FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20552

(Mark One)

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

For the quarterly period ended         June 30, 2001
                               ---------------------------------------------

                                       OR

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

For the transition period from ____________ to _______________

Commission File No. 0-23433

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

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

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

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

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

Yes   X                                 No ___
      ---

As of August 10, 2001, the latest practicable date, 2,638,835 shares of the
registrant's common stock, $1.00 par value, were issued and outstanding.






                                       1
<PAGE>


                         Wayne Savings Bancshares, Inc.

                                      INDEX

                                                                          Page

PART I  - FINANCIAL INFORMATION

          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

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


PART II - OTHER INFORMATION                                                  15

SIGNATURES                                                                   16



























                                       2
<PAGE>


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

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                        (In thousands, except share data)
                                                                                                June 30,      March 31,
         ASSETS                                                                                     2001           2001
<S>                                                                                                <C>             <C>
Cash and due from banks                                                                         $  2,583       $  2,011
Federal funds sold                                                                                 6,000          6,000
Interest-bearing deposits in other financial institutions                                         18,260         12,891
                                                                                                 -------        -------
         Cash and cash equivalents                                                                26,843         20,902

Certificates of deposit in other financial institutions                                               -           5,700
Investment securities - at amortized cost, approximate
  market value of $12,277 and $13,774 as of June 30, 2001
  and March 31, 2001                                                                              12,123         13,641
Mortgage-backed securities available for sale - at market                                          2,666          2,911
Mortgage-backed securities - at cost, approximate
  market value of $4,492 and $5,694 as of June 30, 2001
  and March 31, 2001                                                                               4,489          5,702
Loans receivable - net                                                                           254,837        246,619
Loans held for sale - at lower of cost or market                                                      -             861
Office premises and equipment - at depreciated cost                                                8,882          8,607
Real estate acquired through foreclosure                                                              19            124
Federal Home Loan Bank stock - at cost                                                             3,612          3,510
Accrued interest receivable on loans                                                               1,275          1,328
Accrued interest receivable on mortgage-backed securities                                             39             42
Accrued interest receivable on investments and interest-bearing deposits                             194            203
Prepaid expenses and other assets                                                                  2,762          1,624
                                                                                                 -------        -------

         Total assets                                                                           $317,741       $311,774
                                                                                                 =======        =======

         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                                        $284,384       $277,706
Advances from the Federal Home Loan Bank                                                           6,000          6,000
Advances by borrowers for taxes and insurance                                                        322            827
Accrued interest payable                                                                             309            245
Accounts payable on mortgage loans serviced for others                                               246            234
Other liabilities                                                                                    437            991
Accrued federal income taxes                                                                         234             31
Deferred federal income taxes                                                                        488            455
                                                                                                 -------        -------
         Total liabilities                                                                       292,420        286,489

Stockholders' equity
  Common stock (20,000,000 shares of $1.00 par value authorized;
    2,638,835 shares issued at June 30, 2001 and March 31, 2001)                                   2,639          2,639
  Additional paid-in capital                                                                      14,436         14,436
  Retained earnings - substantially restricted                                                     9,351          9,180
  Less:  67,742 and 57,042 shares of treasury stock - at cost                                     (1,143)        (1,003)
  Accumulated other comprehensive income, unrealized gains on
    securities available for sale, net of related tax effects                                         38             33
                                                                                                 -------        -------
    Total stockholders' equity                                                                    25,321         25,285
                                                                                                 -------        -------

    Total liabilities and stockholders' equity                                                  $317,741       $311,774
                                                                                                 =======        =======
</TABLE>




                                       3
<PAGE>


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

                       CONSOLIDATED STATEMENTS OF EARNINGS

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

                                                                                           2001              2000
<S>                                                                                        <C>               <C>
Interest income
  Loans                                                                                  $4,796            $4,595
  Mortgage-backed securities                                                                131               164
  Investment securities                                                                     207               361
  Interest-bearing deposits and other                                                       285               217
                                                                                          -----             -----
         Total interest income                                                            5,419             5,337

Interest expense
  Deposits                                                                                3,262             3,045
  Borrowings                                                                                 82               116
                                                                                          -----             -----
         Total interest expense                                                           3,344             3,161
                                                                                          -----             -----

         Net interest income                                                              2,075             2,176

Provision for losses on loans                                                                 2                51
                                                                                          -----             -----

         Net interest income after provision for
           losses on loans                                                                2,073             2,125

