form11k-101892_wayne.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________

FORM 11-K

(Mark One):

ý
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

o
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ___________

Commission file number: 0-23433


A.
Full title of the plan and address of the plan, if different from that of the issuer named below:


Wayne Savings 401(k) Retirement Plan

B.
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Wayne Savings Bancshares, Inc.
151 North Market Street
Wooster, Ohio 44691



 
 
 
 


REQUIRED INFORMATION

Financial Statements.  The following financial statements and schedule are filed as part of this annual report for the Wayne Savings 401(k) Retirement Plan (the "Plan"):

 
  
 
Page No.
Report of Independent Registered Public Accounting Firm
3
   
Financial Statements
  
   
Statements of Net Assets Available for Benefits
4
 
 
Statement of Changes in Net Assets Available for Benefits
5
   
Notes to Financial Statements
6
   
Supplemental Schedule
  
   
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
15
   


 

 
 
 

Report of Independent Registered Public Accounting Firm


Administrative Committee
Wayne Savings 401(k) Retirement Plan
Wooster, Ohio

We have audited the accompanying statements of net assets available for benefits of the Wayne Savings 401(k) Retirement Plan as of December 31, 2008 and 2007, and the related statements of changes in net assets available for benefits for the years then ended.  These financial statements are the responsibility of the Plan's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  Our audits included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Wayne Savings 401(k) Retirement Plan as of December 31, 2008, and 2007, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 4, in 2008 the Plan changed its method of accounting for fair value measurements in accordance with Statement of Financial Accounting Standards No. 157.

The accompanying supplemental schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  The supplemental schedule is the responsibility of the Plan's management.  The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

/s/ BKD, LLP                                                                                     

Cincinnati, Ohio
June 26, 2009

Federal Employer Identification Number:  44-0160260

 

 
 
 
Wayne Savings 401(k) Retirement Plan
Statements of Net Assets Available for Benefits
December 31, 2008 and 2007

Assets
 
   
2008
    
2007
  
             
Investments, At Fair Value
   $ 2,058,214     $ 2,578,713  
                 
Receivables
                
Accrued interest and dividends
     2,383       35  
                 
Cash
     -       60  
                 
Net Assets Available for Benefits
   $ 2,060,597     $ 2,578,808  
                 

 

 

 

The Accompanying Notes are an Integral Part of These Statements
 
4
 
Wayne Savings 401(k) Retirement Plan
Statements of Changes in Net Assets Available for Benefits
December 31, 2008 and 2007

   
2008
    
2007
  
Investment Income
            
Net appreciation (depreciation) in fair value of investments
   $ (946,558 )   $ (143,533 )
Interest
     1,792       1,397  
Dividends
     89,403       181,197  
                 
Net investment income (loss)
     (855,363 )     39,061  
                 
Contributions
                
Employer
     161,638       152,305  
Participants
     290,825       264,649  
Rollovers
     17,174       1,919  
                 
      469,637       418,873  
                 
      (385,726 )     457,934  
                 
Deductions
                
Benefits paid directly to participants
     130,314       129,294  
Administrative expenses
     2,171       2,271  
                 
      132,485       131,565  
                 
                 
Net Increase (Decrease)
     (518,211 )     326,369  
                 
Net Assets Available for Benefits, Beginning of Year
     2,578,808       2,252,439  
                 
Net Assets Available for Benefits, End of Year
   $ 2,060,597     $ 2,578,808  
                 

 

 

The Accompanying Notes are an Integral Part of These Statements
 
5
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007

Note 1:
Description of the Plan
 
The following description of the Wayne Savings 401(k) Retirement Plan (Plan) provides only general information.  Participants should refer to the Plan Document and Summary Plan Description for a more complete description of the Plan’s provisions, which are available from the Plan Administrator.
 
General
 
The Plan is a defined contribution plan sponsored by Wayne Savings Community Bank for the benefit of its employees who have at least one year of service and are age 21 or older.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).  Huntington National Bank is the trustee and custodian of the Plan.
 
