Wayne Savings Bancshares, Inc. Announces Record Earnings for six months ending June 30, 2022 and annualized loan growth of 26.5% for 2022

Rhea-AI Summary

Wayne Savings Bancshares (OTCQX: WAYN) reported record net income of $4.1 million or $1.75 per share for the first half of 2022, a 10.8% increase from 2021. Net interest income rose to $10.3 million, while total assets increased to $654.2 million. Loan balances grew 26.5% year-over-year, with significant growth in commercial and residential loans. Nonperforming loans decreased to $796,000. The company declared a cash dividend of $0.23 per share, payable on August 3, 2022. Despite rising non-interest expenses, the efficiency ratio improved to 53.6%.

Positive

• Record net income of $4.1 million, up 10.8% YoY.
• Net interest income increased by $862,000, or 9.2%.
• Loan balances surged by 26.5%, reaching $514.9 million.
• Nonperforming loans decreased to $796,000.
• Cash dividend declared at $0.23 per share.

Negative

• Non-interest income dropped by 18.7%, totaling $599,000.
• Non-interest expenses increased by $216,000, or 7.3%.

WOOSTER, Ohio, July 21, 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 $4.1 million, or $1.75 per common share, for the year to date period ended June 30, 2022, an increase of $397,000, or 10.8%, compared to $3.7 million, or $1.49 per common share, for the same period ended June 30, 2021. The increase in net income was due to an increase in net interest income and an increase in non-interest income partially offset with an increase in non-interest expenses. The return on average equity and return on average assets for the six months ending June 30, 2022 was 16.34% and 1.26%, respectively, compared to 13.88% and 1.20%, for the same period in 2021.

The Company reported net income (unaudited) of $2.0 million, or $0.88 per common share, for the quarter ended June 30, 2022, an increase of $217,000, or 12.0%, compared to $1.8 million, or $0.73 per common share, for the quarter ended June 30, 2021. 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 second quarter of 2022 was 17.37% and 1.23%, respectively, compared to 13.53% and 1.15%, for the same period in 2021.

President and CEO James R. VanSickle commented, “Wayne Savings is pleased to report record earnings for the year-to-date period ended June 30, 2022. We have experienced extraordinary loan originations of over $87.5 million for the first six months of 2022. Wayne Savings team of community bankers has been working hard to provide excellent customer service and achieve outstanding loan and deposit growth in the first half of 2022. We are optimistic about the opportunity to grow our business and thankful for the continued support of our customers, employees and shareholders.”

2022 Select Business Highlights

• Net loan balances increased to $514.9 million at June 30, 2022, compared to $417.5 million at June 30, 2021, or 23.3% growth, comprised mainly of $63.3 million of commercial loans secured by real estate and $32.2 million of one to four residential mortgage loans.
  
  
• Wayne Savings deposits increased $38.6 million, or 7.3%, to $567.7 million at June 30, 2022 compared to $529.2 million at June 30, 2021, primarily due to the growth in “Platinum” checking accounts of $30.9 million. Personal platinum checking accounts increased from $95.8 million at June 30, 2021 to $121.4 million for the year ended June 30, 2022, while business platinum checking accounts increased from $29.4 million at June 30, 2021 to $34.7 million during the same period ending in 2022. In addition to the platinum growth, our impact checking product increased from $9.5 million at June 30, 2021 to $13.2 million at June 30, 2022.
  
  
• On May 23, 2022, Wayne Savings Bancshares, Inc., purchased 189,398 shares from a single shareholder. This completed the stock repurchase program announced on December 16, 2021.
  
  
• Wayne Savings Bancshares, Inc. declared a cash dividend of $0.23 per share for the quarter ending June 30, 2022. The quarterly cash dividend will be paid on August 3, 2022 to the stockholders of record as of July 20, 2022.
  

Second Quarter 2022 Financial Highlights

• Net interest income was $5.3 million for the quarter ended June 30, 2022, an increase of $591,000, or 12.5%, compared to the quarter ended June 30, 2021. The net interest margin increased from 3.15% for the quarter ended June 30, 2021, to 3.40% for the same period in 2022. Interest income on loans increased by $386,000, or 7.85%, primarily related to the $75.9 million of increased average loan balances to $489.4 million for the quarter ended June 30, 2022 from $413.6 million for the same period in the prior year.   Loan interest yields declined 42 bps to 4.34% for the quarter ending June 30, 2022, compared to 4.76% for the same period in 2021, mainly due to $395,000 deferred fees related to the Paycheck Protection Program loans recognized in 2021.   Interest income on securities increased by $106,000 as average balances decreased $16.9 million to $105.5 million at June 30, 2022, and average yields on securities rose from 1.35% in 2021 compared to the yields of 1.96% in 2022. Interest expense decreased $66,000 as the quarterly average cost of funds declined to 0.37% for the quarter ended June 30, 2022, from 0.44% for the same period in 2021.
  
