Wells Financial Corp. Announces Fourth Quarter, Annual Results and Cash Dividend
WELLS, Minn., Feb. 21, 2014 /PRNewswire/ --
Selected Financial Data |
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Quarter Ended Dec. 31, |
Year Ended Dec. 31 |
|||
2013 |
2012 |
2013 |
2012 |
|
Net Income |
$ 101 |
$114 |
$ 1,186 |
$ 1,592 |
Basic earnings per share |
$ 0.13 |
$ 0.15 |
$1.54 |
$2.03 |
Diluted earnings per share |
$ 0.13 |
$ 0.15 |
$1.54 |
$2.03 |
Return on average equity (1) |
1.5% |
1.8% |
4.5% |
6.2% |
Return on average assets (1) |
0.2% |
0.2% |
0.6% |
0.7% |
Net interest rate spread |
3.4% |
3.5% |
3.3% |
3.7% |
Net interest rate margin |
3.4% |
3.5% |
3.3% |
3.7% |
Book value per share |
$ 33.90 |
$ 33.87 |
$ 33.90 |
$ 33.87 |
(1) Annualized |
Quarter Ended December 31, 2013
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 fourth quarter of 2013 of $101,000, down $13,000 or 11.4% when compared to the fourth quarter of 2012. Basic and diluted earnings per share for the fourth quarter of 2013 were $0.13, down $0.02 or 13.3% when compared to the fourth quarter of 2012.
When comparing the fourth quarter of 2013 with the fourth quarter of 2012, the decrease in net income was due, primarily, to a decrease of $470,000 in gain on sale of loans. The decrease in the gain on sale of loans resulted from a lesser amount of loans being originated for sale to the secondary market. Beginning late in the second quarter the rates on residential mortgage loans increased resulting in fewer residential loans being refinanced. Offsetting the decrease in gain on sale of loans was a decrease in noninterest expense.
Year Ended December 31, 2013
Net income decreased by $406,000, or 25.5% for 2013 when compared to 2012. During 2013 the Company saw decreased activity in the refinancing of residential loans sold to the secondary market due to higher market interest rates. This resulted in a decrease of $1,081,000 during 2013 in the gain on sale of loans originated for sale when compared to 2012. Partially offsetting the decrease in the gain on sale of loans originated for sale was a $734,000, or 7.4%, decrease in noninterest expense.
Net interest income decreased by $475,000, or 5.8% for the year ended December 31, 2013 when compared to the year ended December 31, 2012. During 2013 the yield on the Company's loan and security portfolios decreased more than the cost of the Company's deposits resulting in a decrease in net interest income.
The provision for loan loss decreased by $200,000, or 23.8%, for 2013 when compared to 2012. The provision reflects management's monitoring of the allowance for loan losses in relation to the size and quality of the loan portfolio and adjusts the provision for loan losses to adequately provide for loan losses. Due to changes in economic conditions and changes in the composition of the loan portfolio, it is possible that the provision for loan losses will increase in future periods.
Noninterest income decreased by $1,136,000, or 21.5%, for 2013 when compared to 2012 primarily due to a decrease in the gain on sale of loans originated for sale described above. During 2013 the Company saw decreased activity in the refinancing of loans sold to the secondary market due to increasing market rate conditions.
Noninterest expense decreased by $734,000, or 7.4%, for 2013 when compared to 2012 due, primarily, to a decrease of $630,000, in other real estate owned expense. The decrease in other real estate owned expense was due, primarily, to decreased write downs of repossessed property.
Cash Dividend
On February 20, 2014, the Board of Directors declared a quarterly cash dividend of $0.15 per share, payable on March 28, 2014 to shareholders of record on March 14, 2014.
