UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
------------------------------------
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------- ---------------
Commission File Number 0-25342
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Wells Financial Corp.
------------------------------------------------------
(Exact name of Registrant as Specified in Its Charter)
Minnesota 41-1799504
- -------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
53 1st Street S.W., P.O. Box 310, Wells MN 56097
------------------------------------------------
(Address of principal executive offices)
(507)553-3151
----------------------------------------------------
(Registrant's Telephone Number, including Area Code)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check by x whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes |_| No
The number of share outstanding of each of the issuer's classes of common stock
as of April 30, 1997:
Class Outstanding
----- -----------
$.10 par value per share, common stock 1,969,360 Shares
WELLS FINANCIAL CORP. and SUBSIDIARY
FORM 10-QSB
INDEX
PART I - FINANCIAL INFORMATION: Page
Item 1. Financial Statements
Consolidated Statements of Financial Condition 1
Consolidated Statements of Income 2
Consolidated Statement of Stockholders' equity 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Financial Condition
March 31, 1997 and December 31, 1996
(Dollars in Thousands)
(Unaudited)
ASSETS
1997 1996
--------- ----------
Cash, including interest-bearing accounts
3/31/97 $6,081; 12/31/96 $7,560 $ 6,975 $ 8,301
Certificates of deposit 200 200
Securities available for sale 7,100 7,100
Securities held to maturity (approximate
market value $3,277 at March 31, 1997 and
$2,044 at December 31, 1996) 3,300 2,049
Mortgage-backed securities available for sale 321 428
Loans held for sale 1,348 1,791
Loans receivable, net 179,689 178,447
Accrued interest receivable 1,076 1,060
Foreclosed real estate 24 78
Premises and equipment 1,460 1,519
Other assets 393 353
========= =========
TOTAL ASSETS $ 201,886 $ 201,326
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 144,938 $ 145,349
Borrowed funds 26,000 26,500
Advances from borrowers for taxes and
insurance 1,151 681
Income taxes:
Current 381 --
Deferred 292 358
Accrued interest payable 225 126
Accrued expenses and other liabilities 162 110
--------- ---------
TOTAL LIABILITIES 173,149 173,124
--------- ---------
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 16,610 16,588
Retained earnings, substantially
restricted 14,546 13,986
Unrealized appreciation on securities
available for sale, net of related
taxes 304 348
Unearned ESOP shares (868) (896)
Unearned compensation-restricted stock
awards (246) (280)
Treasury stock, at cost (1,828) (1,763)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 28,737 28,202
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' $ 201,886 $ 201,326
========= =========
(See Notes to Consolidated Financial Statements)
1
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Income
Three Months Ended March 31, 1997 and 1996
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
1997 1996
---------- ----------
Interest and dividend income Loans receivable:
First mortgage loans $ 2,977 $ 2,827
Consumer and other loans 558 484
Investment securities and other interest
bearing deposits 221 267
--------- ---------
Total interest income 3,756 3,578
--------- ---------
Interest Expense
Deposits 1,694 1,788
Borrowed funds 346 238
--------- ---------
Total interest expense 2,040 2,026
--------- ---------
Net interest income 1,716 1,552
Provision for loan losses 45 45
--------- ---------
Net interest income after provision for
loan losses 1,671 1,507
--------- ---------
Noninterest income
Gain on sale of loans originated for sale 8 47
Loan origination and commitment fees 29 37
Loan servicing fees 50 49
Insurance commissions 73 102
Fees and service charges 64 55
Other 16 9
--------- ---------
Total noninterest income 240 299
--------- ---------
Noninterest expense
Compensation and benefits 480 475
Occupancy and equipment 151 138
SAIF deposit insurance premium 24 84
Data processing 59 71
Advertising 36 32
Other 193 145
--------- ---------
Total noninterest expense 943 945
--------- ---------
Income before income taxes 968 861
Income tax expense 408 361
========= =========
Net Income $ 560 $ 500
========= =========
Earnings per common share
Primary and fully diluted $ 0.29 $ 0.24
========= =========
Weighted average number of common shares outstanding:
Primary and fully diluted 1,937,353 2,112,986
========= =========
(See Notes to Consolidated Financial Statements)
2
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statement of Stockholders' Equity
For the Three Months Ended March 31, 1997
(Dollars in Thousands)
(Unaudited)
Unrealized
appreciation Unearned Unearned
(depreciation) Employee Compensation
Additional on securities Stock Restricted Total
Common Paid-In Retained available Ownership Stock Treasury Stockholders'
Stock Capital Earnings for sale, net Plan shares Awards Stock Equity
- ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 $ 219 $ 16,588 $ 13,986 $ 348 $ (896) $ (280) $ (1,763) $ 28,202
Net income - - 560 - - - - 560
Net change in unrealized
appreciation (depreciation)
on securities available for
sale, net of related taxes - - - (44) - - - (44)
Treasury stock purchases - - - - - - (65) (65)
Amortization of unearned
compensation - - - - - 34 - 34
Allocated employee stock
ownership plan shares - 22 - - 28 - - 50
------------------------------------------------------------------------------------------------------
Balance, March 31, 1997 $ 219 $ 16,610 $ 14,546 $ 304 $ (868) $ (246) $ (1,828) $ 28,737
======================================================================================================
(See Notes to Consolidated Financial Statements)
3
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996
(Dollars in Thousands)
(Unaudited)
1997 1996
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 560 $ 500
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 45 45
Gain on the sale of loans originated
for sale (8) (47)
Compensation on allocation of ESOP
shares 50 38
Amortization of restricted stock awards 34 --
Investment in foreclosed real estate -- (1)
Write-down of foreclosed real estate 9 --
Gain on the sale of foreclosed real estate (11) --
Unrealized loss on loans held for sale 19 --
Deferred income taxes (35) (17)
Depreciation and amortization on premises
and equipment 65 45
Amortization of deferred loan origination fees (13) (51)
Amortization of excess servicing fees 3 4
Amortization of mortgage servicing rights 7 2
Loans originated for sale (1,315) (9,864)
Proceeds from the sale of loans originated
for sale 1,753 10,504
Changes in assets and liabilities:
Accrued interest receivable (16) (54)
Other assets (44) (921)
Income taxes payable, current 388 249
Accrued expenses and other liabilities 151 (67)
-------- --------
Net cash provided by operating
activities 1,642 365
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in loans (1,293) 4,340
Purchase of securities available for sale (73) (71)
Purchase of securities held to maturity (2,000) (750)
Proceeds from principal repayments of
mortgage backed securities 105 65
Proceeds from the maturities of securities
held to maturity 749 1,400
Purchase of premises and equipment (6) (145)
Proceeds from the sale and redemption of
foreclosed real estate 56 --
-------- --------
Net cash provided by (used in) investment
activities (2,462) 4,839
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits (411) 1,983
Net increase in advances from borrowers for
taxes and insurance 470 445
Proceeds from borrowed funds 1,500 --
Repayments on borrowed funds (2,000) (2,000)
Purchase of treasury stock (65) --
-------- --------
Net cash provided by (used in) financing
activities (506) 428
-------- --------
Net increase (decrease) in cash and cash
equivalents (1,326) 5,632
CASH:
Beginning 8,301 8,192
-------- --------
Ending $ 6,975 $ 13,824
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash payments for:
Interest on deposits $ 1,611 $ 1,802
Interest on borrowed funds 334 241
Income taxes 55 361
======== ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Transfers from loans to foreclosed real estate $ -- $ 5
Allocation of ESOP shares to participants 28 28
======== ========
(See Notes to Consolidated Financial Statements)
4
WELLS FINANCIAL CORP. and SUBSIDIARY
Notes To Consolidated Financial Statements
(Dollars in thousands)
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The foregoing consolidated financial statements are unaudited. However, in
the opinion of management, all adjustments (which consist of normal recurring
accruals) necessary for a fair presentation of the consolidated financial
statements have been included. Results for any interim period are not
necessarily indicative of results to be expected for the year. The interim
consolidated financial statements include the accounts of Wells Financial Corp.