Other income
  Gain on sale of loans                                                                      76                20
  Service fees, charges and other operating                                                 288               198
                                                                                          -----             -----
         Total other income                                                                 364               218

General, administrative and other expense
  Employee compensation and benefits                                                      1,055             1,066
  Occupancy and equipment                                                                   330               329
  Federal deposit insurance premiums                                                         12                18
  Franchise taxes                                                                            67                50
  Other operating                                                                           402               441
                                                                                          -----             -----
         Total general, administrative and other expense                                  1,866             1,904
                                                                                          -----             -----

         Earnings before income taxes                                                       571               439

Federal income taxes
  Current                                                                                   165               148
  Deferred                                                                                   30                 1
                                                                                          -----             -----
         Total federal income taxes                                                         195               149
                                                                                          -----             -----

         NET EARNINGS                                                                    $  376            $  290
                                                                                          =====             =====

         EARNINGS PER SHARE

            Basic                                                                          $.15              $.11
                                                                                            ===               ===

            Diluted                                                                        $.15              $.11
                                                                                            ===               ===
</TABLE>





                                       4
<PAGE>


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

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

                                                                                                 2001              2000
<S>                                                                                               <C>              <C>
Net earnings                                                                                     $376              $290

Other comprehensive income, net of tax:
  Unrealized holding gains on securities during the period,
    net of tax of $3 and $5 in 2001 and 2000, respectively                                          5                10
                                                                                                  ---               ---

Comprehensive income                                                                             $381              $300
                                                                                                  ===               ===

Accumulated comprehensive income (loss)                                                          $ 38              $(26)
                                                                                                  ===               ===
</TABLE>





































                                       5
<PAGE>


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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

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

                                                                                                 2001              2000
<S>                                                                                              <C>                <C>
Cash flows from operating activities:
  Net earnings for the period                                                                 $   376           $   290
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of discounts and premiums on loans,
      investments and mortgage-backed securities - net                                              6                 4
    Amortization of deferred loan origination fees                                                (94)              (44)
    Depreciation and amortization                                                                 113               146
    Loans originated for sale in the secondary market                                          (5,522)           (2,421)
    Proceeds from sale of loans                                                                 6,395             2,119
    (Gain) loss on sale of loans                                                                  (12)                1
    Provision for losses on loans                                                                   2                51
    Federal Home Loan Bank stock dividends                                                        (64)              (60)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable on loans                                                         53               (51)
      Accrued interest receivable on mortgage-backed securities                                     3               (12)
      Accrued interest receivable on investments and interest-bearing deposits                      9                 3
      Prepaid expenses and other assets                                                        (1,138)              (36)
      Accrued interest payable                                                                     64                55
      Accounts payable on mortgage loans serviced for others                                       12                15
      Other liabilities                                                                          (554)              212
      Federal income taxes
        Current                                                                                   203               162
        Deferred                                                                                   30                 1
                                                                                               ------            ------
          Net cash provided by (used in) operating activities                                    (118)              435

Cash flows provided by (used in) investing activities:
  Proceeds from maturity of investment securities                                               1,517                58
  Purchase of mortgage-backed securities                                                           -             (1,000)
  Principal repayments on mortgage-backed securities                                            1,461             1,060
  Loan principal repayments                                                                    16,533             9,304
  Loan disbursements                                                                          (24,566)          (12,689)
  Purchase of office premises and equipment - net                                                (388)             (445)
  Proceeds from sale of real estate acquired through foreclosure                                   12                -
  Decrease in certificates of deposit in other financial institutions                           5,700             4,000
  Purchase of Federal Home Loan Bank stock                                                        (38)               -
                                                                                               ------            ------
          Net cash provided by investing activities                                               231               288
                                                                                               ------            ------

          Net cash provided by operating and investing activities
            (balance carried forward)                                                             113               723
                                                                                               ------            ------
</TABLE>







                                       6
<PAGE>


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

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

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

                                                                                                   2001            2000
<S>                                                                                                <C>              <C>
          Net cash provided by operating and investing activities
            (balance brought forward)                                                           $   113         $   723

Cash flows provided by (used in) financing activities:
  Net increase (decrease) in deposit accounts                                                     6,678            (117)
  Proceeds from Federal Home Loan Bank advances                                                   5,000           2,000
  Repayment of Federal Home Loan Bank advances                                                   (5,000)         (4,000)
  Advances by borrowers for taxes and insurance                                                    (505)              2
  Proceeds from exercise of stock options                                                            -               27
  Dividends paid on common stock                                                                   (205)           (200)
  Purchase of treasury shares                                                                      (140)             -
                                                                                                 ------          ------
          Net cash provided by (used in) financing activities                                     5,828          (2,288)
                                                                                                 ------          ------

