For Immediate Release Contact: Lonnie R. Trasamar
July 30, 2003 (507) 553-3151
Wells Financial Corp. Announces Results for the
Quarter Ended June 30, 2003
Second Quarter Summary:
Net income increased by $320,000, or 46.8%, when compared to the second
quarter of 2002
Diluted earnings per share increased by $0.31, or 55.4%, when compared to
the second quarter of 2002
Net interest income decreased by $229,000, or 11.9%, when compared to the
second quarter of 2002
Year to Date Summary:
Net income increased by $355,000, or 23.1%, when compared to the first six
months of 2002
Diluted earnings per share increased by $0.37, or 29.1%, when compared to
the first six months of 2002
Net interest income decreased by $389,000, or 10.3%, when compared to the
first six months of 2002
Wells, Minnesota - July 30, 2003 - Lonnie R. Trasamar, President of Wells
Financial Corp. (the Company), the holding company of Wells Federal Bank (the
Bank), announced earnings of $1,004,000 for the quarter ended June 30, 2003, up
$320,000 or 46.8%, when compared to the quarter ended June 30, 2002. Diluted
earnings per share for the second quarter of 2003 were $0.87, up $0.31 or 55.4%,
when compared to the second quarter of 2002.
Net income for the six months ended June 30, 2003 was $1,892,000, up
$355,000, or 23.1% when compared to the six months ended June 30, 2002. Diluted
earnings per share were $1.64 for the six months ended June 30, 2003, up $0.37,
or 29.1%, when compared to the first six months of 2002.
Trasamar stated that the increase in net income and earnings per share for
the three and six months ended June 30, 2003 when compared to the same periods
in 2002 resulted from an increase in the gain on sale of loans originated for
sale and in loan origination and commitment fees during 2003. Partially
offsetting these increases was a decrease in net interest income that primarily
resulted from a decrease in the average balance of interest earning assets and,
to a lesser extent, to a decrease in the average yield on interest earning
assets.
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 July 18, 2003, the Company announced a cash dividend of $0.20 per share
payable on August 15, 2003 to shareholders of record on August 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
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2003 2002 2003 2002
--------- ---------- --------- ----------
Return on average assets (1) 1.79% 1.20% 1.69% 1.34%
Return on average equity (1) 15.26% 11.02% 14.57% 12.57%
Net interest margin 3.13% 3.48% 3.14% 3.48%
Book value per share $23.58 $21.05 $23.58 $21.05
(1) annualized
(A balance sheet and income statement are included with this release)
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Financial Condition
June 30, 2003 and December 31, 2002
(Dollars in Thousands)
(Unaudited)
ASSETS
2003 2002
------------- --------------
Cash, including interest-bearing accounts
June 30, 2003 $38,376; December 31, 2002 $35,178 $ 39,439 $ 36,571
Certificates of deposit 200 200
Securities available for sale, at fair value 23,157 19,856
Federal Home Bank Stock 1,875 1,875
Loans held for sale 13,445 9,695
Loans receivable, net 138,362 145,586
Accrued interest receivable 1,342 1,387
Foreclosed real estate 330 209
Premises and equipment 3,421 2,975
Mortgage servicing rights 2,505 2,179
Other assets 106 83
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TOTAL ASSETS $ 224,182 $ 220,616
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 171,257 $ 169,126
Borrowed funds 23,000 23,000
Advances from borrowers for taxes and insurance 1,434 1,347
Deferred Income taxes 1,384 1,376
Accrued interest payable 198 50
Accrued expenses and other liabilities 232 494
------------- --------------
TOTAL LIABILITIES 197,505 195,393
------------- --------------
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 16,970 16,985
Retained earnings, substantially restricted 25,728 24,287
Accumulated other comprehensive income 602 746
Unearned ESOP shares - (29)
Unearned compensation restricted stock awards (96) (138)
Treasury stock, at cost, 1,056,064 shares at June 30, 2003,
and 1,062,435 shares at December 31, 2002 (16,746) (16,847)
------------- --------------
TOTAL STOCKHOLDERS' EQUITY 26,677 25,223
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 224,182 $ 220,616
============= ==============
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2003 2002 2003 2002
------------- ---------- ----------- ------------
Interest and dividend income
Loans receivable:
First mortgage loans $ 1,876 $ 2,323 $ 3,815 $ 4,698
Consumer and other loans 709 780 1,419 1,566
Investment securities and other
interest bearing deposits 316 420 653 811
----------- ----------- ----------- -----------
Total interest income 2,901 3,523 5,887 7,075
----------- ----------- ----------- -----------
Interest Expense
Deposits 897 1,290 1,880 2,679
Borrowed funds 310 310 617 617
----------- ----------- ----------- -----------
Total interest expense 1,207 1,600 2,497 3,296
----------- ----------- ----------- -----------
Net interest income 1,694 1,923 3,390 3,779
Provision for loan losses - - - 23
----------- ----------- ----------- -----------
Net interest income after provision
for loan losses 1,694 1,923 3,390 3,756
----------- ----------- ----------- -----------
Noninterest income
Gain on sale of loans originated for
sale 777 268 1,597 755
Loan origination and commitment fees 814 195 1,401 500
Loan servicing fees 231 165 449 319
Insurance commissions 117 100 211 180
Fees and service charges 196 201 416 402
Other 41 26 69 34
----------- ----------- ----------- -----------
Total noninterest income 2,176 955 4,143 2,190
----------- ----------- ----------- -----------
Noninterest expense
Compensation and benefits 1,054 882 1,966 1,669
Occupancy and equipment 271 215 532 448
Data processing 127 101 252 237
Advertising 74 54 133 100
Amortization & valuation adjustments
for mortgage servicing rights 85 130 604 249
Other 593 298 920 596
----------- ----------- ----------- -----------
Total noninterest expense 2,204 1,680 4,407 3,299
----------- ----------- ----------- -----------
Income before taxes 1,666 1,198 3,126 2,647
Income tax expense 662 514 1,234 1,110
----------- ----------- ----------- -----------
Net Income $ 1,004 $ 684 $ 1,892 $ 1,537
=========== =========== =========== ===========
Cash dividends declared per share $ 0.20 $ 0.18 $ 0.40 $ 0.36
=========== =========== =========== ===========
Earnings per share
Basic earnings per share $ 0.89 $ 0.58 $ 1.68 $ 1.31
=========== =========== =========== ===========
Diluted earnings per share $ 0.87 $ 0.56 $ 1.64 $ 1.27
=========== =========== =========== ===========
Weighted average number of common shares
outstanding:
Basic 1,131,085 1,179,732 1,128,490 1,172,861
=========== =========== =========== ===========
Diluted 1,159,797 1,214,891 1,153,604 1,210,548
=========== =========== =========== ===========