UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
      OF 1934

For the quarterly period ended    June 30, 2005
                              --------------------------------------------------

                                       OR

[_]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from              to
                               ------------    ---------------

Commission File No. 0-23433

                         WAYNE SAVINGS BANCSHARES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                              31-1557791
-------------------------------                             ----------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                            Identification Number)

151 North Market Street
Wooster, Ohio                                                    44691
-------------------------------                                ----------
(Address of principal                                          (Zip Code)
executive office)

Registrant's telephone number, including area code: (330) 264-5767

Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports) and (2) has been subject to such filing  requirements for the past
90 days.

Yes    X                            No
     -----                              -----

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act)

Yes    X                            No
     -----                              -----

As of August 3,  2005,  the latest  practicable  date,  3,429,244  shares of the
registrant's common stock, $.10 par value, were issued and outstanding.


                                       1
<PAGE>


                         Wayne Savings Bancshares, Inc.

                                      INDEX

                                                                            Page

PART I   -   FINANCIAL INFORMATION

  Item 1     Consolidated Statements of Financial Condition                    3
             Consolidated Statements of Earnings                               4
             Consolidated Statements of Comprehensive Income                   5
             Consolidated Statements of Cash Flows                             6
             Notes to Consolidated Financial Statements                        8

  Item 2     Management's Discussion and Analysis of
             Financial Condition and Results of Operations                    12

  Item 3     Quantitative and Qualitative Disclosures About Market Risk       18

  Item 4     Controls and Procedures                                          18


PART II -    OTHER INFORMATION

  Item 1     Legal Proceedings                                                19

  Item 2     Unregistered Sales of Equity Securities and Use of Proceeds      19

  Item 3     Defaults Upon Senior Securities                                  19

  Item 4     Submission of Matters to a Vote of Security Holders              19

  Item 5     Other Information                                                19

  Item 6     Exhibits                                                         19

 SIGNATURES                                                                   20


                                       2
<PAGE>
<TABLE>
<CAPTION>
                                      Wayne Savings Bancshares, Inc.

                              CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                     (In thousands, except share data)
                                                                                        (unaudited)
                                                                                           June 30,    March 31,
         ASSETS                                                                                2005         2005

<S>                                                                                       <C>          <C>
Cash and due from banks                                                                   $   4,694    $   4,176
Federal funds sold                                                                           14,675       19,400
Interest-bearing deposits in other financial institutions                                    10,352        6,366
                                                                                          ---------    ---------
         Cash and cash equivalents                                                           29,721       29,942

Investment securities available for sale - at market                                         66,989       60,844
Investment securities held to maturity - at amortized cost, approximate market value
  of $12,035 and $12,101 as of June 30, 2005 and March 31, 2005, respectively                11,930       12,012
Mortgage-backed securities available for sale - at market                                    53,829       57,724
Mortgage-backed securities held to maturity - at cost, approximate market value of
  $2,408 and $2,647 as of June 30, 2005 and March 31, 2005, respectively                      2,384        2,628
Loans receivable - net                                                                      214,581      213,627
Office premises and equipment - net                                                           8,850        8,922
Real estate acquired through foreclosure                                                         --           35
Federal Home Loan Bank stock - at cost                                                        4,439        4,386
Cash surrender value of life insurance                                                        6,643        6,581
Accrued interest receivable on loans                                                            930          757
Accrued interest receivable on mortgage-backed securities                                       242          444
Accrued interest receivable on investments and interest-bearing deposits                        749          708
Prepaid expenses and other assets                                                             4,742        3,996
Prepaid federal income taxes                                                                    560          795
                                                                                          ---------    ---------

         Total assets                                                                     $ 406,589    $ 403,401
                                                                                          =========    =========

         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                                  $ 327,502    $ 320,586
Advances from the Federal Home Loan Bank                                                     39,000       40,000
Advances by borrowers for taxes and insurance                                                   151          612
Accrued interest payable                                                                        230          198
Accounts payable on mortgage loans serviced for others                                          218          231
Other liabilities                                                                             1,005        1,174
Deferred federal income taxes                                                                   767          401
                                                                                          ---------    ---------
         Total liabilities                                                                  368,873      363,202

Commitments                                                                                      --           --

Stockholders' equity
  Common stock (8,000,000 shares of $ .10 par value authorized; 3,934,874 and 3,907,318
    shares issued at June  30, 2005 and March 31, 2005)                                         393          391
  Additional paid-in capital                                                                 35,498       11,399
  Retained earnings - substantially restricted                                               11,399       11,371
  Less required contributions for shares acquired by Employee Stock Ownership Plan           (1,283)      (1,304)
  Less 505,630 and 282,261 shares of treasury stock at June 30, 2005 and
    March 31, 2005 - at cost                                                                 (8,211)      (4,600)
  Accumulated other comprehensive (loss) - unrealized losses on securities designated
    as available for sale                                                                       (80)        (792)
                                                                                          ---------    ---------
         Total stockholders' equity                                                          37,716       40,199
                                                                                          ---------    ---------

         Total liabilities and stockholders' equity                                       $ 406,589    $ 403,401
                                                                                          =========    =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>
<TABLE>
<CAPTION>
                         Wayne Savings Bancshares, Inc.