Net increase (decrease) in cash and cash equivalents                                              5,941          (1,565)

Cash and cash equivalents at beginning of period                                                 20,902          14,309
                                                                                                 ------          ------

Cash and cash equivalents at end of period                                                      $26,843         $12,744
                                                                                                 ======          ======

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
    Federal income taxes                                                                        $    20         $    -
                                                                                                 ======          ======

    Interest on deposits and borrowings                                                         $ 3,280         $ 3,106
                                                                                                 ======          ======

Supplemental disclosure of noncash investing activities:
  Unrealized gains on securities designated as
    available for sale, net of related tax effects                                              $     5         $    10
                                                                                                 ======          ======

  Recognition of mortgage servicing rights in accordance
    with SFAS No. 140                                                                           $    64         $    21
                                                                                                 ======          ======

  Issuance of mortgage loan upon sale of real estate acquired
    through foreclosure                                                                         $    93         $    -
                                                                                                 ======          ======
</TABLE>






                                       7
<PAGE>


                         Wayne Savings Bancshares, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                For the three months ended June 30, 2001 and 2000


1.       Basis of Presentation

         The accompanying unaudited consolidated financial statements were
         prepared in accordance with instructions for Form 10-QSB and,
         therefore, do not include information or footnotes necessary for a
         complete presentation of financial position, results of operations and
         cash flows in conformity with accounting principles generally accepted
         in the United States of America. Accordingly, these financial
         statements should be read in conjunction with the financial statements
         and notes thereto of Wayne Savings Bancshares, Inc. included in the
         Annual Report on Form 10-KSB for the year ended March 31, 2001.

         In the opinion of management, all adjustments (consisting only of
         normal recurring accruals) which are necessary for a fair presentation
         of the financial statements have been included. The results of
         operations for the three-month period ended June 30, 2001 are not
         necessarily indicative of the results which may be expected for the
         entire fiscal year.

2.       Principles of Consolidation

         The accompanying consolidated financial statements include Wayne
         Savings Bancshares, Inc. (the "Company") and its wholly-owned
         subsidiary, Wayne Savings Community Bank ("Wayne Savings" or the
         "Bank"). In fiscal 2000 the Bank formed a new federal savings bank
         subsidiary in North Canton, Ohio named Village Savings Bank, F.S.B.
         ("Village"), hereinafter collectively referred to as "the Banks". Wayne
         Savings Community Bank has nine banking locations in Wayne, Holmes,
         Ashland, and Medina counties, Ohio, in addition to its Village Savings
         Bank, F.S.B. subsidiary serving Stark county. All significant
         intercompany transactions and balances have been eliminated in the
         consolidation.

3.       Earnings Per Share

         Basic earnings per common share is computed based upon the
         weighted-average number of common shares outstanding during the period.
         Diluted earnings per common share include the dilutive effect of
         additional potential common shares issuable under the Company's stock
         option plan. The computations were as follows:











                                       8
<PAGE>


                         Wayne Savings Bancshares, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                For the three months ended June 30, 2001 and 2000


3.       Earnings Per Share (continued)
<TABLE>
<CAPTION>

         For the three months ended June 30                          2001                  2000
<S>                                                                 <C>                   <C>
         Weighted average common shares
           outstanding (basic)                                  2,574,113             2,603,644

         Dilutive effect of assumed exercise
           of stock options                                         6,454                14,974
                                                                ---------             ---------

         Weighted average common shares
           outstanding (diluted)                                2,580,567             2,618,618
                                                                =========             =========
</TABLE>

4.   Effects of Recent Accounting Pronouncements

              In September 2000, the Financial Accounting Standards Board
     ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
     140 "Accounting for Transfers and Servicing of Financial Assets and
     Extinguishments of Liabilities," which revises the standards for accounting
     for securitizations and other transfers of financial assets and collateral
     and requires certain disclosures, but carries over most of the provisions
     of SFAS No. 125 without reconsideration. SFAS No. 140 is effective for
     transfers and servicing of financial assets and extinguishments of
     liabilities occurring after March 31, 2001. The Statement is effective for
     recognition and reclassification of collateral and for disclosures relating
     to securitization transactions and collateral for fiscal years ending after
     December 15, 2000. Management adopted SFAS No. 140 effective April 1, 2001,
     as required, without material effect on the Company's financial position or
     results of operations.

