----

| 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)               |   |                                  |

| Large                accelerated filer o | Accelerated                filer o | Non-accelerated                filer  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 | 13     |
|                     |                                                                                                                      |   |
| Item                3    | Quantitative                and Qualitative Disclosures About Market                Risk                                  | 23     |
|                     |                                                                                                                      |   |
| Item                4    | Controls                and Procedures                                                                                    | 23     |
|                     |                                                                                                                      |   |
|                     |                                                                                                                      |   |
| PART                II - | OTHER                INFORMATION                                                                                          |   |
|                     |                                                                                                                      |   |
| Item                1    | Legal                Proceedings                                                                                          | 24     |
|                     |                                                                                                                      |   |
| Item                1A   | Risk                Factors                                                                                               | 24     |
|                     |                                                                                                                      |   |
| Item                2    | Unregistered                Sales of Equity Securities and Use of                Proceeds                                 | 24     |
|                     |                                                                                                                      |   |
| Item                3    | Defaults                Upon Senior Securities                                                                            | 24     |
|                     |                                                                                                                      |   |
| Item                4    | Submission                of Matters to a Vote of Security                Holders                                         | 24     |
|                     |                                                                                                                      |   |
| Item                5    | Other                Information                                                                                          | 25     |
|                     |                                                                                                                      |   |
| Item                6    | Exhibits                                                                                                                  | 25     |
|                     |                                                                                                                      |   |
| SIGNATURES               |                                                                                                                      | 26     |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF FINANCIAL      CONDITION**

|                                                                                                                    |   | **December                31,** |        | **March                31,** |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|------------------------------|--------|
| **ASSETS**                                                                                                              |   | **2006**                        |        | **2006**                     |   |
|                                                                                                                    |   | (Unaudited)                     |        |                         |   |
|                                                                                                                    |   |                            |        |                         |   |
| Cash                and due from banks                                                                        |   | $                               | 2,389       |                         | $      | 2,952 |   |
| Federal                funds sold                                                                             |   |                            | 10,000      |                         |   | - |   |
| Interest-bearing                deposits in other financial institutions                                                |   |                            | 8,501       |                         |   | 11,171 |   |
| Cash                and cash equivalents                                                                           |   |                            | 20,890      |                         |   | 14,123 |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
| Investment                securities available for sale - at market                                                     |   |                            | 58,127      |                         |   | 67,505 |   |
| Investment                securities held to maturity - at amortized cost, approximate market                value      |   |                            |        |                         |   |   |   |
| of                $622 and $5,796 as of December 31, 2006 and March 31, 2006, respectively                              |   |                            | 602         |                         |   | 5,802 |   |
| Mortgage-backed                securities available for sale - at market                                                |   |                            | 62,483      |                         |   | 53,932 |   |
| Mortgage-backed                securities held to maturity - at cost, approximate market value of                       |   |                            |        |                         |   |   |   |
| $1,302                and $1,805 as of December 31, 2006 and March 31, 2006,                respectively                |   |                            | 1,293       |                         |   | 1,799 |   |
| Loans                receivable - net                                                                                   |   |                            | 240,751     |                         |   | 235,312 |   |
| Office                premises and equipment - net                                                                      |   |                            | 8,263       |                         |   | 8,557 |   |
| Real                estate acquired through foreclosure                                                                 |   |                            | -           |                         |   | 156 |   |
| Federal                Home Loan Bank stock - at cost                                                                   |   |                            | 4,829       |                         |   | 4,623 |   |
| Cash                surrender value of life insurance                                                                   |   |                            | 5,978       |                         |   | 5,811 |   |
| Accrued                interest receivable on loans                                                                     |   |                            | 1,184       |                         |   | 1,075 |   |
| Accrued                interest receivable on mortgage-backed securities                                                |   |                            | 288         |                         |   | 250 |   |
| Accrued                interest receivable on investments and interest-bearing deposits                                 |   |                            | 464         |                         |   | 700 |   |
| Prepaid                expenses and other assets                                                                        |   |                            | 1,152       |                         |   | 1,526 |   |
| Goodwill                and other intangible assets                                                                     |   |                            | 2,428       |                         |   | 2,508 |   |
| Prepaid                federal income taxes                                                                             |   |                            | 228         |                         |   | - |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
| Total                assets                                                                                             |   | **$**                           | **408,960** |                         | **$**  | **403,679** |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
|  **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                     |   |                            |        |                         |   |   |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
| Deposits                                                                                                                |   | $                               | 335,425     |                         | $      | 332,570 |   |
| Advances                from the Federal Home Loan Bank                                                                 |   |                            | 34,500      |                         |   | 32,750 |   |
| Advances                by borrowers for taxes and insurance                                                       |   |                            | 1,000       |                         |   | 521 |   |
| Accrued                interest payable                                                                                 |   |                            | 354         |                         |   | 263 |   |
| Accounts                payable on mortgage loans serviced for others                                                   |   |                            | 291         |                         |   | 225 |   |
| Other                liabilities                                                                                        |   |                            | 1,082       |                         |   | 1,118 |   |
| Accrued                federal income taxes                                                                             |   |                            | -           |                         |   | 51 |   |
| Deferred                federal income taxes                                                                            |   |                            | 1,026       |                         |   | 665 |   |
| Total                liabilities                                                                                        |   |                            | 373,678     |                         |   | 368,163 |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
| Commitments                                                                                                             |   |                            | -           |                         |   | - |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
| Stockholders’                equity                                                                               |   |                            |        |                         |   |   |   |
| Preferred                stock (500,000 shares of $.10 par value authorized; none issued)                               |   |                            | -           |                         |   | - |   |
| Common                stock (9,000,000 shares of $.10 par value authorized; 3,978,731                and 3,934,874 |   |                            |        |                         |   |   |   |
| shares                issued at December 31, 2006 and March 31, 2006, respectively)                                |   |                            | 398         |                         |   | 393 |   |
| Additional                paid-in capital                                                                               |   |                            | 36,249      |                         |   | 35,604 |   |
| Retained                earnings - substantially restricted                                                             |   |                            | 11,844      |                         |   | 11,394 |   |
| Less                required contributions for shares acquired by Employee Stock Ownership                Plan          |   |                            | (1,178      | )                            |   | (1,239 | ) |
| Less                729,622 and 595,322 shares of treasury stock at December 31, 2006                and                |   |                            |        |                         |   |   |   |
| March                31, 2006, respectively - at cost                                                                   |   |                            | (11,618     | )                            |   | (9,625 | ) |
| Accumulated                other comprehensive loss - unrealized losses on securities                designated         |   |                            |        |                         |   |   |   |
| as                available for sale, net of tax effects                                                           |   |                            | (413        | )                            |   | (1,011 | ) |
| Total                stockholders’ equity                                                                         |   |                            | 35,282      |                         |   | 35,516 |   |
|                                                                                                                    |   |                            |        |                         |   |   |   |
| Total                liabilities and stockholders’ equity                                                         |   | **$**                           | **408,960** |                         | **$**  | **403,679** |   |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF EARNINGS**