                       CONSOLIDATED STATEMENTS OF EARNINGS

                       For the three months ended June 30,
                        (In thousands, except share data)

                                                                (unaudited) (unaudited)
                                                                      2005      2004
<S>                                                                <C>       <C>
Interest income
  Loans                                                            $ 3,284   $ 3,163
  Mortgage-backed securities                                           512       595
  Investment securities                                                759       420
  Interest-bearing deposits and other                                  126        66
                                                                   -------   -------
         Total interest income                                       4,681     4,244

Interest expense
  Deposits                                                           1,618     1,332
  Borrowings                                                           264       293
                                                                   -------   -------
         Total interest expense                                      1,882     1,625
                                                                   -------   -------

         Net interest income                                         2,799     2,619
Provision for losses on loans                                           --        15
                                                                   -------   -------
         Net interest income after provision for losses on loans     2,799     2,604

Other income
  Gain on sale of loans                                                 25        16
  Increase in cash surrender value of life insurance                    61        71
  Service fees, charges and other operating                            322       318
                                                                   -------   -------
         Total other income                                            408       405

General, administrative and other expense
  Employee compensation and benefits                                 1,569     1,348
  Occupancy and equipment                                              425       421
  Federal deposit insurance premiums                                    11        11
  Franchise taxes                                                      129       129
  Other operating                                                      485       460
                                                                   -------   -------
         Total general, administrative and other expense             2,619     2,369
                                                                   -------   -------

         Earnings before income taxes                                  588       640

Federal incomes taxes
  Current                                                              148      (593)
  Deferred                                                              --       771
                                                                   -------   -------
         Total federal income taxes                                    148       178
                                                                   -------   -------

         NET EARNINGS                                              $   440   $   462
                                                                   =======   =======

         EARNINGS PER SHARE
           Basic                                                   $  0.13   $  0.13
                                                                   =======   =======
           Diluted                                                 $  0.13   $  0.13
                                                                   =======   =======
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>
<TABLE>
<CAPTION>
                         Wayne Savings Bancshares, Inc.

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                       For the three months ended June 30,
                                 (In thousands)


                                                                       2005       2004
<S>                                                                 <C>       <C>
Net earnings                                                        $   440    $   462

Other comprehensive income (loss), net of tax:
  Unrealized holding gains on securities, net of taxes (benefits)
    of $367 and $(600), during the respective periods                   712     (1,165)
                                                                    -------    -------

Comprehensive income (loss)                                         $ 1,152    $  (703)
                                                                    =======    =======

Accumulated comprehensive loss                                      $   (80)   $  (686)
                                                                    =======    =======
</TABLE>

See accompanying notes to consolidated financial statements.



                                       5
<PAGE>
<TABLE>
<CAPTION>
                                    Wayne Savings Bancshares, Inc.

                                CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  For the three months ended June 30,
                                           (In thousands)

                                                                                          2005        2004
<S>                                                                                   <C>         <C>
Cash flows from operating activities:
  Net earnings for the period                                                         $    440    $    462
  Adjustments to reconcile net earnings to net cash
  Provided by (used in) operating activities:
    Amortization of discounts and premiums on loans,
      investments and mortgage-backed securities - net                                     152         382
    Amortization of deferred loan origination fees                                         (38)        (87)
    Depreciation and amortization                                                          159         137
    Gain on sale of loans                                                                  (15)         (8)
    Proceeds from sale of loans in the secondary market                                  1,181         918
    Loans originated for sale in the secondary market                                   (1,166)       (917)
    Provision for losses on loans                                                           --          15
    Federal Home Loan Bank stock dividends                                                 (53)        (42)
    Increase (decrease) in cash:
      Accrued interest receivable on loans                                                (173)       (880)
      Accrued interest receivable on mortgage-backed securities                            202          49
      Accrued interest receivable on investments and interest-bearing deposits             (41)       (200)
      Prepaid expenses and other assets                                                   (746)       (346)
      Accrued interest payable                                                              32          (3)
      Accounts payable on mortgage loans serviced for others                               (13)         (7)
      Other liabilities                                                                   (169)       (283)
      Federal income taxes
        Current                                                                            235        (673)
        Deferred                                                                            --         771
                                                                                      --------    --------
          Net cash used in operating activities                                           (13)       (712)

Cash flows provided by (used in) investing activities:
  Purchase of investment securities designated as available for sale                    (5,344)     (8,255)
  Proceeds from maturity of investment securities designated as held to maturity            73          14
  Proceeds from maturity of investment securities designated as available for sale          39         500
  Purchase of mortgage-backed securities designated as available for sale               (4,706)     (3,049)
  Principal repayments on mortgage-backed securities designated as held to maturity        241         779
  Principal repayments and sales of mortgage-backed securities designated as
    available for sale                                                                   8,698      11,657
  Loan principal repayments                                                             35,273      13,594
  Loan disbursements                                                                   (36,264)    (11,988)
  Purchase of office premises and equipment - net                                          (87)       (111)
  Proceeds from sale of real estate acquired through foreclosure                           112         100
  Increase in cash surrender value of life insurance                                       (62)        (71)
  Net cash used in the acquisition of Stebbins Bancshares, Inc.                             --      (1,314)
                                                                                      --------    --------
          Net cash provided by (used in) investing activities                           (2,027)      1,856
                                                                                      --------    --------

          Net cash provided by (used in) operating and investing activities
            (balance carried forward)                                                   (2,040)      1,144
                                                                                      --------    --------
</TABLE>


See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
<TABLE>
<CAPTION>

                              Wayne Savings Bancshares, Inc.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                            For the three months ended June 30,
                                      (In thousands)


                                                                                      2005        2004
<S>                                                                                  <C>          <C>
          Net cash provided by (used in) operating and investing activities
            (balance brought forward)                                             $ (2,040)   $  1,144

Cash flows provided by (used) in financing activities:
  Net increase (decrease) in deposit accounts                                        6,915        (221)
  Proceeds from Federal Home Loan Bank advances                                     14,000          --
  Repayments of Federal Home Loan Bank advances                                    (15,000)     (5,000)
  Advances by borrowers for taxes and insurance                                       (461)       (390)
  Dividends paid on common stock                                                      (412)       (447)
  Proceeds from exercise of stock options                                              367          --
  Amortization of employee stock ownership benefit plan                                 21          38
  Purchase of treasury shares                                                       (3,611)       (413)
                                                                                  --------    --------
          Net cash used in financing activities                                      1,819      (6,433)
                                                                                  --------    --------

