Wayne Savings Bancshares, Inc. Announces Earnings for the second quarter 2021
WOOSTER, Ohio, July 15, 2021 (GLOBE NEWSWIRE) — Wayne Savings Bancshares, Inc. (OTCQX: WAYN), (the “Company”), the holding company parent of Wayne Savings Community Bank, reported net income (unaudited) of $1,802,000 or $0.73 per common share for the quarter ended June 30, 2021, an increase of $151,000 or 9.1%, compared to $1,651,000 or $0.64 per common share for the quarter ended June 30, 2020. The increase in net income was due to an increase in net interest income and a decrease in provision for loan losses partially offset with 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 second quarter of 2021 was 13.53% and 1.15%, respectively, compared to 13.27% and 1.25%, respectively, for the same period in 2020.
President and CEO James R. VanSickle commented, “Wayne Savings continues to concentrate on the financial needs of our customers. We have been able to attract a number of new sales and sales support staff to our team in 2021. They have fit right into our customer service focus and helped us achieve excellent loan and deposit growth in the first half of 2021. Our loan pipeline is robust and we hope to sustain this momentum throughout the remainder of 2021.”
Second Quarter 2021 Business Highlights
Net interest income was $4.7 million for the quarter ended June 30, 2021, an increase of $479,000, or 11.3%, compared to the quarter ended June 30, 2020. The net interest margin decreased from 3.39% for the quarter ended June 30, 2020, to 3.17% for the comparable period of 2021. Interest income on loans increased by $272,000, or 5.9%, as average loan yields increased 9 bps to 4.76% for the quarter ending June 30, 2021 compared to 4.67% for same period in 2020, due to deferred fees recognized as interest income on the Paycheck Protection Program loans. Interest income on investment securities and interest earning cash balances increased by $53,000 as the average balances increased $80.2 million to $183.4 million at June 30, 2021. Average yields declined from 1.52% in 2020 compared to the current yields of 0.97%, due to the continued low interest rate environment. Interest expense decreased $154,000 as the quarterly average cost of funds declined to 0.44% for June 30, 2021 from 0.66% at June 30, 2020.
- Provision for loan losses was $278,000 in the second quarter of 2021 compared to $467,000 for the period ending June 30, 2020. This decrease in provision for loan losses expense was mainly due to the economic impact of the COVID-19 virus on the local economy and additional specific reserves required during the June 30, 2020 quarter on loans evaluated for impairment.
- Noninterest income totaled $737,000, a decrease of $109,000, or 12.9%, mainly due to a decrease in the gain on sale of loans. Mortgage loan originations were higher in 2020 than in 2021, causing fewer loan sales in 2021 as mortgage loan rates continued at historic low levels during both years.
- Noninterest expense totaled $3.0 million for the three-month period ended June 30, 2021, an increase of $340,000, or 12.9%, compared to the three months ended June 30, 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 54.4% as of June 2021 compared to 51.7% as of June 30, 2020.
The Company reported net income (unaudited) of $3.7 million or $1.49 per common share for the six months ended June 30, 2021, an increase of $721,000 or 24.3%, compared to $3.0 million or $1.15 per common share for the same period ended June 30, 2020. The increase in net income was due to an increase in net interest income and a decrease in provision for loan losses, partially offset by 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 six months ended June 30, 2021, was 13.88% and 1.20%, respectively, compared to 11.97% and 1.17%, respectively, for the same period in 2020.
2021 Year-to-Date Business Highlights
Net interest income was $9.4 million for the six-month period ended June 30, 2021, an increase of $994,000, or 11.8%, compared to the same period in 2020 as the six-month average net loan balances increased $14.5 million from the June 30, 2020 period. Net interest margin for the six months ended June 30, 2021 and 2020, declined by 25 basis points to 3.23% as the average yield on interest-earning assets decreased 50 basis points and the average rate on interest-bearing liabilities declined by 25 basis points due to the persistence of the market’s low interest rates. Interest income on loans increased by $537,000, or 5.8%, as loan yields increased 9 bps to 4.84% at June 30, 2021 compared to 3.73% for same period in the prior year caused by the deferred fees recognized as interest income on the Paycheck Protection Program loans. Interest income on investment securities and interest earning cash balances increased by $90,000 as the average balance increased $85.0 million to $180.7 million at June 30, 2020. Average yields declined from 1.80% for the six-month period ending June 30, 2020 to 1.05% for the 2021 period, due to the continued low interest rate environment.
