| ý | QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) |   |
|--------|-------------------------------------------------------------------|--------|
|   | OF                  THE SECURITIES EXCHANGE ACT OF 1934           |   |

| For                the quarterly period ended | June                30, 2006 |   |
|-----------------------------------------------|------------------------------|--------|

| o      | TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) |   |
|--------|--------------------------------------------------------------------|--------|
|   | OF                  THE SECURITIES EXCHANGE ACT OF 1934            |   |

| 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 executive office)      |

| Yes                ý | No                o |
|---------------------------|---------------------|

| Large                accelerated filer o | Accelerated                filer o | Non-accelerated                filer ý |
|------------------------------------------|------------------------------------|---------------------------------------------|

| Yes                o | No                ý |
|----------------------|--------------------------|

----

**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               | 11     |
|                     |                                                                                      |   |
| Item                3    | Quantitative                and Qualitative Disclosures About Market                Risk  | 17     |
|                     |                                                                                      |   |
| Item                4    | Controls                and Procedures                                                    | 17     |
|                     |                                                                                      |   |
|                     |                                                                                      |   |
| PART                II - | OTHER                INFORMATION                                                          |   |
|                     |                                                                                      |   |
| Item                1    | Legal                Proceedings                                                          | 18     |
|                     |                                                                                      |   |
| Item                1A   | Risk                Factors                                                               | 18     |
|                     |                                                                                      |   |
| Item                2    | Unregistered                Sales of Equity Securities and Use of                Proceeds | 18     |
|                     |                                                                                      |   |
| Item                3    | Defaults                Upon Senior Securities                                            | 18     |
|                     |                                                                                      |   |
| Item                4    | Submission                of Matters to a Vote of Security                Holders         | 18     |
|                     |                                                                                      |   |
| Item                5    | Other                Information                                                          | 18     |
|                     |                                                                                      |   |
| Item                6    | Exhibits                                                                                  | 18     |
|                     |                                                                                      |   |
| SIGNATURES               |                                                                                      | 20     |

----

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF FINANCIAL      CONDITION**

|                                                                                                                                      |   | **June                30,** |        | **March                31,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-------------|------------------------------|--------|
| **ASSETS**                                                                                                                                |   | **2006**                    |        | **2006**                     |   |
|                                                                                                                                      |   | **(Unaudited)**             |        |                         |   |
| Cash                and due from banks                                                                                                    |   | $                           | 2,500       |                         | $      | 2,952 |   |
| Federal                funds sold                                                                                                         |   |                        | 1,725       |                         |   | - |   |
| Interest-bearing                deposits in other financial institutions                                                             |   |                        | 6,442       |                         |   | 11,171 |   |
| Cash                and cash equivalents                                                                                                  |   |                        | 10,667      |                         |   | 14,123 |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| Investment                securities available for sale - at market                                                                       |   |                        | 62,920      |                         |   | 67,505 |   |
| Investment                securities held to maturity - at amortized cost, approximate market                value                        |   |                        |        |                         |   |   |   |
| of                $5,644 and $5,796 as of June 30, 2006 and March 31, 2006, respectively                                                  |   |                        | 5,637       |                         |   | 5,802 |   |
| Mortgage-backed                securities available for sale - at market                                                                  |   |                        | 57,199      |                         |   | 53,932 |   |
| Mortgage-backed                securities held to maturity - at cost, approximate market value of                                         |   |                        |        |                         |   |   |   |
| $1,699                and $1,805 as of June 30, 2006 and March 31, 2006, respectively                                                     |   |                        | 1,695       |                         |   | 1,799 |   |
| Loans                receivable - net                                                                                                     |   |                        | 237,003     |                         |   | 235,312 |   |
| Office                premises and equipment - net                                                                                        |   |                        | 8,416       |                         |   | 8,557 |   |
| Real                estate acquired through foreclosure                                                                                   |   |                        | 97          |                         |   | 156 |   |
| Federal                Home Loan Bank stock - at cost                                                                                     |   |                        | 4,689       |                         |   | 4,623 |   |
| Cash                surrender value of life insurance                                                                                     |   |                        | 5,866       |                         |   | 5,811 |   |
| Accrued                interest receivable on loans                                                                                       |   |                        | 1,099       |                         |   | 1,075 |   |
| Accrued                interest receivable on mortgage-backed securities                                                                  |   |                        | 267         |                         |   | 250 |   |
| Accrued                interest receivable on investments and interest-bearing deposits                                                   |   |                        | 571         |                         |   | 700 |   |
| Prepaid                expenses and other assets                                                                                          |   |                        | 1,867       |                         |   | 1,526 |   |
| Goodwill                and other intangible assets                                                                                       |   |                        | 2,481       |                         |   | 2,508 |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| Total                assets                                                                                                               |   | **$**                       | **400,474** |                         | **$**  | **403,679** |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                             |   |                        |        |                         |   |   |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| Deposits                                                                                                                                  |   | $                           | 337,718     |                         | $      | 332,570 |   |
| Advances                from the Federal Home Loan Bank                                                                                   |   |                        | 25,000      |                         |   | 32,750 |   |
| Advances                by borrowers for taxes and insurance                                                                              |   |                        | 94          |                         |   | 521 |   |
| Accrued                interest payable                                                                                                   |   |                        | 290         |                         |   | 263 |   |
| Accounts                payable on mortgage loans serviced for others                                                                     |   |                        | 121         |                         |   | 225 |   |
| Other                liabilities                                                                                                          |   |                        | 1,188       |                         |   | 1,118 |   |
| Accrued                federal income taxes                                                                                               |   |                        | 129         |                         |   | 51 |   |
| Deferred                federal income taxes                                                                                              |   |                        | 434         |                         |   | 665 |   |
| Total                liabilities                                                                                                          |   |                        | 364,974     |                         |   | 368,163 |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| Commitments                                                                                                                               |   |                        | -           |                         |   | - |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| Stockholders’                equity                                                                                                 |   |                        |        |                         |   |   |   |
| Preferred                stock (500,000 shares of $.10 par value authorized-                                                              |   |                        |        |                         |   |   |   |
| no                preferred stock issued as of June 30, 2006 or March 31,2006)                                                            |   |                        | -           |                         |   | - |   |
| Common                stock (9,000,000 shares of $ .10 par value authorized; 3,954,874                and                3,934,874 shares |   |                        |        |                         |   |   |   |
| issued                at June 30, 2006 and March 31, 2006)                                                                                |   |                        | 395         |                         |   | 393 |   |
| Additional                paid-in capital                                                                                                 |   |                        | 35,881      |                         |   | 35,604 |   |
| Retained                earnings - substantially restricted                                                                               |   |                        | 11,584      |                         |   | 11,394 |   |
| Less                required contributions for shares acquired by Employee Stock Ownership                Plan                            |   |                        | (1,219      | )                            |   | (1,239 | ) |
| Less                595,322 shares of treasury stock at both June 30, 2006 and March                31, 2006                - at cost     |   |                        | (9,625      | )                            |   | (9,625 | ) |
| Accumulated                other comprehensive loss - unrealized losses on securities                designated                           |   |                        |        |                         |   |   |   |
| as                available for sale                                                                                                      |   |                        | (1,516      | )                            |   | (1,011 | ) |
| Total                stockholders’ equity                                                                                           |   |                        | 35,500      |                         |   | 35,516 |   |
|                                                                                                                                      |   |                        |        |                         |   |   |   |
| Total                liabilities and stockholders’ equity                                                                           |   | **$**                       | **400,474** |                         | **$**  | **403,679** |   |