              In June 2001, the FASB issued SFAS No. 141 "Business
     Combinations," which requires that all business combinations initiated
     after June 30, 2001 be accounted for using the purchase method. The
     pooling-of-interests method of accounting is prohibited except for
     combinations initiated before June 30, 2001. The remaining provisions of
     SFAS No. 141 relating to business combinations accounted for by the
     purchase method, including identification of intangible assets, accounting
     for negative goodwill, financial statement presentation and disclosure, are
     effective for combinations completed after June 30, 2001. SFAS No. 141 will
     have no effect on the Company's financial position or results of
     operations.






                                       9
<PAGE>


                         Wayne Savings Bancshares, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                For the three months ended June 30, 2001 and 2000


4.   Effects of Recent Accounting Pronouncements (continued)

              In June 2001, the FASB issued SFAS No. 142 "Goodwill and
     Intangible Assets," which prescribes accounting for all purchased goodwill
     and intangible assets. Pursuant to SFAS No. 142, acquired goodwill is not
     amortized, but is tested for impairment at the reporting unit level
     annually and whenever an impairment indicator arises. All goodwill should
     be assigned to reporting units that are expected to benefit from the
     goodwill. When an entity reorganizes its reporting structure, goodwill
     should be reallocated to reporting units based on the relative fair values
     of the units. Goodwill impairment should be tested with a two-step
     approach. First, the fair value of the reporting unit should be compared to
     its carrying value, including goodwill. If the reporting unit's carrying
     value exceeds its fair value, then any goodwill impairment should be
     measured as the excess of goodwill's carrying value over its implied fair
     value. The implied fair value of goodwill should be calculated in the same
     manner as goodwill is calculated for a business combination, using the
     reporting unit's fair value as the "purchase price." Therefore, goodwill's
     implied fair value will be the excess of the "purchase price" over the
     amounts allocated to assets, including unrecognized intangible assets, and
     liabilities of the reporting unit. Goodwill impairment losses should be
     reported in the income statement as a separate line item within operations,
     except for such losses included in the calculation of a gain or loss from
     discontinued operations.

              An acquired intangible asset, other than goodwill, should be
     amortized over its useful economic life. The useful life of an intangible
     asset is indefinite if it extends beyond the foreseeable horizon. If an
     asset's life is indefinite, the asset should not be amortized until the
     life is determined to be finite. Intangible assets being amortized should
     be tested for impairment in accordance with SFAS No. 121. Intangible assets
     not being amortized should be tested for impairment, annually and whenever
     there are indicators of impairment, by comparing the asset's fair value to
     its carrying amount.

              SFAS No. 142 is effective for fiscal years beginning after
     December 15, 2001. Early adoption is permitted for companies with fiscal
     years beginning after March 15, 2001, but only if the first quarter
     financial statements have not previously been issued. Calendar year end
     companies may not adopt early. SFAS No. 142 will have no effect on the
     Company's financial position or results of operations.

              The foregoing discussion of the effects of recent accounting
     pronouncements contains forward-looking statements that involve risks and
     uncertainties. Changes in economic circumstances could cause the effects of
     the accounting pronouncements to differ from managements foregoing
     assessment.



                                       10
<PAGE>


                         Wayne Savings Bancshares, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                For the three months ended June 30, 2001 and 2000


5.   Forward-Looking Statements

              This quarterly report on Form 10-QSB contains forward-looking
     statements. For this purpose, any statements contained herein that are not
     statements of historical fact may be deemed to be forward-looking
     statements. Without limiting the foregoing, the words "believes",
     "anticipates", "plans", "expects" and similar expressions are intended to
     identify forward-looking statements. There are a number of important
     factors that could cause the Company's actual results to differ materially
     from those contemplated by such forward-looking statements. These important
     factors include, without limitation, the Bank's continued ability to
     originate quality loans, fluctuation of interest rates, real estate market
     conditions in the Bank's lending areas, general and local economic
     conditions, the continued ability of the Banks to attract and retain
     deposits, the Company's ability to control costs, new accounting
     pronouncements and changing regulatory requirements.


























                                       11
<PAGE>


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


Discussion of Financial Condition Changes from March 31, 2001 to June 30, 2001

At June 30, 2001, the Company had total assets of $317.7 million, an increase of
$6.0 million, or 1.9%, over March 31, 2001. The increase was funded primarily by
a $6.7 million increase in deposits.

