Wayne Savings Bancshares — Proxy Contest (May 2017)
33 slides from Wayne Savings Bancshares's proxy contest presentation, May 4, 2017
Slide 1: Wayne Savings Bancshares Investor Presentation
Wayne Savings Bancshares, Inc. (Nasdaq: WAYN) Investor Presentation On May 4, 2017, Wayne Savings Bancshares, Inc. issued the following investor presentation:
Slide 2: Safe Harbor Language
Safe Harbor Language Additional Information In connection with its 2017 Annual Meeting of Stockholders, Wayne Savings Bancshares, Inc. has filed a definitive proxy statement and other documents regarding the 2017 Annual Meeting of Stockholders with the Securities and Exchange Commission (“SEC”) and
Slide 3: Business Overview
Business Overview Founded in 1997, Wayne Savings Bancshares, Inc. (“WAYN” or “Company”) operates as a thrift holding company for Wayne Savings Community Bank (“Bank”). The Bank offers a full range of consumer and business financial services. The Bank’s principal business activities consist of origin
Slide 4: Timeline
Timeline Oct. 31, 2014 The Company announced that Rod C. Steiger, Director, President and CEO of the Company would retire from the Company and Bank effective December 31, 2014. Mr. Steiger served as President and CEO since Jan. 15, 2011. Nov. 3, 2014 H. Stewart Fitz Gibbon became President and CEO e
Slide 5: Our Strategy has Yielded Positive Results
Our Strategy has Yielded Positive Results WAYN has dramatically improved its operating metrics since 2012 Loans are up $84 million and comprise 73% of Assets, up from $248 million and 62%, respectively NPAs/Assets has improved to 0.85% from 2.18% Profitability as measured by ROE has improved 27.6% f
Slide 6: Our Strategy
Our Strategy Maintain strategic focus on core customer service, community relationships and staff alignment. Enhance the customer experience while taking advantage of disruption in the local banking market resulting from acquisitions of independent local community and regional banks. Rotate balance
Slide 7: Total Shareholder Return (TSR) Analysis
Total Shareholder Return (TSR) Analysis
Slide 8: WAYN's TSR outperformed its peers and the benchmark index prior to Stilwell's nomination
WAYN’s TSR outperformed its peers and the benchmark index prior to Stilwell’s nomination Source: SNL Financial. Data as of 1/8/2017. Note: Please see the Appendix for peer group.
Slide 9: The outperformance exists over the longer 3-year period
The outperformance exists over the longer 3-year period Source: SNL Financial. Data as of 1/8/2017. Note: Please see the Appendix for peer group.
Slide 10: ... and a much longer 5-year period
... and a much longer 5-year period Source: SNL Financial. Data as of 1/8/2017. Note: Please see the Appendix for peer group.
Slide 11: Stilwell's May 2016 suggestion to sell WAYN had no apparent impact on share price
Stilwell's May 2016 suggestion to sell WAYN had no apparent impact on share price Source: FactSet. Data as of 1/8/2017.
Slide 12: Stilwell's May 2016 suggestion was largely unnoticed
Stilwell’s May 2016 suggestion was largely unnoticed Neither The American Banker nor SNL Financial reported on Stilwell's May 2016 statement No other journalist (nationally or locally) reported on the May 2016 statement WAYN continued to trade in line with peers and S&P 500 for more than 45 days aft
Slide 13: Stilwell's support for management and strategy in previous filings
Stilwell’s support for management and strategy in previous filings Filing Date Ticker of Issuer Statement Regarding WAYN Aug 11, 2016 HARI “We [Stilwell] filed our original Schedule 13D reporting our position on October 8, 2010. We supported H. Stewart Fitz Gibbon III’s appointment as president and
Slide 14: Financial Performance
Financial Performance
Slide 15: WAYN's TSR performance is due to strong operating performance, driven by loan growth
WAYN’s TSR performance is due to strong operating performance, driven by loan growth Source: WAYN’s 10-K Filings
Slide 16: Loan growth has been accompanied by strict underwriting standards
Loan growth has been accompanied by strict underwriting standards Source: WAYN’s 10-K Filings; SNL Financial
Slide 17: Loan growth has been funded by strong deposit growth
Loan growth has been funded by strong deposit growth Source: WAYN’s 10-K Filings
Slide 18: Room for further growth reflected in lower Loan/Deposit Ratio
There is room for further growth as reflected in WAYN’s relatively lower Loan/Deposit Ratio Source: FactSet
Slide 19: Shift in loan composition should drive NIM higher resulting in increased NII
Shift in loan composition should drive NIM higher resulting in increased NII Source: WAYN’s 10-K Filings; SNL Financial *Net interest margin = Net interest income divided by interest-earning assets
Slide 20: Net interest income coupled with strict cost control should help bolster earnings
Net interest income coupled with strict cost control should help bolster earnings Source: SNL Financial *Efficiency ratio = Non-interest expense divided by (sum of net interest income and non-interest income/other income) **WAYN’s noninterest expenses are adjusted for the severance and elevated reti
Slide 21: Above peer average ROAA and ROAE indicative of successful growth strategy
Above peer average ROAA and ROAE are indicative of a successful growth strategy Source: SNL Financial *ROAA (Return on Average Assets) = Net income divided by average total assets ** The adjusted ROAA would have been 0.58% without the severance and elevated retirement costs of $468,000 for FY2016.
