WEFC Wells Financial (MM)

Wells Financial Corp. Announces Third Quarter Earnings WELLS, Minn., Nov. 9 /PRNewswire-FirstCall/ -- Selected Financial Data Three months ended Nine months ended September September September September 30, 2004 30, 2003 30, 2004 30, 2003 Net Income $471,000 $1,135,000 $1,513,000 $3,027,000 Basic earnings per share $0.40 $1.00 $1.30 $2.68 Diluted earnings per share $0.40 $0.98 $1.28 $2.62 Return on average equity (1) 6.6% 16.8% 7.1% 15.3% Return on average assets (1) 0.8% 2.0% 0.9% 1.8% Net interest rate spread 3.8% 2.9% 3.7% 2.8% Net interest rate margin 4.0% 3.2% 3.9% 3.0% Book value per share at September 30 $24.88 $24.18 $24.88 $24.18 (1) annualized Lonnie R. Trasamar, President of Wells Financial Corp. (the "Company") (NASDAQ:WEFC), the holding company of Wells Federal Bank (the "Bank"), announced earnings of $471,000 for the quarter ended September 30, 2004, down 58.5% when compared to the same period in 2003. Basic and diluted earnings per share for the quarter were $0.40 and $0.40. This compares to basic and diluted earnings per share of $1.00 and $0.98, respectively, for the quarter ended September 30, 2003. Net income for the nine-months ended September 30, 2004 was $1,513,000, down 50.0% when compared to the same period in 2003. Basic and diluted earnings per share were $1.30 and $1.28, respectively. Basic and diluted earnings per share for the nine-months ended September 30, 2003 were $2.68 and $2.62, respectively. The decrease in net income for the three and nine months ended September 30, 2004 when compared to the same periods in 2003 was primarily the result of decreases of $1,371,000 and $3,540,000, respectively, in the gain on sale of loans originated for sale. During the first nine months of 2004 fewer mortgage loans were originated for sale when compared to the first nine months of 2003 resulting in a decrease in gain on sale of loans originated for sale. Partially offsetting the decrease in gain on sale of loans originated for sale were increases of $542,000 and $1,200,000 in net interest income for the three and nine months ended September 30, 2004, respectively, when compared to the same periods in 2003. Total assets increased by $8,671,000 during the first nine months of 2004 due primarily to an increase of $32,500,000 in loans receivable. The increase in loans receivable resulted, primarily, from increases in commercial and agricultural real estate loans. Cash and securities available for sale decreased by $13,753,000 and $11,254,000, respectively. Liabilities increased by $7,618,000 during the first nine months of 2004 primarily due to a $10,640,000 increase in borrowed funds being partially offset by a $4,580,000 decrease in deposits. 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 September 30, 2004 and December 31, 2003 (Dollars in Thousands) (Unaudited) ASSETS 2004 2003 Cash, including interest-bearing accounts September 30, 2004 $5,844; December 31, 2003 $17,655 $11,565 $25,318 Certificates of deposit 200 200 Securities available for sale, at fair value 16,156 27,410 Federal Home Loan Bank Stock, at cost 1,777 1,303 Loans held for sale 1,549 1,997 Loans receivable, net 192,549 160,049 Prepaid income taxes 92 - Accrued interest receivable 1,613 1,209 Premises and equipment, net 4,140 3,585 Mortgage servicing rights, net 2,573 2,681 Other assets 262 53 TOTAL ASSETS $232,476 $223,805 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $165,082 $169,662 Borrowed funds 33,640 23,000 Advances from borrowers for taxes and insurance 2,555 1,585 Deferred income taxes 1,506 1,456 Accrued interest payable 291 34 Accrued expenses and other liabilities 481 200 TOTAL LIABILITIES 203,555 195,937 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 17,142 17,154 Retained earnings, substantially restricted 27,669 26,922 Accumulated other comprehensive income 554 525 Unearned compensation restricted stock awards (396) (561) Treasury stock, at cost, shares at September 30, 2004, 1,024,849 and 1,033,673 shares at December 31, 2003 (16,267) (16,391) TOTAL STOCKHOLDERS' EQUITY 28,921 27,868 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $232,476 $223,805 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, 2004 2003 2004 2003 Interest and dividend income Loans receivable: First mortgage loans $1,754 $1,674 $5,187 $5,489 Consumer and other loans 1,163 698 3,260 2,117 Investment securities and other interest bearing deposits 189 275 634 928 Total interest income 3,106 2,647 9,081 8,534 Interest Expense Deposits 637 763 1,933 2,643 Borrowed funds 357 314 988 931 Total interest expense 994 1,077 2,921 3,574 Net interest income 2,112 1,570 6,160 4,960 Provision for loan losses - - - - Net interest income after provision for loan losses 2,112 1,570 6,160 4,960 Noninterest income Gain on sale of loans originated for sale 273 1,644 1,102 4,642 Loan servicing fees 241 242 722 691 Insurance commissions 165 135 505 346 Fees and service charges 161 404 464 820 Other 33 66 93 135 Total noninterest income 873 2,491 2,886 6,634 Noninterest expense Compensation and benefits 1,091 1,068 3,388 3,034 Occupancy and equipment 260 298 794 830 Data processing 102 106 369 358 Advertising 84 73 236 206 Amortization and valuation adjustments for mortgage servicing rights 209 250 473 854 Other 509 439 1,389 1,359 Total noninterest expense 2,255 2,234 6,649 6,641 Income before taxes 730 1,827 2,397 4,953 Income tax expense 259 692 884 1,926 Net income $471 $1,135 $1,513 $3,027 Cash dividends declared per share $0.22 $0.20 $0.66 $0.60 Earnings per share Basic $0.40 $1.00 $1.30 $2.68 Diluted $0.40 $0.98 $1.28 $2.62 Weighted average number of common shares outstanding: Basic 1,161,706 1,132,939 1,160,848 1,129,989 Diluted 1,186,586 1,157,877 1,185,728 1,154,927 DATASOURCE: Wells Financial Corp. CONTACT: Lonnie R. Trasamar of Wells Financial Corp., +1-507-553-3151

Copyright