|                                                                         |   | **Nine                months**  |      | **Three                months** |   |
|------------------------------------------------------------------------------|--------|---------------------------------|-----------|---------------------------------|--------|
|                                                                         |   | **ended**                       |      | **ended**                       |   |
|                                                                         |   | **December                31,** |      | **December                31,** |   |
|                                                                         |   | **2006**                        |      | **2005**                        |   | **2006** |   | **2005** |   |
|                                                                         |   | (Unaudited)                     |      |
| Interest                income                                               |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Loans                                                                        |   | $                               | 11,924    |                            | $      | 10,351 |   | $ | 4,048 |   | $ | 3,626 |   |
| Mortgage-backed                securities                                    |   |                            | 2,327     |                            |   | 1,462 |   |   | 846 |   |   | 483 |   |
| Investment                securities                                         |   |                            | 2,082     |                            |   | 2,296 |   |   | 627 |   |   | 763 |   |
| Interest-bearing                deposits and other                           |   |                            | 360       |                            |   | 351 |   |   | 158 |   |   | 109 |   |
| Total                interest income                                    |   |                            | 16,693    |                            |   | 14,460 |   |   | 5,679 |   |   | 4,981 |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Interest                expense                                              |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Deposits                                                                     |   |                            | 7,194     |                            |   | 5,201 |   |   | 2,545 |   |   | 1,855 |   |
| Borrowings                                                                   |   |                            | 1,038     |                            |   | 764 |   |   | 410 |   |   | 262 |   |
| Total                interest expense                                        |   |                            | 8,232     |                            |   | 5,965 |   |   | 2,955 |   |   | 2,117 |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Net                interest income                                           |   |                            | 8,461     |                            |   | 8,495 |   |   | 2,724 |   |   | 2,864 |   |
| Provision                for losses on loans                                 |   |                            | 70        |                            |   | - |   |   | 10 |   |   | - |   |
| Net                interest income after provision for losses on loans  |   |                            | 8,391     |                            |   | 8,495 |   |   | 2,714 |   |   | 2,864 |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Other                income                                                  |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Gain                (loss) on sale of loans                                  |   |                            | -         |                            |   | 68 |   |   | - |   |   | (1 | ) |
| Proceeds                due from bank-owned life insurance policy            |   |                            | -         |                            |   | 63 |   |   | - |   |   | 63 |   |
| Increase                in cash surrender value of life insurance            |   |                            | 167       |                            |   | 184 |   |   | 57 |   |   | 59 |   |
| Service                fees, charges and other operating                |   |                            | 1,123     |                            |   | 1,006 |   |   | 376 |   |   | 346 |   |
| Total                other income                                            |   |                            | 1,290     |                            |   | 1,321 |   |   | 433 |   |   | 467 |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| General,                administrative and other expense                     |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Employee                compensation and benefits                            |   |                            | 4,179     |                            |   | 5,070 |   |   | 1,332 |   |   | 1,957 |   |
| Occupancy                and equipment                                  |   |                            | 1,438     |                            |   | 1,410 |   |   | 503 |   |   | 509 |   |
| Federal                deposit insurance premiums                            |   |                            | 31        |                            |   | 33 |   |   | 11 |   |   | 11 |   |
| Franchise                taxes                                               |   |                            | 177       |                            |   | 394 |   |   | (21 | ) |   | 133 |   |
| Other                operating                                               |   |                            | 1,555     |                            |   | 1,550 |   |   | 530 |   |   | 576 |   |
| Total                general, administrative and other expense          |   |                            | 7,380     |                            |   | 8,457 |   |   | 2,355 |   |   | 3,186 |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Earnings                before income taxes (credits)                   |   |                            | 2,301     |                            |   | 1,359 |   |   | 792 |   |   | 145 |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Federal                incomes taxes (credits)                               |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Current                                                                      |   |                            | 608       |                            |   | 82 |   |   | 310 |   |   | (147 | ) |
| Deferred                                                                |   |                            | 53        |                            |   | 199 |   |   | (81 | ) |   | 121 |   |
| Total                federal income taxes (credits)                          |   |                            | 661       |                            |   | 281 |   |   | 229 |   |   | (26 | ) |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| NET                EARNINGS                                                  |   | **$**                           | **1,640** |                            | **$**  | **1,078** |   | **$** | **563** |   | **$** | **171** |   |
| EARNINGS                PER SHARE                                            |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Basic                                                                        |   | **$**                           | **0.51**  |                            | **$**  | **0.32** |   | **$** | **0.18** |   | **$** | **0.05** |   |
| Diluted                                                                 |   | **$**                           | **0.51**  |                            | **$**  | **0.32** |   | **$** | **0.18** |   | **$** | **0.05** |   |
|                                                                         |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| DIVIDENDS                PER SHARE                                           |   | **$**                           | **0.36**  |                            | **$**  | **0.36** |   | **$** | **0.12** |   | **$** | **0.12** |   |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF COMPREHENSIVE      INCOME**

