Wayne Savings Bancshares — Shareholder Meeting (May 2014)
48 slides from Wayne Savings Bancshares's shareholder meeting presentation, May 23, 2014
Slide 1: Annual Shareholders' Meeting May 22, 2014
Annual Shareholders’ Meeting May 22, 2014
Slide 2: Forward Looking Statements
Forward Looking Statements In addition to the historical information contained herein, the following discussion contains forward - looking statements that involve risks and uncertainties . Economic circumstances, the Company’s operations, and actual results could differ significantly from those disc
Slide 3: Call To Order
Call To Order Peggy J. Schmitz Chair, Board of Directors
Slide 4: Directors
Directors Peggy Schmitz, Chair, Board of Directors Daniel R. Buehler (nominee for a new term) Jonathan Ciccotelli, CPA David L. Lehman Debra A. Marthey (nominee for a new term) Glenn W. Miller, CPA Rod Steiger, President & CEO
Slide 5: Executive Management Team
Executive Management Team Rod Steiger – President and CEO H. Stewart Fitz Gibbon III – Executive Vice President , COO, CRO, Secretary and Treasurer Joel D. Beckler – SVP, Senior Loan Officer Myron Swartzentruber, CPA – SVP, CFO
Slide 6: Also Present
Also Present Becky Rose – VP, Internal Audit Brittany Hartzler - AVP , Assistant Corporate Secretary Craig Liechty , CPA - Partner, BKD LLP Scott Hopf , CPA – Senior Manager, BKD LLP Francis Grady – Grady & Associates
Slide 7: Instructions on Procedures
Instructions on Procedures
Slide 8: Opening of Polls
Opening of Polls are COMMUNITY BANK See
Slide 9: Closing of Polls
Closing of Polls are COMMUNITY BANK See Gra with w | WOOSTER,
Slide 10: Rod Steiger Retirement
Rod Steiger Retirement Retiring on December 31, 2014 after 35 successful years in banking. “I am most proud of helping to navigate the Company through a long and difficult recession, leaving it in a better position than when I arrived. I wish continued success all of our stockholders, employees, cus
Slide 11: Business Overview
Business Overview Rod Steiger President and CEO
Slide 12: History
History □ 1899 - Wayne Building & Loan Company Mutual Company with $300,000 capital, 214 depositors and assets of $23,996 □ 1902 - Bought existing building on North Market Street for $900 □ 1964 - The Wayne Savings & Loan Company □ 1993 - Converted to Ohio - chartered capital stock savings associati
Slide 13: Wayne Savings at a Glance
Wayne Savings at a Glance □ 11 offices in 5 counties □ Core lines of business include: □ Mortgage lending □ Consumer and commercial lending □ Deposit products and services □ Retirement accounts □ Merchant credit card services □ As of December 31, 2013 □ Assets of $410.3 million, □ Net loans of $261.
