Wayne Bancorp, Inc. Reports 2004 Year to Date Net Income and Earnings Per Share

Wayne Bancorp, Inc. Reports 2004 Year to Date Net Income and
Earnings Per Share 


WOOSTER, Ohio, July 23  /PRNewswire-FirstCall/ -- Wayne Bancorp, Inc.
(NASDAQ:WNNB), 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 second quarter and year to date results.

David P. Boyle, Chairman, President and CEO of the Company stated, "Our year to
date earnings are slightly behind our internal projections.  This is due in
part to costs related to the pending merger with National City Corporation,
offset by a more stable than expected net interest margin, a better than
anticipated mortgage market and non-interest revenue enhancements. We expect
continued challenges in the net interest margin in the short term until
economic activity warrants more significant 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 them."

Boyle continued, "We are excited about our pending merger with and into
National City Corporation, which will allow us to provide new products and
services to our customers, as well as an expansive branch network. Both
companies have assembled integration teams who are working diligently to effect
a smooth merger and transition, which is expected to close during the fourth
quarter of this year."

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 includes operations from Banc Services
Corp, (BSC) from the date of the acquisition, which was effective on May 31,
2003.  As a result of this, the variances from 2004 compared to 2003 are
substantially all related to the merger with BSC.

Total assets decreased by $38.0 million, or 4.5 percent, to stand at $811.0
million at June 30, 2004, compared to $849.0 million at June 30, 2003. This
decrease in assets includes a  $46.2 million decrease in loans as a result of
selling $60.5 million of mortgage loans into the secondary market over the past
twelve months, a $13.9 million decrease in federal funds sold due to paying
cash consideration of $13.8 million to shareholders of BSC in connection with
the merger, and a $32.5 million decrease in deposits and short-term borrowings
partially due to commercial customers cash funding their operations and
reducing debt.  These decreases were offset by a $27.0 million increase in the
securities portfolio, which was funded from the cash proceeds from the loan
sales.

In the quarter ended June 30, 2004, Wayne Bancorp, Inc. reported net income of
$1,997,000, or $.32 per share.  This compares to second quarter 2003 net income
of $2,231,000, or $.40 per share.  For the first six months of 2004, the
Company reported net income of $4,325,000, or $.69 per share.  This compares to
2003 net income of $4,459,000, or $.82 per share for the same time period,
which represents a decrease of 3.0 percent in earnings and 15.6 percent in
earnings per share.  Included in the quarterly and year to date results for the
period ending June 30, 2004 are merger related expenses of $301,000, which is
equivalent to $.03 per share net of tax.

Return on average equity for the second quarter of 2004 was 8.03 percent
compared to 12.58 percent for the second quarter of 2003.  Return on average
equity for the six months ended June 30, 2004 was 8.66 percent compared to
14.41 percent for the same period in 2003.  Return on average assets was .98
percent for the second quarter of 2004, compared to 1.41 percent for the second
quarter of 2003.  Return on average assets for the six months ended June 30,
2004 was 1.07 percent compared to 1.59 percent for the comparable period in
2003.

Net interest income for the second quarter increased $1,050,000 or 15.6
percent, to $7,773,000 compared to $6,723,000 for the same period in 2003. For
the first full six months of the year, net interest income has increased
$2,437,000 or 19.1 percent, to $15,233,000 from $12,796,000 for the comparable
period in 2003.  During the six month period ended June 30, 2004, the Company
experienced a 9.9 percent increase in interest income, while interest expense
declined by 13.6 percent.  The increase for the three and six months ended June
30, 2004 is primarily due to the merger with BSC during 2003, which increased
the Company's earning asset base and ability to increase revenues. Although net
interest income has increased substantially from the prior year, the prolonged
low interest rate environment and the repricing that has occurred on the
balance sheet, has caused a decline in the net interest margin from 4.87
percent at June 30, 2003 to 4.29 percent at June 30, 2004, which is up from
4.22 percent at March 31, 2004.  Although the Federal Open Market Committee
(FOMC) initiated a 25 basis point interest rate increase late in the second
quarter of this year due to signs of a recovering economy, Management feels
that the net interest margin will continue to be under pressure during the
second half of the year due to the continued repricing that is occurring, and
until this rate increase works its way through the balance sheet.

Non-interest income for the second quarter increased $277,000 or 18.3 percent
to $1,794,000 from $1,517,000 for the same quarter in 2003.  For the six months
ended June 30, 2004, non-interest income was $3,783,000 compared to $2,846,000
for the same period in 2003, which is an increase of $937,000, or 33.0 percent.
 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, offset by a decline
in mortgage loan servicing fees and revenues generated from Chippewa Valley
Title Agency, Inc., a wholly-owned subsidiary of WCNB. Although fees generated
from mortgage sales have increased for the first six months of this year,
Management anticipates that mortgage activity and sales may decrease in the
second half of this year due to a steady rise in mortgage interest rates since
year end.