(Company), its subsidiary, Wells Federal Bank (Bank), and the Bank's subsidiary,
Wells Insurance Agency, Inc.
NOTE 2. REGULATORY CAPITAL
The following table presents the Bank's regulatory capital amounts and
percents at March 31, 1997 and December 31, 1996.
March 31, 1997 December 31, 1996
Amount Percent Amount Percent
----------------------------------------------------------------------
(Dollars in Thousands)
Tangible Capital:
Required $ 2,988 1.50% $ 2,981 1.50%
Actual 21,064 10.57% 20,478 10.31%
Excess 18,076 9.07% 17,497 8.81%
Core Capital
Required (1) $ 5,976 3.00% $ 5,961 3.00%
Actual 21,064 10.57% 20,478 10.31%
Excess 15,088 7.57% 14,517 7.31%
Risk-based Capital
Required $ 9,122 8.00% $ 9,054 8.00%
Actual 21,690 19.02% 21,064 18.61%
Excess 12,568 11.02% 12,010 10.61%
(1) The OTS is expected to adopt a core capital requirement for savings
institutions comparable to the requirement for national banks that became
effective December 31, 1990. The OTS core capital requirement is anticipated to
be at least 3% of total adjusted assets for thrifts that receive the highest
supervisory rating for safety and soundness, with a 4% to 5% core capital
requirement for all other thrifts. No prediction can be made as to the exact
nature of any new OTS core capital regulation, or the date of its effectiveness,
and the core capital requirement to be applicable to the Bank under such
regulation.
5
WELLS FINANCIAL CORP. and SUBSIDIARY
Notes to consolidated Financial Statements Continued
(Unaudited)
NOTE 3. EARNINGS PER SHARE
Earnings per share for the quarters ended March 31, 1997 and 1996 were
computed by dividing net income for the period by the weighted average common
shares and common share equivalents outstanding during the period.
NOTE 4. SELECTED FINANCIAL DATA
For the three months
ended
March 31,
1997 1996
------------------------
Return on assets
(ratio of net income to average total assets)(1) 1.11% 1.03%
Return on equity
(ratio of net income to average equity) (1) 7.85% 6.88%
Equity to assets ratio
(ratio of average equity to average total assets) 14.19% 14.94%
Net interest margin
(ratio of net interest income to average
interest earning assets) (1) 3.41% 3.34%
(1) Net income and net interest income have been annualized.
6
WELLS FINANCIAL CORP. and SUBSIDIARY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
General:
Wells Financial Corp. (Company) was incorporated under the laws of the
State of Minnesota in December 1994 for the purpose of owning all of the
outstanding stock of Wells Federal Bank, fsb (Bank) issued in the mutual to
stock conversion of the Bank. On April 11, 1995, the conversion was completed
and $8.4 million of the net proceeds from the sale of the stock was provided to
the Bank in exchange for all of the Bank's stock. The consolidated financial
statements included herein are for the Company, the Bank and the Bank's wholly
owned subsidiary, Wells Insurance Agency, Inc.
The income of the Company is derived primarily from the operations of the
Bank and the Bank's subsidiary, and to a lesser degree from interest income from
securities and certificates of deposit with other banks that the Company has
purchased. The Bank's net income is primarily dependent upon the difference (or
spread) between the average yield earned on loans, investments and
mortgage-backed securities and the average rate paid on deposits and borrowings,
as well as the relative amounts of such assets and liabilities. The interest
rate spread is affected by regulatory, economic and competitive factors that
influence interest rates, loan demand and deposit flows. Net income is also
affected by, among other things, provision for loan losses, gains on the sale of
interest earning assets, service charges, servicing fees, subsidiary activities,
operating expenses, and income taxes.
