FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20552
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
----------------------------------------------
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.
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(Exact name of registrant as specified in its charter)
United States 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 (Zip Code)
executive office)
Registrant's telephone number, including area code: (330) 264-5767
Check whether the issuer: (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
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
--- -----
As of November 8, 2000, the latest practicable date, 2,592,793 shares of the
registrant's common stock, $1.00 par value, were issued and outstanding.
Page 1 of 16 pages
<PAGE>
Wayne Savings Bancshares, Inc.
INDEX
Page
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II - OTHER INFORMATION 16
SIGNATURES 17
2
<PAGE>
Wayne Savings Bancshares, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
September 30, March 31,
ASSETS 2000 2000
<S> <C> <C>
Cash and due from banks $ 3,838 $ 2,502
Federal funds sold 1,475 3,475
Interest-bearing deposits in other financial institutions 6,352 8,332
------- -------
Cash and cash equivalents 11,665 14,309
Certificates of deposit in other financial institutions 700 4,000
Investment securities - at amortized cost, approximate
market value of $22,777 and $22,634 as of September 30, 2000
and March 31, 2000 23,150 23,199
Mortgage-backed securities available for sale - at market 3,152 3,450
Mortgage-backed securities - at cost, approximate
market value of $6,438 and $6,938 as of September 30, 2000
and March 31, 2000 6,497 7,046
Loans receivable - net 242,147 237,095
Loans held for sale - at lower of cost or market 570 317
Real estate acquired through foreclosure 90 90
Office premises and equipment - at depreciated cost 8,470 8,160
Federal Home Loan Bank stock - at cost 3,385 3,160
Accrued interest receivable on loans 1,277 1,255
Accrued interest receivable on mortgage-backed securities 65 60
Accrued interest receivable on investments and interest-bearing deposits 321 354
Prepaid expenses and other assets 1,448 1,390
Prepaid federal income taxes 138 184
------- -------
Total assets $303,075 $304,069
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $265,697 $264,952
Advances from the Federal Home Loan Bank 10,000 12,000
Advances by borrowers for taxes and insurance 752 777
Accrued interest payable 266 228
Accounts payable on mortgage loans serviced for others 87 100
Other liabilities 624 516
Deferred federal income taxes 388 375
------- -------
Total liabilities 277,814 278,948
Stockholders' equity
Common stock (20,000,000 shares of $1.00 par value authorized; 2,638,335 and
2,632,229 shares issued at September 30, 2000
and March 31, 2000, respectively) 2,638 2,632
Additional paid-in capital 14,423 14,393
Retained earnings - substantially restricted 8,874 8,777
Less 34,369 and 33,214 shares of treasury stock - at cost (663) (645)
Accumulated comprehensive loss, unrealized losses on
securities designated as available for sale, net of related tax effects (11) (36)
------- -------
Total stockholders' equity 25,261 25,121
------- -------
Total liabilities and stockholders' equity $303,075 $304,069
======= =======
</TABLE>
3
<PAGE>
Wayne Savings Bancshares, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share data)
Six months Three months
ended ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Interest income
Loans $ 9,245 $ 8,788 $4,650 $4,484
Mortgage-backed securities 312 276 148 168
Investment securities 757 394 396 224
Interest-bearing deposits and other 381 628 164 304
------ ------ ----- -----
Total interest income 10,695 10,086 5,358 5,180
Interest expense
Deposits 6,168 5,519 3,123 2,837
Borrowings 241 254 125 127
------ ------ ----- -----
Total interest expense 6,409 5,773 3,248 2,964
------ ------ ----- -----
Net interest income 4,286 4,313 2,110 2,216
Provision for losses on loans 73 44 22 23
------ ------ ----- -----
Net interest income after provision for losses on loans 4,213 4,269 2,088 2,193
Other income
Gain on sale of loans 55 21 35 1
Service fees, charges and other operating 422 335 224 166
------ ------ ----- -----
Total other income 477 356 259 167
General, administrative and other expense
Employee compensation and benefits 2,109 1,895 1,043 970
Occupancy and equipment 677 731 348 389
Federal deposit insurance premiums 32 101 14 66
Franchise taxes 125 178 75 90
Other operating 752 742 311 384
------ ------ ----- -----
Total general, administrative and other expense 3,695 3,647 1,791 1,899
------ ------ ----- -----
Earnings before income taxes 995 978 556 461
Federal incomes taxes
Current 348 357 199 (67)
Deferred (8) (24) (8) 225
------ ------ ----- -----
