For Immediate Release Contact: Lonnie R. Trasamar
- --------------------- (507) 553-3151
March 4, 2004
Wells Financial Corp. Announces Annual Results
Selected Financial Data
Year ended Year ended
12/31/03 12/31/02
Net Income $ 3,540,000 $ 3,340,000
Basic earnings per share $ 3.12 $ 2.84
Diluted earnings per share $ 3.05 $ 2.75
Return on average equity 13.30% 13.31%
Return on average assets 1.58% 1.47%
Book value per share $ 24.15 $ 22.42
Net interest rate spread 3.16% 3.16%
Net interest margin 3.33% 3.47%
Allowance for loan loss to total loans 0.56% 0.62%
Wells, Minnesota - March 4, 2004 - Lonnie R. Trasamar, President of
Wells Financial Corp. (the Company), the holding company of Wells Federal Bank
(the Bank), announced record earnings of $3,540,000 for the year ended December
31, 2003. Basic and diluted earnings per share for 2003 were $3.12 and $3.05,
respectively. This compares to net income of $3,340,000 for the year ended
December 31, 2002. Basic and diluted earnings per share for 2002 were $2.84 and
$2.75, respectively. The increase in income for 2003 when compared to 2002
resulted, primarily, from an increase in noninterest income.
During 2003, the Bank and its subsidiary, Greater Minnesota Mortgage,
originated and sold to the secondary market a record amount of residential
mortgage loans, primarily during the first three quarters of the year. This
increased loan activity, along with improved market pricing during 2003,
resulted in increases in the gain on sale of loans and loan origination and
commitment fees when compared to 2002.
Net income for the quarter ended December 31, 2003 was $513,000, a
$444,000 decrease when compared to the quarter ended December 31, 2002.
Increased interest rates on residential mortgages resulted in a lesser amount of
loans being originated and sold to the secondary market during the fourth
quarter of 2003 when compared to the same period in 2002 which resulted in a
decrease in noninterest income.
Assets increased by $3,189,000, from $220,616,000 at December 31, 2002
to $223,805,000 at December 31, 2003 due to increases in the loan portfolio and
securities available for sale being partially offset by a decrease in cash. The
Company's loan portfolio increased by $14,463,000, from $145,586,000 at December
31, 2002 to $160,049,000 at December 31, 2003 primarily due to an increase in
agricultural and commercial real estate loans.
Equity increased by $2,645,000, from $25,223,000 at December 31, 2002
to $27,868,000 at December 31, 2003. This increase was primarily due to net
income for the year of $3,540,000 being partially offset by the payment of
$905,000 in dividends.
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.
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
December 31, 2003 and December 31, 2002
(Dollars in Thousands)
(Unaudited)
ASSETS
2003 2002
--------- ---------
Cash, including interest-bearing accounts
December 31, 2003 $17,655; December 31, 2002 $35,178 $ 25,315 $ 36,571
Certificates of deposit 200 200
Securities available for sale, at fair value 27,410 19,856
Federal Home Loan Bank Stock, at cost 1,303 1,875
Loans held for sale 1,997 9,695
Loans receivable, net 160,049 145,586
Accrued interest receivable 1,209 1,387
Premises and equipment 3,585 2,975
Mortgage servicing rights, net 2,681 2,179
Other assets 53 292
--------- ---------
TOTAL ASSETS $ 223,805 $ 220,616
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 169,662 $ 169,126
Borrowed funds 23,000 23,000
Advances from borrowers for taxes and insurance 1,585 1,347
Deferred income taxes 1,456 1,376
Accrued interest payable 34 50
Accrued expenses and other liabilities 200 494
--------- ---------
TOTAL LIABILITIES 195,937 195,393
--------- ---------
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 17,154 16,985
Retained earnings, substantially restricted 26,922 24,287
Accumulated other comprehensive income 525 746
Unearned ESOP shares - (29)
Unearned compensation restricted stock awards (561) (138)
Treasury stock, at cost, 1,054,060 shares at December
31, 2003, and 1,062,435 shares at December 31, 2002 (16,391) (16,847)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 27,868 25,223
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 223,805 $ 220,616
========= =========
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------- -----------------
2003 2002 2003 2002
------- ------- ------- -------
Interest and dividend income
Loans receivable:
First mortgage loans $ 1,958 $ 2,202 $ 7,447 $ 9,153
Consumer and other loans 731 791 2,848 3,186
Investment securities and other
Interest bearing deposits 291 328 1,219 1,526
------- ------- ------- -------
Total interest income 2,980 3,321 11,514 13,865
------- ------- ------- -------
Interest Expense
Deposits 707 1,112 3,350 5,002
Borrowed funds 314 314 1,245 1,245
------- ------- ------- -------
Total interest expense 1,021 1,426 4,595 6,247
------- ------- ------- -------
Net interest income 1,959 1,895 6,919 7,618
Provision for loan losses - - - 23
------- ------- ------- -------
Net interest income after provision for
loan losses 1,959 1,895 6,919 7,595
------- ------- ------- -------
Noninterest income
Gain on sale of loans originated for sale 269 1,155 2,840 2,229
Loan origination and commitment fees 179 770 2,250 1,696
Loan servicing fees 256 171 947 661
Insurance commissions 113 105 459 405
Fees and service charges 238 313 1,058 892
Other 61 14 196 74
------- ------- ------- -------
Total noninterest income 1,116 2,528 7,750 5,957
------- ------- ------- -------
Noninterest expense
Compensation and benefits 1,125 1,023 4,159 3,540
Occupancy and equipment 323 226 1,153 885
Data processing 113 108 471 446
Advertising 87 74 293 236
Amortization and valuation adjustments for
mortgage servicing rights 217 1,010 1,071 1,453
Other 393 349 1,752 1,289
------- ------- ------- -------
Total noninterest expense 2,258 2,790 8,899 7,849
------- ------- ------- -------
Income before taxes 817 1,633 5,770 5,703
Income tax expense 304 676 2,230 2,363
------- ------- ------- -------
Net income $ 513 $ 957 $ 3,540 $ 3,340
======= ======= ======= =======
Cash dividends declared per share $ 0.20 $ 0.18 $ 0.80 $ 0.72
======= ======= ======= =======
Earnings per share
Basic earnings per share $ 0.44 $ 0.82 $ 3.12 $ 2.84
======= ======= ======= =======
Diluted earnings per share $ 0.43 $ 0.78 $ 3.05 $ 2.75
======= ======= ======= =======