The Bank has eight full service offices located in Faribault, Martin, Blue
Earth, Nicollet, Freeborn and Steele Counties, Minnesota.
Comparison of Financial Condition at March 31, 1997 and December 31, 1996:
Total assets increased by $560,000 from $201,326,000 at December 31, 1996
to $201,886,000 at March 31, 1997. The increase in total assets is primarily due
to net income for the quarter ended March 31, 1997. Cash decreased by $1,326,
from $8,301 at December 31, 1996 to $6,975 at March 31, 1997 as cash was used to
fund loan growth and increase investments in securities.
In accordance with the Bank's internal classification of assets policy,
management evaluates the loan portfolio on a quarterly basis to identify and
determine the adequacy of the allowance for loan loses. As of December 31, 1996
and March 31, 1997 the balance in the allowance for loan losses and the
allowance for loan losses as a percentage of total loans was $615,000 and
$608,000 and 0.34% and 0.34%, respectively.
Loans on which the accrual of interest has been discontinued amounted to
$392,000 and $298,000 at March 31, 1997 and December 31, 1996, respectively. The
effect of nonaccrual loans was not significant to the results of operations. The
Company includes all loans considered impaired under FASB Statement No. 114 in
nonaccrual loans. The amount of impaired loans was not material at March 31,
1997 and December 31, 1996.
Activity in the Company's allowance for loan losses for the three months
ended March 31, 1997 and 1996 is summarized as follows:
1997 1996
---------------------------------
Balance on January 1, $ 615,372 $ 512,430
Provision for loan losses 45,000 45,000
Charge-offs (17,628) (20,940)
Recoveries 10,205 2,602
---------------------------------
Balance on March 31, $ 652,948 $ 593,092
---------------------------------
7
Deposits decreased by $411,000 from $145,349,000 at December 31, 1996 to
$144,938,000 at March 31, 1997. Borrowed funds decreased by $500,000 from
$26,500,000 at December 31, 1996 to $26,000,000 at March 31, 1997. Current
income tax liability increased by $381,000 during the three month period ended
March 31, 1997. On September 30, 1996, a law was enacted which required savings
institutions insured by the Savings Association Insurance Fund (SAIF) to pay a
one time special assessment to recapitalize the SAIF. Due to the tax
consequences of this assessment, the Company had no current tax liability as of
December 31, 1996.
Equity increased by $535,000 from $28,202,000 at December 31, 1996 to
$28,737,000 at March 31, 1997. This change in equity is primarily due to net
income of $560,000 for the three months ended March 31, 1997 and due to the
purchase of $65,000 of treasury stock.
Comparison of Operating Results for the Three Months Ended March 31, 1997 and
March 31, 1996:
Net Income. Net Income increased by $60,000 for the three month period
ended March 31, 1997 when compared to the three month period ended March 31,
1996. The increase in net income was primarily due to an increase of $164,000 in
net interest income for the quarter ended March 31, 1997 when compared to the
same period in 1996. Also affecting net income was a $59,000 decrease in
noninterest income for the three months ended March 31, 1997 when compared to
the same period in 1996, which is discussed below.
Interest Income. Interest income from the loan portfolio increased by
$224,000 while interest income from investments in securities, certificates of
deposit and interest earned on interest bearing cash accounts decreased by
$46,000 for the three months ended March 31, 1997 when compared to the three
months ended March 31, 1996. The increase in interest income from the loan
portfolio was primarily the result of an increase in the average amount of the
loan portfolio during the first quarter of 1997 when compared to the first
quarter of 1996. The decrease in interest income from other interest bearing
assets was the result of a decrease in the average amount of these assets during
the first quarter of 1997 when compared to the first quarter of 1996.