Net decrease in cash and cash equivalents                                             (221)     (5,289)

Cash and cash equivalents at beginning of period                                    29,942      19,887
                                                                                  --------    --------

Cash and cash equivalents at end of period                                        $ 29,721    $ 14,598
                                                                                  ========    ========


Supplemental disclosure of cash flow information:
  Cash paid during the period for:
    Federal income taxes                                                          $     --    $     --
                                                                                  ========    ========

    Interest on deposits and borrowings                                           $  1,850    $  1,611
                                                                                  ========    ========


Supplemental disclosure of noncash investing activities:
  Transfers from loans to real estate acquired through foreclosure                $     81    $     --
                                                                                  ========    ========

  Unrealized gains (losses) on securities designated as available for sale,
    net of related tax effects                                                    $    712    $ (1,165)
                                                                                  ========    ========

  Recognition of mortgage servicing rights in accordance
    with SFAS No. 140                                                             $     10    $      8
                                                                                  ========    ========

  Fair value of assets received in the acquisition of Stebbins Bancshares, Inc.   $     --    $ 24,539
                                                                                  ========    ========

  Goodwill recognized in the acquisition of Stebbins Bancshares, Inc.             $     --    $  1,470
                                                                                  ========    ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       7
<PAGE>

                         Wayne Savings Bancshares, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

            For the three month periods ended June 30, 2005 and 2004

1.    Basis of Presentation
      ---------------------

      The accompanying unaudited consolidated financial statements for the three
      months  ended June 30,  2005 and 2004 were  prepared  in  accordance  with
      instructions  for  Form  10-Q  and  Article  10  of  Regulation  S-X  and,
      therefore,  do  not  include  information  or  footnotes  necessary  for a
      complete  presentation  of financial  position,  results of operations and
      cash flows in conformity with accounting  principles generally accepted in
      the United  States of America.  Accordingly,  these  financial  statements
      should be read in conjunction with the consolidated  financial  statements
      and notes  thereto  of Wayne  Savings  Bancshares,  Inc.  (the  "Company")
      included  in the Annual  Report on Form 10-K for the year ended  March 31,
      2005.

      In the opinion of management,  all adjustments  (consisting only of normal
      recurring  accruals)  which are necessary for a fair  presentation  of the
      unaudited  financial  statements  have  been  included.   The  results  of
      operations  for the  three  month  period  ended  June  30,  2005  are not
      necessarily indicative of the results which may be expected for the entire
      fiscal year.

      Critical  Accounting  Policy - The Company's  critical  accounting  policy
      relates to the allowance for losses on loans.  The Company has established
      a systematic  method of  periodically  reviewing the credit quality of the
      loan portfolio in order to establish a sufficient  allowance for losses on
      loans. The allowance for losses on loans is based on management's  current
      judgments about the credit quality of individual loans and segments of the
      loan portfolio. The allowance for losses on loans is established through a
      provision,  and  considers  all known  internal and external  factors that
      affect loan  collectability  as of the reporting  date.  Such  evaluation,
      which included a review of all loans on which full  collectability may not
      be reasonably  assured,  considers among other matters,  the estimated net
      realizable value or the fair value of the underlying collateral,  economic
      conditions,  historical loan loss  experience,  management's  knowledge of
      inherent risks in the portfolio that are probable and reasonably estimable
      and other  factors that warrant  recognition  in providing an  appropriate
      loan  loss  allowance.   Management  has  discussed  the  development  and
      selection of this critical  accounting  policy with the audit committee of
      the Board of Directors.

      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  assets  and  liabilities  and  disclosure  of
      contingent assets and liabilities at the date of the financial  statements
      and the reported  amounts of revenues and  expenses  during the  reporting
      period. Actual results could differ from those estimates.

2.    Principles of Consolidation
      ---------------------------

      The accompanying  consolidated  financial statements include Wayne Savings
      Bancshares, Inc. and the Company's wholly-owned subsidiary,  Wayne Savings
      Community Bank ("Wayne Savings" or the "Bank").

      During fiscal 2004, the Company's  Board of Directors  approved a business
      combination,   which  was  completed  in  June  2004,   whereby   Stebbins
      Bancshares,  Inc.,  the parent of Stebbins  National Bank, was merged into
      Wayne Savings Bancshares,  Inc. and Stebbins National Bank merged with and
      into Wayne Savings Community Bank. The business  combination was accounted
      for using the purchase  method of  accounting.  Accordingly,  the June 30,
      2004  consolidated  financial  statements  herein  include the accounts of
      Stebbins National Bank from the June 1, 2004 acquisition date through June
      30, 2004.


                                       8
<PAGE>

                         Wayne Savings Bancshares, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              For three month periods ended June 30, 2005 and 2004


2.    Principles of Consolidation (continued)
      ---------------------------

      Wayne  Savings has eleven  banking  locations in Wayne,  Holmes,  Ashland,
      Medina and Stark counties. All significant  intercompany  transactions and
      balances have been eliminated in the consolidation.

3.    Earnings Per Share
      ------------------

      Basic   earnings   per   common   share  are   computed   based  upon  the
      weighted-average  number of common shares  outstanding  during the period,
      less shares in the Company's  Employee Stock  Ownership Plan ("ESOP") that
      are  unallocated  and not committed to be released.  Diluted  earnings per
      common  share  include the  dilutive  effect of all  additional  potential
      common  shares  issuable  under  the  Company's  stock  option  plan.  The
      computations are as follows:

                                                  For the three months ended
                                                            June 30,
                                                        2005          2004

      Weighted-average common shares
        outstanding (basic)                        3,439,760     3,636,504
      Dilutive effect of assumed exercise
        of stock options                              17,552        32,632
                                                   ---------     ---------
      Weighted-average common shares
        outstanding (diluted)                      3,457,312     3,669,136
                                                   =========     =========

      All  outstanding  options were included in the diluted  earnings per share
      calculation for the three month periods ending June 30, 2005 and 2004.

