Wayne Savings Bancshares, Inc. Announces Record Earnings for the third quarter of 2022 and the nine-month period ended September 30, 2022; Loan growth annualized for the nine months ended September 30, 2022, was 29.4%
WOOSTER, Ohio, Oct. 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 $6.6 million, or $2.89 per common share, for the year-to-date period ended September 30, 2022, an increase of $954,000, or 16.9%, compared to $5.6 million, or $2.30 per common share, for the same period ended September 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 and provision for federal income taxes. The return on average equity and return on average assets for the nine months ending September 30, 2022, was 18.34% and 1.33%, respectively, compared to 14.17% and 1.21%, for the same period in 2021.
The Company reported net income (unaudited) of $2.5 million, or $1.14 per common share, for the quarter ended September 30, 2022, an increase of $557,000, or 28.5%, compared to $2.0 million, or $0.81 per common share, for the quarter ended September 30, 2021. The increase in net income was due to an increase in net interest income, partially offset with an increase in provision for loan losses, non-interest expenses and provision for federal income taxes. The return on average equity and return on average assets for the third quarter of 2022 was 22.85% and 1.48%, respectively, compared to 14.76% and 1.23%, for the same period in 2021.
President and CEO James R. VanSickle commented, “Wayne Savings has delivered an outstanding quarter for our shareholders as we achieved record levels of net income, earnings per share, return on equity and loan originations. We remain optimistic as we execute our strategy of increasing market share in existing locations and expanding to new communities. Wayne Savings will open two new locations during the fourth quarter of 2022, a loan production office in Mahoning County and our thirteenth full service branch in Dalton, Ohio.”
“The Wayne Savings lending team set a record of $73.4 million of loan originations during the third quarter. We have certainly benefitted from expanding the number of lenders available to serve our customers. We are fortunate to have a wonderful team of community bankers working tirelessly to meet the financial needs of our communities.”
2022 Select Business Highlights
- Net loan balances increased to $554.8 million at September 30, 2022, compared to $433.2 million at September 30, 2021, or 28.1% growth, comprised mainly of $77.1 million of commercial loans secured by real estate and $41.8 million of one to four residential mortgage loans.
- Wayne Savings deposits increased $62.6 million, or 11.8%, to $592.7 million at September 30, 2022, compared to $530.1 million at September 30, 2021, primarily due to the growth in “Platinum” checking accounts of $17.7 million, increased brokered certificate of deposits of $20.0 million and $8.1 million in basic business accounts. Personal Platinum checking accounts increased from $105.7 million at September 30, 2021, to $116.9 million at September 30, 2022, while Business Platinum checking accounts increased from $29.7 million at September 30, 2021, to $36.2 million during the same period ending in 2022. In addition to the Platinum growth, our Impact checking product increased from $9.5 million at September 30, 2021, to $14.0 million at September 30, 2022. The Company used brokered deposits as a replacement to Federal Home Loan Advances to fund the loan growth.
- 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 September 30, 2022. The quarterly cash dividend will be paid on November 2, 2022, to the stockholders of record as of October 19, 2022.
Third Quarter 2022 Financial Highlights
- Net interest income was $6.2 million for the quarter ended September 30, 2022, an increase of $1.3 million, or 25.1%, compared to the quarter ended September 30, 2021. The net interest margin increased from 3.31% for the quarter ended September 30, 2021, to 3.83% for the same period in 2022. Interest income on loans increased by $1.1 million, or 21.45% primarily related to the $111.9 million of increased average loan balances to $536.3 million for the quarter ended September 30, 2022, from $424.4 million for the same period in the prior year
- Provision for loan losses increased to $410,000 for the third quarter 2022 compared to $177,000 for the same period in 2021 mainly due to the increased loan growth for the 2022 quarter compared to the 2021 quarter.
- Noninterest income totaled $636,000, a decrease of $27,000, or 4.1%, from $663,000 for the quarter ended September 2021, caused by a decline in mortgage loans sold during the 2022 quarter, partially offset with increased deposit fees.
- Noninterest expense totaled $3.4 million for the three-month period ended September 30, 2022, an increase of $293,000, or 9.6%, compared to the three months ended September 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 48.8% for the three-month period ended September 30, 2022, compared to 54.3% for the same period in 2021.
2022 Year-to-Date Business Highlights
- Net interest income was $16.5 million for the nine-month period ended September 30, 2022, an increase of $2.1 million, or 14.7%, compared to the same period in 2021 as the nine-month average net loan balances increased $85.8 million from the September 30, 2021 period. Net interest margin for the nine months ended September 30, 2022 and 2021, rose by 25 basis points to 3.48% as the average yield on interest-earning assets increased 18 basis point and the average rate on interest-bearing liabilities declined by 7 basis points. Interest income on loans increased by $1.6 million, or 10.9%, as average balances increased for the nine-month period ending September 30, 2022, of $496.2 million, from $410.4 million for the period ended September 30, 2021.
