Wayne Savings Bancshares — Shareholder Meeting (May 2015)
52 slides from Wayne Savings Bancshares's shareholder meeting presentation, May 29, 2015
Slide 1: Annual Shareholders' Meeting May 28, 2015
Annual Shareholders’ Meeting May 28, 2015
Slide 2: 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 discussed in forward - looking
Slide 3: Call To Order
Call To Order Peggy J. Schmitz Chair, Board of Directors
Slide 4: Directors
Directors Peggy J. Schmitz, Chair, Board of Directors Daniel R. Buehler Jonathan Ciccotelli, CPA Stewart Fitz Gibbon, President & CEO ( nominee for election)
Slide 5: Directors
Directors David L. Lehman (nominee for a new term) Debra A. Marthey Glenn W. Miller, CPA (nominee for a new term)
Slide 6: Senior Management Team
Stewart Fitz Gibbon – President and CEO Joel Beckler – SVP, Senior Loan Officer Myron Swartzentruber, CPA – SVP, CFO Ursula Lehman – SVP, Director of Human Resources and Training Jeff King – SVP, Chief Information Officer Donna Knack – SVP, Director of Customer Service and Sales Senior Management Te
Slide 7: Also Present
Also Present Becky Rose – VP, Internal Audit, Inspector of Election Brittany Hartzler – AVP , Corporate Secretary Scott Hopf, CPA – Senior Manager, BKD LLP Steve Wuchnick , CPA – Senior Associate , BKD LLP Francis Grady – Grady & Associates
Slide 8: Instructions on Procedures
Instructions on Procedures Together we grow
Slide 9: Opening of Polls
Opening of Polls
Slide 10: Closing of Polls
Closing of Polls
Slide 11: Business Overview
Business Overview Stewart Fitz Gibbon President and CEO
Slide 12: Mission/Vision/Values/Outcome Objectives
We will fulfill our communities’ banking needs while expanding opportunities for our staff and increasing value for our stakeholders. Mission/Vision/Values/Outcome Objectives □ An independent dynamic financial services organization □ A top performing community bank □ The bank of choice for customers
Slide 13: Mission/Vision/Values/Outcome Objectives (continued)
Mission/Vision/Values/Outcome Objectives (continued) Neighbors serving neighbors to achieve financial goals. □ Integrity □ Commitment □ Accountability □ Relationships □ Diligence
Slide 14: Mission/Vision/Values/Outcome Objectives (continued)
□ Profitability – increase shareholder value □ Create opportunities for our staff □ Give back to our communities Mission/Vision/Values/Outcome Objectives (continued)
Slide 15: Strategic Initiatives
□ 10 - K Strategic Initiatives and Board Chair’s Letter. □ New CEO, eliminate the former COO position, reallocate resources to information technology, human resources, internal audit and risk management. □ Continued remixing of balance sheet assets to increase higher yielding, on a risk adjusted bas
Slide 16: Strategic Initiatives (continued)
□ Continued transition from a transaction oriented thrift culture to a relationship oriented commercial bank culture through new position descriptions, activity goals, performance reviews and compensation structures consistent with regulatory guidance. In addition, turnover in the existing staff is
Slide 17: Strategic Initiatives (continued)
□ Continued focus on enterprise risk management and regulatory compliance. The focus of the ERM program is to ensure the identification, measurement and management of risks, and the pricing of risk to produce acceptable returns to shareholders. As part of ERM and coordinated with internal audit, reg
Slide 18: Implementing the Strategy: Technology & Marketing
Implementing the Strategy Technology & Marketing Developing New Mobile - Friendly , Relevant Website □ 2015 Summer launch □ KEY sales & marketing channel □ Online “branch” location □ Internet is now the primary source of information . . . before coming into the branch to do business