4.    Stock Option Plan
      -----------------

      The Company has a 1993  incentive  Stock Option Plan that provided for the
      issuance of 196,390 shares of authorized  common stock, as adjusted,  with
      2,567 options  outstanding  at June 30, 2005. In fiscal 2004,  the Company
      adopted a new Stock Option Plan that  provided for the issuance of 142,857
      incentive  options and 61,224  non-incentive  options of authorized common
      stock.  As of June 30,  2005,  all  options  under the 2004 Plan have been
      granted,  are subject to exercise at the  discretion of the grantees,  and
      will expire in fiscal 2014 unless otherwise exercised.

      In the fourth quarter of fiscal 2005,  the Company  adopted the provisions
      of SFAS No. 123(R),  "Share Based  Payment." SFAS No. 123(R)  requires the
      recognition of compensation  related stock option awards based on the fair
      value of the option  award at the grant  date.  Compensation  cost is then
      recognized over the vesting period. Subsequent to the adoption of SFAS No.
      123(R),  the Company  modified  163,265 stock option awards under the 2004
      Stock Option Plan,  eliminating the reload options  contained  therein and
      immediately  vesting  these  shares.  Pursuant  to SFAS  No.  123(R),  the
      modification represents a new grant.  Accordingly,  in accordance with the
      modified prospective application method under SFAS No. 123(R), the Company
      recognized  compensation  costs  representing the fair value of the option
      awards at the date of modification.

      The Company  accounted  for its stock option plans in fiscal 2004 pursuant
      SFAS No.  123,  "Accounting  for  Stock-Based  Compensation,"  which  also
      provided for a fair value-based method for measuring  compensation cost at
      the grant  date  based on the fair  value of the award at the grant  date.
      Compensation was then


                                       9
<PAGE>

                         Wayne Savings Bancshares, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              For three month periods ended June 30, 2005 and 2004

4.    Stock Option Plan (continued)
      -----------------

      recognized  over the  service  period,  generally  defined as the  vesting
      period.  Alternatively,  SFAS No. 123  permitted  entities  to continue to
      account for stock options using the  Accounting  Principles  Board ("APB")
      Opinion No. 25, "Accounting for Stock Issued to Employees."  Entities that
      continued  to account  for stock  options  using APB  Opinion  No. 25 were
      required to make pro forma  disclosures  of net  earnings and earnings per
      share, as if the fair value-based method of accounting defined in SFAS No.
      123 had been  applied.  Wayne  Savings had  continued to account for stock
      based compensation in accordance with APB Opinion No. 25.

      In  accordance  with APB  Opinion  No. 25, no  compensation  cost has been
      recognized  for  the  plans  in the  quarter  ended  June  30,  2004.  Had
      compensation  cost for the Plan been determined based on the fair value at
      the grant dates for awards under the Plan  consistent  with the accounting
      method  utilized in SFAS No. 123, the  Company's net earnings and earnings
      per share for the  three-month  period ended June 30, 2004 would have been
      reported as the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                        Three months
                                                                        June 30,2004

<S>                                <C>                                    <C>
      Net earnings (In thousands)                          As reported    $   462
                                  Stock-based compensation, net of tax        (27)
                                                                          -------

                                                             Pro-forma    $   435
                                                                          =======
      Earnings per share
        Basic                                               As reported   $   .13
                                  Stock-based compensation, net of tax         --
                                                                          -------

                                                             Pro-forma    $   .13
                                                                          =======

        Diluted                                            As reported    $   .13
                                  Stock-based compensation, net of tax       (.01)
                                                                          -------

                                                             Pro-forma    $   .12
                                                                          =======
</TABLE>

      There were no options  granted during the three months ended June 30, 2005
      or June 30, 2004.



                                       10
<PAGE>

                         Wayne Savings Bancshares, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

            For the three month periods ended June 30, 2005 and 2004


4.    Stock Option Plan (continued)
      -----------------

      A summary of the status of the Company's  stock option plans as of and for
      the years ended March 31, 2005 and 2004,  and the three  months ended June
      30, 2005 is presented below:

<TABLE>
<CAPTION>
                                              Three months ended                      Year ended
                                                   June 30,                            March 31,
                                                    2005                    2005                      2004
                                                        Weighted-                Weighted-                Weighted-
                                                         average                  average                  average
                                                         exercise                 exercise                 exercise
                                              Shares      price       Shares       price        Shares       price
<S>                                          <C>        <C>           <C>        <C>             <C>       <C>
      Outstanding at beginning of period     214,204    $   13.84     214,204    $   13.84       28,666    $    6.26
      Granted                                     --           --     163,265        13.95      204,081        13.95
      Exercised                              (27,556)       13.35          --           --      (18,543)        3.31
      Forfeited                                   --           --    (163,265)      (13.95)          --           --
                                           ---------    ---------   ---------    ---------    ---------    ---------

      Outstanding at end of period           186,648    $   13.92     214,204    $   13.84      214,204    $   13.84
                                           =========    =========   =========    =========    =========    =========

      Options exercisable at period-end      186,648    $   13.92     214,204    $   13.84       10,123    $   11.67
                                           =========    =========   =========    =========    =========    =========

      Fair value of options granted                     $      --                $    4.07                 $    3.93
                                                        =========                =========                 =========
</TABLE>

      The following information applies to options outstanding at June 30, 2005:

      Number outstanding.......................................          186,648
      Range of exercise prices.................................  $11.67 - $13.95
      Weighted-average exercise price..........................           $13.92
      Weighted-average remaining contractual life..............       8.75 years

      The fair value of  options  granted  has been  based on the Black  Scholes
      pricing model using a dividend yield of 4.5% and 3.3%, expected volatility
      of 27.3% and 28.8% for fiscal  2005 and 2004,  respectively.  All  options
      granted in fiscal 2004 have expected lives of ten years, while the options
      granted in fiscal 2005 have expected lives of nine years.