*Back            to Index*

----

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF EARNINGS**

|                                                                   |   | **Three                months ended** |     |
|------------------------------------------------------------------------|--------|---------------------------------------|----------|
|                                                                   |   | **June                30,**           |     |
|                                                                   |   | **2006**                              |     | **2005** |   |
|                                                                   |   |  **(Unaudited)**                 |     |
| Interest                income                                         |   |                                  |     |
| Loans                                                                  |   | $                                     | 3,891    |   | $ | 3,284 |   |
| Mortgage-backed                securities                              |   |                                  | 699      |   |   | 512 |   |
| Investment                securities                                   |   |                                  | 743      |   |   | 759 |   |
| Interest-bearing                deposits and other                     |   |                                  | 103      |   |   | 126 |   |
| Total                interest income                                   |   |                                  | 5,436    |   |   | 4,681 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| Interest                expense                                        |   |                                  |     |   |   |   |   |
| Deposits                                                               |   |                                  | 2,232    |   |   | 1,618 |   |
| Borrowings                                                             |   |                                  | 283      |   |   | 264 |   |
| Total                interest expense                                  |   |                                  | 2,515    |   |   | 1,882 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| Net                interest income                                     |   |                                  | 2,921    |   |   | 2,799 |   |
| Provision                for losses on loans                           |   |                                  | 30       |   |   | - |   |
| Net                interest income after provision for losses on loans |   |                                  | 2,891    |   |   | 2,799 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| Other                income                                            |   |                                  |     |   |   |   |   |
| Gain                on sale of loans                                   |   |                                  | -        |   |   | 25 |   |
| Increase                in cash surrender value of life insurance      |   |                                  | 55       |   |   | 61 |   |
| Service                fees on deposit accounts                        |   |                                  | 207      |   |   | 178 |   |
| Other                operating                                         |   |                                  | 164      |   |   | 144 |   |
| Total                other income                                      |   |                                  | 426      |   |   | 408 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| General,                administrative and other expense               |   |                                  |     |   |   |   |   |
| Employee                compensation and benefits                      |   |                                  | 1,398    |   |   | 1,569 |   |
| Occupancy                and equipment                                 |   |                                  | 458      |   |   | 425 |   |
| Franchise                taxes                                         |   |                                  | 118      |   |   | 129 |   |
| Amortization                of goodwill and other intangible assets    |   |                                  | 27       |   |   | 27 |   |
| Other                operating                                         |   |                                  | 486      |   |   | 469 |   |
| Total                general, administrative and other expense         |   |                                  | 2,487    |   |   | 2,619 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| Earnings                before income taxes                            |   |                                  | 830      |   |   | 588 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| Federal                incomes taxes                                   |   |                                  |     |   |   |   |   |
| Current                                                                |   |                                  | 208      |   |   | 148 |   |
| Deferred                                                               |   |                                  | 29       |   |   | - |   |
| Total                federal income taxes                              |   |                                  | 237      |   |   | 148 |   |
|                                                                   |   |                                  |     |   |   |   |   |
| NET                EARNINGS                                            |   | **$**                                 | **593**  |   | **$** | **440** |   |
|                                                                   |   |                                  |     |   |   |   |   |
| EARNINGS                PER SHARE                                      |   |                                  |     |   |   |   |   |
| Basic                                                                  |   | **$**                                 | **0.18** |   | **$** | **0.13** |   |
| Diluted                                                                |   | **$**                                 | **0.18** |   | **$** | **0.13** |   |
|                                                                   |   |                                  |     |   |   |   |   |
| DIVIDENDS                PER SHARE                                     |   | **$**                                 | **0.12** |   | **$** | **0.12** |   |