Interest Expense. Interest expense on deposits decreased by $94,000 for
the first quarter of 1997 when compared to the first quarter of 1996. This
decrease was the result of a decrease in the average amount of deposits during
the first quarter of 1997 when compared to the first quarter of 1996. Interest
expense on borrowings increased by $108,000 during the first three months of
1997 when compared to the first three months of 1996. This increase was
primarily the result of an increase in the average amount of borrowings during
the first three months of 1997 when compared to the first three months of 1996.
Net Interest income. Net interest income increased by $164,000 from
$1,552,000 for the first quarter of 1996 to $1,716,000 for the first quarter of
1997. This is primarily the result of the increase in the interest income on the
loan portfolio due to the increase in the average loans for the three months
ended March 31, 1997 when compared to the same period in 1996.
Provision for loan losses. The provision for loan losses remained constant
during the first three months of 1997 when compared to the first three months of
1996. While the Company maintains its allowance for loan losses at a level that
it considers to be adequate to provide for potential losses, there can be no
assurance that further additions will not be made to the loss allowance and that
losses will not exceed estimated amounts.
Noninterest Income. Noninterest income decreased by $59,000 for the
quarter ended March 31, 1997 when compared to the same period in 1996. The
decrease in noninterest income was primarily the result of a $39,000 decrease in
the gain on sale of loans originated for sale and a $29,000 decrease in
insurance commissions for the first quarter of 1997 when compared to the first
quarter of 1996. The decrease in the gain on sale of loans originated for sale
was the result of a lesser amount of loans being sold during the first three
months of 1997 as compared to the first three months of 1996. The decrease in
insurance commissions was the result of a decrease in contingency commissions
that were earned by the Bank's insurance subsidiary during the first quarter of
1997 when compared to the same period in 1996.
Noninterest Expense. Total noninterest expense remained relatively
constant during the three month period ended March 31, 1997 when compared to the
same period in 1996. Increases in occupancy and equipment and other noninterest
expense were offset by decreases in data processing and SAIF insurance premiums.
The reduction in the SAIF insurance premiums was the result of legislation that
was signed into law on September 30, 1996 which recapitalized the SAIF and
reduced the insurance rate on a prospective basis.
8
Income Tax Expense. Income tax expense increased by $47,000 from $361,000
for the three months ended March 31, 1996 to $408,000 for the three months ended
March 31, 1997. This increase was the result of an increase in income before
income taxes for the three months ended March 31, 1997 when compared to the same
period in 1996.
Non-performing Assets. The following table sets forth the amounts and
categories of non-performing assets at March 31, 1997 and December 31, 1996.
March 31, 1997 December 31, 1996
----------------------------------
(Dollars in Thousands)
Non-accruing loans:
One to four family real estate $ 291 $ 164
All other mortgage loans 18 59
Consumer 83 75
------ -------
Total $ 392 $ 298
====== =======
Accruing loans which are contractually
past due 90 days or more:
One to four family real estate $ 117 $ 147
All other mortgage loans 80 -
------ -------
Total $ 197 $ 147
====== =======
Total non-accrual and accruing loans
past due 90 days or more $ 589 $ 445
====== =======
Repossessed property $ 24 $ 78
Other non-performing assets - -
------ -------
Total repossessed and non-performing
assets $ 24 $ 78
====== =======
Total non-performing assets $ 613 $ 523
====== =======
Total non-accrual and accruing loans
past due 90 days or more to net loans 0.33% 0.25%
====== =======
Total non-accrual and accruing loans
past due 90 days or more to total assets 0.29% 0.22%
====== =======
Total nonperforming assets to total assets 0.30% 0.26%
====== =======
Financial Standards Board Statement No. 114, Accounting by Creditors for
Impairment of a Loan, and Statement No. 118, Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures, requires that
impaired loans within the scope of these Statements be measured based on the
present value of expected future cash flows discounted at the loan's effective
interest rate; or as a practical expedient, either at the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent. At March 31, 1997 and December 31, 1996, the value of loans that
would be classified as impaired under these Statements is considered to be
immaterial.