5.    Reclassifications
      -----------------

      Certain  amounts in the  statement of earnings have been  reclassified  to
      conform to the 2005 consolidated financial statement presentation.

                                       11
<PAGE>

ITEM 2           MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


Average Balance Sheet

The  following  table sets forth certain  information  relating to the Company's
average balance sheets and reflects the average yield on assets and average cost
of liabilities for the periods indicated and the average yields earned and rates
paid.  Such yields and costs are  derived by  dividing  income or expense by the
average  balance  of  assets  or  liabilities,  respectively,  for  the  periods
presented.

<TABLE>
<CAPTION>
                                                For the three months ended June 30,
                                 -------------------------------------------------------------
                                             2005                             2004
                                 -----------------------------    ----------------------------
                                 Average               Average    Average              Average
                                 Balance    Interest     Rate     Balance   Interest     Rate
                                 -------    --------     ----     -------   --------     ----
                                                      (Dollars in thousands)
<S>                              <C>        <C>          <C>     <C>        <C>          <C>
Interest-earning assets:
  Loans receivable, net(1)       $213,111   $  3,284     6.16%   $207,928   $  3,163     6.08%
  Mortgage-backed
    securities(2)                  58,657        512     3.49      84,799        595     2.81
  Investment securities            76,749        759     3.96      43,719        420     3.84
  Interest-bearing deposits(3)     17,617        126     2.86      29,778         66      .89
                                 --------   --------             --------   --------
     Total interest-
       earning assets             366,134      4,681     5.11     366,224      4,244     4.64
Non-interest-earning assets        25,724                           9,482
                                 --------                        --------
     Total assets                $391,858                        $375,706
                                 ========                        ========

Interest-bearing liabilities:
  Deposits                       $321,346   $  1,618     2.01%   $301,040   $  1,332     1.77%
  Borrowings                       29,392        264     3.59      28,780        293     4.07
                                 --------   --------             --------   --------
     Total interest-
       bearing liabilities        350,738      1,882     2.15     329,820      1,625     1.97
                                            --------   ------               --------   ------
Non-interest bearing
  liabilities                       1,364                           4,504
                                 --------                        --------
     Total liabilities            352,102                         334,324
Stockholders' equity               39,756                          41,382
                                 --------                        --------
     Total liabilities and
       stockholders' equity      $391,858                        $375,706
                                 ========                        ========
Net interest income                         $  2,799                        $  2,619
                                            ========                        ========
Interest rate spread(4)                                  2.96%                           2.67%
                                                       ======                          ======
Net yield on interest-
  earning assets(5)                                      3.06%                           2.86%
                                                       ======                          ======
Ratio of average interest-
  earning assets to average
  interest-bearing liabilities                         104.39%                         111.04%
                                                       ======                          ======
</TABLE>

------------------------------------------

(1)   Includes non-accrual loan balances.
(2)   Includes mortgage-backed securities designated as available for sale.
(3)   Includes  federal  funds  sold  and  interest-bearing  deposits  in  other
      financial institutions.
(4)   Interest rate spread  represents the difference  between the average yield
      on  interest-earning  assets  and the  average  cost  of  interest-bearing
      liabilities
(5)   Net yield on  interest-earning  assets represents net interest income as a
      percentage of average interest-earning assets.


                                       12
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Discussion of Financial Condition Changes from March 31, 2005 to June 30, 2005
------------------------------------------------------------------------------

At June 30,  2005,  we had total assets of $406.6  million,  an increase of $3.2
million, or .8%, from March 31, 2005 levels.

Liquid  assets,  consisting of cash,  interest-bearing  deposits and  investment
securities,  increased by $5.8 million,  or 5.7%, to $108.6  million at June 30,
2005  mainly  due to  purchases  of  available  for sale  investment  securities
amounting to $5.3 million. Mortgage-backed securities decreased by $4.1 million,
or  6.9%,  to  $56.2  million  as  these  securities   continued  to  experience
significant   principal   repayments  due  to  the  general  low  interest  rate
environment,   partially  offset  by  purchases  of  mortgage-backed  securities
totaling $4.7 million.

During the three month  period  ended June 30, 2005 loans  receivable  increased
$954,000  as the Bank  originated  $37.4  million  of loans  offset by  received
payments of $35.3  million and loan sales  totaling  $1.2  million.  Rather than
reinvest  funds from sales of and  repayments on loans in long-term,  fixed rate
and low  yielding  residential  loans  during  this period of  historically  low
interest rates,  management has invested in short-term marketable securities and
adjustable  rate  commercial  loans.  The Company  believes  that  investing  in
short-term  securities and adjustable-rate loans positions the Company favorably
in an increasing  interest rate environment by providing it with the flexibility
to  redeploy  such  assets in higher  yielding  loans and other  investments  as
interest  rates rise.  The  composition of the loan portfolio has changed during
the three  months  due to a net  decrease  of $6.4  million in  residential  and
construction  mortgage  loans offset by increases  in  multi-family  real estate
loans of $3.6 million, nonresidential mortgage loans totaling $2.8 million and a
net increase in commercial  loans of $1.2 million in connection  with the Bank's
increased emphasis on commercial lending.