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF COMPREHENSIVE      INCOME**

|                                                                                            |   | **Three                months ended** |       |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                                                            |   | **June                30,**           |       |
|                                                                                            |   | **2006**                              |       | **2005** |   |
|                                                                                            |   |  **(Unaudited)**                 |       |
| Net                earnings                                                                     |   | $                                     | 593        |   | $ | 440 |   |
|                                                                                            |   |                                  |       |   |   |   |   |
| Other                comprehensive income:                                                      |   |                                  |       |   |   |   |   |
| Unrealized                holding gains (losses) on securities, net of related                  |   |                                  |       |   |   |   |   |
| taxes                (benefits) of $(260) and $367 during the respective                periods |   |                                  | (505       | ) |   | 712 |   |
|                                                                                            |   |                                  |       |   |   |   |   |
| Comprehensive                income                                                             |   | **$**                                 | **88**     |   | **$** | **1,152** |   |
|                                                                                            |   |                                  |       |   |   |   |   |
| Accumulated                comprehensive loss                                                   |   | **$**                                 | **(1,516** | **)** | **$** | **(80** | **)** |

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                                                       |   | **2006**              |    | **2005** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|---------|----------|--------|
|                                                                                                                                       |   | **(Unaudited)**  |    |
| Cash                flows from operating activities:                                                                                       |   |                  |    |     |   |   |   |
| Net                earnings for the period                                                                                                 |   | $                     | 593     |     | $      | 440 |   |
| Adjustments                to reconcile net earnings to net cash                                                                           |   |                  |    |     |   |   |   |
| Provided                by operating activities:                                                                                           |   |                  |    |     |   |   |   |
| Amortization                of discounts and premiums on                                                                                   |   |                  |    |     |   |   |   |
| investments                and mortgage-backed securities - net                                                                            |   |                  | (8      | )        |   | 152 |   |
| Amortization                of deferred loan origination fees                                                                              |   |                  | (10     | )        |   | (38 | ) |
| Depreciation                and amortization                                                                                               |   |                  | 173     |     |   | 159 |   |
| Amortization                of expense related to ESOP                                                                                     |   |                  | 20      |     |   | 21 |   |
| Gain                on sale of loans                                                                                                       |   |                  | -       |     |   | (15 | ) |
| Proceeds                from sale of loans in the secondary market                                                                         |   |                  | -       |     |   | 1,181 |   |
| Loans                originated for sale in the secondary market                                                                           |   |                  | -       |     |   | (1,166 | ) |
| Provision                for losses on loans                                                                                               |   |                  | 30      |     |   | - |   |
| Federal                Home Loan Bank stock dividends                                                                                      |   |                  | (66     | )        |   | (53 | ) |
| Increase                (decrease) in cash:                                                                                                |   |                  |    |     |   |   |   |
| Accrued                interest receivable on loans                                                                                        |   |                  | (29     | )        |   | (173 | ) |
| Accrued                interest receivable on mortgage-backed securities                                                                   |   |                  | (13     | )        |   | 202 |   |
| Accrued                interest receivable on investments and interest-bearing                deposits                                     |   |                  | 129     |     |   | (41 | ) |
| Prepaid                expenses and other assets                                                                                           |   |                  | (341    | )        |   | (773 | ) |
| Amortization                of expense related to intangibles                                                                              |   |                  | 27      |     |   | 27 |   |
| Accrued                interest payable                                                                                                    |   |                  | 27      |     |   | 32 |   |
| Accounts                payable on mortgage loans serviced for others                                                                      |   |                  | (104    | )        |   | (13 | ) |
| Other                liabilities                                                                                                           |   |                  | 68      |     |   | (169 | ) |
| Federal                income taxes                                                                                                        |   |                  |    |     |   |   |   |
| Current                                                                                                                                    |   |                  | 73      |     |   | 235 |   |
| Deferred                                                                                                                                   |   |                  | 29      |     |   | - |   |
| Net                cash provided by operating activities                                                                                   |   |                  | 598     |     |   | 8 |   |
|                                                                                                                                       |   |                  |    |     |   |   |   |
| Cash                flows used in investing activities:                                                                                    |   |                  |    |     |   |   |   |
| Purchase                of investment securities designated as available for sale                                                          |   |                  | (1,101  | )        |   | (5,344 | ) |
| Proceeds                from maturity of investment securities designated as held to                maturity                               |   |                  | 165     |     |   | 73 |   |
| Proceeds                from maturity of investment securities designated as available for                sale                             |   |                  | 5,465   |     |   | 39 |   |
| Purchase                of mortgage-backed securities designated as available for                sale                                      |   |                  | (8,478  | )        |   | (4,706 | ) |
| Principal                repayments on mortgage-backed securities designated as held to                maturity                            |   |                  | 103     |     |   | 241 |   |
| Principal                repayments and sales of mortgage-backed securities designated as                available                for sale |   |                  | 4,677   |     |   | 8,698 |   |
| Loan                principal repayments                                                                                                   |   |                  | 21,477  |     |   | 35,273 |   |
| Loan                disbursements                                                                                                          |   |                  | (23,188 | )        |   | (36,264 | ) |
| Purchase                of office premises and equipment - net                                                                             |   |                  | (32     | )        |   | (88 | ) |
| Proceeds                from sale of real estate acquired through foreclosure                                                              |   |                  | 59      |     |   | 112 |   |
| Increase                in cash surrender value of life insurance                                                                          |   |                  | (55     | )        |   | (61 | ) |
| Net                cash used in investing activities                                                                                       |   |                  | (908    | )        |   | (2,027 | ) |
|                                                                                                                                       |   |                  |    |     |   |   |   |
| Net                cash used in operating and investing activities                                                                         |   |                  |    |     |   |   |   |
| (balance                carried forward)                                                                                                   |   |                  | (310    | )        |   | (2,019 | ) |

