Wayne Savings Bancshares, Inc. Announces Record Annual Earnings of $7.4 million and 16.2% Loan Growth for 2021

Rhea-AI Summary

Wayne Savings Bancshares, Inc. (OTCQX: WAYN) reported record net income of $7.4 million or $3.06 per share for the year ended December 31, 2021, an increase of 11.2% from 2020. This growth was attributed to rising net interest income and reduced loan loss provisions, despite declines in non-interest income and increased expenses. Net loans rose 16.2% to $454.6 million, largely from non-residential real estate lending. The Company opened a new branch in Washingtonville, contributing significantly to its growth. Assets totaled $636 million, with equity increasing by $1.5 million.

Positive

• Record net income of $7.4 million for the year, up 11.2% from 2020.
• Net interest income increased by $2.1 million, or 12.2%, for the year.
• Net loan balances grew 16.2% to $454.6 million, driven by non-residential real estate loans.
• Deposits increased by $55.9 million, or 11.5%, primarily in 'Platinum' checking accounts.
• New branch opened in Washingtonville contributed 38% of total loan growth.

Negative

• Decrease in non-interest income by 13.9% due to lower loan sales.
• Non-interest expenses increased by $1.3 million, or 11.8%, primarily from higher salaries and benefits.
• Net interest margin decreased from 3.34% in 2020 to 3.22% in 2021.
• Average yields on securities declined from 2.17% to 1.39% in 2021.

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 Bank’s 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 magazine’s 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 Company’s 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 Company’s 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 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 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-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)
		December				September				June				March
		2021				2021				2021				2021
Interest and dividend income		$	5,502			$	5,589			$	5,364			$	5,352
Interest expense			592				617				630				670
Net interest income			4,910				4,972				4,734				4,682
Provision for loan losses			128				177				278				163
Net interest income after
provision for loan losses			4,782				4,795				4,456				4,519
Non-interest income			598				663				737				615
Non-interest expense			3,156				3,057				2,975				2,795
Income before federal income taxes			2,224				2,401				2,218				2,339
Provision for federal income taxes			428				449				416				452
Net income		$	1,796			$	1,952			$	1,802			$	1,887
Earnings per share - basic		$	0.76			$	0.81			$	0.73			$	0.76
Earnings per share - diluted		$	0.75			$	0.80			$	0.72			$	0.76
Dividends per share		$	0.21			$	0.21			$	0.21			$	0.21
Return on average assets			1.12	%			1.23	%			1.15	%			1.26	%
Return on average equity			13.48	%			14.76	%			13.53	%			14.22	%
Shares outstanding			2,365,268				2,380,374				2,401,411				2,477,391
Book value per share		$	22.67			$	22.25			$	21.66			$	21.14
		December				September				June				March
		2020				2020				2020				2020
Interest and dividend income		$	5,168			$	5,099			$	5,039			$	5,050
Interest expense			716				771				784				883
Net interest income			4,452				4,328				4,255				4,167
Provision for loan losses			134				69				467				620
Net interest income after
provision for loan losses			4,318				4,259				3,788				3,547
Non-interest income			742				890				846				556
Non-interest expense			2,848				2,753				2,635				2,484
Income before federal income taxes			2,212				2,396				1,999				1,619
Provision for federal income taxes			439				447				348				302
Net income		$	1,773			$	1,949			$	1,651			$	1,317
Earnings per share - basic		$	0.71			$	0.77			$	0.64			$	0.51
Earnings per share - diluted		$	0.68			$	0.77			$	0.64			$	0.51
Dividends per share		$	0.20			$	0.20			$	0.20			$	0.20
Return on average assets			1.25	%			1.42	%			1.25	%			1.07	%
Return on average equity			13.69	%			15.38	%			13.27	%			10.65	%
Shares outstanding			2,482,886				2,493,706				2,542,631				2,588,945
Book value per share		$	20.99			$	20.39			$	19.75			$	18.77

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 provision for loan losses		4,782				4,318			18,552			15,912
Non-interest income		598				742			2,613			3,034
Non-interest expense
Salaries and employee benefits		1,869				1,646			6,920			6,108
Net occupancy and equipment expense		503				480			1,943			1,775
Federal deposit insurance premiums		59				41			224			131
Franchise 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 income taxes		2,224				2,212			9,182			8,226
Provision for federal income taxes		428				439			1,745			1,536
Net 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 31, 2021				December 31, 2020
ASSETS
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 issued)		398				398
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 shares
at December 31, 2021 and December 31, 2020, respectively.		(25,786	)			(22,705	)
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 been derived from the audited Consolidated Balance Sheet as of that date.

FAQ

What are Wayne Savings Bancshares' earnings for 2021?

Wayne Savings Bancshares reported record net income of $7.4 million for the year ended December 31, 2021.

How did Wayne Savings Bancshares perform in the fourth quarter of 2021?

In Q4 2021, net income was $1.8 million, an increase from $1.77 million in Q4 2020.

What was the growth percentage of net loans for Wayne Savings Bancshares in 2021?

Net loan balances increased by 16.2% to $454.6 million for the year ended December 31, 2021.

How much did Wayne Savings Bancshares increase its deposits in 2021?

Wayne Savings Bancshares saw a deposit increase of $55.9 million, or 11.5%, in 2021.

What is the stock symbol for Wayne Savings Bancshares?

The stock symbol for Wayne Savings Bancshares is WAYN.