WELLS FINANCIAL CORP. 
By WELLS, Minn., April 22 /PRNewswire-FirstCall/ --
Selected Financial Data
(Dollars in Thousands, except per share data)
(unaudited)
Quarter Ended March 31,
2010 2009
---- ----
Net Income $351 $645
Basic earnings per share $0.45 $0.83
Diluted earnings per share $0.45 $0.83
Return on average equity (1) 6.33% 12.40%
Return on average assets (1) 0.54% 0.99%
Net interest rate spread 3.32% 3.40%
Net interest rate margin 3.38% 3.47%
Book value per share $28.52 $27.23
(1) Annualized
Lonnie R. Trasamar, President of Wells Financial Corp. (OTC Bulletin Board: WEFP) (the Company), the holding company of Wells Federal Bank (the Bank), announced first quarter earnings for 2010 of $351,000, down $294,000 or 45.6%, when compared to the first quarter of 2009. Basic and diluted earnings per share for the quarter were $0.45, down $0.38, when compared to the first quarter of 2009. The decrease in net income resulted from a decrease of $660,000 in the gain on sale of loans to the secondary market. During the first quarter of 2009 the Bank saw increased activity in the refinancing of loans sold to the secondary market when compared to the first quarter of 2010 due to programs introduced by the secondary market that streamlined the refinance process for the Bank's customers. While these programs are still available a large number of the Bank's customers elected to refinance their loans during 2009.
When comparing the first quarter of 2010 with the same period in 2009 the provision for loan loss decreased by $260,000. The provision reflects management's monitoring of the allowance for loan losses in relation to the size and quality of the loan portfolio. Management adjusts the provision for loan losses to adequately provide for loan losses. Due to changes in economic conditions and changes in the composition of the loan portfolio, it is possible that the provision for loan losses will increase in future periods.
When comparing March 31, 2010 to December 31, 2009, total assets decreased by $3,015,000 due, primarily, to a decrease in loans receivable. Liabilities decreased by $3.3 million during the first quarter of 2010 due to a decrease in borrowed funds.
Cash Dividend Announcement
On April 20, 2010, the Company's Board of Directors declared a $0.26 per share cash dividend, payable on May 21, 2010 to shareholders of record on May 7, 2010. This is the eighteenth consecutive quarter that the Company has paid a $0.26 dividend.
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.
**An unaudited consolidated balance sheet and income statement are part of this press release**
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statement of Financial Condition
(Dollars in Thousands)
(Unaudited)
ASSETS
03/31/10 12/31/09
-------- --------
Cash, including interest-bearing accounts: $28,666 $41,013
03/31/10 $24,468; 12/31/09 $34,777
Certificates of deposit 11,131 175
Securities available for sale 13,045 10,698
Federal Home Loan Bank Stock, at cost 2,491 2,728
Loans held for sale 958 1,931
Loans receivable, net 192,041 195,423
Accrued interest receivable 1,511 1,564
Premises and equipment 3,614 3,693
Mortgage servicing rights, net 1,304 1,373
Other assets 7,445 6,623
----- -----
TOTAL ASSETS $262,206 $265,221
======== ========
LIABILITIES AND EQUITY
LIABILITIES:
Deposits $209,360 $208,870
Borrowed funds 26,185 31,435
Advances from borrowers for taxes and
insurance 3,460 2,233
Income taxes:
Deferred 83 157
Accrued interest payable 176 61
Accrued expenses and other liabilities 614 402
--- ---
TOTAL LIABILITIES 239,878 243,158
------- -------
STOCKHOLDER'S EQUITY:
Common stock, $.10 par value; 7,000.000
shares
authorized; 2,187,500 shares issued $219 $219
Additional paid in capital 17,127 17,166
Retained earnings, substantially restricted 32,763 32,615
Other comprehensive income 156 131
Treasury stock, at cost, 1,404,699 shares
at March
31, 2010;1,411,260 shares at December
31,2009 (27,937) (28,068)
------- -------
TOTAL EQUITY 22,328 22,063
------ ------
TOTAL LIABILITIES AND EQUITY $262,206 $265,221
======== ========
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statement of Income
(Dollars in Thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2010 2009
---- ----
Interest and dividend income
Loans receivable:
Residential loans $601 $717
Commercial Loans 591 630
Ag Real Estate Loans 749 898
Consumer and other loans 1,117 1,241
Investment securities and other
interest-
bearings deposits 141 105
--- ---
Total interest income 3,199 3,591
----- -----
Interest expense
Deposits 872 1,054
Borrowed funds 262 424
--- ---
Total interest expense 1,134 1,478
----- -----
Net interest income 2,065 2,113
----- -----
Provision for loan losses 125 385
--- ---
Net interest income after
provision for loan losses 1,940 1,728
----- -----
Noninterest income
Gain on sale of loans 134 794
Loan servicing fees 239 225
Insurance commissions 204 186
Fees and service charges 132 149
Other 78 68
--- ---
Total noninterest income 787 1,422
--- -----
Noninterest expense
Compensation and benefits 1,038 1,074
Occupancy and equipment 250 261
Federal insurance premiums 110 18
Data processing 187 200
Advertising 56 54
Amortization & Valuation adjustments
for MSR's 86 146
Other 430 375
--- ---
Total noninterest expense 2,157 2,128
----- -----
Income before income taxes 570 1,022
Income tax expense 219 377
Net Income $351 $645
==== ====
Earnings per share
Basic earnings per share $0.45 $0.83
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Diluted earnings per share $0.45 $0.83
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SOURCE Wells Financial Corp.