- Net loan balances increased from $391.4 million at December 31, 2020, to $417.5 million, an increase of $26.1 million, or 13.3% of annualized growth in mainly commercial real estate loans.
- Provision for loan losses was $441,000 for the six-month period ending June 30, 2021, compared to $1.1 million for the prior year. This decrease in provision for loan losses expense was mainly due to the economic impact of the COVID-19 virus on the local economy in 2020 and additional specific reserve required on loans evaluated for impairment for the June 30, 2020 period.
- Noninterest income totaled $1.4 million, a decrease of 3.6%, mainly due to the reduction of gain on sale of loans. This is a result of the volume of the single-family mortgage loan sales declining to $9.4 million in 2021 from $12.8 million in 2020.
- Noninterest expense totaled $5.8 million for the six-month period ended June 30, 2021, an increase of $651,000, or 12.7%, compared to the June 30, 2020 six-month period. This increase was primarily due to an increase in salaries and employee benefits and net occupancy and equipment expense. These increases were mainly the result of additional sales and sales support staff to facilitate loan growth. The Company’s efficiency ratio was 53.6% for the six-month period ended June 30, 2021 compared to 52.1% for the same period ended June 2020.
June 30, 2021 Financial Condition
At June 30, 2021, the Company had total assets of $628.7 million, an increase of $37.1 million, from total assets at December 31, 2020. The growth in total assets includes a $26.1 million increase in net loans, primarily due to commercial loan additions, and increase in securities of $28.8 million, partially offset by a $17.9 million decrease in cash and cash equivalents compared to December 31, 2020.
The allowance for loan losses increased from $4.7 million at December 31, 2020, to $5.1 million at June 30, 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 $711,000 from $1.4 million at December 31, 2020, as the Bank received proceeds from a foreclosure sale and a loan was transferred into foreclosed asset held for sale. Past due loan balances of 30 days and more decreased slightly from $3.0 million at December 31, 2020, to $2.8 million at June 30, 2021, mainly due to decreased commercial loan delinquencies.
Total liabilities increased $37.2 million mainly due to an increase in deposits accounts of $44.6 million caused mainly by organic growth coupled with economic impact stimulus payments and the Paycheck Protection Program. The Company is continuing to enhance its deposit products in an effort to serve its customers and increase deposit balances.
Total stockholders’ equity declined by $91,000 in the first half of 2021. The Company earned $3.7 million of net income for the six months ended June 30, 2021. The Company’s earnings was offset with the repurchase of treasury shares of $2.2 million and an additional $1.0 million was used to pay dividends.
Established in 1899, Wayne Savings Community Bank, the wholly owned subsidiary of Wayne Savings Bancshares, Inc., has eleven full-service banking locations in the communities of Wooster, Ashland, Millersburg, Rittman, Lodi, North Canton, Creston, and Fredericksburg, Ohio. The Bank also has a loan production office in 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 | |||||||||||||
| 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 | ||||||||
| June | March | December | September | |||||||||||||
| 2020 | 2020 | 2019 | 2019 | |||||||||||||
| Interest and dividend income | $ | 5,039 | $ | 5,050 | $ | 5,125 | $ | 5,130 | ||||||||
| Interest expense | 784 | 883 | 956 | 956 | ||||||||||||
| Net interest income | 4,255 | 4,167 | 4,169 | 4,174 | ||||||||||||
| Provision for loan losses | 467 | 620 | 5 | 181 | ||||||||||||
| Net interest income after provision for loan losses | 3,788 | 3,547 | 4,164 | 3,993 | ||||||||||||
| Non-interest income | 846 | 556 | 739 | 621 | ||||||||||||
| Non-interest expense | 2,635 | 2,484 | 2,785 | 2,667 | ||||||||||||