|                                                                           |   | **Nine                months**  |      | **Three                months** |   |
|--------------------------------------------------------------------------------|--------|---------------------------------|-----------|---------------------------------|--------|
|                                                                           |   | **ended**                       |      | **ended**                       |   |
|                                                                           |   | **December                31,** |      | **December                31,** |   |
|                                                                           |   | **2006**                        |      | **2005**                        |   | **2006** |   | **2005** |   |
|                                                                           |   | (Unaudited)                     |      |
|                                                                           |   |                            |      |                            |   |   |   |   |   |
| Net                earnings                                                    |   | $                               | 1,640     |                            | $      | 1,078 |   | $ | 563 |   | $ | 171 |   |
|                                                                           |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income (loss):                              |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) on securities, net of related |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| taxes                (benefits) of $308, $(22), $83 and $(233) during the      |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| respective                periods                                              |   |                            | 598       |                            |   | (42 | ) |   | 162 |   |   | (452 | ) |
|                                                                           |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Comprehensive                income (loss)                                     |   | **$**                           | **2,238** |                            | **$**  | **1,036** |   | **$** | **725** |   | **$** | **(281** | **)** |
|                                                                           |   |                            |      |                            |   |   |   |   |   |   |   |   |   |
| Accumulated                comprehensive loss                                  |   | **$**                           | **(413**  | **)**                           | **$**  | **(834** | **)** | **$** | **(413** | **)** | **$** | **(834** | **)** |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                                                       |   | **2006**    |    | **2005** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|----------|--------|
|                                                                                                                                       |   | (Unaudited) |    |
|                                                                                                                                       |   |        |    |     |   |
| Cash                flows from operating activities:                                                                                       |   |        |    |     |   |   |   |
| Net                earnings for the period                                                                                                 |   | $           | 1,640   |     | $      | 1,078 |   |
| Adjustments                to reconcile net earnings to net cash provided by                                                               |   |        |    |     |   |   |   |
| operating                activities:                                                                                                       |   |        |    |     |   |   |   |
| Amortization                of discounts and premiums on loans,                                                                            |   |        |    |     |   |   |   |
| investments                and mortgage-backed securities - net                                                                            |   |        | (66     | )        |   | 384 |   |
| Amortization                of deferred loan origination fees                                                                              |   |        | (39     | )        |   | (110 | ) |
| Depreciation                and amortization                                                                                               |   |        | 528     |     |   | 504 |   |
| Amortization                of expense related to ESOP                                                                                     |   |        | 109     |     |   | 153 |   |
| Gain                on sale of loans                                                                                                       |   |        | -       |     |   | (17 | ) |
| Proceeds                due from bank-owned life insurance policy                                                                     |   |        | -       |     |   | (63 | ) |
| Proceeds                from sale of loans in the secondary market                                                                         |   |        | -       |     |   | 5,763 |   |
| Loans                originated for sale in the secondary market                                                                      |   |        | -       |     |   | (5,749 | ) |
| Provision                for losses on loans                                                                                          |   |        | 70      |     |   | - |   |
| Federal                Home Loan Bank stock dividends                                                                                 |   |        | (206    | )        |   | (173 | ) |
| Increase                (decrease) in cash due to changes in:                                                                              |   |        |    |     |   |   |   |
| Accrued                interest receivable on loans                                                                                        |   |        | (109    | )        |   | (420 | ) |
| Accrued                interest receivable on mortgage-backed securities                                                                   |   |        | (38     | )        |   | 152 |   |
| Accrued                interest receivable on investments and interest-bearing                deposits                                |   |        | 236     |     |   | 199 |   |
| Prepaid                expenses and other assets                                                                                           |   |        | 374     |     |   | 274 |   |
| Amortization                of expense related to intangibles                                                                              |   |        | 80      |     |   | 80 |   |
| Accrued                interest payable                                                                                                    |   |        | 91      |     |   | (38 | ) |
| Accounts                payable on mortgage loans serviced for others                                                                      |   |        | 66      |     |   | 136 |   |
| Other                liabilities                                                                                                           |   |        | (36     | )        |   | (21 | ) |
| Federal                income taxes                                                                                                        |   |        |    |     |   |   |   |
| Current                                                                                                                               |   |        | (279    | )        |   | 170 |   |
| Deferred                                                                                                                                   |   |        | 53      |     |   | 199 |   |
| Net                cash provided by operating activities                                                                                   |   |        | 2,474   |     |   | 2,501 |   |
|                                                                                                                                       |   |        |    |     |   |   |   |
| Cash                flows provided by (used in) investing activities:                                                                      |   |        |    |     |   |   |   |
| Purchase                of investment securities designated as available for sale                                                          |   |        | (1,101  | )        |   | (7,344 | ) |
| Purchase                of investment securities designated as held to maturity                                                            |   |        | -       |     |   | (50 | ) |
| Proceeds                from maturity of investment securities designated as held to                maturity                          |   |        | 2,708   |     |   | 1,168 |   |
| Proceeds                from sale of investment securities designated as held to maturity                                                  |   |        | 2,512   |     |   | - |   |
| Proceeds                from maturity of investment securities designated as available for                sale                             |   |        | 11,091  |     |   | 4,135 |   |
| Purchase                of mortgage-backed securities designated as available for sale                                                     |   |        | (15,584 | )        |   | (16,215 | ) |
| Principal                repayments on mortgage-backed securities designated as held to                maturity                            |   |        | 500     |     |   | 698 |   |
| Principal                repayments and sales of mortgage-backed securities designated as                available                for sale |   |        | 7,380   |     |   | 21,900 |   |
| Loan                principal repayments                                                                                                   |   |        | 38,643  |     |   | 24,082 |   |
| Loan                disbursements                                                                                                          |   |        | (44,114 | )        |   | (40,228 | ) |
| Purchase                of office premises and equipment - net                                                                        |   |        | (234    | )        |   | (246 | ) |
| Proceeds                from sale of real estate acquired through foreclosure                                                              |   |        | 156     |     |   | 163 |   |
| Increase                in cash surrender value of life insurance                                                                          |   |        | (167    | )        |   | (184 | ) |
| Net                cash provided by (used in) investing activities                                                                         |   |        | 1,790   |     |   | (12,121 | ) |
|                                                                                                                                       |   |        |    |     |   |   |   |
| Net                cash provided by (used in) operating and investing                activities                                            |   |        |    |     |   |   |   |
| (balance                carried forward)                                                                                                   |   |        | 4,264   |     |   | (9,620 | ) |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