Slide 22: Similar to ROAA, ROAE has consistently outperformed the peer group
Similar to ROAA, ROAE has consistently outperformed the peer group Source: SNL Financial *ROAE (Return on Average Equity) = Net income divided by average total equity ** The adjusted ROAE would have been 6.21% without the severance and elevated retirement costs of $468,000 for FY2016.
Slide 23: Strong earnings have translated into increased dividends and tangible book value per share
Strong earnings have translated into increased dividends and tangible book value per share Source: WAYN’s 10-K Filings
Slide 24: Share repurchase plan has been accretive
Share repurchase plan has been accretive Source: WAYN’s 10-K Filings; FactSet
Slide 25: Board and Corporate Governance
Board and Corporate Governance
Slide 26: Our Uncontested Nominee: Daniel Buehler
Our Uncontested Nominee: Daniel Buehler President of E & H Family Group, Inc. Employed at E & H (and predecessors) since 1974 A chain of grocery and hardware stores -- 26 stores total Located entirely in WAYN's market area Extensive experience in business management Broad and deep community involvem
Slide 27: Our Contested Nominee: Debra Marthey
Our Contested Nominee: Debra Marthey Deep financial experience Over 35 years full-time experience, including at The J.M. Smucker Company and at Pricewaterhouse Coopers Over 15 years as Treasurer of The J.M. Smucker Company (retired 2016). Responsible for risk management at J.M. Smucker Company Impor
Slide 28: Our Board has the right mix of necessary skills and experience
Our Board has the right mix of necessary skills and experience Essential for effective management guidance and oversight Key for ensuring prudent growth (through loans and investments) without taking excessive investment/credit risk Vital for offering the right products to the right customers
Slide 29: Stilwell's Nominee: Stephen Burchett
Stilwell’s Nominee: Stephen Burchett Mr. Burchett is a litigator from Kentucky. His firm’s website lists his first specialty as “medical malpractice”. His practice is located in Kentucky and West Virginia – hundreds of miles from Wooster, Ohio. Stilwell has not demonstrated any connections that Mr.
Slide 30: Stilwell's Nominee: Stephen Burchett (contd.)
Stilwell’s Nominee: Stephen Burchett (contd.) Stilwell has granted Mr. Burchett an option for 50,000 shares of WAYN 90% of the option vests only if WAYN undergoes a change in control within 3 years of the 2017 Annual Meeting In other words, it vests only if WAYN is sold during Mr. Burchett’s term on
Slide 31: Our nominee is more qualified and has the relevant experience/skillset
Our nominee is more qualified and has the relevant experience/skillset
Slide 32: Appendix
Appendix
Slide 33: Peer Group: Nationwide Publicly Traded Thrifts, $250 - $750 million in Assets
Peer Group: Nationwide Publicly Traded Thrifts, $250 - $750 million in Assets PBHC HBK FCAP RNDB WBB MSBF CARV PBSK WEBK ANCB HMNF BYFC CWAY HFBL BYBK WBKC PBIP WVFC IROQ BCTF ESBK JXSB UCBA FSBC PBBI MELR