Non-interest expenses for the second quarter increased $1,698,000 or 33.8
percent to $6,729,000 from $5,031,000 for the same quarter in 2003.  For the
six months ended June 30, 2004 non-interest expense was $12,779,000 compared to
$9,284,000 for the same period in 2003, which is an increase of $3,495,000, or
37.8 percent.  This increase is primarily related to the merger with BSC, 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 $811 million financial services
company.  Its bank affiliates -- Wayne County National Bank and Savings Bank &
Trust -- operate 25 banking centers in Wayne, Holmes, Medina, Stark and Summit
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)                                             June 30,
  (in thousands of dollars except share data)        2004           2003

  ASSETS
    Cash and due from banks                        $29,324        $35,471
    Federal funds sold                                   0         13,869
      Total cash and cash equivalents               29,324         49,340

    Securities, available for sale                 272,857        245,817
    Loans                                          462,056        508,290
    Allowance for loans                             (7,220)        (8,129)
      Net loans                                    454,836        500,161

    Premises and equipment                          15,479         14,795
    Intangible assets                               30,072         30,600
    Other assets                                     8,449          8,300
      Total assets                                $811,017       $849,013


                   CONSOLIDATED STATEMENTS OF CONDITION

  (unaudited)                                             June 30,
  (in thousands of dollars except share data)       2004           2003

  LIABILITIES
    Deposits
      Non-interest bearing                        $114,127        $79,778
      Interest bearing                             554,869        609,374
        Total deposits                             668,996        689,152

    Short-term borrowings                           31,253         43,610
    Other borrowed funds                            10,179          9,961
    Other liabilities                                2,960          7,416
      Total liabilities                            713,388        750,139

  SHAREHOLDERS' EQUITY
    Common stock - stated value $1 per share         6,337          6,246
    Shares authorized - 12,000,000 in 2004
      and 2003
    Shares issued - 6,336,143 in 2004 and
      6,245,964 in 2003
    Shares outstanding - 6,315,770 in 2004
      and 6,025,403 in 2003
    Paid in capital                                 47,114         43,561
    Retained earnings                               48,037         52,675
    Unearned ESOP shares - 59,333 in 2004
      and 68,979 in 2003                            (1,065)        (1,278)
    Treasury stock, at cost - 20,373 in 2004
      and 220,561 in 2003                             (522)        (6,194)

    Shares held in Trust for Deferred Share
      Plan - 33,160 in 2004 and 0 in 2003             (905)             0
    Accumulated other comprehensive income (loss)   (1,367)         3,864
      Total shareholders' equity                    97,629         98,874
  Total liabilities and shareholders' equity      $811,017       $849,013


  CONSOLIDATED STATEMENTS OF INCOME

  (unaudited)              Three Months Ended          Six Months Ended
  (in thousands of dollars       June 30,                    June 30,
   except per share data)   2004         2003         2004         2003

  INTEREST INCOME
  Interest and fees on
    loans                 $7,713       $7,254      $15,262      $13,860
  Interest on securities   2,155        1,934        4,222        3,840
  Other interest income       19           57           38           60

    Total interest income  9,887        9,245       19,522       17,760

  INTEREST EXPENSE
  Interest on deposits     1,928        2,402        3,946        4,740
  Interest on short-term
    borrowings                49           59          111          111
  Interest on other borrowed
    funds                    137           61          232          113

    Total interest expense 2,114        2,522        4,289        4,964

  Net interest income      7,773        6,723       15,233       12,796
  Provision for loan losses   59           71          179          111

  Net interest income after
    provision for loan
    losses                 7,714        6,652       15,054       12,685

  Non-interest income      1,794        1,517        3,783        2,846
  Non-interest expense     6,729        5,031       12,779        9,284

  Income before income
    tax expense            2,779        3,138        6,058        6,247

  Income tax expense         782          907        1,733        1,788

  Net income              $1,997       $2,231       $4,325       $4,459

  Net income per share     $0.32        $0.40        $0.69        $0.82
  Dividends per share      $0.18        $0.17        $0.36        $0.34


                           FINANCIAL HIGHLIGHTS

  KEY MANAGEMENT RATIOS

                                                           June 30,
  (unaudited)                                        2004           2003

  Net interest margin (a) (b)                        4.29%          4.87%
  Quarter end loan to deposit ratio                 69.07%         73.78%
  Loss allowance to quarter end loans                1.56%          1.60%
  Return on average assets (a)                       1.07%          1.59%
  Return on average equity (a)                       8.66%         14.41%
  Total other expenses to average assets (a)         3.19%          3.28%
  Total other income to average assets (a)            .93%          1.01%
  Net operating burden to average assets (a)         2.26%          2.27%

   (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/ 

Copyright