Wells Financial Corp. Announces Annual Results and Cash Dividend

Jan 21, 2010, 10:40 ET from Wells Financial Corp.

WELLS, Minn., Jan. 21 /PRNewswire-FirstCall/ --

Selected Financial Data

(Dollars in Thousands, except per share data)

(unaudited)



Quarter Ended
December 31,

Year Ended
December 31,


2009

2008

2009

2008






Net Income

$      440   

$      455   

$    2,110   

$    1,245   

Basic earnings per share

$     0.57   

$     0.59   

$      2.72   

$      1.59   

Diluted earnings per share

$     0.57   

$     0.58   

$      2.71   

$      1.58   

Return on average equity (1)

8.02%

8.90%

9.85%

6.03%

Return on average assets (1)

0.68%

0.73%

0.81%

0.50%

Net interest rate spread

3.26%

3.47%

3.29%

3.25%

Net interest rate margin

3.32%

3.57%

3.36%

3.35%

Book value per share

$   28.42   

$   26.58   

$    28.42   

$    26.58   

(1) Annualized







Lonnie R. Trasamar, President of Wells Financial Corp. (the Company) (OTC Bulletin Board: WEFP), the holding company of Wells Federal Bank (the Bank), announced annual earnings for 2009 of $2,110,000, up $865,000 or 69.5%, when compared to 2008.  Basic and diluted earnings per share for 2009 were $2.72 and $2.71, respectively, up $1.13, when compared to 2008. The increase in net income for 2009 when compared to 2008 resulted, primarily, from an increase in the gain on sale of loans to the secondary market.  During 2009 the Bank saw increased activity in the refinancing of loans sold to the secondary market due to a decrease in secondary market interest rates and programs introduced by the secondary market that streamlined the refinance process for the Bank's customers.  Net income for the quarter ended December 31, 2009 was $440,000, down $15,000 or 3.3%, when compared to the same period in 2008.  Basic and diluted earnings per share for the fourth quarter of 2009 were $0.57.  Basic and diluted earnings per share for the fourth quarter of 2008 were $0.59 and $0.58, respectively.

When comparing December 31, 2009 to December 31, 2008, total assets increased by $12,168,000 due to a $32.3 million increase in cash.  This increase in cash resulted from an increase in customer deposits of $26 million.  Partially offsetting the increase in cash was a $22 million decrease in loans receivable.  The decrease in loans receivable resulted, primarily, from decreases in loans for agricultural land and home equity line of credit loans.  Liabilities increased by $10.7 million during 2009 due to the increase in deposits mentioned above being partially offset by a $15.4 million decrease in borrowed funds.  

Cash Dividend Announcement

On January 19, 2010, the Company's Board of Directors declared a $0.26 per share cash dividend, payable on February 23, 2010 to shareholders of record on February 09, 2010.  This is the seventeenth 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

12/31/09

12/31/08

Cash, including interest-bearing accounts:

$        41,013 

$          8,744 

   12/31/09 $34,777; 12/31/08 $2,689

Certificates of deposit

175 

700 

Securities available for sale

10,698 

8,420 

Federal Home Loan Stock

2,728 

3,302 

Loans held for sale

1,931 

2,974 

Loans receivable, net

195,423 

217,425 

Accrued interest receivable

1,564 

1,813 

Prepaid Income Taxes

Premises and equipment

3,693 

3,961 

Mortgage servicing rights, net

1,373 

1,294 

Other assets

6,623 

4,420 

             TOTAL ASSETS

$      265,221 

$      253,053 

LIABILITIES AND EQUITY

LIABILITIES:

   Deposits

$      208,871 

$      182,888 

   Borrowed funds

31,435 

46,806 

   Advances from borrowers for taxes and insurance

2,233 

2,081 

   Income taxes:

      Deferred

53 

205 

   Accrued interest payable

61 

84 

   Accrued expenses and other liabilities

505 

376 

         TOTAL LIABILITIES

243,158 

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

17,166 

17,143 

   Retained earnings, substantially restricted

32,615 

31,312 

   Other comprehensive income

131 

23 

   Treasury stock, at cost, 1,411,260 shares at December

31, 2009; 1,412,060 shares at December 31, 2008

(28,068)

(28,084)

         TOTAL EQUITY

22,063 

20,613 

              TOTAL LIABILITIES AND EQUITY

$      265,221 

$      253,053 

Wells Financial Corp. and Subsidiary

Consolidated Statement of Income

(Dollars in thousands, except per share data)

(unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2009

2008

2009

2008

Interest and dividend income

 Loans receivable:

   Residential loans

$    615

$    683

$ 2,689

$ 2,818

   Commercial Loans

583

638

2,478

2,717

   Ag Real Estate Loans

783

909

3,398

3,508

   Consumer and other loans

1,170

1,308

4,754

5,123

 Investment securities and other interest-

   bearings deposits

109

124

437

688

              Total interest income

3,260

3,662

13,756

14,854

Interest expense

 Deposits

949

1,144

4,000

5,140

 Borrowed funds

302

418

1,591

1,870

              Total interest expense

1,251

1,562

5,591

7,010

              Net interest income

2,009

2,100

8,165

7,844

Provision for loan losses

145

150

980

503

              Net interest income after

               provision for loan losses

1,864

1,950

7,185

7,341

Noninterest income

 Gain on sale of loans

282

172

2,365

853

 Loan servicing fees

240

225

933

910

 Insurance commissions

154

150

636

601

 Fees and service charges

158

164

605

683

 Other

249

73

463

334

              Total noninterest income

1,083

784

5,002

3,381

Noninterest expense

 Compensation and benefits

1,135

987

4,269

4,089

 Occupancy and equipment

246

282

1,010

1,175

 Federal insurance premiums

196

8

325

28

 Data processing

174

184

738

780

 Advertising

58

62

238

238

 Amortization & Valuation adjustments for MSR's

89

135

461

552

 Impairment of Securities Available for Sale

-

-

-

485

 Other

387

332

1,791

1,380

              Total noninterest expense

2,285

1,990

8,832

8,727

              Income before income taxes

662

744

3,355

1,995

Income tax expense

222

289

1,245

750

              Net Income

$    440

$    455

$ 2,110

$ 1,245

Earnings per share

   Basic earnings per share

$   0.57

$   0.59

$   2.72

$   1.59

   Diluted earnings per share

$   0.57

$   0.58

$   2.71

$   1.58

SOURCE Wells Financial Corp.