Wayne Bancorp, Inc. Reports 2004 First Quarter Results

Wayne Bancorp, Inc. Reports 2004 First Quarter Results 


WOOSTER, Ohio, April 23  /PRNewswire-FirstCall/ -- Wayne Bancorp, Inc. , parent
holding company of Wayne County National Bank (WCNB), Savings Bank & Trust
(SBT), MidOhio Data, Inc. (MID) and Access Financial Corp. (AFC), today
announced its 2004 first quarter results.

David P. Boyle, Chairman, President and CEO of the Company stated, "Our first
quarter earnings are slightly ahead of our internal projections.  This is due
in part to a more stable than expected net interest margin, a better than
anticipated mortgage market, continued realization of cost savings from the
Banc Services Corp. (BSC) acquisition and non-interest revenue enhancements. 
We expect continued challenges in the net interest margin until economic
activity warrants changes in the interest rate environment.  We are cautiously
optimistic that these changes are on the horizon, and we are prepared to take
full advantage of these changes."

The following commentary, including performance information includes year to
date consolidated operations and financial data for Wayne Bancorp, Inc. Prior
year information for the same period does not include operations from BSC, as
this acquisition was effective on May 31, 2003.

Total assets increased by $194.4 million, or 31.4 percent, to stand at $813.7
million at March 31, 2004, compared to $619.3 million at March 31, 2003, which
is primarily due to the acquisition of BSC during the second quarter of 2003. 
The increase in assets includes a $69.9 million increase in loans, an $87.5
million increase in securities and federal funds sold, while deposits increased
$144.0 million and short-term borrowings and other borrowed funds increased by
$14.9 million.  As a result of the merger, the Company recorded goodwill and
core deposit intangible, which are included in other assets.  As of March 31,
2004 goodwill was $24.7 million while core deposit intangible was $4.4 million.

In the quarter ended March 31, 2004, Wayne Bancorp, Inc. reported net income of
$2,328,000, or $.37 per share.  This compares to first quarter 2003 net income
of $2,228,000, or $.42 per share.  Return on average equity for the first
quarter of 2004 was 9.27 percent compared to 13.32 percent for the same period
one year ago, while return on average assets for the first quarter of 2004 was
1.15 percent compared to 1.46 percent for the same period one year ago. 
Although year to date net income has increased over the prior period, the
Company experienced a dilution in its return on average equity and average
assets due to a 50.1 percent increase in average equity and a 32.4 percent
increase in average assets compared to the same period one year ago as a result
of the merger.

Net interest income for the first quarter increased from $6,073,000 in 2003, to
$7,460,000 in 2004, which represents an increase of 22.8 percent, or
$1,387,000.  The Company experienced a 13.2 percent increase in interest
income, while interest expense declined by 10.9 percent.  This increase in net
interest income is primarily due to the merger with BSC during 2003, which
increased the Company's earning asset base and ability to increase revenues.
Due to the prolonged low interest rate environment and the repricing that has
occurred on the balance sheet, the net interest margin has declined from 4.39
percent at March 31, 2003 to 4.22 percent at March 31, 2004.  Although the
current margin remains strong, the Company anticipates that there will be
further margin compression during 2004 as a result of the continued downward
repricing on the asset side of the balance sheet exceeding the repricing on the
liability side.  On a positive note, the economic conditions have shown signs
of improvement over the past quarter, signaling that rate increases may follow
in the near future, and due to the balance sheet structure and increase in
earning assets, management believes the Company is well positioned to take
advantage of these interest rate increases.

Non-interest income for the first quarter increased $660,000, or 49.7 percent,
to $1,989,000 compared to $1,329,000 for the same quarter in 2003.  This
increase is due to increases in several areas, including service charges and
fees on deposits, trust revenues, and net gains recognized on the sale of
securities, and mortgage loans into the secondary market.  As mortgage rates
have begun to rise over the past quarter, the Company anticipates that mortgage
activity and sales may decrease in future quarters of this year.

Non-interest expenses for the first quarter increased $1,797,000, or 42.3
percent, to $6,050,000 compared to $4,253,000 for the same period in 2003. 
This increase is primarily related to the addition of BSC during 2004, which
increased the Company's staff level and number of branch locations, and
includes increases in expenses related to compensation and employee health
insurance, building and equipment expenses, and other non-interest expenses.

Wayne Bancorp, Inc. (NASDAQ:WNNB) is an $814 million financial services
company.  Its bank affiliates -- Wayne County National Bank and Savings Bank &
Trust  -- operate 25 banking centers in Wayne, Holmes, Medina and Stark
Counties.  The Company's non-bank affiliates, including, MidOhio Data, Inc.,
which performs proof and data processing operations, and Chippewa Valley Title
Agency, Inc., a wholly-owned subsidiary of WCNB are both located in Wayne
County, while Access Financial Corp., a consumer finance company is located in
Stark county.  For more information, visit WCNB's Web site at wcnb.com and
SBT's Web site at svgsbank.com .

