WELLS, Minn., Oct. 22, 2014 /PRNewswire/ --
Selected Financial Data (Dollars in Thousands, except per share data) (unaudited) |
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Quarter Ended Sept. 30, |
Nine Months Ended |
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2014 |
2013 |
2014 |
2013 |
|
Net Income |
$ 518 |
$ 470 |
$ 865 |
$ 1,085 |
Basic earnings per share |
$ 0.68 |
$ 0.61 |
$ 1.14 |
$ 1.41 |
Diluted earnings per share |
$ 0.68 |
$ 0.61 |
$ 1.14 |
$ 1.41 |
Return on average equity (1) |
7.9% |
7.2% |
4.4% |
5.2% |
Return on average assets (1) |
0.8% |
0.8% |
0.5% |
0.6% |
Net interest rate spread |
3.5% |
3.3% |
3.5% |
3.3% |
Net interest rate margin |
3.6% |
3.3% |
3.5% |
3.3% |
Book value per share |
$ 35.37 |
$ 34.06 |
$ 35.37 |
$ 34.06 |
(1) Annualized |
Three Months Ended September 30, 2014
Lonnie R. Trasamar, President of Wells Financial Corp. (OTC BB:WEFP)(the Company), the holding company of Wells Federal Bank (the Bank), announced earnings for the third quarter of 2014 of $518,000, up $48,000 or 10.2% when compared to the third quarter of 2013. Basic and diluted earnings per share for the third quarter of 2014 were $0.68, up $0.07 or 11.4% when compared to the third quarter of 2013. The improvement in net income for the quarter is due, primarily, to a reduction in tax expense and an increase in net interest income.
When comparing the third quarter of 2014 with the third quarter of 2013, net interest income increased by $141,000, or 7.4% due to an increase in the net interest rate spread and an increase in the average balance of the loan portfolio. The provision for loan loss increased from $40,000 during the third quarter of 2013 to $100,000 during the third quarter of 2014. Please see discussion below for more information on the provision and allowance for loan loss. Noninterest income decreased by $95,000 due, primarily, to a decrease in the gain on sale of loans as fewer residential loans were originated and sold to the secondary market. Noninterest expense increased by $143,000, or 6.7% due, primarily, to an increase in compensation and benefits and data processing costs. Upon completion and filing of the Company's 2013 income tax return it was realized that the Company was over accrued for income tax purposes. This over accrual was reversed during the third quarter of 2014 resulting in a decrease in tax expense.
Nine Months Ended September 30, 2014
When comparing the nine months ended September, 30, 2014 net interest income increased by $282,000, or 4.9%, due to increases in the net interest rate spread and the average balance of the loan portfolio discussed above. Noninterest income decreased by $586,000, or 17.9%, due to a decrease in the gain on sale of loans. During 2014 changes in market conditions resulted in fewer loans being originated and sold to the secondary market than during 2013. Noninterest expense increased by $337,000, or 5.0%, due primarily, to increases in compensation and benefits (primarily increased health insurance costs) and data processing.
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. The provision for loan loss increased by $5,000 for the first nine months of 2014 when compared to the same period in 2013. As of September 30, 2014 and 2013, the balance in the allowance for loan losses and the allowance for loan losses as a percentage of total loans were $2,040,000 and $1,634,000 and 1.1% and 1.0%, respectively.
