For Immediate Release Contact: Lonnie R. Trasamar - --------------------- (507) 553-3151 April 25, 2003 Wells Financial Corp. Announces First Quarter Results Wells, Minnesota - April 25, 2003 - Lonnie R. Trasamar, President of Wells Financial Corp. (the Company), the holding company of Wells Federal Bank (the Bank), announced earnings of $888,000 for the quarter ended March 31, 2003, up $35,000 or 4.1%, when compared to the quarter ended March 31, 2002. Basic earnings per share for the first quarter of 2003 were $0.79 per share, up $0.06 or 8.2% when compared to the first quarter of 2002. Diluted earnings per share for the first quarter of 2003 were $0.77, up $0.06 or 8.5%, when compared to the first quarter of 2002. Trasamar stated that he is pleased with the continued profitability of the Company. "Loan originations by the Bank have been excellent", he stated. He went on to explain that in addition to loan originations by the Bank, the Bank continues to develop relationships with correspondent banks throughout southern Minnesota to originate residential, farm and commercial mortgage loans which gives the Bank an even greater market share. Wells Financial Corp. and Wells Federal Bank are headquartered in Wells, Minnesota. The Bank operates eight full service offices located in Wells, Blue Earth, Mankato, Fairmont, North Mankato, Albert Lea, St. Peter and Owatonna Minnesota and a loan origination office located in Farmington, Minnesota. The Bank is a community oriented, full service savings bank offering traditional mortgage, consumer, commercial and agricultural loan products. The Bank offers insurance, mutual funds and variable rate annuity products through its subsidiary, Wells Insurance Agency. Dividend On April 18, 2003, the Company announced a cash dividend of $0.20 per share payable on May 15, 2003 to shareholders of record on May 1, 2003. Forward-looking Statements The foregoing material may contain forward-looking statements concerning the financial condition, results of operations and business of the Company. We caution that such statements are subject to a number of uncertainties and actual results could differ materially and, therefore, readers should not place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Selected Financial Information 03/31/03 12/31/02 ------------------------------------------ Return on average assets (1) 1.59% 1.47% Return on average equity (1) 13.86% 13.31% Net interest rate spread 2.89% 3.16% Net interest margin 3.17% 3.47% Book value per share $22.89 $22.42 (1) annualized WELLS FINANCIAL CORP. and SUBSIDIARY Consolidated Statements of Financial Condition March 31, 2003 and December 31, 2002 (Dollars in Thousands) (Unaudited) ASSETS 2003 2002 --------- --------- Cash, including interest-bearing accounts March 31, 2003 $45,636; December 31, 2002 $35,178 $ 46,560 $ 36,571 Certificates of deposit 200 200 Securities available for sale, at fair value 20,315 19,856 Federal Home Loan Bank Stock, at cost 1,875 1,875 Loans held for sale 14,439 9,695 Loans receivable, net 135,662 145,586 Accrued interest receivable 1,233 1,387 Foreclosed real estate 417 209 Premises and equipment 3,400 2,975 Mortgage servicing rights, net 2,242 2,179 Other assets 115 83 --------- --------- TOTAL ASSETS $ 226,458 $ 220,616 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $ 172,671 $ 169,126 Borrowed funds 23,000 23,000 Advances from borrowers for taxes and insurance 2,129 1,347 Deferred income taxes: 1,301 1,376 Accrued interest payable 126 50 Accrued expenses and other liabilities 1,348 494 --------- --------- TOTAL LIABILITIES 200,575 195,393 --------- --------- STOCKHOLDERS' EQUITY: Preferred stock, no par value; 500,000 shares Authorized; none outstanding - - Common stock, $.10 par value; authorized 7,000,000 Shares; issued 2,187,500 shares 219 219 Additional paid-in capital 16,959 16,985 Retained earnings, substantially restricted 24,950 24,287 Accumulated other comprehensive income 627 746 Unearned ESOP shares - (29) Unearned compensation restricted stock awards (117) (138) Treasury stock, at cost, 1,056,614 shares at March 31, 2003, and 1,062,435 shares at December 31, 2002 (16,755) (16,847) --------- --------- TOTAL STOCKHOLDERS' EQUITY 25,883 25,223 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 226,458 $ 220,616 ========= ========= WELLS FINANCIAL CORP. and SUBSIDIARY Consolidated Statements of Income Three Months Ended March 31, 2003 and 2002 (Dollars in thousands, except per share data) (Unaudited) 2003 2002 ---------- ---------- Interest and dividend income Loans receivable: First mortgage loans $ 1,939 $ 2,375 Consumer and other loans 721 786 Investment securities and other interest bearing deposits 340 391 ---------- ---------- Total interest income 3,000 3,552 ---------- ---------- Interest Expense Deposits 986 1,389 Borrowed funds 307 307 ---------- ---------- Total interest expense 1,293 1,696 ---------- ---------- Net interest income 1,707 1,856 Provision for loan losses -- 23 ---------- ---------- Net interest income after provision for losses 1,707 1,833 ---------- ---------- Noninterest income Gain on sale of loans originated for sale 820 487 Loan origination and commitment fees 587 305 Loan servicing fees 218 154 Insurance commissions 94 80 Fees and service charges 220 201 Other 30 8 ---------- ---------- Total noninterest income 1,969 1,235 ---------- ---------- Noninterest expense Compensation and benefits 911 787 Occupancy and equipment 261 233 Data processing 125 136 Advertising 59 46 Amortization and valuation adjustments for mortgage servicing rights 519 119 Other 341 298 ---------- ---------- Total noninterest expense 2,216 1,619 ---------- ---------- Income before income taxes 1,460 1,449 Income tax expense 572 596 ---------- ---------- Net Income $ 888 $ 853 ========== ========== Earnings per share Basic $ 0.79 $ 0.73 ========== ========== Diluted $ 0.77 $ 0.71 ========== ========== Weighted average number of common shares outstanding: Basic 1,125,866 1,162,394 ========== ========== Diluted 1,147,342 1,194,997 ========== ==========