Wells Financial Corp. Announces First Quarter Results

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Apr 16, 2014, 03:04 ET

WELLS, Minn., April 16, 2014 /PRNewswire/ --

Selected Financial Data (Dollars in Thousands, except per share data) (unaudited)

	Quarter Ended March 31,
	2014	2013

Net Income	$ 251	$ 229
Basic earnings per share	$ 0.33	$ 0.30
Diluted earnings per share	$ 0.33	$ 0.30
Return on average equity (1)	3.8%	3.5%
Return on average assets (1)	0.4%	0.4%
Net interest rate spread	3.4%	3.3%
Net interest rate margin	3.4%	3.4%
Book value per share	$ 34.54	$ 34.09
(1) Annualized

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 first quarter of 2014 of $251,000, up $22,000 or 9.6% when compared to the first quarter of 2013. Basic and diluted earnings per share for the first quarter of 2014 were $0.33, up $0.03 or 10.0% when compared to the first quarter of 2013.

When comparing the first quarter of 2014 with the first quarter of 2013, net interest income increased by $33,000, or 1.7%. The provision for loan loss decreased by $205,000, or 54.7%. Noninterest income decreased by $308,000, or 25.5% during 2014 due, primarily, to a decrease in the gain on sale of loans. Fewer loans for sale to the secondary market were originated in 2014 when compared to 2013, due to changes in market rates. Noninterest expense decreased by $107,000, or 4.5%, during the first quarter of 2014 when compared to the same period in 2013.

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 stated above, the provision for loan loss decreased by $205,000 for the first quarter of 2014 when compared to the same period in 2013. As of March 31, 2014 and 2013, the balance in the allowance for loan losses and the allowance for loan losses as a percentage of total loans were $1,826,000 and $1,878,000 and 1.1% and 1.2%, 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
Consolidated Statement of Financial Condition
(Dollars in thousands)
(Unaudited)

ASSETS
	03/31/14	12/31/13

Cash, including interest-bearing accounts:	$ 15,443	$ 12,625
03/31/14 $11,591; 12/31/13 $5,370
Certificates of deposit	3,450	3,695
Fed Funds Sold	11,500	5,000
Securities available for sale	36,458	41,569
Securities held to maturity	-	-
Federal Home Loan Bank Stock, at cost	2,036	2,021
Loans held for sale	1,307	1,952
Loans receivable, net	163,924	165,401
Accrued interest receivable	724	804
Prepaid income taxes	234	-
Foreclosed real estate	4,386	4,340
Premises and equipment	2,995	3,040
Mortgage servicing rights, net	1,934	1,952
Other assets	939	1,402
TOTAL ASSETS	$ 245,330	$ 243,801


LIABILITIES AND EQUITY

LIABILITIES:
Deposits	$ 214,164	$ 214,370
Borrowed funds	-	-
Advances from borrowers for taxes and insurance	3,924	2,614
Income taxes:
Deferred	-	-
Accrued interest payable	54	6
Accrued expenses and other liabilities	883	728
TOTAL LIABILITIES	219,025	217,718

STOCKHOLDER'S EQUITY:
Common stock, $.10 par value; 7,000.000 shares
authorized; 2,187,500 shares issued	$ 219	$ 219
Additional paid in capital	17,094	17,086
Retained earnings, substantially restricted	37,372	37,235
Other comprehensive income	(10)	(264)
Treasury stock, at cost, 1,425,885 shares at March
31, 2014; 1,418,180 shares at December 31, 2013	(28,370)	(28,193)
TOTAL EQUITY	26,305	26,083

TOTAL LIABILITIES AND EQUITY	$ 245,330	$ 243,801




Wells Financial Corp. and Subsidiary
Consolidated Statement of Income
(Dollars in thousands, except per share data)
(Unaudited)
	Three Months Ended
	March 31,
	2014	2013

Interest and dividend income
Loans receivable:
Residential loans	$ 653	$ 631
Commercial Loans	307	313
Ag Real Estate Loans	331	338
Consumer and other loans	626	689
Investment securities and other interest-
bearings deposits	194	168
Total interest income	2,111	2,139
Interest expense
Deposits	160	220
Borrowed funds	-	1
Total interest expense	160	221
Net interest income	1,951	1,918
Provision for loan losses	170	375
Net interest income after
provision for loan losses	1,781	1,543
Noninterest income
Gain on sale of loans	176	536
Loan servicing fees	225	234
Insurance commissions	141	209
Fees and service charges	105	111
Other	252	117
Total noninterest income	899	1,207
Noninterest expense
Compensation and benefits	1,179	1,063
Occupancy and equipment	208	219
Federal insurance premiums	54	49
Data processing	215	210
Advertising	48	59
Amortization & Valuation adjustments for MSR's	71	118
Other	486	650
Total noninterest expense	2,261	2,368
Income before income taxes	419	382
Income tax expense	168	153
Net Income	$ 251	$ 229

Earnings per share
Basic earnings per share	$ 0.33	$ 0.30
Diluted earnings per share	$ 0.33	$ 0.30