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS (CONTINUED)**

|                                                                                                    |   | **2006**              |       | **2005** |   |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------|------------|----------|--------|
|                                                                                                    |   | **(Unaudited)**  |       |
| Net                cash used in operating and investing activities                                      |   |                  |       |     |   |   |   |
| (balance                brought forward)                                                                |   | $                     | (310       | )        | $      | (2,019 | ) |
|                                                                                                    |   |                  |       |     |   |   |   |
| Cash                flows provided by (used in) financing activities:                                   |   |                  |       |     |   |   |   |
| Net                increase in deposit accounts                                                         |   |                  | 5,148      |     |   | 6,915 |   |
| Proceeds                from Federal Home Loan Bank advances                                            |   |                  | 25,250     |     |   | 14,000 |   |
| Repayments                of Federal Home Loan Bank advances                                            |   |                  | (33,000    | )        |   | (15,000 | ) |
| Advances                by borrowers for taxes and insurance                                            |   |                  | (427       | )        |   | (461 | ) |
| Dividends                paid on common stock                                                           |   |                  | (401       | )        |   | (412 | ) |
| Proceeds                from exercise of stock options                                                  |   |                  | 279        |     |   | 367 |   |
| Tax                benefits of stock options exercised                                                  |   |                  | 5          |     |   | - |   |
| Purchase                of treasury shares                                                              |   |                  | -          |     |   | (3,611 | ) |
| Net                cash provided by (used in) financing activities                                      |   |                  | (3,146     | )        |   | 1,798 |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| Net                decrease in cash and cash equivalents                                                |   |                  | (3,456     | )        |   | (221 | ) |
|                                                                                                    |   |                  |       |     |   |   |   |
| Cash                and cash equivalents at beginning of period                                         |   |                  | 14,123     |     |   | 29,942 |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| Cash                and cash equivalents at end of period                                               |   | **$**                 | **10,667** |     | **$**  | **29,721** |   |
|                                                                                                    |   |                  |       |     |   |   |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| Supplemental                disclosure of cash flow information:                                        |   |                  |       |     |   |   |   |
| Cash                paid during the period for:                                                         |   |                  |       |     |   |   |   |
| Federal                income taxes                                                                     |   | **$**                 | **130**    |     | **$**  | **-** |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| Interest                on deposits and borrowings                                                      |   | **$**                 | **2,488**  |     | **$**  | **1,850** |   |
|                                                                                                    |   |                  |       |     |   |   |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| 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                                                               |   | **$**                 | **(505**   | **)**    | **$**  | **712** |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| Recognition                of mortgage servicing rights in accordance                                   |   |                  |       |     |   |   |   |
| with                SFAS No. 140                                                                        |   | **$**                 | **-**      |     | **$**  | **10** |   |
|                                                                                                    |   |                  |       |     |   |   |   |
| Dividends                payable                                                                        |   | **$**                 | **403**    |     | **$**  | **412** |   |

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc. **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