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 |
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Consolidated Statement of Financial Condition |
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(Dollars in thousands) |
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(Unaudited) |
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ASSETS |
|||||||||
09/30/14 |
12/31/13 |
||||||||
Cash, including interest-bearing accounts: |
$ 13,511 |
$ 12,625 |
|||||||
09/30/14 $9,473; 12/31/13 $5,370 |
|||||||||
Certificates of deposit |
4,916 |
3,695 |
|||||||
Fed Funds Sold |
1,500 |
5,000 |
|||||||
Securities available for sale |
38,261 |
41,569 |
|||||||
Securities held to maturity |
- |
- |
|||||||
Federal Home Loan Stock |
2,086 |
2,021 |
|||||||
Loans held for sale |
1,587 |
1,952 |
|||||||
Loans receivable, net |
177,692 |
165,401 |
|||||||
Accrued interest receivable |
1,056 |
804 |
|||||||
Prepaid Income Taxes |
- |
- |
|||||||
Foreclosed real estate |
4,197 |
4,340 |
|||||||
Premises and equipment |
3,109 |
3,040 |
|||||||
Mortgage servicing rights, net |
1,895 |
1,952 |
|||||||
Other assets |
1,370 |
1,402 |
|||||||
TOTAL ASSETS |
$ 251,180 |
$ 243,801 |
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LIABILITIES AND EQUITY |
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LIABILITIES: |
|||||||||
Deposits |
$ 220,284 |
$ 214,370 |
|||||||
Borrowed funds |
- |
- |
|||||||
Advances from borrowers for taxes and insurance |
3,575 |
2,614 |
|||||||
Accrued interest payable |
137 |
6 |
|||||||
Accrued expenses and other liabilities |
773 |
728 |
|||||||
TOTAL LIABILITIES |
224,769 |
217,718 |
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STOCKHOLDER'S EQUITY: |
|||||||||
Common stock, $.10 par value; 7,000.000 shares |
|||||||||
authorized; 2,187,500 shares issued |
$ 219 |
$ 219 |
|||||||
Additional paid in capital |
17,111 |
17,086 |
|||||||
Retained earnings, substantially restricted |
37,758 |
37,235 |
|||||||
Other comprehensive income |
79 |
(264) |
|||||||
Treasury stock, at cost, 1,440,813 shares at September |
|||||||||
30, 2014; 1,418,180 shares at December 31, 2013 |
(28,756) |
(28,193) |
|||||||
TOTAL EQUITY |
26,411 |
26,083 |
|||||||
TOTAL LIABILITIES AND EQUITY |
$ 251,180 |
$ 243,801 |
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Wells Financial Corp. and Subsidiary |
|||||||||
Consolidated Statement of Income |
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(Dollars in thousands, except per share data) |
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(Unaudited) |
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Three Months Ended |
Nine Months Ended |
||||||||
September 30, |
September 30, |
||||||||
2014 |
2013 |
2014 |
2013 |
||||||
Interest and dividend income |
|||||||||
Loans receivable: |
|||||||||
Residential loans |
$ 677 |
$ 654 |
$ 1,997 |
$ 1,908 |
|||||
Commercial Loans |
336 |
297 |
959 |
920 |
|||||
Ag Real Estate Loans |
353 |
289 |
1,029 |
941 |
|||||
Consumer and other loans |
660 |
653 |
1,918 |
2,001 |
|||||
Investment securities and other interest- |
|||||||||
bearings deposits |
177 |
212 |
548 |
556 |
|||||
Total interest income |
2,203 |
2,105 |
6,451 |
6,326 |
|||||
Interest expense |
|||||||||
Deposits |
148 |
191 |
462 |
618 |
|||||
Borrowed funds |
- |
- |
- |
1 |
|||||
Total interest expense |
148 |
191 |
462 |
619 |
|||||
Net interest income |
2,055 |
1,914 |
5,989 |
5,707 |
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Provision for loan losses |
100 |
40 |
420 |
415 |
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Net interest income after |
|||||||||
provision for loan losses |
1,955 |
1,874 |
5,569 |
5,292 |
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Noninterest income |
|||||||||
Gain on sale of loans |
214 |
344 |
564 |
1,289 |
|||||
Gain on sale of securities AFS |
- |
4 |
3 |
4 |
|||||
Loan servicing fees |
168 |
227 |
600 |
693 |
|||||
Insurance commissions |
195 |
181 |
487 |
542 |
|||||
Fees and service charges |
129 |
114 |
346 |
334 |
|||||
Other |
211 |
142 |
695 |
419 |
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Total noninterest income |
917 |
1,012 |
2,695 |
3,281 |
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Noninterest expense |
|||||||||
Compensation and benefits |
1,093 |
991 |
3,460 |
3,143 |
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Occupancy and equipment |
172 |
204 |
573 |
665 |
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Federal insurance premiums |
83 |
45 |
190 |
107 |
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Data processing |
266 |
197 |
685 |
602 |
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Advertising |
71 |
68 |
181 |
184 |
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Amortization of mortgage servicing rights |
90 |
110 |
239 |
344 |
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Other |
487 |
504 |
1,748 |
1,694 |
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Total noninterest expense |
2,262 |
2,119 |
7,076 |
6,739 |
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Income before income taxes |
610 |
767 |
1,188 |
1,834 |
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Income tax expense |
92 |
297 |
323 |
749 |
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Net Income |
$ 518 |
$ 470 |
$ 865 |
$ 1,085 |
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Earnings per share |
|||||||||
Basic earnings per share |
$ 0.68 |
$ 0.61 |
$ 1.14 |
$ 1.41 |
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Diluted earnings per share |
$ 0.68 |
$ 0.61 |
$ 1.14 |
$ 1.41 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wells-financial-corp-announces-third-quarter-results-333450364.html
SOURCE Wells Financial Corp.
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