WOOSTER, Ohio, Feb. 13, 2017 (GLOBE NEWSWIRE) — Wayne Savings Bancshares, Inc. (Nasdaq:WAYN), the holding company parent of Wayne Savings Community Bank, reported net income (unaudited) of $315,000 or $0.12 per common share for the quarter ended December 31, 2016, compared to $592,000 or $0.22 per common share for the quarter ended December 31, 2015. The decrease in net income was primarily due to severance costs of $291,000 and elevated retirement costs of approximately $124,000, the increase in provision for loan losses of $109,000, and a decrease in noninterest income as loan sales declined due to rising rates.These changes in net income were partially offset by an increase in net interest income of $178,000 and a reduction in the provision for federal income taxes of $119,000.The increase in net interest income was mainly the result of a $39.2 million, or 13.4%, increase in net loans.The return on average equity and return on average assets for the 2016 quarter were 3.03% and 0.28%, respectively, compared to 5.92% and 0.55%, respectively, for the 2015 quarter.Without the severance and elevated retirement costs net of federal income taxes, the quarterly earnings would have been $589,000.The adjusted return on average equity would have been 5.67% and the adjusted return on average assets would have been 0.53% for the 2016 quarter.
Net interest income increased $178,000 for the quarter ended December 31, 2016, compared to the quarter ended December 31, 2015. Interest income increased $205,000 during the 2016 quarter primarily due to a $19.4 million increase in average interest-earning assets, and an increase in the rates earned on those assets from 3.68% in the prior year quarter to 3.70% in the current year quarter. Â Interest expense increased $27,000 primarily due to a $17.7 million increase in the average balance of interest-bearing liabilities. The rates paid on those liabilities were unchanged, and was 0.52% for both quarters ended December 31, 2016 and 2015, respectively. The net interest rate spread increased from 3.16% for the quarter ended December 31, 2015 to 3.18% for the quarter ended December 31, 2016.Â
Provision for loan losses was $213,000 in the 2016 quarter, an increase of $109,000 from $104,000 provided during the 2015 quarter. Â Â The increase is primarily due to an increase in specific reserves on certain identified loans and an increase in loan balances, partially offset by a decrease in charge-offs and loss history compared to the prior year period.
Noninterest income decreased $12,000 for the quarter ended December 31, 2016 compared to the quarter ended December 31, 2015. The decrease was primarily due to a $36,000 decrease in gain on sale of loans, due to a decrease in loans sold during the current year quarter. The decrease in gain on sale of loans was partially offset by an increase in service fees, charges and other operating income primarily due to an increase in service charges on deposits.Â
Noninterest expense totaled $3.3 million and increased $453,000 for the quarter ended December 31, 2016 compared to the quarter ended December 31, 2015.This increase is primarily due to a $427,000 increase in salaries and employee benefits, and a $65,000 increase in occupancy and equipment expense, partially offset by a $59,000 decrease in federal deposit insurance premiums compared to the prior year quarter. The increase in salaries and employee benefits was primarily a result of increased compensation and payroll taxes due to severance payments, merit increases, an increase in healthcare costs due to an increase in premiums, and an increase in pension costs due to current year retirements, partially offset by lower education and training and post-retirement benefit costs compared to the prior year quarter. Included in salaries and employee benefits is $291,000 related to severance expenses during the current year quarter. The increase in occupancy and equipment expense was due to increases in insurance, depreciation expense, furniture and fixture expense and ATM network expenses compared to the prior year quarter. The decrease in federal deposit insurance premiums was due to a lower assessment rate compared to the prior year quarter.