Cash and due from banks, federal funds sold, interest-bearing deposits,
certificates of deposit and investment securities totaled approximately $39.0
million at June 30, 2001, a decrease of approximately $1.3 million, or 3.2%,
from March 31, 2001 levels. Regulatory liquidity approximated 17.9% at June 30,
2001, compared to 17.5% at March 31, 2001. During the quarter ended June 30,
2001, excess liquidity was used to fund loan originations.

Mortgage-backed securities decreased by $1.5 million, or 16.9%, to $7.2 million
at June 30, 2001. This decrease was primarily due to principal repayments on
mortgage-backed securities totaling $1.5 million for the three months ended June
30, 2001.

Loans receivable increased by approximately $7.4 million, or 3.0%, over the
March 31, 2001 total. This increase resulted from loan disbursements of $30.1
million, which were partially offset by principal repayments of $16.5 million
and sales of $6.4 million. The majority of loan disbursements during the 2001
quarter were comprised of loans secured by one- to four-family residential real
estate. The allowance for loan losses totaled $656,000 at June 30, 2001,
compared to $655,000 at March 31, 2001. Nonperforming loans totaled $358,000 at
June 30, 2001 and $515,000 at March 31, 2001. The allowance for loan losses
totaled 183.2% and 127.2% of nonperforming loans at June 30, 2001 and March 31,
2001, respectively. Although management believes that its allowance for loan
losses at June 30, 2001, is adequate based upon the available facts and
circumstances, there can be no assurance that additions to such allowance will
not be necessary in future periods, which would adversely affect the Company's
results of operations.

Deposits increased by approximately $6.7 million, or 2.4%, during the quarter,
to a total of $284.4 million at June 30, 2001. This growth was mainly due to the
impact of the Bank's use of official checks program beginning April 1, 2001 and
competitive passbook rates.

Stockholders' equity increased by approximately $36,000, or 0.1%, due primarily
to net earnings of $376,000, partially offset by dividends paid totaling
$205,000 and purchases of treasury shares totaling $140,000.

The Banks are subject to capital standards, which generally require the
maintenance of regulatory capital sufficient to meet each of three tests, the
tangible capital requirement, the core capital requirement and the risk-based
capital requirement. At June 30, 2001, both Wayne Savings' and Village's
regulatory capital exceeded all minimum capital requirements.

Comparison of Operating  Results for the Three Month Periods Ended June 30, 2001
and 2000

Net earnings totaled $376,000 for the three months ended June 30, 2001, compared
to net earnings of $290,000 for the same period in 2000, an increase of $86,000,
or 29.7%. The increase in net earnings resulted primarily from an increase in
other income of $146,000, a decrease of $49,000 in the provision for losses on
loans and a $38,000 decrease in general, administrative and other expenses,
which were partially offset by a decrease in net interest income of $101,000 and
an increase in federal income taxes of $46,000.



                                       12
<PAGE>


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


Comparison of Operating Results for the Three Month Periods Ended June 30, 2001
and 2000 (continued)

Net Interest Income

Interest on loans and mortgage-backed securities totaled $4.9 million for the
three months ended June 30, 2001, an increase of $168,000, or 3.5%, over the
same period in 2000. The increase can be primarily attributed to a $1.9 million,
or .1%, increase in the average balance of loans and mortgage-backed securities
outstanding and an increase in the average yield of four basis points, from
7.62% for the three months ended June 30, 2000, to 7.66% for the three months
ended June 30, 2001.

Interest on investments and interest-bearing deposits decreased by $86,000, or
14.9%, during the three months ended June 30, 2001, as compared to the same
period in 2000, as a result of a decrease in the average yield to 4.76% for the
three months ended June 30, 2001, from 6.83% for the period ending June 30,
2000, partially offset by an increase in the average balance of approximately
$7.5 million year to year.

Interest expense on deposits and borrowings increased by $183,000, or 5.8%,
during the three months ended June 30, 2001, over the same period in 2000. The
increase can be primarily attributed to a $3.7 million, or 1.4%, increase in the
average balance of interest-bearing liabilities and an increase in the cost of
deposits of 23 basis points to 4.93% from 4.70%.

As a result of the foregoing changes in interest income and interest expense,
net interest income decreased by $101,000, or 4.6%, during the three months
ended June 30, 2001, as compared to the same period in 2000. The Company's
interest rate spread decreased from 2.82% at June 30, 2000 to 2.33% at June 30,
2001.