Total federal income taxes 340 333 191 158
------ ------ ----- -----
NET EARNINGS $ 655 $ 645 $ 365 $ 303
====== ====== ===== =====
EARNINGS PER SHARE
Basic $0.25 $0.25 $0.14 $0.12
==== ==== ==== ====
Diluted $0.25 $0.25 $0.14 $0.12
==== ==== ==== ====
</TABLE>
4
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Wayne Savings Bancshares, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except share data)
Six months Three months
ended ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net earnings $655 $645 $365 $303
Other comprehensive income (loss) net of tax:
Unrealized holding gains(losses) on securities
during the period, net of tax $13, $(25), $8
and $(2), respectively 25 (48) 15 (4)
--- --- --- ---
Comprehensive income $680 $597 $380 $299
=== === === ===
Accumulated comprehensive loss $(11) $(46) $(11) $(46)
=== === === ===
</TABLE>
5
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Wayne Savings Bancshares, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended September 30,
(In thousands)
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net earnings for the period $ 655 $ 645
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of discounts and premiums on loans,
investments and mortgage-backed securities - net 9 14
Amortization of deferred loan origination fees (64) (290)
Depreciation and amortization 349 367
Loans originated for sale in the secondary market (4,362) (1,750)
Proceeds from sale of loans 4,123 3,350
(Gain) loss on sale of loans (14) 12
Provision for losses on loans 73 44
Federal Home Loan Bank stock dividends (122) (106)
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans (22) (159)
Accrued interest receivable on mortgage-backed securities (5) (35)
Accrued interest receivable on investments and interest-bearing deposits 33 (34)
Prepaid expenses and other assets (58) 91
Accrued interest payable 38 4
Accounts payable on mortgage loans serviced for others (13) 207
Other liabilities 108 (18)
Federal income taxes
Current 46 (63)
Deferred (8) (24)
------ ------
Net cash provided by operating activities 766 2,255
Cash flows provided by (used in) investing activities:
Purchase of investment securities designated as held to maturity - (7,500)
Proceeds from maturity of investment securities 55 1,066
Purchase of mortgage-backed securities (1,000) (6,985)
Principal repayments on mortgage-backed securities 1,878 2,722
Loan principal repayments 16,329 20,545
Loan disbursements (21,390) (37,941)
Purchase of office premises and equipment - net (659) (1,128)
Purchase of Federal Home Loan Bank stock (103) -
Decrease in certificates of deposit in other financial institutions 3,300 2,000
------ ------
Net cash used in investing activities (1,590) (27,221)
------ ------
Net cash used in operating and investing activities
(balance carried forward) (824) (24,966)
------ ------
</TABLE>
6
<PAGE>
Wayne Savings Bancshares, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the six months ended September 30,
(In thousands)
2000 1999
<S> <C> <C>
Net cash used in operating and investing activities
(balance brought forward) $ (824) $(24,966)
Cash flows provided by (used in) financing activities:
Net increase in deposit accounts 745 23,202
Proceeds from Federal Home Loan Bank advances 7,000 -
Repayment of Federal Home Loan Bank advances (9,000) (1,000)
Advances by borrowers for taxes and insurance (25) 2
Proceeds from exercise of stock options 36 6
Dividends paid on common stock (558) (392)
Purchase of treasury shares (18) (106)
------ -------
Net cash provided by (used in) financing activities (1,820) 21,712
------ -------
Net decrease in cash and cash equivalents (2,644) (3,254)
Cash and cash equivalents at beginning of period 14,309 16,245
------ -------
Cash and cash equivalents at end of period $11,665 $ 12,991
====== =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ 290 $ 396
====== =======
Interest on deposits and borrowings $ 6,371 $ 5,769
====== =======
Supplemental disclosure of noncash investing activities:
Unrealized gains (losses) on securities designated as
available for sale, net of related tax effects $ 25 $ (48)
====== =======
Recognition of mortgage servicing rights in accordance
with SFAS No. 125 $ 41 $ 33
====== =======
Issuance of mortgage loan upon sale of real estate
acquired through foreclosure $ - $ 699
====== =======
</TABLE>
7
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Wayne Savings Bancshares, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the six and three month periods ended September 30, 2000 and 1999
1. Basis of Presentation
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-QSB and,
therefore, do not include information or footnotes necessary for a
complete presentation of financial position, results of operations and
cash flows in conformity with generally accepted accounting principles.