| Income before federal income taxes | 1,999 | 1,619 | 2,118 | 1,947 | ||||||||||||
| Provision for federal income taxes | 348 | 302 | 389 | 364 | ||||||||||||
| Net income | $ | 1,651 | $ | 1,317 | $ | 1,729 | $ | 1,583 | ||||||||
| Earnings per share – basic and diluted | $ | 0.64 | $ | 0.51 | $ | 0.66 | $ | 0.60 | ||||||||
| Dividends per share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | ||||||||
| Return on average assets | 1.25 | % | 1.07 | % | 1.40 | % | 1.29 | % | ||||||||
| Return on average equity | 13.27 | % | 10.65 | % | 14.26 | % | 13.14 | % | ||||||||
| Shares outstanding | 2,542,631 | 2,588,945 | 2,601,836 | 2,617,005 | ||||||||||||
| Book value per share | $ | 19.75 | $ | 18.77 | $ | 18.60 | $ | 18.23 | ||||||||
| 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, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Interest income | $ | 5,364 | $ | 5,039 | $ | 10,716 | $ | 10,089 | ||||
| Interest expense | 630 | 784 | 1,300 | 1,667 | ||||||||
| Net interest income | 4,734 | 4,255 | 9,416 | 8,422 | ||||||||
| Provision for loan losses | 278 | 467 | 441 | 1,087 | ||||||||
| Net interest income after provision for loan losses | 4,456 | 3,788 | 8,975 | 7,335 | ||||||||
| Non-interest income | 737 | 846 | 1,352 | 1,402 | ||||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 1,694 | 1,515 | 3,272 | 2,932 | ||||||||
| Net occupancy and equipment expense | 486 | 424 | 972 | 845 | ||||||||
| Federal deposit insurance premiums | 41 | 57 | 84 | 57 | ||||||||
| Franchise taxes | 106 | 105 | 214 | 209 | ||||||||
| Advertising and marketing | 36 | 37 | 67 | 66 | ||||||||
| Legal | 26 | 23 | 37 | 53 | ||||||||
| Professional fees | 72 | 50 | 132 | 94 | ||||||||
| ATM Network | 102 | 67 | 193 | 137 | ||||||||
| Auditing and accounting | 73 | 65 | 146 | 122 | ||||||||
| Stockholder expense | 36 | 37 | 55 | 55 | ||||||||
| Other | 303 | 256 | 598 | 549 | ||||||||
| Total non-interest expense | 2,975 | 2,635 | 5,770 | 5,119 | ||||||||
| Income before federal income taxes | 2,218 | 1,999 | 4,557 | 3,618 | ||||||||
| Provision for federal income taxes | 416 | 348 | 868 | 650 | ||||||||
| Net income | $ | 1,802 | $ | 1,651 | $ | 3,689 | $ | 2,968 | ||||
| Earnings per share | ||||||||||||
| Basic | $ | 0.73 | $ | 0.64 | $ | 1.49 | $ | 1.15 | ||||
| Diluted | $ | 0.72 | $ | 0.64 | $ | 1.48 | $ | 1.15 | ||||
| WAYNE SAVINGS BANCSHARES, INC. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (Dollars in thousands, except share data – unaudited) | |||||||
| June 30, 2021 | December 31, 2020 | ||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 56,635 | $ | 74,490 | |||
| Securities, net (1) | 127,579 | 98,826 | |||||
| Loans held for sale | 225 | 861 | |||||
| Loans receivable, net | 417,483 | 391,352 | |||||
| Federal Home Loan Bank stock | 4,226 | 4,226 | |||||
| Premises & equipment, net | 5,424 | 5,467 | |||||
| Foreclosed assets held for sale, net | 692 | 366 | |||||
| Bank-owned life insurance | 11,034 | 10,903 | |||||
| Other assets | 5,401 | 5,100 | |||||
| TOTAL ASSETS | $ | 628,699 | $ | 591,591 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Deposit accounts | $ | 529,175 | $ | 484,588 | |||
| Other short-term borrowings | 20,953 | 23,075 | |||||
| Federal Home Loan Bank advances | 22,000 | 26,000 | |||||
| Accrued interest payable and other liabilities | 4,547 | 5,813 | |||||
| TOTAL LIABILITIES | 576,675 | 539,476 | |||||
| Common stock (3,978,731 shares of $.10 par value issued) | 398 | 398 | |||||
| Additional paid-in capital | 36,338 | 36,312 | |||||
| Retained earnings | 39,946 | 37,281 | |||||
| Shares acquired by ESOP | (12 | ) | (24 | ) | |||
| Treasury Stock, at cost – 1,577,320 shares and 1,495,845 shares at June 30, 2021 and December 31, 2020, respectively. | (24,838 | ) | (22,705 | ) | |||
| Accumulated other comprehensive income | 192 | 853 | |||||
| TOTAL STOCKHOLDERS’ EQUITY | 52,024 | 52,115 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 628,699 | $ | 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.