|                                                                                                    |   | **2006**    |       | **2005** |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------|------------|----------|--------|
|                                                                                                    |   | (Unaudited) |       |
|                                                                                                    |   |        |       |     |   |
| Net                cash provided by (used in) operating and investing                activities         |   |        |       |     |   |   |   |
| (balance                brought forward)                                                                |   | $           | 4,264      |     | $      | (9,620 | ) |
|                                                                                                    |   |        |       |     |   |   |   |
| Cash                flows provided by (used in) financing activities:                                   |   |        |       |     |   |   |   |
| Net                increase in deposit accounts                                                         |   |        | 2,855      |     |   | 8,282 |   |
| Proceeds                from Federal Home Loan Bank advances                                            |   |        | 78,400     |     |   | 37,150 |   |
| Repayments                of Federal Home Loan Bank advances                                            |   |        | (76,650    | )        |   | (46,650 | ) |
| Advances                by borrowers for taxes and insurance                                            |   |        | 479        |     |   | 292 |   |
| Dividends                paid on common stock                                                           |   |        | (1,190     | )        |   | (1,216 | ) |
| Proceeds                from exercise of stock options                                                  |   |        | 602        |     |   | 367 |   |
| Tax                benefits from exercise of stock options                                         |   |        | -          |     |   | 27 |   |
| Purchase                of treasury shares                                                              |   |        | (1,993     | )        |   | (5,025 | ) |
| Net                cash provided by (used in) financing activities                                      |   |        | 2,503      |     |   | (6,773 | ) |
|                                                                                                    |   |        |       |     |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                     |   |        | 6,767      |     |   | (16,393 | ) |
|                                                                                                    |   |        |       |     |   |   |   |
| Cash                and cash equivalents at beginning of period                                         |   |        | 14,123     |     |   | 29,942 |   |
|                                                                                                    |   |        |       |     |   |   |   |
| Cash                and cash equivalents at end of period                                               |   | **$**       | **20,890** |     | **$**  | **13,549** |   |
|                                                                                                    |   |        |       |     |   |   |   |
|                                                                                                    |   |        |       |     |   |   |   |
| Supplemental                disclosure of cash flow information:                                        |   |        |       |     |   |   |   |
| Cash                paid during the period for:                                                         |   |        |       |     |   |   |   |
| Federal                income taxes                                                                     |   | **$**       | **830**    |     | **$**  | **325** |   |
|                                                                                                    |   |        |       |     |   |   |   |
| Interest                on deposits and borrowings                                                      |   | **$**       | **8,141**  |     | **$**  | **6,003** |   |
|                                                                                                    |   |        |       |     |   |   |   |
|                                                                                                    |   |        |       |     |   |   |   |
| Supplemental                disclosure of noncash investing activities:                                 |   |        |       |     |   |   |   |
| Transfers                from loans to real estate acquired through foreclosure                         |   | **$**       | **-**      |     | **$**  | **184** |   |
|                                                                                                    |   |        |       |     |   |   |   |
| Unrealized                gains (losses) on securities designated as available for                sale, |   |        |       |     |   |   |   |
| net                of related tax effects                                                               |   | **$**       | **598**    |     | **$**  | **(42** | **)** |
|                                                                                                    |   |        |       |     |   |   |   |
| Recognition                of mortgage servicing rights in accordance                                   |   |        |       |     |   |   |   |
| with                SFAS No. 140                                                                   |   | **$**       | **-**      |     | **$**  | **51** |   |
|                                                                                                    |   |        |       |     |   |   |   |
| Dividends                payable                                                                        |   | **$**       | **390**    |     | **$**  | **401** |   |