9
Liquidity and Capital Resources:
Wells Federal is required under applicable federal regulations to
maintain specified levels of "liquid" investments in qualifying types of US
Government, federal agency and other investments having maturities of five years
or less. Current OTS regulations require that a savings association maintain
liquid assets of not less than 5% of its average daily balance of net
withdrawable deposit accounts and borrowings payable in one year or less, of
which short-term liquid assets must consist of not less than 1%. At March 31,
1997, the Bank's liquidity, as measured for regulatory purposes, was 5.95%. The
Bank adjusts liquidity as appropriate to meet its asset/liability objectives.
The Bank's primary sources of funds are deposits, borrowed funds,
amortization and prepayment of loans, maturities of investment securities and
funds provided from operations. While scheduled loan repayments are a relatively
predictable source of funds, deposit flows and loan prepayments are
significantly influenced by general interest rates, economic conditions and
competition. If needed, the Bank's source of funds can be supplemented by
wholesale funds obtained through additional advances from the Federal Home Loan
Bank system. The Bank invests excess funds in overnight deposits, which not only
serve as liquidity, but also earn interest as income until funds are needed to
meet required loan funding.
The Bank has other sources of liquidity if a need for additional funds
arises although the Bank has not used them. Additional sources of funds include
borrowing against mortgage-backed or other securities. At March 31, 1997, the
mortgage-backed securities portfolio consisted solely of collateralized mortgage
obligations guaranteed as to principal by FNMA or FHLMC. These securities are
considered non-high-risk securities under applicable criteria. These securities
had a market value of $321,000 at March 31, 1997 and the carrying value of these
securities are adjusted quarterly to reflect market value.
In 1996, the Company approved stock buy back programs in which up to
317,188 shares of the common stock of the Company may be acquired. An additional
186,313 shares may be purchased in the future in accordance with these programs.
The Bank is required to maintain specified amounts of capital. The capital
standards generally require the maintenance of regulatory capital sufficient to
meet a tangible capital requirement, a core capital requirement and a risk based
capital requirement. At March 31, 1997, the Bank's tangible capital totaled
$21.1 million, or 10.57% of adjusted total assets, and core capital totaled
$21.1 million, or 10.57% of adjusted total assets, which substantially exceeded
the respective 1.5% tangible capital and 3.0% core capital requirements at that
date by $18.1 million and $15.1 million, respectively, or 9.07% and 7.57% of
adjusted total assets, respectively. The Bank's risk-based capital totaled $21.7
million at March 31, 1997 or 19.02% of risk-weighted assets, which exceeded the
current requirements of 8.0% of risk-weighted assets by $12.6 million or 11.02%
of risk-weighted assets.
As of May 20, 1996, the most recent examination by the Office of Thrift
Supervision categorized the Bank as "well capitalized" under the regulatory
framework for Prompt Corrective Action. To be categorized as adequately
capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based,
and Tier 1 leverage ratios. There are no conditions or events since that
notification that management believes have changed the Bank's category.
10
WELLS FINANCIAL CORP. and SUBSIDIARY
March 31, 1997
FORM 10-QSB
PART II. OTHER INFORMATION
- --------------------------
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other information
-----------------
None
Item 6. Exhibits and Reports of Form 8-K
--------------------------------
a. Exhibits: None
b. No reports on Form 8-K were filed
No other information is required to be filed under Part II of the form
===============================================================================
Page 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WELLS FINANCIAL CORP.
By: /s/ Lawrence H. Kruse Date: 04/30/97
-------------------------------------- --------------
Lawrence H. Kruse
President and Chief Executive Officer
By: /s/ James D. Moll Date: 04/30/97
--------------------------------------- ---------------
James D. Moll
Treasurer and Principal Financial &
Accounting Officer
12