<TABLE>
<CAPTION>
                                            June 30, 2005          March 31, 2005
                                                   (Dollars in thousands)
<S>                                      <C>           <C>      <C>           <C>
Mortgage loans:
   One-to four-family residential(1)     $154,280      70.73%   $157,658      72.60%
   Residential construction loans           4,842       2.22       7,872       3.63
   Multi-family residential                 7,698       3.53       4,053       1.87
   Non-residential real estate/land(2)     31,781      14.57      29,187      13.44
                                         --------   --------    --------   --------
     Total mortgage loans                 198,601      91.05     198,770      91.54
Other loans:
   Consumer loans(3)                        4,227       1.94       4,306       1.98
   Commercial business loans               15,290       7.01      14,075       6.48
                                         --------   --------    --------   --------
     Total other loans                     19,517       8.95      18,381       8.46
   Total loans before net items           218,118     100.00%    217,151     100.00%
                                                    ========               ========
Less:
   Loans in process                         1,694                  1,638
   Deferred loan origination fees             470                    512
   Allowance for loan losses                1,373                  1,374
                                         --------               --------
     Total loans receivable, net         $214,581               $213,627
                                         ========               ========
   Mortgage-backed securities, net(4)    $ 56,213               $ 60,352
                                         ========               ========
</TABLE>

-----------------------------------

(1)   Includes equity loans  collateralized by second mortgages in the aggregate
      amount of $20.5  million  and $20.3  million as of June 30, 2005 and March
      31, 2005, respectively. Such loans have been underwritten on substantially
      the same basis as the Company's first mortgage loans.
(2)   Includes land loans of $1.2 million and $1.4 as of June 30, 2005 and March
      31, 2005, respectively.
(3)   Includes second mortgage loans of $1.3 million and $1.4 million as of June
      30, 2005 and March 31, 2005, respectively.
(4)   Includes mortgage-backed securities designated as available for sale.


                                       13
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Nonperforming  and impaired  loans amounted to $1.4 million at June 30, 2005, as
compared with $906,000 in  nonperforming  and impaired  loans at March 31, 2005.
Such loans consisted,  on both dates, of primarily  residential  mortgage loans.
Historically,  the Company  generally has not recognized losses on nonperforming
loans  secured  by  residential  mortgages.   The  following  table  sets  forth
information  regarding  our past due,  nonaccrual  and  impaired  loans and real
estate acquired through foreclosure as of June 30, 2005 and March 31, 2005.

                                                             June 30,  March 31,
                                                                 2005       2005
Past due loans 30-89 days:
  Mortgage loans:
    One- to four-family residential                            $1,039    $  895
    Nonresidential                                                 14        --
    Land                                                           --        --
  Non-mortgage loans:
    Commercial business loans                                       3        --
    Consumer loans                                                 72        11
                                                               ------    ------
                                                                1,128       906

Non-accrual loans:
  Mortgage loans:
    One- to four-family residential                             1,227       895
    All other mortgage loans                                       42        --
  Non-mortgage loans:
    Commercial business loans                                     102        --
    Consumer                                                        8        11
                                                               ------    ------
Total non-accrual loans                                         1,379       906
Accruing loans 90 days or more delinquent                          --        --
                                                               ------    ------

Total non-performing loans                                      1,379       906
Loans deemed impaired                                              --        --
                                                               ------    ------
Total non-performing and impaired loans                         1,379       906
Total real estate acquired through foreclosure                     --        35
                                                               ------    ------
Total non-performing and impaired assets                       $1,379    $  941
                                                               ======    ======

Total non-performing and impaired loans to net
  loans receivable                                               0.64%     0.42%
                                                               ======    ======
Total non-performing and impaired loans to total assets          0.34%     0.22%
                                                               ======    ======
Total non-performing and impaired assets to total assets         0.34%     0.23%
                                                               ======    ======

In addition,  the Company reclassified $2.8 million of the Stebbins portfolio as
substandard.  These loans are not delinquent, but until they can be restructured
and  supported by current  financial  statements,  the Company will  continue to
classify them as substandard.


                                       14
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Discussion of Financial  Condition  Changes from March 31, 2005 to June 30, 2005
--------------------------------------------------------------------------------
(continued)
-----------

Historically,  the Company has had minimal  loan losses  charged off through the
allowance. The following table sets forth the analysis of the allowance for loan
losses for the periods indicated.

<TABLE>
<CAPTION>
                                                   For the three months      For the year
                                                          ended                 ended
                                                      June 30, 2005         March 31, 2005
<S>                                                      <C>                  <C>
Loans receivable, net                                    $ 214,581            $ 213,627
                                                         =========            =========
Average loans receivable, net                            $ 213,111            $ 212,785
                                                         =========            =========

Allowance balance (at beginning of period)               $   1,374            $     815
Charge-offs:
  Mortgage loans:
    One- to four-family                                         (7)                 (28)
    Residential construction                                    --                   --
    Multi-family residential                                    --                   --
    Non-residential real estate and land                        --                   --
  Other loans:
    Consumer                                                   (15)                 (44)
    Commercial                                                  --                  (54)
                                                         ---------            ---------
         Gross charge-offs                                     (22)                (126)
                                                         ---------            ---------
Recoveries:
  Mortgage loans:
    One- to four-family                                         --                   --
    Residential construction                                    --                   --
    Multi-family residential                                    --                   --
    Non-residential real estate and land                        --                   --
  Other loans:
    Consumer                                                    13                   25
    Commercial                                                   8                   --
                                                         ---------            ---------
         Gross recoveries                                       21                   25
                                                         ---------            ---------
         Net charge-offs                                        (1)                (101)
                                                         ---------            ---------
Provision charged to operations                                 --                  430
Stebbins acquisition                                            --                  230
                                                         ---------            ---------
Allowance for loans losses balance (at end
  of period)                                             $   1,373            $   1,374
                                                         =========            =========
Allowance for loan losses as a percent of loans
  receivable, net at end of period                            0.64%                0.64%
                                                         =========            =========
Net loans charged off as a percent of average
  loans receivable, net                                       0.00%                0.05%
                                                         =========            =========
Ratio of allowance for loan losses to non-
  performing loans at end of period                         100.44%              151.66%
                                                         =========            =========
</TABLE>

Deposits at June 30, 2005,  totaled $327.5 million,  an increase of $6.9 million
from $320.6 million at March 31, 2005, due to Bank's competitive deposit pricing
in all market areas.

