on sale of loans. Mortgage loans originations were lower in 2021 than in 2020, prompting fewer loan sales in 2021. -- Noninterest expense totaled $3.2 million for the three-month period ended December 31, 2021, an increase of $308,000, or 10.8%, compared to the three months ended December 31, 2020, primarily due to increased salaries and employee benefits as the Company added additional sales and sales support staff to facilitate loan growth. The Companys efficiency ratio was 57.2% for the quarter ended December 2021 compared to 54.8% for the same period in 2020. Our excellent efficiency ratio is a result of our disciplined expense management philosophy.

2021 Year-to-Date Financial Highlights

-- Net interest income was $19.3 million for the year ended December 31, 2021, an increase of $2.1 million, or 12.2%, compared to the same period in 2020 as the annual average loan balances increased $23.9 million from the December 31, 2020 period. Net interest margin for the year was 3.22% for 2021 compared to 3.34% for the previous year. During 2021, the average yield on interest-earning assets declined 34 basis points and the average rate on interest-bearing liabilities decreased 22 basis points. The decline in our net interest margin over the last few years has been due to the persistence of the low interest rate environment. Interest income on loans increased by $1.3 million, or 6.7%, as loan yields were 4.78% in 2021, compared to 4.75% for 2020. This was due to the recognition of deferred fees as interest income on the PPP loans and $23.9 million of increased average loan balances from the December 31, 2020 annual average balances. Interest income on securities increased by $258,000 as the average balance increased $54.6 million to $118.6 million during 2021. Average yields on securities declined from 2.17% for the year ending December 31, 2020, to 1.39% for the same period in 2021, due primarily to securities purchased in 2021 at lower yields and accelerated prepayments. Interest expense decreased $645,000 as the twelve-month average cost of funds declined to 0.44% for 2021, from 0.66% for 2020. -- Provision for loan losses was $746,000 for the year ending December 31, 2021, compared to $1.3 million for the prior year. The decrease in provision for loan losses expense was primarily due to the uncertainty of the economic impact of COVID-19 in 2020 compared to the improving economic factors in 2021. -- Noninterest income totaled $2.6 million, a decrease of 13.9%, due primarily to the reduction of gain on sale of loans. This is the result of the volume of the single-family mortgage loan sales declining from $26.5 million in 2020 to $17.6 million in 2021. -- Noninterest expense totaled $12.0 million for the year ended December 31, 2021, an increase of $1.3 million, or 11.8%, compared to the December 31, 2020 year. The increase was primarily due to the growth in salaries and employee benefits and net occupancy and equipment expense. The increase in salaries and employee benefits was due to additional sales and sales support staff added to facilitate loan growth and expansion into new markets. The Companys efficiency ratio was 54.7% for the year ended December 31, 2021, compared to 53.0% for the same period in 2020. -- We continue to enhance shareholder value through earnings improvement and stock repurchase programs. In December 2021, Wayne Savings Bancshares, Inc. completed the December 2020 repurchase plan and adopted a new repurchase plan authorizing an additional 118,707 shares of common stock to be repurchased.

December 31, 2021 Financial Condition

At December 31, 2021, the Company had total assets of $636.0 million, an increase of $44.4 million, from total assets at December 31, 2020. The growth in total assets includes a $63.2 million increase in net loans and an increase in securities of $11.4 million, partially offset by a $30.1 million decrease in cash and cash equivalents as compared to December 31, 2020. The increase in net loans receivable was primarily related to the growth in non-residential real estate loans of $75.8 million.

The allowance for loan losses increased from $4.7 million at December 31, 2020, to $5.4 million at December 31, 2021. The allowance for loan losses and the related provision for loan losses is based on managements 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 have declined to $1.2 million at year end 2021, from $1.4 million at December 31, 2020. Past due loan balances of 30 days and more increased from $3.0 million at December 31, 2020, to $3.3 million at December 31, 2021, mainly due to increased non-residential real estate loan delinquencies.

Total liabilities increased $42.9 million due to an increase in deposits accounts of $55.9 million. The Platinum checking accounts increased $30.1 million. The Platinum products, available to both businesses and individuals, represent $145.9 million of our deposit balances at December 31, 2021. Statement savings accounts increased by $11.3 million and basic business checking accounts increased $6.6 million in 2021.

Total stockholders equity increased by $1.5 million in the year ended December 31, 2021. The Company earned $7.4 million of net income for the year ended December 31, 2021, exceeding 2020 by 11.2%. The Company repurchased 122,718 treasury shares, or $3.2 million, and paid $2.0 million in dividends during 2021. Accumulated other comprehensive income decreased by $957,000 mainly due to a decrease in gross unrealized gain on securities available for sale.