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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ASSETS |
||||
12/31/13 |
12/31/12 |
|||
Cash, including interest-bearing accounts: |
$ 12,625 |
$ 13,000 |
||
12/31/13 $5,370; 12/31/12 $4,543 |
||||
Certificates of deposit |
3,695 |
9,631 |
||
Fed Funds Sold |
5,000 |
21,000 |
||
Securities available for sale |
41,569 |
23,068 |
||
Federal Home Loan Stock |
2,021 |
2,188 |
||
Loans held for sale |
1,952 |
6,911 |
||
Loans receivable, net |
165,401 |
157,901 |
||
Accrued interest receivable |
804 |
826 |
||
Prepaid Income Taxes |
402 |
151 |
||
Foreclosed real estate |
4,340 |
3,601 |
||
Premises and equipment |
3,040 |
3,192 |
||
Mortgage servicing rights, net |
1,952 |
1,940 |
||
Other assets |
1,000 |
938 |
||
TOTAL ASSETS |
$ 243,801 |
$ 244,347 |
||
LIABILITIES AND EQUITY |
||||
LIABILITIES: |
||||
Deposits |
$ 214,370 |
$ 214,928 |
||
Borrowed funds |
- |
150 |
||
Advances from borrowers for taxes and insurance |
2,614 |
2,494 |
||
Accrued interest payable |
6 |
8 |
||
Accrued expenses and other liabilities |
728 |
610 |
||
TOTAL LIABILITIES |
217,718 |
218,190 |
||
STOCKHOLDER'S EQUITY: |
||||
Common stock, $.10 par value; 7,000.000 shares authorized; 2,187,500 shares issued |
$ 219 |
$ 219 |
||
Additional paid in capital |
17,086 |
17,137 |
||
Retained earnings, substantially restricted |
37,235 |
36,510 |
||
Other comprehensive income |
(264) |
420 |
||
Treasury stock, at cost, 1,418,180 shares at December 31, 2013; 1,415,307 shares at December 31, 2012 |
(28,193) |
(28,129) |
||
TOTAL EQUITY |
26,083 |
26,157 |
||
TOTAL LIABILITIES AND EQUITY |
$ 243,801 |
$ 244,347 |
Wells Financial Corp. and Subsidiary |
|||||||||
Three Months Ended |
Twelve Months Ended |
||||||||
December 31, |
December 31, |
||||||||
2013 |
2012 |
2013 |
2012 |
||||||
Interest and dividend income |
|||||||||
Loans receivable: |
|||||||||
Residential loans |
$ 653 |
$ 655 |
$ 2,561 |
$ 2,739 |
|||||
Commercial Loans |
319 |
318 |
1,239 |
1,366 |
|||||
Ag Real Estate Loans |
310 |
347 |
1,251 |
1,491 |
|||||
Consumer and other loans |
653 |
747 |
2,654 |
3,195 |
|||||
Investment securities and other interest-bearings deposits |
214 |
154 |
770 |
599 |
|||||
Total interest income |
2,149 |
2,221 |
8,475 |
9,390 |
|||||
Interest expense |
|||||||||
Deposits |
179 |
255 |
797 |
1,212 |
|||||
Borrowed funds |
- |
1 |
1 |
26 |
|||||
Total interest expense |
179 |
256 |
798 |
1,238 |
|||||
Net interest income |
1,970 |
1,965 |
7,677 |
8,152 |
|||||
Provision for loan losses |
225 |
185 |
640 |
840 |
|||||
Net interest income after provision for loan losses |
1,745 |
1,780 |
7,037 |
7,312 |
|||||
Noninterest income |
|||||||||
Gain on sale of loans |
253 |
723 |
1,542 |
2,623 |
|||||
Gain on sale of securities AFS |
- |
- |
4 |
- |
|||||
Loan servicing fees |
230 |
236 |
923 |
936 |
|||||
Insurance commissions |
117 |
173 |
659 |
708 |
|||||
Fees and service charges |
120 |
129 |
454 |
498 |
|||||
Other |
150 |
105 |
569 |
522 |
|||||
Total noninterest income |
870 |
1,366 |
4,151 |
5,287 |
|||||
Noninterest expense |
|||||||||
Compensation and benefits |
1,075 |
1,151 |
4,218 |
4,371 |
|||||
Occupancy and equipment |
203 |
224 |
868 |
857 |
|||||
Federal insurance premiums |
54 |
58 |
161 |
204 |
|||||
Data processing |
210 |
190 |
812 |
761 |
|||||
Advertising |
66 |
84 |
250 |
264 |
|||||
Amortization & Valuation adjustments for MSR's |
86 |
145 |
430 |
558 |
|||||
Other real estate owned |
167 |
737 |
730 |
1,360 |
|||||
Other |
616 |
383 |
1,746 |
1,575 |
|||||
Total noninterest expense |
2,477 |
2,972 |
9,216 |
9,950 |
|||||
Income before income taxes |
138 |
174 |
1,972 |
2,649 |
|||||
Income tax expense |
37 |
60 |
786 |
1,057 |
|||||
Net Income |
$ 101 |
$ 114 |
$ 1,186 |
$ 1,592 |
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Earnings per share |
|||||||||
Basic earnings per share |
$ 0.13 |
$ 0.15 |
$ 1.54 |
$ 2.03 |
|||||
Diluted earnings per share |
$ 0.13 |
$ 0.15 |
$ 1.54 |
$ 2.03 |
SOURCE Wells Financial Corp.
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