WELLS FINANCIAL CORP. 
By WELLS, Minn., July 22 /PRNewswire-FirstCall/ --
Selected Financial Data
Quarter ended Six months ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
-------- -------- -------- --------
Net Income $597,000 $458,000 $1,242,000 $782,000
Basic earnings
per share $0.77 $0.58 $1.60 $0.99
Diluted earnings
per share $0.77 $0.58 $1.60 $0.98
Return on
average equity(1) 11.2% 8.8% 11.1% 7.5%
Return on
average assets(1) 0.9% 0.7% 0.9% 0.6%
Net interest
rate spread 3.3% 3.2% 3.3% 3.1%
Net interest
rate margin 3.4% 3.3% 3.4% 3.2%
Book value per
share $27.75 $26.36 $27.75 $26.36
(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 earnings for the second quarter of 2009 of $597,000, up $139,000 or 30.3%, when compared to the second quarter of 2008. Basic and diluted earnings per share for the second quarter of 2009 were $0.77, up $0.19, or 33.8% when compared to the second quarter of 2008.
Net income for the six months ended June 30, 2009 was $1,242,000, up $460,000 or 58.8% when compared to the same period in 2008. Basic earnings per share were $1.60 for the first six months of 2009, up 61.6% when compared to basic earnings per share of $0.99 for the first six months of 2008. Diluted earnings per share for the first six months of 2009 were $1.60, up 63.3% when compared to the diluted earnings per share of $0.99 for the first six months of 2008.
Net interest income increased by $22,000 and $300,000, or 1.1% and 7.9%, for the three and six month periods ended June 30, 2009, respectively, when compared to the same periods in 2008. The provision for loan loss increased by $300,000 and $627,000 for the three and six months ended June 30, 2009 when compared to the same periods in 2008. 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 loss and adjusts the level of the allowance for loan loss through the provision for loan loss. As of June 30, 2009 and December 31, 2008, the balance in the allowance for loan losses and the allowance for loan losses as a percentage of total loans were $1,785,000 and $1,096,000 and 0.85% and 0.50%, respectively.
When comparing the quarter and six months ended June 30, 2009 to the same periods in 2008, noninterest income increased by $587,000 and $1,134,000, or 62.8% and 62.7%, respectively, due to an increase in the gain on sale of loans which resulted from increased residential loan refinance activity. Noninterest expense increased by $34,000 and $31,000, or 1.6% and 0.7% for the quarter and six months ended June 30, 2009, respectively, when compared to the same periods in 2008.
When comparing June 30, 2009 to December 31, 2008, total loans decreased by $9,778,000 due, primarily, to decreases in home equity line of credit loans and loans on agricultural real estate. Liabilities increased by $2,929,000 during the first six months of 2009 due to a decrease in borrowed funds being more than offset by an increase in deposits.
Cash Dividend Announcement
On July 21, 2009, the Company's Board of Directors declared a $0.26 per share cash dividend, payable on August 24, 2009 to shareholders of record on August 10, 2009.
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
06/30/09 12/31/08
-------- --------
Cash, including interest-bearing
accounts: $20,394 $8,744
06/30/09 $15,468; 12/31/08 $2,689
Certificates of deposit 400 700
Securities available for sale 8,465 8,420
Federal Home Loan Stock 3,660 3,302
Loans held for sale 11,704 2,974
Loans receivable, net 198,917 217,425
Accrued interest receivable 1,812 1,813
Prepaid Income Taxes - -
Premises and equipment 3,845 3,961
Mortgage servicing rights, net 1,469 1,294
Other assets 6,224 4,420
----- -----
TOTAL ASSETS $256,890 $253,053
======== ========
LIABILITIES AND EQUITY
LIABILITIES:
Deposits $190,970 $182,888
Borrowed funds 41,281 46,806
Advances from borrowers
for taxes and insurance 2,198 2,081
Income taxes:
Deferred 15 205
Accrued interest payable 319 84
Accrued expenses and
other liabilities 586 376
--- ---
TOTAL LIABILITIES 235,369 232,440
------- -------
STOCKHOLDER'S EQUITY:
Common stock, $.10 par
value; 7,000.000 shares
authorized; 2,187,500
shares issued $219 $219
Additional paid in capital 17,158 17,143
Retained earnings,
substantially restricted 32,150 31,312
Other comprehensive income 78 23
Treasury stock, at cost,
1,412,060 shares at June 30, 2009;
1,412,060 shares at December 31,
2008 (28,084) (28,084)
------- -------
TOTAL EQUITY 21,521 20,613
------ ------
TOTAL LIABILITIES AND
EQUITY $256,890 $253,053
======== ========
WELLS FINANCIAL CORP. and SUBSIDIARY
Consolidated Statement of Income
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Interest and dividend
income
Loans receivable:
Residential loans $704 $719 $1,421 $1,481
Commercial Loans 578 701 1,208 1,396
Ag Real Estate Loans 882 883 1,780 1,764
Consumer and
other loans 1,183 1,271 2,424 2,554
Investment securities
and other interest-
bearings deposits 107 189 212 400
--- --- --- ---
Total interest
income 3,454 3,763 7,045 7,595
----- ----- ----- -----
Interest expense
Deposits 1,005 1,320 2,059 2,777
Borrowed funds 478 494 902 1,034
--- --- --- -----
Total interest
expense 1,483 1,814 2,961 3,811
----- ----- ----- -----
Net interest
income 1,971 1,949 4,084 3,784
----- ----- ----- -----
Provision for loan
losses 375 75 760 133
--- --- --- ---
Net interest
income after
provision for
loan losses 1,596 1,874 3,324 3,651
----- ----- ----- -----
Noninterest income
Gain on sale of loans 932 294 1,726 545
Loan servicing fees 231 230 456 460
Insurance commissions 147 138 333 310
Fees and service
charges 143 172 292 335
Other 68 100 136 159
--- --- --- ---
Total noninterest
income 1,521 934 2,943 1,809
----- --- ----- -----
Noninterest expense
Compensation and
benefits 1,028 1,027 2,102 2,094
Occupancy and
equipment 265 303 526 631
Federal insurance
premiums 38 6 56 11
Data processing 239 219 493 417
Advertising 49 60 103 113
Amortization &
Valuation adjustments
for MSR's 115 135 261 277
Other 398 348 719 686
--- --- --- ---
Total noninterest
expense 2,132 2,098 4,260 4,229
----- ----- ----- -----
Income before
income taxes 985 710 2,007 1,231
Income tax expense 388 252 765 449
--- --- --- ---
Net Income $597 $458 $1,242 $782
==== ==== ====== ====
Earnings per share
Basic earnings
per share $0.77 $0.58 $1.60 $0.99
===== ===== ===== =====
Diluted earnings
per share $0.77 $0.58 $1.60 $0.98
===== ===== ===== =====
SOURCE Wells Financial Corp.