*Critical      Accounting Policy *

*Use      of Estimates*
**      -**

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

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc. **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|                                                                |   | **For                the three months ended** |          |
|---------------------------------------------------------------------|--------|-----------------------------------------------|---------------|
|                                                                |   | **June                30,**                   |          |
|                                                                |   | **2006**                                      |          | **2005** |   |
|                                                                |   |                                          |          |   |   |
| Weighted-average                common shares outstanding (basic)   |   |                                          | 3,234,972     |   |   | 3,439,760 |   |
| Dilutive                effect of assumed exercise of stock options |   |                                          | 13,024        |   |   | 17,552 |   |
|                                                                |   |                                          |          |   |   |   |   |
| Weighted-average                common shares outstanding (diluted) |   |                                          | **3,247,996** |   |   | **3,457,312** |   |

|                                              |   | **Three                months ended** |        |          |   | **Year                ended** |   |          |        |
|---------------------------------------------------|--------|---------------------------------------|-------------|---------------|--------|-------------------------------|--------|---------------|-------------|
|                                              |   | **June                30,**           |        |          |   | **March                31,**  |   |          |        |
|                                              |   | **2006**                              |        | **2006**      |   | **2005**                      |   |
|                                              |   |                                  |        | **Weighted-** |   |                          |   | **Weighted-** |        |   |   | **Weighted-** |   |
|                                              |   |                                  |        | **average**   |   |                          |   | **average**   |        |   |   | **average** |   |
|                                              |   |                                  |        | **exercise**  |   |                          |   | **exercise**  |        |   |   | **exercise** |   |
|                                              |   | **Shares**                            |        | **price**     |   | **Shares**                    |   | **price**     |        | **Shares** |   | **price** |   |
|                                              |   |                                  |        |          |   |                          |   |          |        |   |   |   |   |
| Outstanding                at beginning of period |   |                                  | 179,148     |          | $      | 13.92                         |   |          | 214,204     |   | $ | 13.84 |   |   | 214,204 |   | $ | 13.84 |   |
| Granted                                           |   |                                  | -           |          |   | -                             |   |          | -           |   |   | - |   |   | 163,265 |   |   | 13.95 |   |
| Exercised                                         |   |                                  | (20,000     | )             |   | 13.95                         |   |          | (27,556     | ) |   | 13.32 |   |   | - |   |   | - |   |
| Forfeited                                         |   |                                  | -           |          |   | -                             |   |          | (7,500      | ) |   | 13.95 |   |   | (163,265 | ) |   | 13.95 |   |
|                                              |   |                                  |        |          |   |                          |   |          |        |   |   |   |   |   |   |   |   |   |   |
| Outstanding                at end of period       |   |                                  | **159,148** |          | **$**  | **13.91**                     |   |          | **179,148** |   | **$** | **13.92** |   |   | **214,204** |   | **$** | **13.84** |   |
|                                              |   |                                  |        |          |   |                          |   |          |        |   |   |   |   |   |   |   |   |   |   |
| Options                exercisable at period-end  |   |                                  | **159,148** |          | **$**  | **13.91**                     |   |          | **179,148** |   | **$** | **13.92** |   |   | **214,204** |   | **$** | **13.84** |   |
| Fair                value of options granted      |   |                                  |        |          | **$**  | **-**                         |   |          |        |   | **$** | **-** |   |   |   |   | **$** | **4.07** |   |

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

|   | Number                outstanding                          | 159,148                        |
|--------|------------------------------------------------------------|--------------------------------|
|   | Range                of exercise prices                    | $11.67                - $13.95 |
|   | Weighted-average                exercise price             | $13.92                         |
|   | Weighted-average                remaining contractual life | 7.75                years      |

|   | · | Separately                recognize financial assets as servicing assets or servicing liabilities,                each time it undertakes an obligation to service a financial asset                by                entering into certain kinds of servicing contracts; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Initially                measure all separately recognized servicing assets and liabilities                at fair                value, if practicable; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Separately                present servicing assets and liabilities subsequently measured at                fair                value in the statement of financial condition and additional disclosures                for all separately recognized servicing assets and servicing                liabilities. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Back          to Index*

----

|  **ITEM              2**  |  **MANAGEMENT’S                DISCUSSION AND ANALYSIS OF                FINANCIAL** |   |
|-------------------------------------|-------------------------------------------------------------------------------------------------|--------|
|                                |  **CONDITION                AND RESULTS OF OPERATIONS**                                    |   |