Slide 14: Deposit Market Share - Wayne County
14 Deposit Market Share - Wayne County Source: SNL Financial. Deposit data as of 6/30/13. 2013 RankInstitution (ST) Type 2013 Number of Branches 2013 Total Deposits in Market ($) 2013 Total Market Share (%) 1PNC Financial Services Group (PA) Bank 11 504,188 28.60 2FirstMerit Corp. (OH) Bank 6 309,43
Slide 15: Deposit Market Share - Stark County
15 Deposit Market Share - Stark County 2013 RankInstitution (ST) Type 2013 Number of Branches 2013 Total Deposits in Market ($000) 2013 Total Market Share (%) 1FirstMerit Corp. (OH) Bank 16 1,414,036 25.41 2Huntington Bancshares Inc. (OH) Bank 27 1,407,877 25.30 3JPMorgan Chase & Co. (NY) Bank 13 71
Slide 16: Community Benefit
Community Benefit □ Annual Wages: $6 Million+ □ Charitable Contributions : $23,000 + □ 450+ Hours of employee time donated for charity □ Taxes for schools, cities, etc. □ $$$$$$ paid to local vendors
Slide 17: Experienced Board & Management
Experienced Board & Management 17 Executive Management Age Title Rod Steiger 66 President and Chief Executive Officer 3 Stewart Fitz Gibbon 57 EVP, COO, CRO, Secretary and Treasurer 8 Joel Beckler 52 SVP and Senior Loan Officer 9 Myron Swartzentruber, CPA 46 SVP and Chief Financial Officer 13 Years
Slide 18: Business Strategy
Business Strategy 18 □ Continue to diversify our loan portfolio into small business lending, especially C&I □ Attract and retain lower - cost core deposits □ Maintain high asset quality levels □ Continue to operate as a community - oriented financial institution
Slide 19: Dodd Frank Act
Dodd Frank Act Wayne COMMUNITY BANK See 19
Slide 20: Dodd Frank Act
Dodd Frank Act 20 Written to address systemic problems created with mega - banks, and has burdened the community banking landscape with the regulatory requirements originally written for the big banks. □ Increases regulatory compliance costs □ Adds uncertainty □ Adds complexity in planning □ Reduces
Slide 21: Dodd Frank Act
Dodd Frank Act 21 Dodd Frank Act
Slide 22: Dodd Frank Act Drives Up Small-Bank Costs
22 According to George Mason University’s Mercatus Center, a large majority of surveyed small banks have seen compliance costs rise since the passing of the Dodd Frank Act. Dodd Frank Act Drives Up Small - Bank Costs
Slide 23: 2013 Noteworthy Achievements
2013 Noteworthy Achievements □ Worked substantially to improve our organizational culture and added emphasis on revenue generation □ Reduced expenses through a new branch staffing model and close analysis of operating expense □ Enhanced information technology systems to add products and improve oper
Slide 24: 2014 Goals
2014 Goals □ To be the community bank of choice for customers, employees and investors □ To excel in customer service and continue to be community - minded □ Continue to perform more like a commercial bank with focus on lowering higher - cost deposits and improving loan portfolio mix to have less re
Slide 25: Top Challenges for 2014
Top 10 Challenges for 2014 Source: Austin Associates 2014 Rankings 1. Regulatory Climate 2. Interest Rate Environment 3. Loan Growth 4. The Economy 5. Earnings 6. Asset Quality 7. The Competition 8. Non - Interest Income 9. Deposit Growth 10. Technology 2011 Rank* 1 5 Not Ranked 2 4 3 Not Ranked Not
Slide 26: Five Year Stock Price Performance
5 Year Stock Price Performance (4/01/09 - 4/01/14) 26 Source: SNL Financial as of April 1, 2014
Slide 27: Strong Track Record of Generating Shareholder Value
Strong Track Record of Generating Shareholder Value 27 Tangible Book Value Per Share (Source: SNL) Earnings Per Share
Slide 28: Thank You
THANK YOU We © Together we gu COMMUNITY BANK See
Slide 29: Financial Highlights
H. Stewart Fitz Gibbon, III Executive Vice President , Chief Operating Officer, Chief Risk Officer, Secretary and Treasurer Financial Highlights
Slide 30: WAYN: 2013 Highlights
WAYN: 2013 Highlights □ Capital managed to align with realized growth rate through cash dividend increase and stock repurchase □ Improved Asset Quality. Delinquencies and nonperforming loans reduced. Real Estate Owned went to $0 for the first time in recent memory. □ Increased Earnings, mainly throu