- Net loan balances increased from $454.6 million at December 31, 2021, to $554.8 million at September 30, 2022, an increase of $100.2 million, or 29.4% of annualized growth consisting mainly of commercial real estate loans and one to four residential mortgage loans.
- Provision for loan losses was $841,000 for the nine-month period ending September 30, 2022, compared to $618,000 for the same period in the prior year. This increase in provision for loan losses expense was mainly due to the annualized growth in our loan portfolio for 2022 was 29.4% compared to the annualized growth for the same period in 2021 of 14.2%.
- Noninterest income totaled $2.1 million, an increase of $85,000, or 4.2%, from $2.0 million for the nine-month period ended September 30, 2021, caused by a gain of $229,000 on the sale of foreclosed assets held for sale that was recorded during the nine-month period ended September 30, 2022.
- Noninterest expense totaled $9.6 million for the year-to-date period ended September 30, 2022, an increase of $815,000, or 9.2%, compared to the September 30, 2021 nine-month period. The increase was primarily due to an increase in salaries and employee benefits expense. The Company’s efficiency ratio was 51.8% for the nine-month period ended September 30, 2022, compared to 53.8% for the same period ended September 2021.
September 30, 2022 Financial Condition
At September 30, 2022, the Company had total assets of $687.3 million, an increase of $51.3 million, from December 31, 2021. The growth in total assets includes a $100.2 million increase in net loans, partially offset by a decrease of $36.0 million in cash and cash equivalents and a decrease of $15.6 million in securities, as compared to December 31, 2021.
The allowance for loan losses was $6.3 million at September 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 $845,000 at September 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 $3.0 million at September 30, 2022, mainly due to lower commercial loan delinquencies.
Total liabilities increased $63.4 million from December 31, 2021 to September 30, 2022, mainly due to an increase in deposits accounts of $52.2 million. The “Platinum” checking accounts increased $7.3 million. The Platinum checking account products, available to both businesses and individuals, represent $153.2 million of our deposit balances at September 30, 2022. Basic business checking accounts increased $14.4 million and balances at September 30, 2022, were $73.0 million.
Total stockholders’ equity declined by $12.1 million in the first nine months of 2022. The Company earned $6.6 million of net income for the nine months ended September 30, 2022, exceeding 2021 by 16.9%. The Company repurchased treasury shares of $4.9 million from a single shareholder and paid $1.6 million in dividends during the period. Accumulated other comprehensive loss increased by $12.5 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) | |||||||||||||||||
| September | June | March | December | ||||||||||||||
| 2022 | 2022 | 2022 | 2021 | ||||||||||||||
| Interest and dividend income | $ | 6,892 | $ | 5,889 | $ | 5,517 | $ | 5,502 | |||||||||
| Interest expense | 670 | 564 | 564 | 592 | |||||||||||||
| Net interest income | 6,222 | 5,325 | 4,953 | 4,910 | |||||||||||||
| Provision for loan losses | 410 | 257 | 174 | 128 | |||||||||||||
| Net interest income after | |||||||||||||||||
| provision for loan losses | 5,812 | 5,068 | 4,779 | 4,782 | |||||||||||||
| Non-interest income | 636 | 599 | 865 | 598 | |||||||||||||
| Non-interest expense | 3,350 | 3,191 | 3,101 | 3,156 | |||||||||||||
| Income before federal income taxes | 3,098 | 2,476 | 2,543 | 2,224 | |||||||||||||
| Provision for federal income taxes | 589 | 457 | 476 | 428 | |||||||||||||
| Net income | $ | 2,509 | $ | 2,019 | $ | 2,067 | $ | 1,796 | |||||||||
| Earnings per share – basic | $ | 1.14 | $ | 0.88 | $ | 0.87 | $ | 0.76 | |||||||||
| Earnings per share – diluted | $ | 1.13 | $ | 0.87 | $ | 0.86 | $ | 0.75 | |||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.21 | |||||||||
| Return on average assets | 1.48% | 1.23% | 1.28% | 1.12% | |||||||||||||
| Return on average equity | 22.85% | 17.37% | 15.44% | 13.48% | |||||||||||||
| Shares outstanding | 2,191,338 | 2,185,688 | 2,369,886 | 2,365,268 | |||||||||||||
| Book value per share | $ | 18.94 | $ | 19.33 | $ | 21.12 | $ | 22.67 | |||||||||
| September | June | March | December | ||||||||||||||
| 2021 | 2021 | 2021 | 2020 | ||||||||||||||
| Interest and dividend income | $ | 5,589 | $ | 5,364 | $ | 5,352 | $ | 5,168 | |||||||||