**Average      Balance Sheet**

|                                             |   |                                               |        |     |   |      |   |    |       |     |   |        |   |
|--------------------------------------------------|--------|----------------------------------------------------|-------------|----------|--------|-----------|--------|---------|------------|----------|--------|-------------|--------|
|                                             |   | For                the three months ended June 30, |        |
|                                             |   | 2006                                               |        | 2005     |   |
|                                             |   | Average                                            |        |     |   | Average   |   | Average |       |     |   | Average     |   |
|                                             |   | Balance                                            |        | Interest |   | Rate      |   | Balance |       | Interest |   | Rate        |   |
|                                             |   | (Dollars                in thousands)              |        |
| **Interest-earning                assets**:      |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| Loans                receivable - net1           |   | $                                                  | 235,419     |     | $      | 3,891     |   |    | 6.61       | %        | $      | 213,111     |   | $ | 3,284 |   |   | 6.16 | % |
| Mortgage-backed                                  |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| securities2                                      |   |                                               | 58,521      |     |   | 699       |   |    | 4.78       |     |   | 58,657      |   |   | 512 |   |   | 3.49 |   |
| Investment                securities             |   |                                               | 71,001      |     |   | 743       |   |    | 4.19       |     |   | 76,749      |   |   | 759 |   |   | 3.96 |   |
| Interest-bearing                deposits3        |   |                                               | 10,667      |     |   | 103       |   |    | 3.86       |     |   | 17,617      |   |   | 126 |   |   | 2.86 |   |
| Total                interest-                   |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| earning                assets                    |   |                                               | 375,608     |     |   | 5,436     |   |    | 5.79       |     |   | 366,134     |   |   | 4,681 |   |   | 5.11 |   |
| Non-interest-earning                assets       |   |                                               | 22,857      |     |   |      |   |    |       |     |   | 25,724      |   |   |   |   |   |   |   |
| Total                assets                      |   | **$**                                              | **398,465** |     |   |      |   |    |       |     | **$**  | **391,858** |   |   |   |   |   |   |   |
|                                             |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| **Interest-bearing                liabilities:** |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| Deposits                                         |   | $                                                  | 333,773     |     |   | 2,232     |   |    | 2.67       |     | $      | 321,346     |   |   | 1,618 |   |   | 2.01 |   |
| Borrowings                                       |   |                                               | 25,998      |     |   | 283       |   |    | 4.35       |     |   | 29,392      |   |   | 264 |   |   | 3.59 |   |
| Total                interest-                   |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| bearing                liabilities               |   |                                               | 359,771     |     |   | 2,515     |   |    | 2.8        |     |   | 350,738     |   |   | 1,882 |   |   | 2.15 |   |
| Non-interest                bearing              |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| liabilities                                      |   |                                               | 3,056       |     |   |      |   |    |       |     |   | 1,364       |   |   |   |   |   |   |   |
| Total                liabilities                 |   |                                               | 362,827     |     |   |      |   |    |       |     |   | 352,102     |   |   |   |   |   |   |   |
| Stockholders’                equity        |   |                                               | 35,638      |     |   |      |   |    |       |     |   | 39,756      |   |   |   |   |   |   |   |
| Total                liabilities and             |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| stockholders’                equity        |   | **$**                                              | **398,465** |     |   |      |   |    |       |     | **$**  | **391,858** |   |   |   |   |   |   |   |
| Net                interest income               |   |                                               |        |     | **$**  | **2,921** |   |    |       |     |   |        |   | **$** | **2,799** |   |   |   |   |
| Interest                rate spread4             |   |                                               |        |     |   |      |   |    | **2.99**   | **%**    |   |        |   |   |   |   |   | **2.96** | **%** |
| Net                yield on interest-            |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| earning                assets5                   |   |                                               |        |     |   |      |   |    | **3.11**   | **%**    |   |        |   |   |   |   |   | **3.06** | **%** |
| Ratio                of average interest-        |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| earning                assets to average         |   |                                               |        |     |   |      |   |    |       |     |   |        |   |   |   |   |   |   |   |
| interest-bearing                liabilities      |   |                                               |        |     |   |      |   |    | **104.40** | **%**    |   |        |   |   |   |   |   | **104.39** | **%** |

*Back          to Index*

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION      AND RESULTS OF OPERATIONS (CONTINUED)**

|                                               |   | **June                30, 2006**      |        | **March                31, 2006** |   |
|----------------------------------------------------|--------|---------------------------------------|-------------|-----------------------------------|--------|
|                                               |   | (Dollars                in thousands) |        |
| Mortgage                loans:                     |   |                                  |        |                              |   |   |   |   |   |   |   |   |   |
| One-to                four-family residential(1)   |   | $                                     | 148,027     |                              |   | 61.46 | % | $ | 149,134 |   |   | 62.40 | % |
| Residential                construction loan       |   |                                  | 3,994       |                              |   | 1.66 |   |   | 4,675 |   |   | 1.96 |   |
| Multi-family                residential            |   |                                  | 7,868       |                              |   | 3.27 |   |   | 7,930 |   |   | 3.32 |   |
| Non-residential                real estate/land(2) |   |                                  | 53,382      |                              |   | 22.16 |   |   | 50,778 |   |   | 21.25 |   |
| Total                mortgage loans                |   |                                  | 213,171     |                              |   | 88.55 |   |   | 212,517 |   |   | 88.93 |   |
| Other                loans:                        |   |                                  |        |                              |   |   |   |   |   |   |   |   |   |
| Consumer                loans(3)                   |   |                                  | 5,344       |                              |   | 2.22 |   |   | 4,901 |   |   | 2.05 |   |
|                  Commercial business loans    |   |                                  | 22,235      |                              |   | 9.23 |   |   | 21,550 |   |   | 9.02 |   |
| Total                other loans                   |   |                                  | 27,679      |                              |   | 11.45 |   |   | 26,451 |   |   | 11.07 |   |
| Total                loans before net items        |   |                                  | 240,850     |                              |   | **100.00** | **%** |   | 238,968 |   |   | **100.00** | **%** |
| Less:                                              |   |                                  |        |                              |   |   |   |   |   |   |   |   |   |
| Loans                in process                    |   |                                  | 1,934       |                              |   |   |   |   | 1,729 |   |   |   |   |
| Deferred                loan origination fees      |   |                                  | 444         |                              |   |   |   |   | 443 |   |   |   |   |
| Allowance                for loan losses           |   |                                  | 1,469       |                              |   |   |   |   | 1,484 |   |   |   |   |
| Total                loans receivable - net        |   | **$**                                 | **237,003** |                              |   |   |   | **$** | **235,312** |   |   |   |   |
| Mortgage-backed                securities, net(4)  |   | **$**                                 | **58,894**  |                              |   |   |   | **$** | **55,731** |   |   |   |   |