Contributions
 
The Plan permits eligible employees through a salary deferral election to have the Company make annual contributions of up to 50% of eligible compensation, as defined in the Plan, subject to an overall $15,500 limitation for 2008.  Employee rollover contributions are also permitted.  The Company makes matching contributions of 100% of employees’ salary deferral amounts up to 4% and 50% of the next 2% of the employees’ compensation and profit-sharing contributions.  Company profit-sharing contributions are discretionary as determined by the Company’s Board of Directors.  Contributions are subject to certain limitations.  Forfeitures are used to reduce Company contributions.
 
Participant Investment Account Options
 
Investment account options available include various funds.  Each participant has the option of directing his contributions into any of the separate investment accounts and may change the allocation daily.
 
The Plan Document also includes an automatic deferral feature whereby a participant is treated as electing to defer a certain percentage of eligible compensation unless the participant made an affirmative election otherwise.
 
Participant Accounts
 
Each participant’s account is credited with the participant’s contribution, the Company’s contribution and plan earnings.  Allocations are based on participant earnings or account balances, as defined.  The benefits to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
 

 

 
6
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007


Vesting
 
Participants are immediately vested in both their voluntary contributions and the Company’s contributions plus earnings thereon.
 
Payment of Benefits
 
Upon termination of service, an employee may elect to receive a lump-sum amount equal to the value of his account.  At December 31, 2008 and 2007, no plan assets were allocated to accounts of terminated or retired participants who have elected to withdraw from the Plan but have not yet been paid.
 
Participant Loans
 
The Plan Document includes provisions authorizing loans from the Plan to active eligible participants.  Loans are made to any eligible participant demonstrating a qualifying need.  The minimum amount of a loan shall be $1,000.  The maximum amount of a participant’s loans is determined by the available loan balance restricted to the lesser of $50,000 or 50% of the participant’s vested account balance.  All loans are covered by demand notes and are repayable over a period not to exceed five years (except for loans for the purchase of a principal residence) through payroll withholdings unless the participant is paying the loan in full.  Interest on the loans is based on the prime rate plus 1%.
 
Plan Termination
 
Although it has not expressed an intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA.
 

 
Note 2:
Summary of Significant Accounting Policies
 
Basis of Accounting
 
The accompanying financial statements are prepared on the accrual basis of accounting.
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets and changes in net assets and disclosure of contingent assets and liabilities at the date of the financial statements.  Actual results could differ from those estimates.
 

 

 

 
7
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007


Valuation of Investments and Income Recognition
 
Quoted market prices, if available, are used to value investments.  Participant loans are valued at cost, which approximates fair value.
 
Purchases and sales of securities are recorded on a trade-date basis.  Interest income is recorded on the accrual basis.  Dividends are recorded on the ex-dividend date.
 
Plan Tax Status
 
The Plan operates under a standardized adoption agreement in connection with a prototype 401(k) profit-sharing plan and trust.  This prototype plan document has been filed with the appropriate agency and has obtained a determination letter from the Internal Revenue Service stating that the prototype constitutes a qualified plan under Section 401 of the Internal Revenue Code and that the related trust was tax exempt as of the financial statement date.
 
Payment of Benefits
 
Benefit payments to participants are recorded upon distribution.
 
Administrative Expenses
 
Administrative expenses may be paid by the Company or the Plan, at the Company’s discretion.
 

 

 
8
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007

Note 3:
Investments
 
The Plan’s investments are held by a bank-administered trust fund.  The Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in fair value as follows:
 
   
2008
  
   
Net
Depreciation
in Fair Value
During Year
    
Fair Value at
End of Year
  
             
Mutual funds
   $ (800,348 )   $ 1,706,748  
Wayne Savings Bancshares, Inc. Stock
     (146,210 )     334,890  
Participant loans
     –       16,576  
                 
    $ (946,558 )   $ 2,058,214  

 

 
9
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007

   
2007
  
   
Net
Depreciation
in Fair Value
During Year
    
Fair Value at
End of Year
  
Investments at Fair Value as Determined by Quoted Prices in an Active Market
            
Mutual funds
   $ (7,784 )   $ 2,120,655  
Wayne Savings Bancshares, Inc. Stock
     (135,749 )     426,952  
                 