Accordingly, these financial statements should be read in conjunction
with the financial statements and notes thereto of Wayne Savings
Bancshares, Inc. included in the Annual Report on Form 10-KSB for the
year ended March 31, 2000. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) which are
necessary for a fair presentation of the financial statements have been
included. The results of operations for the six and three month periods
ended September 30, 2000 are not necessarily indicative of the results
which may be expected for an entire fiscal year.
2. Principles of Consolidation
The accompanying consolidated financial statements include Wayne
Savings Bancshares, Inc. (the "Company") and its wholly-owned
subsidiary, Wayne Savings Community Bank ("Wayne Savings" or the
"Bank"). In fiscal 1999, the Bank formed a new federal savings bank
subsidiary in North Canton, Ohio named Village Savings Bank, F.S.B.
("Village"), together referred to as "the Banks".
All significant intercompany transactions and balances have been
eliminated in the consolidation.
3. Earnings Per Share
Basic earnings per common share is computed based upon the weighted
average number of common shares outstanding during the period. Diluted
earnings per common share include the dilutive effect of additional
potential common shares issuable under the Company's stock option plan.
The computations were as follows:
8
<PAGE>
Wayne Savings Bancshares, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six and three month periods ended September 30, 2000 and 1999
3. Earnings Per Share (continued)
<TABLE>
<CAPTION>
For the six months ended September 30 2000 1999
<S> <C> <C>
Weighted average common shares
outstanding (basic) 2,604,077 2,603,715
Dilutive effect of assumed exercise
of stock options 13,654 18,903
--------- ---------
Weighted average common shares
outstanding (diluted) 2,617,731 2,622,618
========= =========
For the three months ended September 30 2000 1999
Weighted average common shares
outstanding (basic) 2,604,507 2,603,235
Dilutive effect of assumed exercise
of stock options 13,520 18,903
--------- ---------
Weighted average common shares
outstanding (diluted) 2,618,027 2,622,138
========= =========
</TABLE>
4. Effects of Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which
requires entities to recognize all derivatives in their financial
statements as either assets or liabilities measured at fair value. SFAS
No. 133 also specified new methods of accounting for hedging
transactions, prescribes the items and transactions that may be hedged,
and specifies detailed criteria to be met to qualify for hedge
accounting.
The definition of a derivative financial instrument is complex, but in
general, it is an instrument with one or more underlyings, such as an
interest rate or foreign exchange rate that is applied to a notional
amount, such as an amount of currency, to determine the settlement
amount(s). It generally requires no significant initial investment and
can be settled net or by delivery of an asset that is readily
convertible to cash. SFAS No. 133 applies to derivatives embedded in
other contracts, unless the underlyings of the embedded derivative is
clearly and closely related to the host contract.
