EX-99.1 3 l05233aexv99w1.txt EXHIBIT 99.1 Exhibit 99.1 WAYNE BANCORP, INC. letterhead NEWS RELEASE FOR IMMEDIATE RELEASE CONTACT: David P. Boyle, CPA President and CEO Wayne Bancorp, Inc. PHONE: (330) 264-1222 EXT: 228 WAYNE BANCORP, INC. REPORTS 2003 FOURTH QUARTER RESULTS WOOSTER, Ohio - January 22, 2004 - 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 2003 fourth quarter and year to date results. "2003 was certainly a volatile and challenging year. Interest rates continued to pressure the net interest margins of most community banks. This pressure increased in our Company during the second half of the year. In addition, during the second half of the year, we have experienced a dramatic slow down in commercial loan demand in our core markets. This slowing of loan growth, margin pressure and the integration of our recent acquisition have slowed the pace of our earnings growth and we expect that this trend will continue into 2004" said President and Chief Executive Officer David Boyle. Boyle continued, "Our existing market will in all likelihood continue to see slower than historical loan demand for the coming several quarters. The wave of mortgage refinancing has significantly slowed, and the recent announcement of the closing of one of the largest employers within our markets will certainly have the local market pausing and bracing for the impact and fallout of that closure." "Our goals for 2004 are aggressive and include expansion into new markets," Boyle stated. "We will be opening one new office early in the second quarter and are working on a second sometime late in the fourth quarter. The entire staff is aware of the challenges that face us for the coming year and are focused on shareholder value and we will work diligently through the coming quarters to see that this Company remains strong." The following commentary, including performance information, includes twelve months of operations for Wayne Bancorp, Inc. comparable with prior year information and seven months of operations from the newly acquired Banc Services Corp. (BSC) included in 2003 year to date numbers. Total assets increased by $203.7 million, or 32.7 percent, to stand at $827.3 million at December 31, 2003, compared to $623.6 million at December 31, 2002. This increase in assets is primarily due to the acquisition of Banc Services Corp. during 2003. This acquisition added loans of $123.0 million and deposits totaling $166.8 million. -more- PAGE 2 OF 6 / 2003 FOURTH QUARTER RESULTS In the quarter ended December 31, 2003, Wayne Bancorp, Inc. reported net income of $2,239,000, or $.36 per share. This compares to fourth quarter 2002 net income of $2,350,000, or $.47 per share. For the full year ended December 31, 2003, the Company reported net income of $9,381,000, or $1.61 per share. This compares to 2002 net income of $8,778,000, or $1.75 per share, which represents an increase of 6.9 percent in earnings, while earnings per share declined by 8.0 percent. Return on average equity for the fourth quarter of 2003 was 10.49 percent compared to 14.56 percent for the fourth quarter of 2002. Return on average equity, for the full year ended December 31, 2003 was 10.99 percent compared to 13.60 percent for 2002. Return on average assets was 1.21 percent for the fourth quarter of 2003, compared to 1.55 percent for the fourth quarter of 2002. Return on average assets for the full year ended December 31, 2003 was 1.26 percent compared to 1.45 percent for 2002. Net interest income for the fourth quarter was $7,847,000, which represents an increase of 27.9 percent, or $1,716,000, from net interest income of $6,131,000 in 2002. For the full year, net interest income increased $4,633,000, or 19.2 percent, from $24,188,000 in 2002, to $28,821,000 for 2003. This increase in net interest income is primarily due to the merger with Banc Services Corp. during 2003, which increased the Company's earning asset base and ability to increase revenues. Despite the prolonged low interest rate environment and the repricing that has occurred on the balance sheet, the net interest margin of 4.39% at December 31, 2003 has remained substantially unchanged from the 4.40% reported at December 31, 2002. Although the margin remained strong during 2003, we believe that the Company and industry will continue to experience downward pressure on its net interest margin due to the prolonged low interest rate environment and expectations that rates will remain in this low trough for the balance of 2004. Non-interest income for the fourth quarter was $1,965,000, which increased $601,000, or 44.1 percent, from $1,364,000 for the same quarter in 2002. For the full year ended December 31, 2003, non-interest income was $6,504,000 compared to $4,943,000 in 2002, which represents an increase of $1,561,000, or 31.6 percent. This increase for the full year is due to increases in service charges and fees on deposits, income from Chippewa Valley Title Agency, a wholly-owned subsidiary of WCNB, Trust revenues and gains on investment sales. Non-interest expenses for the fourth quarter increased $2,137,000, or 51.1 percent, to $6,317,000 from $4,180,000 for the same period in 2002. For the full year ended December 31, 2003, non-interest expenses increased $5,102,000, or 31.2 percent, from $16,369,000 in 2002, to $21,471,000 in 2003. Included in non-interest expenses for the fourth quarter are merger related charges of $420,000, and core deposit amortization of $147,000, while for the full year ended December 31, 2003 these expenses were $498,000, and $348,000 respectively. Also during the fourth quarter WCNB brought its data processing function in-house which increased computer related expenses as a result of system and infrastructure enhancements. Further, as a result of the merger, the Company also consolidated its Trust operations and Mortgage lending during the fourth quarter, to gain operational efficiencies and reduce costs. PAGE 3 OF 6 / 2003 FOURTH QUARTER RESULTS Wayne Bancorp, Inc. (NASDAQ:WNNB) is an $827 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. ### PAGE 4 OF 6 / 2003 FOURTH QUARTER RESULTS CONSOLIDATED STATEMENTS OF CONDITION

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(a) Net interest margin is calculated on a fully taxable equivalent basis.

WAYNE BANCORP INC /OH/ 8-K