Stockholders'  equity  decreased by $2.5  million  during the three months ended
June 30, 2005,  due mainly to the purchase of treasury stock of $3.6 million and
dividends  totaling  $412,000.  These  amounts  were offset by  increases in the
unrealized  gain  on  available  for  sale  securities  of  $712,000,  generally
reflecting the recent decrease in rates,  $440,000 in net earnings for the three
months ended June 30, 2005 and funds from stock options exercised of $367,000.


                                       15
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating  Results for the Three Month Periods Ended June 30, 2005
--------------------------------------------------------------------------------
and 2004
--------

General
-------

Net earnings totaled $440,000 for the quarter ended June 30, 2005, a decrease of
$22,000, or 4.8%, compared to the net earnings of $462,000 for the quarter ended
June 30,  2004.  The decline in net earnings was  primarily  attributable  to an
increase in general,  administrative  and other  expense of $250,000,  or 10.6%,
offset by an  increase  in net  interest  income  of  $180,000,  or 6.9%,  and a
decrease in federal income taxes of $30,000, or 16.9%.

The Company has maintained  its strategy to  aggressively  manage  interest rate
risk. This strategy negatively affected earnings for the three months ended June
30, 2005.  However,  management  believes  that the  investment  of excess funds
primarily in shorter term assets will help the Company in a rising interest rate
environment  by providing  it with the  flexibility  to redeploy  such assets in
higher yielding loans and other investments as interest rates rise.

Interest Income
---------------

Interest  income  increased  $437,000,  or 10.3%,  to $4.7 million for the three
months ended June 30, 2005,  compared to the same period in 2004.  This increase
was mainly due to an increase in the weighted-average  yield on interest-earning
assets to 5.11%  from  4.64%  for the  period  ended  June 30,  2004.  The yield
increase is primarily  due to the Federal  Reserve  raising the prime rate 2.25%
over the past  year and the  corresponding  impact on the  Company's  investment
securities and  interest-bearing  deposits.  The Company  purposefully  invested
excess funds in shorter-term securities available for sale rather than long-term
fixed rate loans.  Although  this  strategy  sacrifices  short-term  income,  it
strengthens  the  Company's  interest  rate  position  and allows the Company to
redeploy such assets in a rising rate environment.

Interest income on loans increased $121,000, or 3.8%, for the three months ended
June 30, 2005, compared to the same period in 2004, due primarily to an increase
in the  weighted-average  balance of loans  period to period of $5.2  million to
$213.1 million for the 2005 period coupled with an eight basis point increase in
the weighted average yield on loans outstanding.

Interest income on mortgage-backed securities decreased $83,000 during the three
months ended June 30, 2005,  compared to the same period in 2004,  due primarily
to a decrease of $26.1 million, or 30.8%, in the weighted-average balance caused
mainly by normal  repayments.  The decrease in the weighted  average balance was
offset by an increase of 68 basis points to a weighted average yield of 3.49% as
compared to 2.81%, from the comparable 2004 period.  The slowdown of prepayments
causes premium  amortization  to decrease,  resulting in an increase in interest
income on mortgage-backed securities.

Interest income on investment securities increased by $339,000, or 80.7%, during
the 2005 period  compared to the same period in 2004,  reflecting an increase in
the weighted  average balance of $33.0 million,  or 75.6%, to $76.7 million from
$43.7 million during the comparable 2004 period, coupled with an increase in the
average yield of 12 basis points to 3.96%.

Interest income on interest-bearing deposits increased by $60,000, or 90.9%, for
the three  months  ended June 30,  2005,  due  primarily  to an  increase in the
average  yield of 197 basis points to an average  yield of 2.86% from an average
yield of .89% for the  quarter  ended June 30,  2004 offset by a decrease in the
weighted average balance of $12.2 million, or 40.8%, compared to the 2004 period
of $29.8 million


                                       16
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating  Results for the Three Month Periods Ended June 30, 2005
--------------------------------------------------------------------------------
and 2004 (continued)
--------------------

Interest Expense
----------------

Interest  expense for the three months ended June 30, 2005 totaled $1.9 million,
an increase of $257,000,  or 15.8%,  from interest  expense for the three months
ended June 30,  2004.  The  increase  resulted  from an  increase in the average
balance of deposits and borrowings  outstanding  of $20.9  million,  or 6.3%, to
$350.7 million for the period ended June 30, 2005 and an 18 basis point increase
in the average cost of funds to 2.15% for the 2005 period.

Interest  expense on deposits  totaled  $1.6  million for the three months ended
June 30, 2005, an increase of $286,000,  or 21.5%,  compared to the three months
ended  June  30,  2004,  as a  result  of an  increase  in the  average  balance
outstanding  of $20.3  million,  or 6.7%, to $321.3  million for the 2005 period
coupled with a 24 basis point  increase in the average cost of deposits to 2.01%
for the 2005 period.

Interest expense on borrowings  totaled $264,000 for the three months ended June
30, 2005, a decrease of $29,000, or 9.9%, from the 2004 period, primarily due to
a decrease on the weighted  average yield of 48 basis points to an average yield
of 3.59% for the three months ended June 30, 2005.

Net Interest Income
-------------------

Net  interest  income  totaled  $2.8 million for the three months ended June 30,
2005, an increase of $180,000,  or 6.9%,  from the three month period ended June
30,  2004.  The average  interest  rate spread  increased to 2.96% for the three
months  ended June 30, 2005 from 2.67% for the three months ended June 30, 2004.
The net interest  margin  increased to 3.06% for the three months ended June 30,
2005 from 2.86% for the three months ended June 30, 2004.

