For Immediate Release Contact: Lonnie R. Trasamar
- ---------------------
April 30, 2004 (507) 553-3151
Wells Financial Corp. Announces First Quarter Results
Selected Financial Data
Three months ended Three months ended
March 31, 2004 March 31, 2003
Net Income $ 477,000 $ 888,000
Basic earnings per share $ 0.41 $ 0.79
Diluted earnings per share $ 0.40 $ 0.77
Return on average equity 6.80% 13.86%
Return on average assets 0.85% 1.59%
Book value per share $ 24.33 $ 22.89
Net interest rate spread 3.59% 2.89%
Net interest margin 3.76% 3.17%
Allowance for loan loss to total loans 0.51% 0.61%
Wells, Minnesota - April 30, 2004 - Lonnie R. Trasamar, President of
Wells Financial Corp. (the "Company"), the holding company of Wells Federal Bank
(the "Bank"), announced earnings of $477,000 for the quarter ended March 31,
2004, down $411,000 or 46.3% when compared to the quarter ended March 31, 2003.
Basic and diluted earnings per share were $0.41 and $0.40, respectively, for the
quarter ended March 31, 2004. This compares to basic and diluted earnings per
share of $0.79 and $0.77, respectively for the quarter ended March 31, 2003. The
decrease in net income was primarily the result of a decrease in gain on sale of
loans originated for sale. During the first quarter of 2004 fewer loans were
originated for sale when compared to the first quarter of 2003 resulting in a
decrease in the gain on sale of loans originated for sale. Partially offsetting
the decrease in gain on sale of loans originated for sale was a $254,000
increase in net interest income. Trasamar stated that while the residential
mortgage originations have decreased when compared to last year, he is
encouraged by increases in the Company's net interest margin, net interest
spread and the increase in the Company's loan portfolio.
Total assets increased by $2.9 million from $223,805,000 at December
31, 2003 to $226,704,000 at March 31, 2004 primarily due to cash that was
received from increases in deposits and advances from borrowers for taxes and
insurance being used to fund loan growth. The Company also used cash and cash
received from a decrease in securities available for sale to fund the increases
in loans receivable and loans held for sale of $7.5 million and $4.4 million,
respectively, during the first quarter of 2004.
Liabilities increased by $2,472,000 from $195,937,000 at December 31,
2003 to $198,409,000 at March 31, 2004. This increase is primarily due to a
$1,240,000 increase in deposits and a $973,000 increase in advances from
borrowers for taxes and insurance.
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 loan origination offices located in Farmington, Minnesota and
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
Statements in this press release that are not strictly historical may
be "forward-looking" statements, which involve risks and uncertainties. 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 arising after
the date hereof.
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Financial Condition
March 31, 2004 and December 31, 2003
(Dollars in Thousands)
(Unaudited)
ASSETS
2004 2003
------------------- ------------------
Cash, including interest-bearing accounts
March 31, 2004 $9,268; December 31, 2003 $17,655 $ 17,567 $ 25,318
Certificates of deposit 125 200
Securities available for sale, at fair value 26,005 27,410
Federal Home Loan Bank Stock, at cost 1,304 1,303
Loans held for sale 6,393 1,997
Loans receivable, net 167,562 160,049
Accrued interest receivable 1,239 1,209
Premises and equipment, net 3,798 3,585
Mortgage servicing rights, net 2,518 2,681
Other assets 193 53
------------------- ------------------
TOTAL ASSETS $ 226,704 $ 223,805
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 170,902 $ 169,662
Borrowed funds 23,000 23,000
Advances from borrowers for taxes and insurance 2,558 1,585
Deferred income taxes 1,507 1,456
Accrued interest payable 126 34
Accrued expenses and other liabilities 316 200
------------------- ------------------
TOTAL LIABILITIES 198,409 195,937
------------------- ------------------
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 17,146 17,154
Retained earnings, substantially restricted 27,145 26,922
Accumulated other comprehensive income 614 525
Unearned compensation restricted stock awards (583) (561)
Treasury stock, at cost, 1,024,549 shares at March
31, 2004, and 1,033,673 shares at December 31, 2003 (16,246) (16,391)
------------------- ------------------
TOTAL STOCKHOLDERS' EQUITY 28,295 27,868
------------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 226,704 $ 223,805
=================== ==================
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Income
Three Months Ended March 31, 2004 and 2003
(Dollars in thousands, except per share data)
(Unaudited)
2004 2003
--------------- -------------------
Interest and dividend income
Loans receivable:
First mortgage loans $ 1,730 $ 1,939
Consumer and other loans 976 721
Investment securities and other
interest bearing deposits 226 340
--------------- -------------------
Total interest income 2,932 3,000
--------------- -------------------
Interest expense
Deposits 661 986
Borrowed funds 310 307
--------------- -------------------
Total interest expense 971 1,293
--------------- -------------------
Net interest income 1,961 1,707
Provision for loan losses - -
--------------- -------------------
Net interest income after provision for
loan losses 1,961 1,707
--------------- -------------------
Noninterest income
Gain on sale of loans originated for sale 279 1,407
Loan servicing fees 241 218
Insurance commissions 188 94
Fees and service charges 181 220
Other 30 30
--------------- -------------------
Total noninterest income 919 1,969
--------------- -------------------
Noninterest expense
Compensation and benefits 1,022 911
Occupancy and equipment 264 261
Data processing 140 125
Advertising 81 59
Amortization and valuation adjustments for
mortgage servicing rights 240 519
Other 387 341
--------------- -------------------
Total noninterest expense 2,134 2,216
--------------- -------------------
Income before income taxes 746 1,460
Income tax expense 269 572
--------------- -------------------
Net Income $ 477 $ 888
=============== ===================
Cash dividend declared per common share $ 0.22 $ 0.20
=============== ===================
Earnings per share
Basic $ 0.41 $ 0.79
=============== ===================
Diluted $ 0.40 $ 0.77
=============== ===================
Weighted average number of common shares outstanding:
Basic 1,158,546 1,125,866
=============== ===================
Diluted 1,196,291 1,147,342
=============== ===================