Slide 31: Equity to Assets at Period End (%)
Equity to Assets at Period End (%) 10 9.5 7.5 : 1 T 1 3/31/09 3/31/10 3/31/11 12/31/11 12/31/12 12/31/13 We COMMUNITY BANK See o oo
Slide 32: Nonperforming and impaired assets to total assets (%)
Nonperforming and impaired assets to total assets (%) 2.5 - 4 - 2 1.5 1- a 7 il - 0.5 0 r T 3/31/2009 3/31/2010 3/31/2011 12/31/2011 12/31/2012 12/31/2013 We COMMUNITY BANK See
Slide 33: Nonperforming Loans ($000)
Nonperforming Loans ($000) | . 5,000 | 4,000 | Zz - 3,000 | 2,000 | 1,000 | 3/31/09 3/31/10 3/3111 12/31/11 12/3842 12/31/13 We COMMUNITY BANK See
Slide 34: Total $ Past Due ($000)
Total $ Past Due ($000) 6,000 5,000 4,000 3,000 2,000 1,000 | e F&F & oe x SF oe W. COMMUNITY BANK See
Slide 35: Total $ Real Estate Owned (REO) ($000)
Total $ Real Estate Owned (REO) ($000) wear <a, SAVINGS BANK 3/3110 3/31/11 12/31/11 12/31/12 12/81/13
Slide 36: M - Management
□ Everything not in C, A, E, L or S □ Strategy , Reputation, Operations, Compliance , Information Security □ Some acronyms you might have heard – CRA (Community Reinvestment Act) – BSA (Bank Secrecy Act) – GLBA (Gramm - Leach - Bliley Act) M - MANAGEMENT
Slide 37: Net Income ($000)
3/31/09 Net Income ($000) 12M 9M 12M 12M 3/310 = 3/31/11 12/81/11 12/31/12 12/31/13 {US Sats COMMUNITY BANK See
Slide 38: Loan Portfolio, Net ($000)
Loan Portfolio, Net ($000) 265,000 260,000 255,000 250,000 245,000 240,000 235,000 230,000 225,000 220,000 215,000 T T 3/31/09 = 3/31/10 3/31/11 12/34/11 12/31/12 12/31/13 Ww COMMUNITY BANK See
Slide 39: L - Liquidity
L - LIQUIDITY □ Deposits are our principal source of funds. □ Two principal types – low - cost transaction accounts for everyday use by consumers and businesses and higher - cost time deposits, mainly by consumers. □ Liquidity is our ability to fund loans or deposit withdrawals when they occur – Inv
Slide 40: Interest Rate Risk
Interest Rate Risk □ Hard to measure due to lots of assumptions required to run models to estimate IRR. □ Falling rates - borrowers refinance loans at lower rates and securities pay down faster with reinvestment at lower rates. Asset yields generally fall faster than the cost of funds , reducing net
Slide 41: S - Sensitivity
S - SENSITIVITY □ Rising rates – depositors move into higher yielding accounts. Cost of funds generally rises faster than asset yields, reducing net income.
Slide 42: S - Sensitivity
S - SENSITIVITY □ Interest rates are low and have been low for an extended period since the financial crisis of 2008. □ When will rates go up? □ The Federal Reserve is holding rates down through monetary policy and has published criteria for when it will allow rates to rise.
Slide 43: S - Sensitivity
Measure Target February 2014 February 2013 Unemployment 6.5% 6.7% 7.7% Current Inflation 2.5% 2.0% 2.0% Expected Inflation 2.5% 1.8% 1.5% S - SENSITIVITY
Slide 44: Change in Market Value of Equity for a Change in Interest Rates
Change in Market Value of Equity for a Change in Interest Rates 0 : -10 =o -15 -20 -25 -30 -36 12/31/13 Change in Market Value of Equity (% -40 12/31/12 Change in Market Value of Equity (%: \ US Sets Together we grow <a, SAVINGS BANK
Slide 45: Operations
□ Branch traffic is decreasing, as transactions increasingly move to electronic channels. □ However , new accounts are still generally opened in branches, and service questions come to the branches. □ So , we’ve reduced staffing in our branches, but certain minimums are required for security and to
Slide 46: First Quarter 2014 Highlights
□ Press release and 10 - Q filed. □ Earnings per share of $0.24 compared to $0.20 last year. □ Total Loans up 1% from 12/31/13. □ Total noninterest expense down 3% compared to last year. □ No Real Estate Owned. First Quarter 2014 Highlights
Slide 47: Report of the Inspector of Election
REPORT OF THE INSPECTOR OF ELECTION Becky Rose, VP, Internal Audit
Slide 48: Adjournment
Adjournment Thank you for your support. Management will answer questions following the meeting.
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