----

*Index*

**Wayne      Savings Bancshares, Inc. **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

*Critical      Accounting Policy *

*Use      of Estimates*
** **

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

----

*Index*

**Wayne      Savings Bancshares, Inc. **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|   |                                               |   | **For                the nine months ended** |          | **For                the three months ended** |   |
|--------|----------------------------------------------------|--------|----------------------------------------------|---------------|-----------------------------------------------|--------|
|   |                                               |   | **December                31,**              |          | **December                31,**               |   |
|   |                                               |   | **2006**                                     |          | **2005**                                      |   | **2006** |   | **2005** |   |
|   |                                               |   |                                         |          |                                          |   |   |   |   |   |
|   | Weighted-average                common shares      |   |                                         |          |                                          |   |   |   |   |   |   |   |   |   |
|   | outstanding                (basic)                 |   |                                         | 3,209,885     |                                          |   | 3,320,492 |   |   | 3,239,078 |   |   | 3,231,757 |   |
|   | Dilutive                effect of assumed exercise |   |                                         |          |                                          |   |   |   |   |   |   |   |   |   |
|   | of                stock options                    |   |                                         | 7,315         |                                          |   | 17,747 |   |   | 5,010 |   |   | 9,778 |   |
|   | Weighted-average                common shares      |   |                                         |          |                                          |   |   |   |   |   |   |   |   |   |
|   | outstanding                (diluted)               |   |                                         | **3,217,200** |                                          |   | **3,338,239** |   |   | **3,244,088** |   |   | **3,241,535** |   |

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

|   |                                              |   |                                 |        |                          |   |       |   |          |        |       |   |          |   |
|--------|---------------------------------------------------|--------|--------------------------------------|-------------|-------------------------------|--------|------------|--------|---------------|-------------|------------|--------|---------------|--------|
|   |                                              |   | **Nine                months ended** |        | **Year                ended** |   |
|   |                                              |   | **December                31,**      |        | **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                                         |   |                                 | (60,924     | )                             |   | 13.85      |   |          | (27,556     | )          |   | 13.32         |   |   | - |   |   | - |   |
|   | Forfeited                                         |   |                                 | (4,000      | )                             |   | 13.95      |   |          | (7,500      | )          |   | 13.95         |   |   | (163,265 | ) |   | 13.95 |   |
|   |                                              |   |                                 |        |                          |   |       |   |          |        |       |   |          |   |   |   |   |   |   |   |
|   | Outstanding                at end of period       |   |                                 | **114,224** |                          | **$**  | **13.95**  |   |          | **179,148** |       | **$**  | **13.92**     |   |   | **214,204** |   | **$** | **13.84** |   |
|   |                                              |   |                                 |        |                          |   |       |   |          |        |       |   |          |   |   |   |   |   |   |   |
|   | Options                exercisable at period-end  |   |                                 | **114,224** |                          | **$**  | **13.95**  |   |          | **179,148** |       | **$**  | **13.92**     |   |   | **214,204** |   | **$** | **13.84** |   |
|   |                                              |   |                                 |        |                          |   |       |   |          |        |       |   |          |   |   |   |   |   |   |   |
|   | Fair                value of options granted      |   |                                 |        |                          | **$**  | **-**      |   |          |        |       | **$**  | **-**         |   |   |   |   | **$** | **4.07** |   |

|   | Number                outstanding                                  | 114,224                   |
|--------|--------------------------------------------------------------------|---------------------------|
|   | Exercise                price on all remaining options outstanding | 13.95                     |
|   | Weighted-average                remaining contractual life         | 7.25                years |

| 5. | Recent                Accounting Developments |
|----|-----------------------------------------------|

|   | · | 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. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| 5. | Recent                Accounting Developments                (continued) |
|----|--------------------------------------------------------------------------|

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| 5. | Recent                Accounting Developments                (continued) |
|----|--------------------------------------------------------------------------|