9
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Wayne Savings Bancshares, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the six and three month periods ended September 30, 2000 and 1999
4. Effects of Recent Accounting Pronouncements (continued)
SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years
beginning after June 15, 2000. On adoption, entities are permitted to
transfer held-to-maturity debt securities to the available-for-sale or
trading category without calling into question their intent to hold
other debt securities to maturity in the future. SFAS No. 133 is not
expected to have a material impact on the Company's financial
statements.
In September 2000, the FASB issued SFAS No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities", which revises the standards for accounting for
securitizations and other transfers of financial assets and collateral
and requires certain disclosures, but carries over most of the
provisions of SFAS No. 125 without reconsideration. SFAS No. 140 is
effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The
Statement is effective for recognition and reclassification of
collateral and for disclosures relating to securitization transactions
and collateral for fiscal years ending after December 15, 2000. SFAS
No. 140 is not expected to have a material effect on the Company's
financial position or results of operations.
10
<PAGE>
Wayne Savings Bancshares, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Discussion of Financial Condition Changes from March 31, 2000 to September 30,
2000
At September 30, 2000, the Company had total assets of $303.1 million, a
decrease of $994,000, or .3%, from March 31, 2000. The decrease was due
primarily to a $2.0 million reduction in the balance of advances from the
Federal Home Loan Bank, partially offset by an increase in deposits totaling
$745,000.
Cash and due from banks, federal funds sold, interest-bearing deposits,
certificates of deposit and investment securities totaled approximately $35.5
million, a decrease of approximately $6.0 million, or 14.4%, from March 31, 2000
levels. Regulatory liquidity approximated 16.6% at September 30, 2000, compared
to 17.9% at March 31, 2000. During the quarter ended September 30, 2000, excess
liquidity was used to fund loan originations and to repay Federal Home Loan Bank
advances.
Mortgage-backed securities decreased to approximately $9.6 million at September
30, 2000 as compared to $10.5 million at March 31, 2000. The decrease of
$847,000, or 8.1%, was primarily due to principal repayments of $1.9 million,
partially offset by purchases totaling $1.0 million.
Loans receivable and loans held for sale increased by approximately $5.3
million, or 2.2%, over the March 31, 2000 total. This increase resulted from
loan disbursements of $25.8 million, which were partially offset by principal
repayments of $16.3 million and sales of $4.1 million. The allowance for loan
losses totaled $868,000 at September 30, 2000, as compared to $793,000 at March
31, 2000. Nonperforming loans totaled $253,000 at September 30, 2000 and
$200,000 at March 31, 2000. The allowance for loan losses totaled 343.0% and
396.5% of nonperforming loans at September 30, 2000 and March 31, 2000,
respectively. Although management believes that its allowance for loan losses at
September 30, 2000, was adequate based upon the available facts and
circumstances, there can be no assurance that additions to such allowance will
not be necessary in future periods, which would adversely affect the Company's
results of operations.
Deposits increased by approximately $745,000, or .3%, from the March 31, 2000
level to $265.7 million at September 30, 2000. The increase in deposits was
primarily attributable to growth achieved at new branch office locations,
coupled with management's continuing efforts to achieve a moderate rate of
growth through marketing and other business strategies.
The Banks are subject to capital standards which generally require the
maintenance of regulatory capital sufficient to meet each of three tests, the
tangible capital requirement, the core capital requirement and the risk-based
capital requirement. At September 30, 2000, both Wayne Savings and Village's
regulatory capital exceeded all minimum capital requirements.
11
<PAGE>
Wayne Savings Bancshares, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Six Month Periods Ended September 30,
2000 and 1999
Net earnings totaled $655,000 for the six months ended September 30, 2000, as
compared to net earnings of $645,000 for the same period in 1999, an increase of
$10,000, or 1.6%. The increase in net earnings resulted primarily from an
increase of $121,000, or 34.0% in other income, which was partially offset by a
decrease of $27,000, or .6%, in net interest income, an increase of $29,000, or
65.9%, in the provision for losses on loans, an increase of $48,000, or 1.3%, in
general, administrative and other expenses, and an increase of $7,000 in the
provision for federal income taxes.