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

Forward-Looking-StatementsThis 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 Companys plans, objectives, expectations and intentions and other statements contained in this release that are not historical facts and pertain to the Companys 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 Companys 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 Companys loan portfolios; shifts in interest rates; shifts in the rate of inflation; shifts in the demand for the Companys 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) December September June March 2021 2021 2021 2021 Interest anddividend $ 5,502 $ 5,589 $ 5,364 $ 5,352 incomeInterest 592 617 630 670 expenseNet interest 4,910 4,972 4,734 4,682 incomeProvisionfor loan 128 177 278 163 lossesNet interest income afterprovisionfor loan 4,782 4,795 4,456 4,519 lossesNon-interest 598 663 737 615 incomeNon-interest 3,156 3,057 2,975 2,795 expenseIncome beforefederal income 2,224 2,401 2,218 2,339 taxesProvisionfor federal 428 449 416 452 income taxesNet income $ 1,796 $ 1,952 $ 1,802 $ 1,887 Earnings pershare - $ 0.76 $ 0.81 $ 0.73 $ 0.76 basicEarnings pershare - $ 0.75 $ 0.80 $ 0.72 $ 0.76 dilutedDividends $ 0.21 $ 0.21 $ 0.21 $ 0.21 per shareReturn onaverage 1.12 % 1.23 % 1.15 % 1.26 %assetsReturn onaverage 13.48 % 14.76 % 13.53 % 14.22 %equityShares 2,365,268 2,380,374 2,401,411 2,477,391 outstandingBook value $ 22.67 $ 22.25 $ 21.66 $ 21.14 per share December September June March 2020 2020 2020 2020 Interest anddividend $ 5,168 $ 5,099 $ 5,039 $ 5,050 incomeInterest 716 771 784 883 expenseNet interest 4,452 4,328 4,255 4,167 incomeProvisionfor loan 134 69 467 620 lossesNet interest income afterprovisionfor loan 4,318 4,259 3,788 3,547 lossesNon-interest 742 890 846 556 incomeNon-interest 2,848 2,753 2,635 2,484 expenseIncome beforefederal income 2,212 2,396 1,999 1,619 taxesProvisionfor federal 439 447 348 302 income taxesNet income $ 1,773 $ 1,949 $ 1,651 $ 1,317 Earnings pershare - $ 0.71 $ 0.77 $ 0.64 $ 0.51 basicEarnings pershare - $ 0.68 $ 0.77 $ 0.64 $ 0.51 dilutedDividends $ 0.20 $ 0.20 $ 0.20 $ 0.20 per shareReturn onaverage 1.25 % 1.42 % 1.25 % 1.07 %assetsReturn onaverage 13.69 % 15.38 % 13.27 % 10.65 %equityShares 2,482,886 2,493,706 2,542,631 2,588,945 outstandingBook value $ 20.99 $ 20.39 $ 19.75 $ 18.77 per share

WAYNE SAVINGS BANCSHARES, INC. Condensed Consolidated Statements of Income (Dollars in thousands, except share data - unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Interest income $ 5,502 $ 5,168 $ 21,807 $ 20,356 Interest expense 592 716 2,509 3,154 Net interest income 4,910 4,452 19,298 17,202 Provision for loan losses 128 134 746 1,290 Net interest income after 4,782 4,318 18,552 15,912 provision for loan lossesNon-interest income 598 742 2,613 3,034 Non-interest expense Salaries and employee 1,869 1,646 6,920 6,108 benefitsNet occupancy and 503 480 1,943 1,775 equipment expenseFederal deposit insurance 59 41 224 131 premiumsFranchise taxes 113 103 443 418 Advertising and marketing 66 21 171 141 Legal (1 ) 8 47 92 Professional fees 52 65 202 224 ATM network 91 83 380 311 Auditing and accounting 40 64 257 250 Other 364 337 1,396 1,270 Total non-interest expense 3,156 2,848 11,983 10,720 Income before federal 2,224 2,212 9,182 8,226 income taxesProvision for federal 428 439 1,745 1,536 income taxesNet income $ 1,796 $ 1,773 $ 7,437 $ 6,690 Earnings per share Basic $ 0.76 $ 0.71 $ 3.06 $ 2.63 Diluted $ 0.75 $ 0.68 $ 3.03 $ 2.60

WAYNE SAVINGS BANCSHARES, INC.Condensed Consolidated Balance Sheets(Dollars in thousands, except share data - unaudited) December December 31, 2021 31, 2020ASSETS Cash and cash equivalents $ 44,437 $ 74,490 Securities, net (1) 110,216 98,826 Loans held for sale 272 861 Loans receivable, net 454,587 391,352 Federal Home Loan Bank stock 4,226 4,226 Premises & equipment, net 5,223 5,467 Bank-owned life insurance 11,169 10,903 Other assets 5,874 5,466 TOTAL ASSETS $ 636,004 $ 591,591 LIABILITIES AND STOCKHOLDERS? EQUITY Deposit accounts $ 540,456 $ 484,588 Other short-term borrowings 22,402 23,075 Federal Home Loan Bank advances 14,000 26,000 Accrued interest payable and other liabilities 5,520 5,813 TOTAL LIABILITIES 582,378 539,476 Common stock (3,978,731 shares of $.10 par value 398 398 issued)Additional paid-in capital 36,420 36,312 Retained earnings 42,698 37,281 Shares acquired by ESOP - (24 )Treasury Stock, at cost - 1,613,463 shares and 1,495,845 sharesat December 31, 2021 and December 31, 2020, (25,786 ) (22,705 )respectively.Accumulated other comprehensive income (loss) (104 ) 853 TOTAL STOCKHOLDERS? EQUITY 53,626 52,115 TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY $ 636,004 $ 591,591 (1) Includes available-for-sale and held-to-maturity classifications.Note: The December 31, 2020 Condensed Consolidated Balance Sheet has beenderived from the audited Consolidated Balance Sheet as of that date.