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

**Average      Balance Sheet**

|                                                                     |   | For                the nine months ended December 31, |        |
|--------------------------------------------------------------------------|--------|-------------------------------------------------------|-------------|
|                                                                     |   | 2006                                                  |        | 2005 |   |
|                                                                     |   | Average                                               |        |   |   | Average |   | Average |   |   |   | Average |   |
|                                                                     |   | Balance                                               |        | Interest |   | Rate |   | Balance |   | Interest |   | Rate |   |
|                                                                     |   | (Dollars                in thousands)                 |        |
| **Interest-earning                assets**:                              |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                receivable, net1                               |   | $                                                     | 236,917     |   | $ | 11,924 |   |   | 6.71 | % | $ | 219,668 |   | $ | 10,351 |   |   | 6.28 | % |
| Mortgage-backed                                                          |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities2                                                         |   |                                                  | 62,637      |   |   | 2,327 |   |   | 4.95 |   |   | 54,229 |   |   | 1,462 |   |   | 3.59 |   |
| Investment                securities                                     |   |                                                  | 66,724      |   |   | 2,082 |   |   | 4.16 |   |   | 76,906 |   |   | 2,296 |   |   | 3.98 |   |
| Interest-bearing                deposits3                           |   |                                                  | 11,705      |   |   | 360 |   |   | 4.10 |   |   | 15,001 |   |   | 351 |   |   | 3.12 |   |
| Total                interest-                                           |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets                             |   |                                                  | 377,983     |   |   | 16,693 |   |   | 5.89 |   |   | 365,804 |   |   | 14,460 |   |   | 5.27 |   |
| Non-interest-earning                assets                          |   |                                                  | 22,781      |   |   |   |   |   |   |   |   | 25,103 |   |   |   |   |   |   |   |
|                                                                     |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                         |   | **$**                                                 | **400,764** |   |   |   |   |   |   |   | **$** | **390,907** |   |   |   |   |   |   |   |
|                                                                     |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest-bearing                liabilities:**                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                            |   | $                                                     | 331,637     |   |   | 7,194 |   |   | 2.89 |   | $ | 324,300 |   |   | 5,201 |   |   | 2.14 |   |
| Borrowings                                                          |   |                                                  | 30,247      |   |   | 1,038 |   |   | 4.58 |   |   | 27,340 |   |   | 764 |   |   | 3.73 |   |
| Total                interest-                                           |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| bearing                liabilities                                       |   |                                                  | 361,884     |   |   | 8,232 |   |   | 3.03 |   |   | 351,640 |   |   | 5,965 |   |   | 2.26 |   |
| Non-interest                bearing                                      |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                                                              |   |                                                  | 3,221       |   |   |   |   |   |   |   |   | 1,662 |   |   |   |   |   |   |   |
| Total                liabilities                                         |   |                                                  | 365,105     |   |   |   |   |   |   |   |   | 353,302 |   |   |   |   |   |   |   |
| Stockholders’                equity                           |   |                                                  | 35,659      |   |   |   |   |   |   |   |   | 37,605 |   |   |   |   |   |   |   |
| Total                liabilities and                                     |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders’                equity                           |   | **$**                                                 | **400,764** |   |   |   |   |   |   |   | **$** | **390,907** |   |   |   |   |   |   |   |
| Net                interest income                        |   |                                                  |        |   | **$** | **8,461** |   |   |   |   |   |   |   | **$** | **8,495** |   |   |   |   |
| Interest                rate spread4       |   |                                                  |        |   |   |   |   |   | **2.86** | **%** |   |   |   |   |   |   |   | **3.01** | **%** |
| Net                yield on interest-                                    |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets5             |   |                                                  |        |   |   |   |   |   | **2.98** | **%** |   |   |   |   |   |   |   | **3.10** | **%** |
| Ratio                of average interest-                                |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets to average                                 |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interest-bearing                liabilities          |   |                                                  |        |   |   |   |   |   | **104.45** | **%** |   |   |   |   |   |   |   | **104.03** | **%** |

| 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. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Index*

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

**Average      Balance Sheet - (continued)**

|                                                          |   | For                the three months ended December 31, |        |
|---------------------------------------------------------------|--------|--------------------------------------------------------|-------------|
|                                                          |   | 2006                                                   |        | 2005 |   |
|                                                          |   | Average                                                |        |   |   | Average |   | Average |   |   |   | Average |   |
|                                                          |   | Balance                                                |        | Interest |   | Rate |   | Balance |   | Interest |   | Rate |   |
|                                                          |   | (Dollars                in thousands)                  |        |
| **Interest-earning                assets**:                   |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                receivable, net1                         |   | $                                                      | 238,683     |   | $ | 4,048 |   |   | 6.78 | % | $ | 227,198 |   | $ | 3,626 |   |   | 6.38 | % |
| Mortgage-backed                                               |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities2                                              |   |                                                   | 66,485      |   |   | 846 |   |   | 5.09 |   |   | 50,747 |   |   | 483 |   |   | 3.81 |   |
| Investment                securities                          |   |                                                   | 61,419      |   |   | 627 |   |   | 4.08 |   |   | 75,893 |   |   | 763 |   |   | 4.02 |   |
| Interest-bearing                deposits3                |   |                                                   | 14,261      |   |   | 158 |   |   | 4.43 |   |   | 12,333 |   |   | 109 |   |   | 3.54 |   |
| Total                interest-                                |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets                                 |   |                                                   | 380,848     |   |   | 5,679 |   |   | 5.96 |   |   | 366,171 |   |   | 4,981 |   |   | 5.44 |   |
| Non-interest-earning                assets                    |   |                                                   | 22,782      |   |   |   |   |   |   |   |   | 24,973 |   |   |   |   |   |   |   |
|                                                          |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                   |   | **$**                                                  | **403,630** |   |   |   |   |   |   |   | **$** | **391,144** |   |   |   |   |   |   |   |
|                                                          |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest-bearing                liabilities:**              |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                      |   | $                                                      | 329,691     |   |   | 2,545 |   |   | 3.09 |   | $ | 326,088 |   |   | 1,855 |   |   | 2.28 |   |
| Borrowings                                               |   |                                                   | 34,586      |   |   | 410 |   |   | 4.74 |   |   | 27,551 |   |   | 262 |   |   | 3.80 |   |
| Total                interest-                                |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| bearing                liabilities                            |   |                                                   | 364,277     |   |   | 2,955 |   |   | 3.24 |   |   | 353,639 |   |   | 2,117 |   |   | 2.39 |   |
| Non-interest                bearing                           |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                   |   |                                                   | 3,838       |   |   |   |   |   |   |   |   | 1,603 |   |   |   |   |   |   |   |
| Total                liabilities                              |   |                                                   | 368,115     |   |   |   |   |   |   |   |   | 355,242 |   |   |   |   |   |   |   |
| Stockholders’                equity                |   |                                                   | 35,515      |   |   |   |   |   |   |   |   | 35,902 |   |   |   |   |   |   |   |
| Total                liabilities and                          |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders’                equity                |   | **$**                                                  | **403,630** |   |   |   |   |   |   |   | **$** | **391,144** |   |   |   |   |   |   |   |
| Net                interest income                       |   |                                                   |        |   | **$** | **2,724** |   |   |   |   |   |   |   | **$** | **2,864** |   |   |   |   |
| Interest                rate spread4           |   |                                                   |        |   |   |   |   |   | **2.72** | **%** |   |   |   |   |   |   |   | **3.05** | **%** |
| Net                yield on interest-                         |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets5                      |   |                                                   |        |   |   |   |   |   | **2.86** | **%** |   |   |   |   |   |   |   | **3.13** | **%** |
| Ratio                of average interest-                     |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets to average                      |   |                                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interest-bearing                liabilities    |   |                                                   |        |   |   |   |   |   | **104.55** | **%** |   |   |   |   |   |   |   | **103.54** | **%** |