Slide 19: Mobile Responsive – One Website, Multiple Devices
Mobile Responsive – O ne W ebsite, Multiple D evices
Slide 20: Mobile Responsive – One Website, Multiple Devices
□ Mobile usage has now surpassed desktop. □ Websites must now have dynamic content that is optimized to drive new customers to us. □ We understand that as a community bank, we have to show that we have the technology customers need, just like the big banks. □ While customers value the personalized s
Slide 21: Website — BEFORE
Website — BEFORE = Prscsurr scone more> @ reve 70 gs eee | = Hello, freedom
Slide 22: Slide 22
Slide 23: Implementing the Strategy: Managing Overhead Expenses
Ashland drive - thru building closure □ Low transaction volume □ Little disruption to customers ▪ ATM and night drop will remain open ▪ Main office 300 feet away ▪ Sugarbush office and drive - thru 2.14 miles away ▪ Mobile check deposit available □ Savings of 2 full - time staff and utilities Implem
Slide 24: Managing Overhead Expense (continued) Branch Transaction Study
Managing Overhead Expense ( continued) Branch Transaction Study Jul-14 Aug-14 Oct-14 Jan-15 Feb-15 Mar-15 Average
Slide 25: 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, 2014 □ Assets of $417.7 million □ Net loans of $265.6 million □ Deposits of $34
Slide 26: Deposit Market Share – Wayne County
26 Deposit Market Share – Wayne County 2014 Rank Institution (ST) Type 2014 Number of Branches 2014 Total Deposits in Market ($000) 2014 Total Market Share (%) 1 PNC Financial Services Group (PA) Bank 11 516,835 28.11 2 FirstMerit Corp. (OH) Bank 5 330,746 17.99 3 Farmers National Banc Corp. (OH) Ba
Slide 27: Deposit Market Share – Ashland County
27 Deposit Market Share – Ashland County 2014 Rank Institution (ST) Type 2014 Number of Branches 2014 Total Deposits in Market ($000) 2014 Total Market Share (%) 1 PNC Financial Services Group (PA) Bank 2 111,805 18.57 2 Huntington Bancshares Inc. (OH) Bank 1 104,241 17.31 3 Park National Corp. (OH)
Slide 28: Deposit Market Share – Stark County
28 Deposit Market Share – Stark County 2014 Rank Institution (ST) Type 2014 Number of Branches 2014 Total Deposits in Market ($000) 2014 Total Market Share (%) 1 Huntington Bancshares Inc. (OH) Bank 26 1,513,948 26.26 2 FirstMerit Corp. (OH) Bank 16 1,415,340 24.55 3 JPMorgan Chase & Co. (NY) Bank 1
Slide 29: Deposit Market Share – Holmes County
29 Deposit Market Share – Holmes 2014 Rank Institution (ST) Type 2014 Number of Branches 2014 Total Deposits in Market ($000) 2014 Total Market Share (%) 1 Killbuck Bancshares Inc. (OH) Bank 6 332,376 43.71 2 CSB Bancorp Inc. (OH) Bank 7 281,270 36.99 3 Park National Corp. (OH) Bank 1 41,794 5.50 4
Slide 30: Deposit Market Share – Medina County
30 Deposit Market Share - Medina County 2014 Rank Institution (ST) Type 2014 Number of Branches 2014 Total Deposits in Market ($000) 2014 Total Market Share (%) 1 FirstMerit Corp. (OH) Bank 12 880,998 27.27 2 Ohio Farmers Insurance Co. (OH) Thrift HC 3 488,620 15.12 3 TFS Financial Corp (MHC) (OH) T
Slide 31: Deposit Market Share – Summary
31 Deposit Market Share – Summary County 2014 Total Deposits 2014 Total Branches 2014 Wayne Savings Deposits 2014 Wayne Savings Branches 2014 Total Market Share (%) 2014 Rank Wayne 1,838,834 49 237,444 7 12.91 4 Ashland 602,106 19 42,685 2 7.09 7 Stark 5,764,858 124 24,850 1 0.43 13 Holmes 760,371 2
Slide 32: Experienced Board & Management
Experienced Board & Management 32 Name Age Peggy Schmitz 63 Chair of the Board 2008 Dan Buehler 60 Director 2005 Jonathan Ciccotelli, CPA 49 Lead Director 2010 David Lehman 68 Director 2012 Debi Marthey 60 Director 2011 Glenn Miller, CPA 51 Director 2012 Stewart Fitz Gibbon 58 Director, President an