  
• Provision for loan losses decreased to $257,000 for the second quarter 2022 compared to $278,000 for the same period in 2021.
  
  
• Noninterest income totaled $599,000, a decrease of $138,000, or 18.7%, from $737,000 for the quarter ended June 2021, caused by a decline in mortgage loans sold during the 2022 quarter, partially offset with increased deposit fees.
  
  
• Noninterest expense totaled $3.2 million for the three-month period ended June 30, 2022, an increase of $216,000, or 7.3%, compared to the three months ended June 30, 2021, primarily due to increased salaries and employee benefits as the Company added additional sales and sales support staff to facilitate loan and deposit growth. The Company’s efficiency ratio was 53.9% for the three-month period ended June 30, 2022, compared to 54.4% for the same period in 2021.
  

2022 Year-to-Date Business Highlights

Net interest income was $10.3 million for the six-month period ended June 30, 2022, an increase of $862,000, or 9.2%, compared to the same period in 2021 as the six-month average net loan balances increased $72.5 million from the June 30, 2021 period. Net interest margin for the six months ended June 30, 2022, rose by 10 basis points to 3.30%. The average yield on interest-earning assets increased 1 basis point and the average rate on interest-bearing liabilities declined by 9 basis points due to the persistence of the market’s low interest rates. Interest income on loans increased by $523,000, or 5.4%, as average balances increased for the six-month period at June 30, 2021 of $403.2 million, to $475.7 million for the period ended June 30, 2022. Loan interest yields declined 51 bps to 4.33% for the six-month period ending June 30, 2022, compared to 4.84% for the same period in 2021, primarily due to $937,000 deferred fees related to the Paycheck Protection Program loans recognized in 2021.   Interest income on investment securities and interest earning cash balances increased by $167,000 while the average balance decreased $37.3 million to $143.4 million at June 30, 2022. Average yields increased from 1.05% for the six-month period ending June 30, 2021, to 1.56% for the 2022 period as the Federal Reserve began raising interest rates. Deposit interest expense decreased $38,000 despite an increase in the average deposit balances of $53.4 million as the average rate declined by 6 bps.

• Net loan balances increased from $454.6 million at December 31, 2021, to $514.9 million at June 30, 2022, an increase of $60.3 million, or 26.5% of annualized growth consisting mainly of commercial real estate loans and one to four residential mortgage loans.
  
  
• Provision for loan losses was $431,000 for the six-month period ending June 30, 2022, compared to $441,000 for the same period in the prior year. This decrease in provision for loan losses expense was mainly due to the improved economic factors compared to the COVID-19 virus outlook on the local economy in 2021 and reduced specific reserve required on loans evaluated for impairment for the June 30, 2022 period.
  
• Noninterest income totaled $1.5 million, an increase of $112,000, or 8.3%, from $1.4 million for the six-month period ended June 30, 2021, caused by a gain of $229,000 on the sale of foreclosed assets held for sale was recorded during the six-month period ended June 30, 2022.

• Noninterest expense totaled $6.3 million for the year-to-date period ended June 30, 2022, an increase of $522,000, or 9.0%, compared to the June 30, 2021 six-month period. The increase was primarily due to an increase in salaries and employee benefits expense. The Company’s efficiency ratio was 53.6% for both six-month periods ended June 30, 2022 and 2021.
  

June 30, 2022 Financial Condition

At June 30, 2022, the Company had total assets of $654.2 million, an increase of $18.2 million, from December 31, 2021. The growth in total assets includes a $60.3 million increase in net loans, partially offset by a decrease of $35.2 million in cash and cash equivalents, as compared to December 31, 2021.

The allowance for loan losses was $5.9 million at June 30, 2022, compared 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 declined to $796,000 at June 30, 2022 from $1.2 million at December 31, 2021, as the Bank received payoffs of two nonperforming loans from a single customer totaling $402,000. Past due loan balances of 30 days and more decreased from $3.3 million at December 31, 2021, to $2.0 million at June 30, 2022, mainly due to lower commercial loan delinquencies.

Total liabilities increased $29.6 million from December 31,2021 to June 30, 2022 mainly due to an increase in deposits accounts of $27.3 million. The “Platinum” checking accounts increased $10.2 million. The Platinum checking account products, available to both businesses and individuals, represent $156.1 million of our deposit balances at June 30, 2022. Basic business checking accounts balances at June 30, 2022 were $71.1 million.

Total stockholders’ equity declined by $11.4 million in the first half of 2022. The Company earned $4.1 million of net income for the six months ended June 30, 2022, exceeding 2021 by 10.8%. The Company repurchased treasury shares of $4.9 million from a single shareholder and paid $1.0 million in dividends during the period. Accumulated other comprehensive loss increased by $9.6 million primarily due to an increase in gross unrealized loss on securities available for sale as market interest rates increased.