      (143,533 )     2,547,607  
                 
Investments at Cost Which Approximates Market
                
Money market fund
     –       10,856  
Participant loans
     –       20,250  
                 
      –       31,106  
                 
    $ (143,533 )   $ 2,578,713  

 

 

 
10
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007

The fair value of individual investments that represented 5% or more of the Plan’s net assets available for benefits were as follows:
 
   
2008
    
2007
  
             
Wayne Savings Bancshares. Inc. common stock
   $ 334,890     $ 426,952  
Fidelity Advisor Equity Growth Fund  -  Class T
     262,734       479,682  
Federated Capital Preservation Fund Institutional
     384,677       270,650  
Fidelity Advisor Mid Cap Fund - Class T
     111,934       232,108  
Dreyfus S&P 500 Index Fund
     142,301       210,039  
Franklin Templeton Growth Fund - Class A
     **       197,435  
Federated Capital Appreciation Fund - Class A
     131,142       171,238  
Columbia Small Cap Core Fund  - Class A
     **       132,783  
T. Rowe Price High Yield Fund – Advisor Class
     121,854       **  
    $ 1,489,532     $ 2,120,887  
                 
 
**Investment represents less than 5% of the plans net assets at specified date
 
 
Note 4:
Disclosures about Fair Value of Financial Instruments
 
Effective January 1, 2008, the Plan adopted SFAS No. 157, “Fair Value Measurements.”  SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  SFAS No. 157 has been applied prospectively as of the beginning of the period.
 
SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  SFAS No. 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The standard describes three levels of inputs that may be used to measure fair value:
 
 
Level 1
Quoted prices in active markets for identical assets or liabilities
 
 
Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
 
 
Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
 
Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying statement of net assets available for benefits, as well as the general classification of such instruments pursuant to the valuation hierarchy.
 
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.  If quoted market prices are not available, then fair values are estimated by using
 

 
11
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007

pricing models, quoted prices of securities with similar characteristics or discounted cash flows.  In certain cases where Level 1 or Level 2 inputs are not available, investments are classified within Level 3 of the hierarchy.
 
The following table presents the fair value measurements of assets recognized in the accompanying statements of net assets measured at fair value on a recurring basis and the level within the SFAS No. 157 fair value hierarchy in which the fair value measurements fall at December 31, 2008:
 
         
Fair Value Measurements Using
  
   
Fair Value
    
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
    
Significant
Other
Observable
Inputs
(Level 2)
    
Significant
Unobservable
Inputs
(Level 3)
  
                         
Mutual funds
   $ 1,706,748     $ 1,706,748     $ ––     $ ––  
Wayne Savings Bancshares, Inc. common stock
     334,890       334,890       ––       ––  
Participant loans
     16,576       ––       ––       16,576  
    $ 2,058,214     $ 2,041,638     $ ––     $ 16,576  
                                 

 
The following is a reconciliation of the beginning and ending balances of recurring fair value measurements using significant unobservable (Level 3) inputs:
 
Beginning balance
   $ 20,250  
Loan proceeds less repayments
     (3,674 )
Ending balance
   $ 16,576  
         

 

 
12
 
Wayne Savings 401(k) Retirement Plan
Notes to Financial Statements
December 31, 2008 and 2007


 
 
Note 5:
Party-in-Interest Transactions
 
Party-in-interest transactions include those with fiduciaries or employees of the Plan, any person who provides services to the Plan, an employer whose employees are covered by the Plan, an employee organization whose members are covered by the Plan, a person who owns 50 percent or more of such an employer or employee association, or relatives of such persons.
 
The Plan invests in certain funds of the Plan trustee.  The Plan paid $2,171 and $2,271 of recordkeeping fees to Huntington National Bank during 2008 and 2007, respectively.  The Company provides certain administrative services at no cost to the Plan.
 