Slide 33: Five Year Stock Price Performance (4/30/10 – 4/30/15)
5 Year Stock Price Performance (4/30/10 – 4/30/15) 33 Source: SNL Financial as of April 30, 2015
Slide 34: Strong Track Record of Generating Shareholder Value
Strong Track Record of Generating Shareholder Value 34 Tangible Book Value Per Share Earnings Per Share Source: SNL Financial
Slide 35: WAYN: 2014 Financial Highlights
□ Capital managed to align with realized growth rate through cash dividend increase and stock repurchase. □ Improved Asset Quality. Impaired loans reduced. Real Estate Owned up from $0 last year, but still low by historical standards. □ Increased Earnings, mainly through expense control, but also th
Slide 36: Equity to Assets at Period End (%)
0 2 4 6 8 10 12 14 Equity to Assets at Period End (%) C - CAPITAL
Slide 37: Nonperforming and impaired assets to total assets (%)
Nonperforming and impaired assets to total assets (%) (Uses
Slide 38: Nonperforming Loans ($000)
(Uses Nonperforming Loans ($000)
Slide 39: Total $ Past Due ($000)
Total $ Past Due ($000) Wyse Together we grow
Slide 40: Total $ Real Estate Owned (REO) ($000)
Total $ Real Estate Owned (REO) ($000) Weare Together we grow
Slide 41: M - Management
□ Everything not in C, A, E, L or S □ Strategy , Reputation, Operations , Compliance □ Information/ Cybersecurity – top regulatory and consumer concern □ Some acronyms you might have heard – CRA (Community Reinvestment Act) – BSA (Bank Secrecy Act) – GLBA (Gramm - Leach - Bliley Act) M - MANAGEMENT
Slide 42: E - Earnings: Net Income ($000)
- 500 1,000 1,500 2,000 2,500 3,000 12 M 3/31/09 12 M 3/31/10 12 M 3/31/11 9 M 12/31/11 12 M 12/31/12 12 M 12/31/13 12M 12/31/14 E - EARNINGS Net Income ($000)
Slide 43: 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. – In
Slide 44: 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 45: S - Sensitivity
S - SENSITIVITY □ Rising rates – depositors move into higher yielding accounts. Cost of funds generally rises faster than asset yields, reducing net income. Another top regulatory concern.
Slide 46: 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. Future policy decisions are “data dependent.”
Slide 47: S - Sensitivity
S - SENSITIVITY Measure Target February 2015 February 2014 February 2013 National Unemployment Rate Below 6.5% 5.5% 6.7% 7.7% FRB Labor Market Conditions Index Positive Results 2.0 3.3 3.9 CPI less food and energy 2.0% 1.7% 1.6% 2.0% Expected Inflation 2.0% 1.5% 1.8% 1.5%
Slide 48: Market Value of Equity in Changing Rate Environments
‘Market Value of Equity in Changing Rate Environments 5 -100 +100 +200 +300 oo [= nena 2 (10%) st (8%) gy (15%) 0%) (13%) £ (20%) (1956) £ (25%) (25%), £ ow) i (27%) J fon) (e%) 12/31/2014 12/31/2013 Weare Together we grow
Slide 49: First Quarter 2015 Highlights
□ Press release and 10 - Q filed at www.sec.gov. □ Earnings per share of $0.16 for the quarter, compared to $0.24 in the prior year quarter. □ Decrease mainly due to a $233,000 provision for loan losses as a group of nonperforming loans continues to be worked out and an increase in loan balances. Fi
Slide 50: First Quarter 2015 Highlights (continued)
□ Increase of 1% in total loans compared to 12/31/14 despite another difficult winter reflected in 0.2% reported growth in Gross Domestic Product (GDP) and strong competition on pricing and loan terms. □ Decrease of 3% in total securities compared to 12/31/14 as lower yielding securities balances ar
Slide 51: Report of the Inspector of Election
REPORT OF THE INSPECTOR OF ELECTION Becky Rose, VP, Internal Audit
Slide 52: Adjournment
Adjournment Thank you for your support. Management will answer questions following the meeting.
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