| (1) | Includes                equity loans collateralized by second mortgages in the aggregate                amount of                $20.7 million and $20.9 million as of June 30, 2006 and March 31,                2006, respectively. Such loans have been underwritten on substantially                the                same basis as the Company’s first mortgage                loans. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes                land loans of $634,000 and $674,000 as of June 30, 2006 and March                31,                2006, respectively. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes                second mortgage loans of $592,000 and $783,000 as of June 30, 2006                and                March 31, 2006, respectively. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Back          to Index*

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION      AND RESULTS OF OPERATIONS (CONTINUED)**

|                                                                    |   | **June                30,**                 |     | **March                31,** |   |
|-------------------------------------------------------------------------|--------|---------------------------------------------|----------|------------------------------|--------|
|                                                                    |   | **2006**                                    |     | **2006**                     |   |
| Past                due loans 30-89 days:                               |   |  (Dollars                in thousands) |     |
| Mortgage                loans:                                          |   |                                        |     |                         |   |   |   |
| One-                to four-family residential                          |   | $                                           | 514      |                         | $      | 553 |   |
| Non-residential                                                         |   |                                        | -        |                         |   | - |   |
| Land                                                                    |   |                                        | -        |                         |   | - |   |
| Non-mortgage                loans:                                      |   |                                        |     |                         |   |   |   |
| Commercial                business loans                                |   |                                        | 26       |                         |   | 72 |   |
| Consumer                loans                                           |   |                                        | 16       |                         |   | 1 |   |
|                                                                    |   |                                        | 556      |                         |   | 626 |   |
|                                                                    |   |                                        |     |                         |   |   |   |
| Non-accrual                loans:                                       |   |                                        |     |                         |   |   |   |
| Mortgage                loans:                                          |   |                                        |     |                         |   |   |   |
| One-                to four-family residential                          |   |                                        | 792      |                         |   | 725 |   |
| All                other mortgage loans                                 |   |                                        | -        |                         |   | - |   |
| Non-mortgage                loans:                                      |   |                                        |     |                         |   |   |   |
| Commercial                business loans                                |   |                                        | -        |                         |   | 47 |   |
| Consumer                                                                |   |                                        | -        |                         |   | - |   |
| Total                non-accrual loans                                  |   |                                        | 792      |                         |   | 772 |   |
| Accruing                loans 90 days or more delinquent                |   |                                        | -        |                         |   | - |   |
|                                                                    |   |                                        |     |                         |   |   |   |
| Total                non-performing loans                               |   |                                        | 792      |                         |   | 772 |   |
| Loans                deemed impaired                                    |   |                                        | -        |                         |   | - |   |
| Total                non-performing and impaired loans                  |   |                                        | 792      |                         |   | 772 |   |
| Total                real estate acquired through foreclosure           |   |                                        | 97       |                         |   | 156 |   |
| Total                non-performing and impaired assets                 |   | **$**                                       | **889**  |                         | **$**  | **928** |   |
|                                                                    |   |                                        |     |                         |   |   |   |
| Total                non-performing and impaired loans to net           |   |                                        |     |                         |   |   |   |
| loans                receivable                                         |   |                                        | **0.33** | **%**                        |   | **0.33** | **%** |
| Total                non-performing and impaired loans to total assets  |   |                                        | **0.20** | **%**                        |   | **0.19** | **%** |
| Total                non-performing and impaired assets to total assets |   |                                        | **0.22** | **%**                        |   | **0.23** | **%** |

*Back          to Index*

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION      AND RESULTS OF OPERATIONS (CONTINUED)**

