Wayne Savings Bancshares, Inc. Announces Record Earnings for the First Quarter 2022

Rhea-AI Summary

Wayne Savings Bancshares, Inc. (WAYN) reported a net income of $2.1 million, or $0.87 per share, for Q1 2022, a 9.5% increase year-over-year. Key factors contributing to this growth include a rise in net interest income to $5.0 million and an increase in non-interest income to $865,000. Loan balances rose by 16.3% to $476.6 million, while deposits grew by 10.6% to $562.6 million. A cash dividend was declared at $0.23 per share, marking a 9.5% increase. Although total stockholders’ equity decreased by $3.6 million, the efficiency ratio remained stable at 53.3%. Overall, the company's financial performance remained strong despite economic challenges.

Positive

• Net income increased by 9.5% to $2.1 million for Q1 2022.
• Net interest income rose to $5.0 million, up 5.8% year-over-year.
• Loan balances grew by 16.3% to $476.6 million.
• Deposits increased by 10.6% to $562.6 million.
• Declared a cash dividend increase of 9.5% to $0.23 per share.

Negative

• Total stockholders’ equity decreased by $3.6 million.
• The net interest margin decreased slightly from 3.25% to 3.21%.
• Past due loan balances of 30 days and more increased from $3.3 million to $4.5 million.

WOOSTER, Ohio, April 19, 2022 (GLOBE NEWSWIRE) -- Wayne Savings Bancshares, Inc. (OTCQX: WAYN), (the “Company”), the holding company parent of Wayne Savings Community Bank, reported net income (unaudited) of $2.1 million, or $0.87 per common share, for the quarter ended March 31, 2022, an increase of $180,000, or 9.5%, compared to $1.9 million, or $0.76 per common share, for the quarter ended March 31, 2021. The increase in net income was due to an increase in net interest income and non-interest income, partially offset with an increase in non-interest expenses and increased provision for federal income taxes. The return on average equity and return on average assets for the first quarter of 2022 was 15.44% and 1.28%, respectively, compared to 14.22% and 1.26%, respectively, for the same period in 2021.

President and CEO James R. VanSickle commented, “We achieved solid first-quarter results earning over $2 million in a single quarter for the first time in Wayne Savings history. Our loan and deposit growth continues to exceed expectations, despite the continued impacts of the pandemic and evolving interest rate environment. 2022 is off to a good start, and I would like to thank our team for their dedication to serve our valued communities.”

2022 Select Business Highlights

• Net loan balances increased to $476.6 million at March 31, 2022, compared to $409.8 million at March 31, 2021, an increase of 16.3%. The growth was primarily from $48.8 million of commercial loans secured by real estate and $17.3 million of one to four residential mortgage loans. The Bank’s markets have continued to provide strong loan growth over the past 12 months.
  
  
• Wayne Savings deposits increased $54.0 million, or 10.6%, to $562.6 million at March 31, 2022 compared to $508.6 million at March 31, 2021, primarily due to increased demand accounts. Our “Platinum” checking accounts were responsible for $42.5 million of this growth. Personal platinum checking accounts increased from $89.9 million to $123.5 million during the year ending March 31, 2022, while business platinum checking accounts increased from $26.2 million to $35.1 million during the same period.
  
  
• Wayne Savings Bancshares, Inc. declared a cash dividend increase of $0.02 to $0.23 per share, a 9.50% increase, for the quarter ending March 31,2022. The quarterly cash dividend will be paid on May 4, 2022 to the stockholders of record as of April 20,2022.
  
  
• Wayne Savings Bancshares, Inc. announced the nomination of Lance J. Ciroli as a director of both Wayne Savings Bancshares, Inc. and its wholly-owned subsidiary Wayne Savings Community Bank at the 2022 Annual Meeting to be held on April 28, 2022. Mr. Ciroli was employed with the Office of the Comptroller of the Currency (OCC), U.S. Treasury for 33 years. At the time of his retirement from the OCC in 2008, Mr. Ciroli was the Assistant Deputy Comptroller responsible for both the Cleveland, Ohio and Detroit, Michigan offices for the OCC.
  