Net Interest Income
Interest income on loans and mortgage-backed securities totaled $9.6 million for
the six months ended September 30, 2000, an increase of $493,000, or 5.4%, over
the same period in 1999. The increase can be primarily attributed to a $16.5
million, or 7.0%, increase in the average balance of loans and mortgage-backed
securities outstanding.
Interest income on investments and interest-bearing deposits increased by
$116,000, or 11.4%, during the six months ended September 30, 2000, as compared
to the same period in 1999, as a result of a slight increase in the average
balance from year to year, coupled with an increase in the average yield.
Interest expense on deposits and borrowings increased by $636,000, or 11.0%,
during the six months ended September 30, 2000, over the same period in 1999.
The increase can be primarily attributed to a $19.4 million, or 7.6%, increase
in the average balance of interest-bearing liabilities year to year, coupled
with an increase in the average cost.
As a result of the foregoing changes in interest income and interest expense,
net interest income decreased by $27,000, or .6%, during the six months ended
September 30, 2000, as compared to the same period in 1999.
Provision for Losses on Loans
A provision for losses on loans is charged to earnings to bring the total
allowance for loan losses to a level considered appropriate by management based
on historical experience, the volume and type of lending conducted by the
Company, the status of past due principal and interest payments, general
economic conditions, particularly as such conditions relate to the Company's
market area, and other factors related to the collectibility of the Company's
loan portfolio. As a result of such analysis, management recorded a $73,000
provision for losses on loans during the six months ended September 30, 2000, an
increase of $29,000, or 65.9%, over the comparable 1999 period, primarily due to
growth in the loan portfolio coupled with management's assessment of the
collateral securing nonperforming loans. The provision for losses on loans is
recorded based upon management's assessment of the risk inherent in the loan
portfolio. There can be no assurance that the loan loss allowance of the Company
will be adequate to cover losses on nonperforming assets in the future.
12
<PAGE>
Wayne Savings Bancshares, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Six Month Periods Ended September 30,
2000 and 1999 (continued)
Other Income
Other income totaled $477,000 for the six months ended September 30, 2000, an
increase of $121,000, or 34.0%, over the comparable 1999 period. This increase
was due primarily to an $87,000, or 26.0%, increase in service fees, charges,
and other operating income coupled with a $34,000 increase in gain on sale of
loans. The increase in service fees, charges and other operating income was
comprised primarily of increases in service charges on checking accounts and
deposit transactions.
General, Administrative and Other Expense
General, administrative and other expense increased by $48,000, or 1.3%, during
the current six month period, due primarily to a $214,000, or 11.3%, increase in
employee compensation and benefits and a $10,000, or 1.3%, increase in other
operating expenses, which were partially offset by a decrease of $54,000, or
7.4%, in occupancy and equipment, a $69,000, or 68.3% decrease in federal
deposit insurance premiums, and a $53,000, or 30.0%, decrease in franchise
taxes. The increase in employee compensation and benefits is primarily
attributed to additional staffing requirements coupled with normal merit
increases. The increase in other operating expenses is due to attendant costs
related to account growth. The decrease in federal deposit insurance premiums
was due to decreased premium rates. The decrease in franchise taxes was
primarily attributable to the net operating loss at Village.
Federal Income Taxes
The provision for federal income taxes amounted to $340,000 for the six months
ended September 30, 2000, an increase of $7,000, or 2.1%, as compared to the
same period in 1999. The increase resulted primarily from a $17,000, or 1.7%,
increase in pretax earnings year to year. The effective tax rate for the six
months ended September 30, 2000 and 1999 was 34.2%, and 34.0%, respectively.
