Wells Financial Corp. Announces First Quarter Results of Operations

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Apr 20, 2016, 10:54 ET

WELLS, Minn., April 20, 2016 /PRNewswire/ --

	Selected Financial Data
	(Dollars in thousands, except per share data)
	(Unaudited)
	Quarter Ended March 31,
	2016	2015

Net Income	$ 566	$ 493
Basic earnings per share	$ 0.71	$ 0.66
Diluted earnings per share	$ 0.71	$ 0.66
Return on average equity (1)	7.21%	7.34%
Return on average assets (1)	0.83%	0.79%
Net interest rate spread	3.76%	3.77%
Net interest rate margin	3.77%	3.78%
Book value per share	$ 39.73	$ 36.52
Tangible book value per share	$ 39.40	$ 36.35
(1) Annualized

Quarter Ended March 31, 2016

James D. Moll, President of Wells Financial Corp. (OTC BB:WEFP)(the Company), the holding company of Wells Federal Bank (the Bank), announced net income for the first quarter of 2016 of $566,000, up $73,000 or 14.8%, when compared to the first quarter of 2015. Basic and diluted earnings per share for the first quarter 2016 were $0.71, up $0.05 or 7.6%, when compared to the first quarter of 2015. The improvement in net income for the quarter is due, primarily, to an increase of $114,000, or 5.1%, in net interest income, a $149,000, or 86.6%, increase in insurance commissions and a reduction of $50,000, or 71.4%, in the provision for loan losses.

The increase in net interest income was due to an increase in the average balance of the loan portfolio. The decrease in the provision for loan losses resulted from management's analysis of credit quality. The Bank's insurance agency subsidiary recorded increased commission income due to favorable insurance loss experience.

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 losses through the provision for loan losses. As of March 31, 2016 and December 31, 2015, the balance in the allowance for loan losses and the allowance for loan losses as a percentage of total loans were $2,070,000 and $1,988,000 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
Consolidated Balance Sheet
March 31, 2016 and December 31, 2015
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Assets
	03/31/16	12/31/15

Cash & cash equivalents	$ 4,895	$ 6,465
Due from banks - interest bearing	11,727	15,137
Fed funds sold	11,500	9,100
Securities available for sale	36,081	34,450
Federal Home Loan Bank stock, at cost	1,956	1,986
Loans held for sale	2,014	1,337
Loans receivable, net	193,681	197,595
Accrued interest receivable	945	1,020
Premises and equipment	3,324	3,368
Mortgage servicing rights, net	1,840	1,863
Foreclosed real estate	1,632	1,632
Core deposit intangible	257	285
Other assets	614	541
Total assets	$ 270,466	$ 274,779


Liabilities and Stockholders' Equity


LIABILITIES:
Deposits	$ 234,307	$ 239,950
Advances from borrowers for taxes and insurance	3,982	2,646
Accrued interest payable	38	12
Accrued expenses and other liabilities	780	871
Total liabilities	239,107	243,479


Stockholders' Equity:
Preferred stock, no par value; 500,000 share authorized; none Outstanding	-
	-	-
Common stock, $0.10 par value; 7,000.000 shares authorized; 2,140,379 shares issued at March 15, 2015 and December 31, 2015
	$ 214	$ 214
Additional paid in capital	18,132	18,126
Retained earnings, substantially restricted	42,603	42,423
Other comprehensive income	360	66
Unallocated Employee Stock Ownership Plan shares	(130)	(146)
Treasury stock, at cost, 1,350,991 shares at March 31, 2016; 1,337,531 shares at December 31, 2015
	(29,820)	(29,383)
Total stockholders' equity	31,359	31,300
	$ 270,466	$ 274,779
Total liabilities and stockholders' equity	$ 270,466	$ 274,779

Wells Financial Corp. and Subsidiary
Consolidated Statements of Income
Three Months Ended March 31, 2016 and 2015
(Dollars in Thousands, Except Per Share Data)
Unaudited
	Three Months Ended
	March 31,
	2016	2015

Interest and dividend income
Loans receivable:
Residential loans	$ 653	$ 725
Commercial loans	469	359
Ag real estate loans	406	384
Consumer and other loans	692	707
Investment securities and other interest-bearings deposits	206	165
Total interest income	2,426	2,340
Interest expense
Deposits	89	117
Borrowed funds	-	-
Total interest expense	89	117
Net interest income	2,337	2,223
Provision for loan losses	20	70
Net interest income after provision for loan losses	2,317	2,153
Noninterest income
Gain on sale of loans	166	165
Loan servicing fees	201	215
Insurance commissions	321	172
Fees and service charges	111	106
Other	139	224
Total noninterest income	938	882
Noninterest expense
Compensation and benefits	1,244	1,112
Occupancy and equipment	196	184
Federal insurance premiums	51	54
Data processing	234	214
Advertising	62	59
Amortization & valuation adjustments for MSR's	66	73
Amortization of intangible assets	28	38
Other real estate owned	23	114
Other	460	381
Total noninterest expense	2,364	2,229
Income before income taxes	891	806
Income tax expense	325	313
Net Income	$ 566	$ 493

Earnings per share
Basic earnings per share	$ 0.71	$ 0.66
Diluted earnings per share	$ 0.71	$ 0.66