| 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. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

|                                                    |   | **December                31, 2006**  |        | **March                31, 2006** |   |
|---------------------------------------------------------|--------|---------------------------------------|-------------|-----------------------------------|--------|
|                                                    |   | (Dollars                in thousands) |        |
| Mortgage                loans:                          |   |                                  |        |                              |   |   |   |   |   |   |   |   |   |
| One-                to four-family residential(1)       |   | $                                     | 145,107     |                              |   | 59.33 | % | $ | 149,134 |   |   | 62.40 | % |
| Residential                construction loans           |   |                                  | 3,306       |                              |   | 1.35 |   |   | 4,675 |   |   | 1.96 |   |
| Multi-family                residential                 |   |                                  | 7,652       |                              |   | 3.13 |   |   | 7,930 |   |   | 3.32 |   |
| Non-residential                real estate/land(2)      |   |                                  | 58,911      |                              |   | 24.09 |   |   | 50,778 |   |   | 21.25 |   |
| Total                mortgage loans                     |   |                                  | 214,976     |                              |   | 87.90 |   |   | 212,517 |   |   | 88.93 |   |
| Other                loans:                             |   |                                  |        |                              |   |   |   |   |   |   |   |   |   |
| Consumer                loans(3)                   |   |                                  | 5,435       |                              |   | 2.22 |   |   | 4,901 |   |   | 2.05 |   |
|  Commercial                business loans     |   |                                  | 24,153      |                              |   | 9.88 |   |   | 21,550 |   |   | 9.02 |   |
| Total                other loans                   |   |                                  | 29,588      |                              |   | 12.10 |   |   | 26,451 |   |   | 11.07 |   |
| Total                loans before net items             |   |                                  | 244,564     |                              |   | **100.00** | **%** |   | 238,968 |   |   | **100.00** | **%** |
| Less:                                                   |   |                                  |        |                              |   |   |   |   |   |   |   |   |   |
| Loans                in process                         |   |                                  | 1,892       |                              |   |   |   |   | 1,729 |   |   |   |   |
| Deferred                loan origination fees           |   |                                  | 431         |                              |   |   |   |   | 443 |   |   |   |   |
| Allowance                for loan losses           |   |                                  | 1,490       |                              |   |   |   |   | 1,484 |   |   |   |   |
| Total                loans receivable, net              |   | **$**                                 | **240,751** |                              |   |   |   | **$** | **235,312** |   |   |   |   |
| Mortgage-backed                securities, net(4)  |   | **$**                                 | **63,776**  |                              |   |   |   | **$** | **55,731** |   |   |   |   |

| (1) | Includes                equity loans collateralized by second mortgages in the aggregate                amount of                $19.9 million and $20.9 million as of December 31, 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 $197,000 and $674,000 as of December 31, 2006 and March                31,                2006, respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes                second mortgage loans of $449,000 and $783,000 as of December 31,                2006 and                March 31, 2006, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)  | Includes              mortgage-backed securities designated as available for              sale.  |
|-----------|-------------------------------------------------------------------------------------------------------|

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

|                                                          |   | **December                31,**       |     | **March                31,** |   |
|---------------------------------------------------------------|--------|---------------------------------------|----------|------------------------------|--------|
|                                                          |   | **2006**                              |     | **2006**                     |   |
|                                                          |   | (Dollars                in thousands) |     |
| Past                due loans 30-89 days:                     |   |                                  |     |                         |   |   |   |
| Mortgage                loans:                                |   |                                  |     |                         |   |   |   |
| One-                to four-family residential                |   | $                                     | 374      |                         | $      | 553 |   |
| Nonresidential                                                |   |                                  | -        |                         |   | - |   |
| Land                                                          |   |                                  | -        |                         |   | - |   |
| Non-mortgage                loans:                            |   |                                  |     |                         |   |   |   |
| Commercial                business loans                      |   |                                  | 59       |                         |   | 72 |   |
| Consumer                loans                                 |   |                                  | 8        |                         |   | 1 |   |
|                                                          |   | **$**                                 | **441**  |                         | **$**  | **626** |   |
|                                                          |   |                                  |     |                         |   |   |   |
| Non-performing                loans:                          |   |                                  |     |                         |   |   |   |
| Mortgage                loans:                                |   |                                  |     |                         |   |   |   |
| One-                to four-family residential                |   |                                  | 815      |                         |   | 725 |   |
| All                other mortgage loans                       |   |                                  | -        |                         |   | - |   |
| Non-mortgage                loans:                            |   |                                  |     |                         |   |   |   |
| Commercial                business loans                      |   |                                  | -        |                         |   | 47 |   |
| Consumer                                                      |   |                                  | -        |                         |   | - |   |
| Total                non-performing loans                     |   |                                  | 815      |                         |   | 772 |   |
| Total                real estate acquired through foreclosure |   |                                  | -        |                         |   | 156 |   |
| Total                non-performing assets                    |   | **$**                                 | **815**  |                         | **$**  | **928** |   |
|                                                          |   |                                  |     |                         |   |   |   |
| Total                non-performing loans to net              |   |                                  |     |                         |   |   |   |
| loans                receivable                               |   |                                  | **0.34** | **%**                        |   | **0.33** | **%** |
| Total                non-performing loans to total assets     |   |                                  | **0.20** | **%**                        |   | **0.19** | **%** |
| Total                non-performing assets to total assets    |   |                                  | **0.20** | **%**                        |   | **0.23** | **%** |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