Provision for Losses on Loans

A provision for losses on loans is charged to earnings to bring the total
allowance for loan losses to a level considered appropriate by management based
on historical experience, the volume and type of lending conducted by the
Company, the status of past due principal and interest payments, general
economic conditions, particularly as such conditions relate to the Company's
market area, and other factors related to the collectibility of the Company's
loan portfolio. As a result of such analysis, management recorded a $2,000
provision for losses on loans during the three months ended June 30, 2001,
primarily due to growth in the loan portfolio, coupled with management's
assessment of the collateral securing nonperforming loans. There can be no
assurance that the loan loss allowance of the Company will be adequate to cover
losses on nonperforming assets in the future.

Other Income

Other income totaled $364,000 for the three months ended June 30, 2001, an
increase of $146,000, or 67.0%, over the comparable 2000 period. This increase
was due primarily to a $90,000, or 45.5%, increase in service fees, charges and
other operating income, coupled with a $56,000, or 280.0%, increase in gain on
sale of loans. The increase in gain on sale of loans was a result of loan sales
of $6.4 million in 2001 compared to the $2.1 million sold through June 30, 2000.
The increase in service fees, charges and other operating income was due
primarily to a new service fee structure implemented on deposit accounts.




                                       13
<PAGE>


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


Comparison of Operating Results for the Three Month Periods Ended June 30, 2001
and 2000 (continued)

General, Administrative and Other Expense

General, administrative and other expense decreased by $38,000, or 2.0%, during
the current three month period, due primarily to a $39,000, or 8.8%, decrease in
other operating expenses and an $11,000, or 1.0%, decrease in employee
compensation and benefits, which were partially offset by a $17,000, or 34.0%,
increase in franchise taxes. General, administrative and other expenses have
decreased period to period due to the continuing effects of management's cost
reduction program implemented during fiscal 2001.

Federal Income Taxes

The provision for federal income taxes amounted to $195,000 for the three months
ended June 30, 2001, an increase of $46,000, or 30.9%, compared to the same
period in 2000. The increase resulted primarily from a $132,000, or 30.1%,
increase in pretax earnings year to year. The effective tax rates for the three
months ended June 30, 2001 and 2000 were 34.2% and 33.9%, respectively.





















                                       14
<PAGE>


                         Wayne Savings Bancshares, Inc.

                                     PART II


ITEM 1.  Legal Proceedings

         Not applicable


ITEM 2.  Changes in Securities and Use of Proceeds

         Not applicable


ITEM 3.  Defaults Upon Senior Securities

         Not applicable


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

          On July 26, 2001, the Annual Meeting of the Company's Stockholders was
          held.  Three  directors  were elected to terms expiring in 2004 by the
          following votes:

          Donald E. Massaro           For:  2,130,292         Withheld:  6,375
          Russell L. Harpster         For:  2,130,490         Withheld:  6,177
          Terry A. Gardner            For:  2,128,826         Withheld:  7,841

          One other  matter was  submitted  to the  stockholders,  for which the
          following votes were cast:

          Ratification  of the  appointment of Grant Thornton LLP as independent
          auditors of the Company for the fiscal year ended March 31, 2002.

          For: 2,134,118              Against:  303            Abstain:  2,246

ITEM 5.  Other Information

          The  Board  of  Directors  of  Wayne  Savings  Bancshares,   Inc.  has
          authorized   management   to  continue   the   repurchase   of  up  to
          approximately  64,200  shares,  or 2.4% of the  Company's  outstanding
          stock, over the next 12 months. Any repurchased shares will be held as
          treasury stock and will be available for general corporate purposes.

          Second Step Conversion

          On July  10,  2001,  the  Company's  Board  of  Directors  approved  a
          reorganization  from the mutual  holding  company to a unitary  thrift
          holding company.  In connection with the  reorganization  of corporate
          form,  the  Company  will offer to its  depositors,  shareholders  and
          others  the  approximately  52% of its shares  presently  owned by the
          mutual holding company.  The  reorganization  is subject to regulatory
          approval and the approval of the Company's shareholders.

ITEM 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:                              None.

         (b)  Reports on Form 8-K:                   None.



                                       15
<PAGE>



                                   SIGNATURES

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





Date:      August 13, 2001                     By: /s/Charles F. Finn
       -------------------------                   -------------------------
                                                     Charles F. Finn
                                                     Chairman and President





Date:      August 13, 2001                     By: /s/Todd  J. Tappel
       -------------------------                   --------------------------
                                                     Todd J. Tappel
                                                      Chief Financial Officer


































                                       16