13
<PAGE>
Wayne Savings Bancshares, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three Month Periods Ended September 30,
2000 and 1999
Net earnings totaled $365,000 for the three months ended September 30, 2000, as
compared to net earnings of $303,000 for the same period in 1999, an increase of
$62,000, or 20.5%. The increase in net earnings resulted primarily from an
increase of $92,000, or 55.1%, in other income, and a $108,000, or 5.7%,
decrease in general, administrative, and other expenses, which were partially
offset by a decrease of $106,000, or 4.8%, in net interest income and a $33,000
increase in the provision for federal income taxes.
Net Interest Income
Interest income on loans and mortgage-backed securities increased by $146,000,
or 3.1%, for the three months ended September 30, 2000 over the same period in
1999. The increase can be primarily attributed to an increase in the average
balance of loans and mortgage-backed securities outstanding.
Interest income on investments and interest-bearing deposits increased $32,000,
or 6.1%, during the current three-month period, as compared to the same period
in 1999, as a result of an increase in the average balance of interest-earning
assets from year to year.
Interest expense on deposits and borrowings increased by $284,000, or 9.6%, for
the three month period ended September 30, 2000 over the comparable period in
1999. The increase can be primarily attributed to an increase in the average
balance of interest-bearing liabilities year to year.
Provision for Losses on Loans
A provision for losses on loans is charged to earnings to bring the total
allowance for loan losses to a level considered appropriate by management.
Management recorded a $22,000 provision for losses on loans during the three
months ended September 30, 2000. The provision for losses on loans was recorded
based upon growth in the loan portfolio, management's assessment of the risk
inherent in the loan portfolio and management's assessment of the collateral
securing non-performing loans. There can be no assurance that the loan loss
allowance of the Company will be adequate to cover losses on non-performing
assets in the future.
14
<PAGE>
Wayne Savings Bancshares, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Comparison of Operating Results for the Three Month Periods Ended September 30,
2000 and 1999 (continued)
Other Income
Other income totaled $259,000 for the three months ended September 30, 2000, an
increase of $92,000 or 55.1%, over the comparable 1999 period. This increase was
due primarily to the $34,000 increase in gain on sale of loans, coupled with a
$58,000, or 34.9%, increase in service fees, charges and other operating income.
The increase in service fees related primarily to increased fees on checking
accounts and deposit transactions.
General, Administrative and Other Expense
General, administrative and other expense decreased by $108,000, or 5.7%, during
the current three-month period compared to the same quarter in 1999. Employee
compensation and benefits increased by $73,000, or 7.5%, during the three months
ended September 30, 2000 as compared to the same period in 1999. Occupancy and
equipment decreased by $41,000, or 10.5%, over the same period. Federal deposit
insurance premiums decreased by $52,000, or 78.8%. Other operating expense
decreased by $73,000, or 19.0%. The increase in employee compensation and
benefits was due primarily to an increase in staffing levels year to year,
coupled with normal merit increases. The decrease in federal deposit insurance
premiums was due to a premium rate reduction implemented in 2000. The decreases
in occupancy and equipment and other operating expenses primarily reflect the
effects of a cost containment program instituted by management during the
quarter.
Federal Income Taxes
The provision for federal income taxes amounted to $191,000 for the three months
ended September 30, 2000, an increase of $33,000, or 20.9%, as compared to the
same period in 1999. The increase was due primarily to the $95,000, or 20.6%,
increase in pre-tax earnings year to year. The effective tax rates for the three
months ended September 30, 2000 and 1999 were 34.4% and 34.3%, respectively.
15
<PAGE>
Wayne Savings Bancshares, Inc.
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities and Use of Proceeds
Not applicable
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable
ITEM 5. Other Information
Not applicable
ITEM 6. Exhibits and Reports on Form 8-K
Exhibits:
27 Financial Data Schedule for the six month
period ended September 30, 2000.
16
<PAGE>
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: November 10, 2000 By: /s/Charles F. Finn
----------------- --------------------------
Charles F. Finn
Chairman and President
Date: November 10, 2000 By: /s/Todd Tappel
------------------ --------------------------
Todd Tappel
Chief Financial Officer
17