|                                                            |  **For                the nine months ended** | **For                the year ended** |        |
|-----------------------------------------------------------------|----------------------------------------------------|---------------------------------------|-------------|
|                                                            |                                               | **December                31, 2006**  |        | **March                31, 2006** |   |
|                                                            |                                               | (Dollars                in thousands) |        |
|                                                            |                                               |                                  |        |   |   |
| Loans                receivable, net                            |                                               | **$**                                 | **240,751** |   | **$** | **235,312** |   |
| Average                loans receivable, net          |                                               | **$**                                 | **236,917** |   | **$** | **222,944** |   |
| Allowance                balance (at beginning of period)       |                                               | $                                     | 1,484       |   | $ | 1,374 |   |
| Charge-offs:                                                    |                                               |                                  |        |   |   |   |   |
| Mortgage                loans:                                  |                                               |                                  |        |   |   |   |   |
| One-                to four-family                              |                                               |                                  | (46         | ) |   | (73 | ) |
| Residential                construction                         |                                               |                                  | -           |   |   | - |   |
| Multi-family                residential                    |                                               |                                  | -           |   |   | - |   |
| Non-residential                real estate and land   |                                               |                                  | (15         | ) |   | - |   |
| Other                loans:                                     |                                               |                                  |        |   |   |   |   |
| Consumer                                                   |                                               |                                  | (21         | ) |   | (75 | ) |
| Commercial                                                 |                                               |                                  | -           |   |   | (10 | ) |
| Gross                charge-offs                                |                                               |                                  | (82         | ) |   | (158 | ) |
| Recoveries:                                                     |                                               |                                  |        |   |   |   |   |
| Mortgage                loans:                                  |                                               |                                  |        |   |   |   |   |
| One-                to four-family                              |                                               |                                  | 1           |   |   | 14 |   |
| Residential                construction                         |                                               |                                  | -           |   |   | - |   |
| Multi-family                residential                    |                                               |                                  | -           |   |   | - |   |
| Non-residential                real estate and land             |                                               |                                  | -           |   |   | - |   |
| Other                loans:                                     |                                               |                                  |        |   |   |   |   |
| Consumer                                              |                                               |                                  | 17          |   |   | 35 |   |
| Commercial                                                 |                                               |                                  | -           |   |   | 8 |   |
| Gross                recoveries                       |                                               |                                  | 18          |   |   | 57 |   |
| Net                charge-offs                             |                                               |                                  | (64         | ) |   | (101 | ) |
| Provision                charged to operations                  |                                               |                                  | 70          |   |   | 211 |   |
| Allowance                for loans losses balance (at end       |                                               |                                  |        |   |   |   |   |
| of                period)                                  |                                               | **$**                                 | **1,490**   |   | **$** | **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                       |                                               |                                  | **0.03**    | **%** |   | **0.05** | **%** |
| Ratio                of allowance for loan losses to non-       |                                               |                                  |        |   |   |   |   |
| performing                loans at end of period           |                                               |                                  | **182.82**  | **%** |   | **192.23** | **%** |

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

**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** |
|---------------------------|--------------------------------------------|

|   | (a) | Evaluation                of disclosure controls and                procedures. |
|--------|-----|---------------------------------------------------------------------------------|

|   | (b) | Changes                in internal controls. |
|--------|-----|----------------------------------------------|

----

*Index*

**Wayne      Savings Bancshares, Inc.**

PART      II

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

| ITEM                1A. | Risk                Factors |
|-------------------------|-----------------------------|

| 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 December 31,                  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 |
|   |                               |                       |                                                   |                            |                                 |
|   | October                1-31, 2006  | -      | $                 -      | -           | 84,602                               |
|   | November                1-30, 2006 | 40,000                     | $14.76                                                 | 40,000                          | 44,602                               |
|   | December                1-31, 2006 | 38,800                     | $14.61                                                 | 38,800                          | 5,802                                |

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

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

----

*Index*

**Wayne      Savings Bancshares, Inc.**

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

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

----

*Index*

**SIGNATURES**

|   |                                                            |   |   |                                                   |
|--------|-----------------------------------------------------------------|--------|--------|--------------------------------------------------------|
| Date:  |      February                  8, 2007 |   | By:    | /s/                  Phillip E. Becker                 |
|   |                                                            |   |   | Phillip                  E. Becker                     |
|   |                                                            |   |   | President                  and Chief Executive Officer |
|   |                                                            |   |   |                                                   |
|   |                                                            |   |   |                                                   |
|   |                                                            |   |   |                                                   |
| Date:  |     February                  8, 2007       |   | By:    | /s/                  H. Stewart Fitz Gibbon III        |
|   |                                                            |   |   | H.                  Stewart Fitz Gibbon III            |
|   |                                                            |   |   | Executive                  Vice President and          |
|   |                                                            |   |   | Chief                  Financial Officer               |