 
Note 6:
Risks and Uncertainties
 
The Plan invests in various investment securities.  Investment securities are exposed to various risks such as interest rate, market and credit risks.  Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the participants’ account balances and the amounts reported in the statements of net assets available for benefits.
 

 
Note 7:
Economic Conditions
 
The current economic environment presents retirement plans with unprecedented circumstances and challenges, which in some cases have resulted in large declines in the fair value of investments.  The financial statements have been prepared using values and information currently available to the Plan.
 
Given the volatility of current economic conditions, the values of assets recorded in the financial statements could change rapidly, resulting in material future adjustments in the investment values that could negatively impact the Plan.
 

 

 
13
 


 

 
Supplementary Schedule
 

 

 
14
 
Wayne Savings 401(k) Retirement Plan
Form 5500 E.I.N. 34-0606020 Plan No. 003
 
 
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2008 and 2007

Identity of Issuer (a)(b)
  
Description of Investment (c)
  
Cost (d)
    
Current Value (e)
  
                   
Mutual funds
                  
*Huntington Dividend Capture Fund IV
  
7,913 shares
     $ 87,799     $ 51,991  
Federated Capital Preservation Fund - Institutional
  
38,468 shares
       384,677       384,677  
Fidelity Advisor Short Fixed Income Fund - Class T
  
5,362 shares
       49,909       46,593  
Pimco Total Return Fund-Administrative Class
  
2,081 shares
       22,301       21,105  
T. Rowe Price High Yield Fund - Advisor Class
  
26,037 shares
       173,899       121,854  
American Balanced Fund - Class R-4
  
6,005 shares
       110,064       82,629  
Columbia Small Cap Core Fund - Class A
  
7,766 shares
       124,071       70,207  
Dreyfus S&P 500 Index Fund
  
5,640 shares
       214,616       142,301  
Dreyfus Small Cap Index Fund
  
1,580 shares
       35,092       21,154  
Federated Capital Appreciation Fund - Class A
  
8,743 shares
       201,105       131,142  
Fidelity Advisor Equity Growth Fund - Class T
  
7,696 shares
       380,504       262,734  
Fidelity Advisor Mid Cap Fund - Class T
  
10,021 shares
       236,636       111,934  
MFS Value Fund – Class R-2
  
748 shares
       18,671       13,035  
Franklin Templeton Growth Fund - Class A
  
7,696 shares
       181,429       100,435  
Vanguard Target Retirement 2010 Fund
  
555 shares
       9,965       9,776  
Vanguard Target Retirement 2015 Fund
  
5,881 shares
       63,519       56,163  
Vanguard Target Retirement 2020 Fund
  
21 shares
       425       356  
Vanguard Target Retirement 2025 Fund
  
1,116 shares
       12,946       10,342  
Vanguard Target Retirement 2030 Fund
  
2,156 shares
       45,341       33,510  
Vanguard Target Retirement 2035 Fund
  
205 shares
       2,622       1,901  
Vanguard Target Retirement 2040 Fund
  
180 shares
       3,437       2,725  
Vanguard Target Retirement 2045 Fund
  
1,441 shares
       14,020       13,795  
Vanguard Target Retirement 2050 Fund
  
604 shares
       11,943       9,169  
                       
Common stocks
                      
*Wayne Savings Bancshares, Inc
  
44,652 shares
       657,211       334,890  
                       
Money market funds
                      
*Huntington Money Market Fund
  
7,220 shares
       7,220       7,220  
                       
*Participant loans
  
8.25% to 9.25%
       –       16,576  
                       
                       
          $ 3,049,422     $ 2,058,214  


 
* Party in interest


 

 
15
 





SIGNATURES


The Plan.  Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees for the Plan have duly caused this annual report to be signed by the undersigned hereunto duly authorized.

 
WAYNE SAVINGS 401(k) RETIREMENT PLAN
     
     
     
     
June 26, 2009
By:
/s/ H. Stewart Fitz Gibbon III
   
H. Stewart Fitz Gibbon III
   
Trustee




 
16
 

INDEX TO EXHIBITS


Number
  
Description
23
  
Consent of Independent Registered Public Accounting Firm