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)
		June				March				December				September
		2022				2022				2021				2021
Interest and dividend income		$	5,889			$	5,517			$	5,502			$	5,589
Interest expense			564				564				592				617
Net interest income			5,325				4,953				4,910				4,972
Provision for loan losses			257				174				128				177
Net interest income after
provision for loan losses			5,068				4,779				4,782				4,795
Non-interest income			599				865				598				663
Non-interest expense			3,191				3,101				3,156				3,057
Income before federal income taxes			2,476				2,543				2,224				2,401
Provision for federal income taxes			457				476				428				449
Net income		$	2,019			$	2,067			$	1,796			$	1,952
Earnings per share - basic		$	0.88			$	0.87			$	0.76			$	0.81
Earnings per share - diluted		$	0.87			$	0.86			$	0.75			$	0.80
Dividends per share		$	0.23			$	0.23			$	0.21			$	0.21
Return on average assets			1.23	%			1.28	%			1.12	%			1.23	%
Return on average equity			17.37	%			15.44	%			13.48	%			14.76	%
Shares outstanding			2,185,688				2,369,886				2,365,268				2,380,374
Book value per share		$	19.33			$	21.12			$	22.67			$	22.25
		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

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,
	2022			2021			2022			2021
Interest income	$	5,889		$	5,364		$	11,406		$	10,716
Interest expense		564			630			1,128			1,300
Net interest income		5,325			4,734			10,278			9,416
Provision for loan losses		257			278			431			441
Net interest income after provision for loan losses		5,068			4,456			9,847			8,975
Non-interest income		599			737			1,464			1,352
Non-interest expense
Salaries and employee benefits		1,909			1,694			3,692			3,272
Net occupancy and equipment expense		511			486			989			972
Federal deposit insurance premiums		46			41			95			84
Franchise taxes		115			106			231			214
Advertising and marketing		57			36			98			67
Legal		12			26			33			37
Professional fees		42			72			155			132
ATM network		94			102			191			193
Auditing and accounting		59			73			120			146
Other		346			339			688			653
Total non-interest expense		3,191			2,975			6,292			5,770
Income before federal income taxes		2,476			2,218			5,019			4,557
Provision for federal income taxes		457			416			933			868
Net income	$	2,019		$	1,802		$	4,086		$	3,689
Earnings per share
Basic	$	0.88		$	0.73		$	1.75		$	1.49
Diluted	$	0.87		$	0.72		$	1.73		$	1.48

WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data - unaudited)
	June 30, 2022				December 31, 2021
ASSETS
Cash and cash equivalents	$	9,248			$	44,437
Securities, net (1)		100,989				110,216
Loans held for sale		-				272
Loans receivable, net		514,893				454,587
Federal Home Loan Bank stock		4,226				4,226
Premises & equipment, net		5,074				5,223
Bank-owned life insurance		11,299				11,169
Other assets		8,498				5,874
TOTAL ASSETS	$	654,227			$	636,004
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts	$	567,733			$	540,456
Other short-term borrowings		20,493				22,402
Federal Home Loan Bank advances		18,500				14,000
Accrued interest payable and other liabilities		5,243				5,520
TOTAL LIABILITIES		611,969				582,378
Common stock (3,978,731 shares of $.10 par value issued)		398				398
Additional paid-in capital		36,447				36,420
Retained earnings		45,736				42,698
Treasury Stock, at cost - 1,793,043 shares and 1,613,463 shares
at June 30, 2022 and December 31, 2021, respectively.		(30,571	)			(25,786	)
Accumulated other comprehensive loss		(9,752	)			(104	)
TOTAL STOCKHOLDERS' EQUITY		42,258				53,626
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	654,227			$	636,004
(1) Includes available-for-sale and held-to-maturity classifications.
Note: The December 31, 2021 Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.

FAQ

What were Wayne Savings Bancshares' earnings for the second quarter of 2022?

Wayne Savings Bancshares reported net income of $2.0 million, or $0.88 per share, for the second quarter of 2022.

What is the net interest income for Wayne Savings for the first half of 2022?

Net interest income for the first half of 2022 was $10.3 million.

How much did Wayne Savings Bancshares grow its loan portfolio by in 2022?

The company grew its loan portfolio by 26.5%, reaching net loan balances of $514.9 million.

What cash dividend was declared by Wayne Savings Bancshares in 2022?

Wayne Savings Bancshares declared a cash dividend of $0.23 per share for the quarter ending June 30, 2022.

What was the efficiency ratio for Wayne Savings Bancshares in 2022?

The efficiency ratio was 53.6% for the six-month period ended June 30, 2022.