When used in this document, the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimated," "projected" or
similar expressions are intended to identify "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties, including
changes in economic conditions in the Company's market area, changes in
policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area and competition that could cause actual
results to differ materially from the historical earnings and those presently
anticipated or projected.  Factors listed above could affect the Company's
financial performance and could cause the Company's actual results to differ
materially from any statements expressed with respect to future periods.  The
Company does not undertake, and specifically disclaims any obligation, to
publicly revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.

                   CONSOLIDATED STATEMENTS OF CONDITION

  (Unaudited)
  (In thousands of dollars except
    share data)                           March 31,
                                    2004            2003
  ASSETS
    Cash and due from banks       $29,314         $26,141
    Federal funds sold             21,920          11,075
      Total cash and
       cash equivalents            51,234          37,216

    Securities, available
     for sale                     254,646         178,008

    Loans held for sale             6,954          25,259
    Loans                         453,657         365,413

    Allowance for loans            (7,203)         (6,040)
      Net loans                   446,454         359,373
    Premises and equipment         15,865          11,330
    Other assets                   38,517           8,071
      Total assets               $813,670        $619,257


  LIABILITIES
    Deposits
      Non-interest bearing       $106,866         $70,772
      Interest bearing            557,206         449,262
        Total deposits            664,072         520,034
    Short-term borrowings          34,441          25,818
    Other borrowed funds            7,794           1,393
    ESOP loan                       1,390           1,533
    Other liabilities               5,229           3,596
        Total liabilities        $712,926        $552,374


  SHAREHOLDERS' EQUITY
    Common stock - stated value
     $1 per share                   6,331           4,917
    Shares authorized - 12,000,000
     in 2004 and 2003
    Shares issued -


6,331,328

     in 2004 and 4,916,911 in 2003

    Shares outstanding - 6,310,955
     in 2004 and 4,754,768 in 2003
    Paid-in capital                46,933          13,187
    Retained earnings              47,167          51,280
    Unearned ESOP shares -


61,515

in 2004 and 71,520 in 2003    (1,115)         (1,334)

Treasury stock, at cost -

20,373 

     in 2004 and 162,143 in 2003     (522)         (4,440)
    Shares held in trust for
     Deferred Share Plan -


30,151

     in 2004 and 0 in 2003           (868)              0
    Accumulated other comprehensive
     income                         2,818           3,273
       Total shareholders' equity 100,744          66,883
  Total liabilities and
   shareholders' equity          $813,670        $619,257



                    CONSOLIDATED STATEMENTS OF INCOME

  (Unaudited)
  (In thousands of dollars
   except per share data)           Three Months Ended
                                          March 31,
                                    2004            2003

  INTEREST INCOME
    Interest and fees on loans     $7,549          $6,606
    Interest on securities          2,067           1,906
    Other interest income              19               3

      Total interest income         9,635           8,515

  INTEREST EXPENSE
    Interest on deposits            2,018           2,338
    Interest on short-term
     borrowings                        62              52
    Interest on other borrowed funds   95              52

      Total interest expense        2,175           2,442

    Net interest income             7,460           6,073
    Provision for loan losses         120              40

    Non-interest income             1,989           1,329
    Non-interest expense            6,050           4,253

    Income before income
     tax expense                    3,279           3,109

    Income tax expense                951             881

  Net income                       $2,328          $2,228

  Net income per share              $0.37           $0.42

  Dividends per share               $0.18           $0.17



                           FINANCIAL HIGHLIGHTS

  KEY MANAGEMENT RATIOS
                                          March 31,
  (Unaudited)                       2004            2003

  Net interest margin (a) (b)        4.22%           4.39%
  Quarter end loan to deposit
   ratio                            69.36%          75.12%
  Loss allowance to quarter
   end loans                         1.56%           1.55%
  Return on average assets (a)       1.15%           1.46%
  Return on average equity (a)       9.27%          13.32%
  Total other expenses to
   average assets (a)                3.05%           2.81%
  Total other income to
   average assets (a)                0.98%           0.87%
  Net operating burden to
   average assets (a)                2.07%           1.94%

  (a) Year to date results annualized.
  (b) Net interest margin is calculated on a fully taxable equivalent basis


DATASOURCE: Wayne Bancorp, Inc.



CONTACT:  David P. Boyle, CPA, Chairman, President and CEO of Wayne

Bancorp, Inc., [phone] Ext: 228



Web site:  http://www.wcnb.com/ 

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