|                                                             |   |                                                  |                                                |        |   |
|------------------------------------------------------------------|--------|-------------------------------------------------------|-----------------------------------------------------|-------------|--------|
|                                                             |   |  **For                  the three months ended** |   **For                  the year ended** |
|                                                             |   |                                                  | **June                  30,2006**                   |        |   |   | **March                  31, 2006** |   |   |
|                                                             |   |                                                  | (Dollars                  in thousands)             |        |   |
|                                                             |   |                                                  |                                                |        |   |   |   |   |   |
| Loans                  receivable - net                          |   |                                                  | **$**                                               | **237,003** |   |   |   | **$** | **235,312** |   |   |
| Average                  loans receivable - net                  |   |                                                  | **$**                                               | **235,419** |   |   |   | **$** | **222,944** |   |   |
| Allowance                  balance (at beginning of period)      |   |                                                  | $                                                   | 1,484       |   |   |   | $ | 1,374 |   |   |
| Charge-offs:                                                     |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| Mortgage                  loans:                                 |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| One-                  to four-family                             |   |                                                  |                                                | (31         | )      |   |   |   | (73 | ) |   |
| Residential                  construction                        |   |                                                  |                                                | -           |   |   |   |   | - |   |   |
| Multi-family                  residential                        |   |                                                  |                                                | -           |   |   |   |   | - |   |   |
| Non-residential                  real estate and land            |   |                                                  |                                                | (15         | )      |   |   |   | - |   |   |
| Other                  loans:                                    |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| Consumer                                                         |   |                                                  |                                                | (2          | )      |   |   |   | (75 | ) |   |
| Commercial                                                       |   |                                                  |                                                | -           |   |   |   |   | (10 | ) |   |
| Gross                  charge-offs                               |   |                                                  |                                                | (48         | )      |   |   |   | (158 | ) |   |
| Recoveries:                                                      |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| Mortgage                  loans:                                 |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| One-                  to four-family                             |   |                                                  |                                                | -           |   |   |   |   | 14 |   |   |
| Residential                  construction                        |   |                                                  |                                                | -           |   |   |   |   | - |   |   |
| Multi-family                  residential                        |   |                                                  |                                                | -           |   |   |   |   | - |   |   |
| Non-residential                  real estate and land            |   |                                                  |                                                | -           |   |   |   |   | - |   |   |
| Other                  loans:                                    |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| Consumer                                                         |   |                                                  |                                                | 3           |   |   |   |   | 35 |   |   |
| Commercial                                                       |   |                                                  |                                                | -           |   |   |   |   | 8 |   |   |
| Gross                  recoveries                                |   |                                                  |                                                | 3           |   |   |   |   | 57 |   |   |
| Net                  charge-offs                                 |   |                                                  |                                                | (45         | )      |   |   |   | (101 | )  |   |
| Provision                  charged to operations                 |   |                                                  |                                                | 30          |   |   |   |   | 211 |   |   |
| Allowance                  for loans losses (at end of period)   |   |                                                  | **$**                                               | **1,469**   |   |   |   | **$** | **1,484** |   |   |
| Allowance                  for loan losses as a percent of loans |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| receivable                  - net at end of period               |   |                                                  |                                                | **0.62**    | **%**  |   |   |   | **0.63** | **%** |   |
| Net                  loans charged off as a percent of average   |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| loans                  receivable - net                          |   |                                                  |                                                | **0.02**    | **%**  |   |   |   | **0.05** | **%** |   |
| Ratio                  of allowance for loan losses to non-      |   |                                                  |                                                |        |   |   |   |   |   |   |   |
| performing                  loans at end of period               |   |                                                  |                                                | **185.48**  | **%**  |   |   |   | **192.23** | **%** |   |
|                                                             |   |                                                  |                                                |        |   |   |   |   |   |   |   |

*Back          to Index*

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION      AND RESULTS OF OPERATIONS (CONTINUED)**

*Back          to Index*

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION      AND RESULTS OF OPERATIONS (CONTINUED)**

*Back          to Index*

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL**

**CONDITION      AND RESULTS OF OPERATIONS (CONTINUED)**

**ITEM      3**
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK**

**ITEM      4**
**CONTROLS      AND PROCEDURES**

*Back          to Index*

----

**Wayne      Savings Bancshares, Inc.**

PART      II

ITEM      1. 

ITEM      1A

ITEM      2.

|   | (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,                2006. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                            |                       |                      | 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 |
|   |                            |                       |                      |                            |                                 |
|   | April                1-30, 2006 | -                          | $                -        | -                               | 140,105                              |
|   | May                1-31, 2006   | -                          | $                -        | -                               | 140,105                              |
|   | June                1-30, 2006  | -                          | $                -        | -                               | 140,105                              |

ITEM      3

ITEM      4

ITEM      5

*Back          to Index*

----

ITEM          6.

|   |    |                                                                      |
|--------|---------|---------------------------------------------------------------------------|
|   | 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         |

*Back          to Index*

----

**SIGNATURES**

| Date:  |     August                4, 2006 |   | By:    | /s/                Phillip E. Becker                             |
|--------|-------------------------------------------------------|--------|--------|------------------------------------------------------------------|
|   |                                                  |   |   | Phillip                E. Becker                                 |
|   |                                                  |   |   | President                and Chief Executive Officer             |
|   |                                                  |   |   |                                                             |
|   |                                                  |   |   |                                                             |
|   |                                                  |   |   |                                                             |
| Date:  |     August                4, 2006 |   | By:    | H.                Stewart Fitz Gibbon III                        |
|   |                                                  |   |   | H.                Stewart Fitz Gibbon III                        |
|   |                                                  |   |   | Senior                Vice President and Chief Financial Officer |
|   |                                                  |   |   |                                                             |

*Back      to Index*