| Interest expense | 617 | 630 | 670 | 716 | |||||||||||||
| Net interest income | 4,972 | 4,734 | 4,682 | 4,452 | |||||||||||||
| Provision for loan losses | 177 | 278 | 163 | 134 | |||||||||||||
| Net interest income after | |||||||||||||||||
| provision for loan losses | 4,795 | 4,456 | 4,519 | 4,318 | |||||||||||||
| Non-interest income | 663 | 737 | 615 | 742 | |||||||||||||
| Non-interest expense | 3,057 | 2,975 | 2,795 | 2,848 | |||||||||||||
| Income before federal income taxes | 2,401 | 2,218 | 2,339 | 2,212 | |||||||||||||
| Provision for federal income taxes | 449 | 416 | 452 | 439 | |||||||||||||
| Net income | $ | 1,952 | $ | 1,802 | $ | 1,887 | $ | 1,773 | |||||||||
| Earnings per share – basic | $ | 0.81 | $ | 0.73 | $ | 0.76 | $ | 0.71 | |||||||||
| Earnings per share – diluted | $ | 0.80 | $ | 0.72 | $ | 0.76 | $ | 0.68 | |||||||||
| Dividends per share | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.20 | |||||||||
| Return on average assets | 1.23% | 1.15% | 1.26% | 1.25% | |||||||||||||
| Return on average equity | 14.76% | 13.53% | 14.22% | 13.69% | |||||||||||||
| Shares outstanding | 2,380,374 | 2,401,411 | 2,477,391 | 2,482,886 | |||||||||||||
| Book value per share | $ | 22.25 | $ | 21.66 | $ | 21.14 | $ | 20.99 | |||||||||
| WAYNE SAVINGS BANCSHARES, INC. | ||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||
| (Dollars in thousands, except share data – unaudited) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Interest income | $ | 6,892 | $ | 5,589 | $ | 18,298 | $ | 16,305 | ||||
| Interest expense | 670 | 617 | 1,798 | 1,917 | ||||||||
| Net interest income | 6,222 | 4,972 | 16,500 | 14,388 | ||||||||
| Provision for loan losses | 410 | 177 | 841 | 618 | ||||||||
| Net interest income after provision for loan losses | 5,812 | 4,795 | 15,659 | 13,770 | ||||||||
| Non-interest income | 636 | 663 | 2,100 | 2,015 | ||||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 1,933 | 1,779 | 5,625 | 5,051 | ||||||||
| Net occupancy and equipment expense | 500 | 468 | 1,489 | 1,440 | ||||||||
| Federal deposit insurance premiums | 92 | 81 | 187 | 165 | ||||||||
| Franchise taxes | 115 | 116 | 346 | 330 | ||||||||
| Advertising and marketing | 98 | 38 | 196 | 105 | ||||||||
| Legal | 25 | 11 | 58 | 48 | ||||||||
| Professional fees | 95 | 18 | 250 | 150 | ||||||||
| ATM network | 100 | 96 | 291 | 289 | ||||||||
| Auditing and accounting | 64 | 71 | 184 | 217 | ||||||||
| Other | 328 | 379 | 1,016 | 1,032 | ||||||||
| Total non-interest expense | 3,350 | 3,057 | 9,642 | 8,827 | ||||||||
| Income before federal income taxes | 3,098 | 2,401 | 8,117 | 6,958 | ||||||||
| Provision for federal income taxes | 589 | 449 | 1,522 | 1,317 | ||||||||
| Net income | $ | 2,509 | $ | 1,952 | $ | 6,595 | $ | 5,641 | ||||
| Earnings per share | ||||||||||||
| Basic | $ | 1.14 | $ | 0.81 | $ | 2.89 | $ | 2.30 | ||||
| Diluted | $ | 1.13 | $ | 0.80 | $ | 2.86 | $ | 2.28 | ||||
| WAYNE SAVINGS BANCSHARES, INC. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Dollars in thousands, except share data – unaudited) | ||||||||
| September 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 8,487 | $ | 44,437 | ||||
| Securities, net (1) | 94,657 | 110,216 | ||||||
| Loans held for sale | – | 272 | ||||||
| Loans receivable, net | 554,808 | 454,587 | ||||||
| Federal Home Loan Bank stock | 3,322 | 4,226 | ||||||
| Premises & equipment, net | 5,021 | 5,223 | ||||||
| Bank-owned life insurance | 11,366 | 11,169 | ||||||
| Other assets | 9,595 | 5,874 | ||||||
| TOTAL ASSETS | $ | 687,256 | $ | 636,004 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Deposit accounts | $ | 592,670 | $ | 540,456 | ||||
| Other short-term borrowings | 17,016 | 22,402 | ||||||
| Federal Home Loan Bank advances | 31,100 | 14,000 | ||||||
| Accrued interest payable and other liabilities | 4,967 | 5,520 | ||||||
| TOTAL LIABILITIES | 645,753 | 582,378 | ||||||
| Common stock (3,978,731 shares of $.10 par value issued) | 398 | 398 | ||||||
| Additional paid-in capital | 36,465 | 36,420 | ||||||
| Retained earnings | 47,740 | 42,698 | ||||||
| Treasury Stock, at cost – 1,787,393 shares and 1,613,463 shares | ||||||||
| at September 30, 2022 and December 31, 2021, respectively. | (30,481 | ) | (25,786 | ) | ||||
| Accumulated other comprehensive loss | (12,619 | ) | (104 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 41,503 | 53,626 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 687,256 | $ | 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. | ||||||||
