For Immediate Release Contact: Lonnie R. Trasamar
November 5, 2003 (507) 553-3151
Wells Financial Corp. Announces Results for Third Quarter 2003
2003 Third Quarter Summary:
Quarter ended Quarter ended
09/30/03 09/30/02 % Change
---------------------------------------------
Net Income $1,135,000 $ 846,000 34.2%
Basic Earnings per Share $ 1.00 $ 0.72 39.0%
Diluted Earnings per Share $ 0.98 $ 0.70 40.0%
Net Interest Income $1,570,000 $1,944,000 -19.2%
Noninterest Income $2,491,000 $1,239,000 101.0%
Noninterest Expense $2,234,000 $1,760,000 26.9%
Year-to-Date Summary:
Nine Months Nine Months
ended 09/30/03 ended 09/30/02 % Change
--------------------------------------------
Net Income $ 3,027,000 $ 2,383,000 27.0%
Basic Earnings per Share $ 2.68 $ 2.02 32.7%
Diluted Earnings per Share $ 2.62 $ 1.97 33.0%
Net Interest Income $ 4,960,000 $ 5,723,000 -13.3%
Noninterest Income $ 6,634,000 $ 3,429,000 93.5%
Noninterest Expense $ 4,953,000 $ 4,070,000 21.7%
Return on Average Assets (1) 1.8% 1.4% 28.6%
Return on Average Equity (1) 15.3% 12.8% 19.5%
Net Interest Margin 3.07% 3.45% -11.0%
Book Value per Share $ 24.18 $ 21.58 12.0%
(1) Annualized
Wells, Minnesota - November 5, 2003 - Lonnie R. Trasamar, President of
Wells Financial Corp. (the "Company"), the holding company of Wells Federal Bank
(the "Bank"), announced earnings of $1,135,000 for the quarter ended September
30, 2003, up $289,000 or 34.2%, when compared to the same period in 2002.
Diluted earnings per share for the quarter were $0.98, up $0.28 or 40.0% when
compared to the same quarter in 2002.
Net income for the nine months ended September 30, 2003 was $3,027,000,
up $644,000 or 27.0%, when compared to the same period in 2002. Diluted earnings
per share for the nine- month period ended September 30, 2003 was $2.62, up
$0.65 or 33.0%, when compared to the same period in 2002.
Trasamar stated that the increase in net income and earnings per share
for the three and nine month periods resulted from an increase in the gain on
sale of loans originated for sale and in loan origination and commitment fees
during 2003 when compared to 2002. These increases resulted from a larger amount
of loans being originated and sold to the secondary market during 2003 when
compared to 2002. Partially offsetting these increases was a decrease in net
interest income and an increase in noninterest expense. The change in net
interest income resulted primarily from a decrease in the average balance of
interest earning assets during 2003 and, to a lesser extent, from a general
decrease in the yield on the Company's loan portfolio. The change in noninterest
expense resulted primarily from increases in compensation and benefits and in
the amortization and valuation adjustments for mortgage servicing rights. The
increase in compensation and benefits resulted primarily from annual
compensation adjustments and increases in commissions paid to loan officers for
the origination of loans.
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. During
the fourth quarter of 2003 the Bank opened a loan origination office in Mason
City, Iowa. 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 October 21, 2003, the Company announced a cash dividend of $0.20 per
share payable on November 17, 2003 to shareholders of record on November 3,
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.
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Financial Condition
September 30, 2003 and December 31, 2002
(Dollars in Thousands)
(Unaudited)
ASSETS
2003 2002
--------- ---------
Cash, including interest-bearing accounts
September 30, 2003 $39,055; December 31, 2002 $35,178 $ 40,601 $ 36,571
Certificates of deposit 200 200
Securities available for sale, at fair value 24,576 19,856
Federal Home Loan Bank Stock, at cost 1,300 1,875
Loans held for sale 4,577 9,695
Loans receivable, net 143,335 145,586
Accrued interest receivable 1,161 1,387
Foreclosed real estate 195 209
Premises and equipment 3,536 2,975
Mortgage servicing rights, net 2,747 2,179
Other assets 225 83
--------- ---------
TOTAL ASSETS $ 222,453 $ 220,616
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 167,622 $ 169,126
Borrowed funds 23,000 23,000
Advances from borrowers for taxes and insurance 2,251 1,347
Deferred income taxes 1,389 1,376
Accrued interest payable 273 50
Accrued expenses and other liabilities 514 494
--------- ---------
TOTAL LIABILITIES 195,049 195,393
--------- ---------
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 16,938 16,985
Retained earnings, substantially restricted 26,636 24,287
Accumulated other comprehensive income 405 746
Unearned ESOP shares - (29)
Unearned compensation restricted stock awards (80) (138)
Treasury stock, at cost, 1,054,060 shares at September
30, 2003, and 1,062,435 shares at December 31, 2002 (16,714) (16,847)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 27,404 25,223
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 222,453 $ 220,616
========= =========
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Interest and dividend income
Loans receivable:
First mortgage loans $ 1,674 $ 2,253 $ 5,489 $ 6,951
Consumer and other loans 698 829 2,117 2,395
Investment securities and other
Interest bearing deposits 275 387 928 1,198
---------- ---------- ---------- ----------
Total interest income 2,647 3,469 8,534 10,544
---------- ---------- ---------- ----------
Interest Expense
Deposits 763 1,211 2,643 3,890
Borrowed funds 314 314 931 931
---------- ---------- ---------- ----------
Total interest expense 1,077 1,525 3,574 4,821
---------- ---------- ---------- ----------
Net interest income 1,570 1,944 4,960 5,723
Provision for loan losses - - - 23
---------- ---------- ---------- ----------
Net interest income after provision for
loan losses 1,570 1,944 4,960 5,700
---------- ---------- ---------- ----------
Noninterest income
Gain on sale of loans originated for sale 974 319 2,571 1,074
Loan origination and commitment fees 670 426 2,071 926
Loan servicing fees 242 171 691 490
Insurance commissions 135 120 346 300
Fees and service charges 404 177 820 579
Other 66 26 135 60
---------- ---------- ---------- ----------
Total noninterest income 2,491 1,239 6,634 3,429
---------- ---------- ---------- ----------
Noninterest expense
Compensation and benefits 1,068 848 3,034 2,517
Occupancy and equipment 298 211 830 659
Data processing 106 101 358 338
Advertising 73 62 206 162
Amortization and valuation adjustments for
mortgage servicing rights 250 194 854 443
Other 439 344 1,359 940
---------- ---------- ---------- ----------
Total noninterest expense 2,234 1,760 6,641 5,059
---------- ---------- ---------- ----------
Income before taxes 1,827 1,423 4,953 4,070
Income tax expense 692 577 1,926 1,687
---------- ---------- ---------- ----------
Net income $ 1,135 $ 846 $ 3,027 $ 2,383
========== ========== ========== ==========
Cash dividends declared per share $ 0.20 $ 0.18 $ 0.60 $ 0.54
========== ========== ========== ==========
Earnings per share
Basic earnings per share $ 1.00 $ 0.72 $ 2.68 $ 2.02
========== ========== ========== ==========
Diluted earnings per share $ 0.98 $ 0.70 $ 2.62 $ 1.97
========== ========== ========== ==========
Weighted average number of common shares
outstanding:
Basic 1,132,939 1,182,522 1,129,989 1,178,437
========== ========== ========== ==========
Diluted 1,157,877 1,213,478 1,154,927 1,212,180
========== ========== ========== ==========