Provision for Losses on Loans
-----------------------------

The  Company  did not  record any  provision  for losses on loans for the period
ending June 30, 2005. For the period ended June 30, 2004,  management recorded a
$15,000  provision for losses on loans. To the best of  management's  knowledge,
all known and  inherent  losses that are  probable  and which can be  reasonably
estimated have been recorded as of June 30, 2005.

Other Income
------------

Other  income,  consisting  primarily  of  the  cash  surrender  value  of  life
insurance, gains on sale of loans, service fees, and charges on deposit accounts
remained  relatively  unchanged  for the three  months  ended  June 30,  2005 as
compared with the quarter ending June 30, 2004.  There was a $9,000  increase on
the gain on sale of loans offset by a decrease of $10,000 in the cash  surrender
value of life insurance.

General, Administrative, and Other Expense
------------------------------------------

General,  administrative  and other expense increased by $250,000,  or 10.6%, to
$2.6  million for the three  months  ended June 30,  2005  compared to the three
months ended June 30, 2004. The increase resulted  primarily from an increase in
employee  compensation and benefits expense of $221,000,  or 16.4%, coupled with
an increase of  $25,000,  or 5.4%,  increase  in other  operating  expense.  The
increase in employee compensation and benefits was mainly due to the addition of
the Stebbins branch acquired in June 2004 and the expansion of personnel  needed
to enhance our commercial lending department and to establish a trust department
staffed by a team of qualified, experienced trust professionals. The increase in
other operating  expense was primarily due to the  amortization of the Stebbin's
intangibles.


                                       17
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating  Results for the Three Month Periods Ended June 30, 2005
--------------------------------------------------------------------------------
and 2004 (continued)
--------------------

Federal Income Taxes
--------------------

The provision  for federal  income taxes was $148,000 for the three months ended
June 30, 2005, a decrease of $30,000,  or 16.9%,  compared to the same period in
2004, primarily due to the $52,000, or 8.1%, decrease in earnings before federal
income  taxes.  The effective tax rate for the three months ended June 30, 2005,
was 25.2% as compared to 27.8% for the same period in 2004.  The  effective  tax
rate for the three  months  ended June 30,  2005  declined  mainly due to income
earned from the purchase of additional tax advantaged municipal securities.


ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      There has been no material  change in the Company's  market risk since the
Company's Form 10-K filed with the  Securities  and Exchange  Commission for the
year ended March 31, 2005.


ITEM 4  CONTROLS AND PROCEDURES

    (a) Evaluation of disclosure controls and procedures.

      Under  the  supervision  and  with  the  participation  of  the  Company's
management,  including our Chief Executive Officer and Chief Financial  Officer,
the Company  evaluated  the  effectiveness  of the design and  operation  of its
disclosure  controls and  procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the  Exchange  Act) as of the end of the period  covered  by this  report.
Based upon that  evaluation,  the Chief  Executive  Officer and Chief  Financial
Officer concluded that, as of the end of the period covered by this report,  the
Company's  disclosure  controls and procedures were effective in timely alerting
them to the material  information  relating to the Company (or our  consolidated
subsidiaries) required to be included in the Company's periodic SEC filings.

    (b) Changes in internal controls.

      There has been no  change  made in the  Company's  internal  control  over
financial reporting during the period covered by this report that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.


                                       18
<PAGE>

                         Wayne Savings Bancshares, Inc.

                                     PART II

ITEM 1.  Legal Proceedings
         -----------------

         Not applicable

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds
         ------------------------------------------------------------

         (a)      Not applicable

         (b)      Not applicable

         (c)      The following table sets forth certain  information  regarding
                  repurchases  by the  Company  for the  quarter  ended June 30,
                  2005.

<TABLE>
<CAPTION>
                                                                   Total # of       Maximum # of shares
                                      Total         Average     shares purchased    which may still be
                                   # of shares    price paid     as part of the     purchased as part
         Period                     purchased      per share     announced plan    of the announced plan
         ------                     ---------      ---------      -------------    ---------------------
<S>                                 <C>             <C>            <C>                 <C>
         April 1-30, 2005                --          $   --            --                 100,730
         May 1-31, 2005              22,500          $15.39            --                  78,230
         June 1-30, 2005(1)         183,369          $16.25            --                 247,294

</TABLE>

         Notes to the Table:

         (1)      A  repurchase  program  for  185,491,  or 5% of the  Company's
                  outstanding  shares,  was  publicly  announced on September 2,
                  2004 and  expires on August  26,  2005.  On June 6, 2005,  the
                  Company announced the completion of the repurchase program and
                  the  authorization  by the Board of Directors of a new program
                  for the repurchase of 352,433 shares,  or 10% of the Company's
                  outstanding shares.

ITEM 3.  Defaults Upon Senior Securities
         -------------------------------

         Not applicable

ITEM 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

         None

ITEM 5.  Other Information
         -----------------

         Not applicable

ITEM 6.  Exhibits
         --------

            EX-31.1     Certification of Chief Executive Officer pursuant
                          to Section 302 of the Sarbanes-Oxley Act of
                          2002, 18 U.S.C. Section 1350

            EX-31.2     Certification of Chief Financial Officer pursuant
                          to Section 302 of the Sarbanes-Oxley Act of
                          2002, 18 U.S.C. Section 1350

            EX-32       Written Statement of Chief Executive Officer and Chief
                          Financial Officer furnished pursuant to Section 906 of
                          the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350


                                       19
<PAGE>



                                   SIGNATURES
                                   ----------

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
      registrant  has duly  caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.





Date:   August 3, 2005                         By:  /s/ Charles F. Finn
      ---------------------------                   ----------------------------
                                                    Charles F. Finn
                                                    Chairman and President



Date:   August 3, 2005                         By:  /s/ Michael C. Anderson
      ---------------------------                   ----------------------------
                                                    Michael C. Anderson
                                                    Chief Financial Officer







                                       20