First Quarter 2022 Financial Highlights

• Net interest income was $5.0 million for the quarter ended March 31, 2022, an increase of $271,000, or 5.8%, compared to the quarter ended March 31, 2021. The net interest margin decreased from 3.25% for the quarter ended March 31, 2021, to 3.21% for the comparable period of 2022. Interest income on loans increased by $137,000, or 2.8%, while average loan yields decreased 62 bps to 4.32% for the quarter ending March 31, 2022, compared to 4.94% for the same period of 2021. The increase in interest income was primarily related to the $69.2 million of increased average loan balances for the quarter. Interest income on securities increased by $31,000 as average balances increased $1.8 million to $111.8 million at March 31, 2022, and average yields on securities rose from 1.70% in 2021 compared to the yields of 1.79% in 2022. Interest expense decreased $106,000 as the quarterly average cost of funds declined to 0.38% for the quarter ended March 31, 2022, from 0.50% for the same period in 2021.
  
  
• Provision for loan losses was relatively unchanged at $174,000 in the first quarter of 2022 compared to $163,000 for the same period in 2021.
  
  
• Noninterest income totaled $865,000, an increase of $250,000, or 40.7%, from $615,000 for the quarter ended March 2021, caused by a gain of $229,000 on the sale of foreclosed assets held for sale.
  
  
• Noninterest expense totaled $3.1 million for the three-month period ended March 31, 2022, an increase of $306,000, or 10.9%, compared to the three months ended March 31, 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 53.3% for the three-month period ended March 31, 2022, compared to 52.8% for the same period in 2021.
  

March 31, 2022 Financial Condition

At March 31, 2022, the Company had total assets of $652.7 million, an increase of $16.7 million, from December 31, 2021. The growth in total assets includes a $22.0 million increase in net loans, partially offset by a decrease of $5.5 million in cash and cash equivalents, as compared to December 31, 2021.

The allowance for loan losses was $5.6 million at March 31, 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 $732,000 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 increased from $3.3 million at December 31, 2021, to $4.5 million at March 31, 2022, mainly due to increased non-residential real estate loan delinquencies.

Total liabilities increased $20.2 million mainly due to an increase in deposits accounts of $22.2 million. The “Platinum” checking accounts increased $12.7 million. The Platinum products, available to both businesses and individuals, represent $158.6 million of our deposit balances at March 31, 2022. Basic business checking accounts increased $7.7 million to $66.2 million at March 31, 2022.

Total stockholders’ equity decreased by $3.6 million during the quarter ended March 31, 2022. The Company earned $2.1 million of net income for the period ended March 31, 2022, exceeding 2021 by 9.5%. The Company accrued $545,000 in dividends during the quarter. Accumulated other comprehensive loss increased by $5.2 million mainly 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)

	March				December				September				June
	2022				2021				2021				2021
Interest and dividend income	$	5,517			$	5,502			$	5,589			$	5,364
Interest expense	564				592				617				630
Net interest income	4,953				4,910				4,972				4,734
Provision for loan losses	174				128				177				278
Net interest income after
provision for loan losses	4,779				4,782				4,795				4,456
Non-interest income	865				598				663				737
Non-interest expense	3,101				3,156				3,057				2,975
Income before federal income taxes	2,543				2,224				2,401				2,218
Provision for federal income taxes	476				428				449				416
Net income	$	2,067			$	1,796			$	1,952			$	1,802
Earnings per share - basic	$	0.87			$	0.76			$	0.81			$	0.73
Earnings per share - diluted	$	0.86			$	0.75			$	0.80			$	0.72
Dividends per share	$	0.23			$	0.21			$	0.21			$	0.21
Return on average assets	1.28		%		1.12		%		1.23		%		1.15		%
Return on average equity	15.44		%		13.48		%		14.76		%		13.53		%
Shares outstanding	2,369,886				2,365,268				2,380,374				2,401,411
Book value per share	$	21.12			$	22.67			$	22.25			$	21.66
	March				December				September				June
	2021				2020				2020				2020
Interest and dividend income	$	5,352			$	5,168			$	5,099			$	5,039
Interest expense	670				716				771				784
Net interest income	4,682				4,452				4,328				4,255
Provision for loan losses	163				134				69				467
Net interest income after
provision for loan losses	4,519				4,318				4,259				3,788
Non-interest income	615				742				890				846
Non-interest expense	2,795				2,848				2,753				2,635
Income before federal income taxes	2,339				2,212				2,396				1,999
Provision for federal income taxes	452				439				447				348
Net income	$	1,887			$	1,773			$	1,949			$	1,651
Earnings per share - basic	$	0.76			$	0.71			$	0.77			$	0.64
Earnings per share - diluted	$	0.76			$	0.68			$	0.77			$	0.64
Dividends per share	$	0.21			$	0.20			$	0.20			$	0.20
Return on average assets	1.26		%		1.25		%		1.42		%		1.25		%
Return on average equity	14.22		%		13.69		%		15.38		%		13.27		%
Shares outstanding	2,477,391				2,482,886				2,493,706				2,542,631
Book value per share	$	21.14			$	20.99			$	20.39			$	19.75

WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data - unaudited)

	Three Months Ended
	March 31,
	2022			2021
Interest income	$	5,517		$	5,352
Interest expense	564			670
Net interest income	4,953			4,682
Provision for loan losses	174			163
Net interest income after provision for loan losses	4,779			4,519
Non-interest income	865			615
Non-interest expense
Salaries and employee benefits	1,783			1,578
Net occupancy and equipment expense	478			486
Federal deposit insurance premiums	49			43
Franchise taxes	116			108
Advertising and marketing	41			31
Legal	21			11
Professional fees	113			60
ATM network	97			91
Auditing and accounting	61			73
Other	342			314
Total non-interest expense	3,101			2,795
Income before federal income taxes	2,543			2,339
Provision for federal income taxes	476			452
Net income	$	2,067		$	1,887
Earnings per share
Basic	$	0.87		$	0.76
Diluted	$	0.86		$	0.76

WAYNE SAVINGS BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data - unaudited)

	March 31, 2022				December 31, 2021
ASSETS
Cash and cash equivalents	$	38,903			$	44,437
Securities, net (1)	109,540				110,216
Loans held for sale	-				272
Loans receivable, net	476,552				454,587
Federal Home Loan Bank stock	4,226				4,226
Premises & equipment, net	5,099				5,223
Bank-owned life insurance	11,234				11,169
Other assets	7,111				5,874
TOTAL  ASSETS	$	652,665			$	636,004
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts	$	562,618			$	540,456
Other short-term borrowings	21,097				22,402
Federal Home Loan Bank advances	14,000				14,000
Accrued interest payable and other liabilities	4,901				5,520
TOTAL LIABILITIES	602,616				582,378
Common stock (3,978,731 shares of $.10 par value issued)	398				398
Additional paid-in capital	36,436				36,420
Retained earnings	44,220				42,698
Treasury Stock, at cost - 1,608,845 shares and 1,613,463 shares
at March 31, 2022 and December 31, 2021, respectively.	(25,714		)		(25,786		)
Accumulated other comprehensive loss	(5,291		)		(104		)
TOTAL STOCKHOLDERS' EQUITY	50,049				53,626
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	652,665			$	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 Q1 2022?

Wayne Savings Bancshares reported a net income of $2.1 million, or $0.87 per share, for Q1 2022.

How much did Wayne Savings' net loan balances increase by?

Net loan balances increased by 16.3%, reaching $476.6 million as of March 31, 2022.

What was the cash dividend declared by Wayne Savings Bancshares for Q1 2022?

The cash dividend declared was $0.23 per share, representing a 9.5% increase.

How did Wayne Savings Bancshares perform in terms of deposit growth?

Deposits increased by 10.6% to $562.6 million compared to the same period last year.

What are the key challenges reported by Wayne Savings in latest financial results?

Total stockholders’ equity decreased by $3.6 million and past due loan balances increased.