Wells Financial Corp. Announces Second Quarter Results and Cash Dividend
WELLS, Minn., July 21 /PRNewswire-FirstCall/ --
Selected Financial Data (Dollars in Thousands, except per share data) (unaudited) |
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Quarter Ended June 30, |
Six Months Ended June 30, |
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2010 |
2009 |
2010 |
2009 |
||
Net Income |
$ 475 |
$ 597 |
$ 826 |
$ 1,242 |
|
Basic earnings per share |
$ 0.61 |
$ 0.77 |
$ 1.06 |
$ 1.60 |
|
Diluted earnings per share |
$ 0.61 |
$ 0.77 |
$ 1.05 |
$ 1.60 |
|
Return on average equity (1) |
8.5% |
11.2% |
7.4% |
11.1% |
|
Return on average assets (1) |
0.7% |
0.9% |
0.6% |
0.9% |
|
Net interest rate spread |
3.6% |
3.3% |
3.5% |
3.3% |
|
Net interest rate margin |
3.7% |
3.4% |
3.5% |
3.4% |
|
Book value per share |
$28.88 |
$27.75 |
$28.88 |
$27.75 |
|
(1) Annualized |
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Lonnie R. Trasamar, President of Wells Financial Corp. (OTC Bulletin Board: WEFP) (the Company), the holding company of Wells Federal Bank (the Bank), announced earnings for the second quarter of 2010 of $475,000, down $122,000 or 20.4%, when compared to the second quarter of 2009. Basic and diluted earnings per share for the second quarter of 2010 were $0.61, down $0.16 or 20.8%, when compared to the same period in 2009.
Net income for the six months ended June 30, 2010 was $826,000, down $416,000 or 33.5% when compared to the first six months of 2009. When comparing the first six months of 2010 with the same period in 2009, basic and diluted earnings per share decreased by $0.54 and $0.55 or 33.8% and 34.4%, respectively.
The primary reason for the decrease in net income for the quarter and six months ended June 30, 2010 resulted from a decrease in gain on sale of loans. The Bank saw a decreased volume of residential loan refinancing during the first six months of 2010 when compared to the first six months of 2009 which resulted in the decrease in gain on sale of loans. Partially offsetting the decrease in the gain on sale of loans was an increase in net interest income of $215,000, or 10.9% for the second quarter of 2010 and $167,000, or 4.1%, for the six months ended June 30, 2010 when compared to the same periods in 2009.
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 losses decreased by $120,000, or 32.0% and $380,000, or 50.0% for the quarter and six months ended June 30, 2010 when compared to the same periods in 2009. As of June 30, 2010 and December 31, 2009, the balance in the allowance for loan losses and the allowance for loan losses as a percentage of total loans were $1,827,000 and $1,785,000 and 0.95% and 0.85%, respectively.
When comparing the second quarter and six months ended June 30, 2010 to the same periods in 2009, noninterest income decreased by $477,000 and $1,112,000 or 22.4% and 37.8%, respectively, due to the decrease in gain on sale of loans described above and noninterest expense remained relatively constant.
When comparing June 30, 2010 with December 31, 2009, total assets decreased by $15,495,000 and total liabilities decreased by $16,042,000 due to cash being used to repay borrowed funds.
Cash Dividend Announcement
On July 20, 2010, the Company's Board of Directors declared a $0.26 per share cash dividend, payable on August 20, 2010 to shareholders of record on August 6, 2010.
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 |
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06/30/10 |
12/31/09 |
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Cash, including interest-bearing accounts: |
$ 17,755 |
$ 41,013 |
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06/30/10 $13,063; 12/31/09 $34,777 |
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Certificates of deposit |
7,645 |
175 |
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Securities available for sale |
16,205 |
10,698 |
|||
Federal Home Loan Stock |
2,026 |
2,728 |
|||
Loans held for sale |
2,458 |
1,931 |
|||
Loans receivable, net |
190,148 |
195,423 |
|||
Accrued interest receivable |
1,591 |
1,564 |
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Prepaid Income Taxes |
- |
- |
|||
Premises and equipment |
3,546 |
3,693 |
|||
Mortgage servicing rights, net |
1,340 |
1,373 |
|||
Other assets |
7,012 |
6,623 |
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TOTAL ASSETS |
$ 249,726 |
$ 265,221 |
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LIABILITIES AND EQUITY |
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LIABILITIES: |
|||||
Deposits |
$ 211,868 |
$ 208,870 |
|||
Borrowed funds |
12,110 |
31,435 |
|||
Advances from borrowers for taxes and insurance |
2,206 |
2,233 |
|||
Income taxes: |
|||||
Deferred |
9 |
157 |
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Accrued interest payable |
272 |
61 |
|||
Accrued expenses and other liabilities |
651 |
402 |
|||
TOTAL LIABILITIES |
227,116 |
243,158 |
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STOCKHOLDER'S EQUITY: |
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Common stock, $.10 par value; 7,000.000 shares |
|||||
authorized; 2,187,500 shares issued |
$ 219 |
$ 219 |
|||
Additional paid in capital |
17,132 |
17,166 |
|||
Retained earnings, substantially restricted |
33,034 |
32,615 |
|||
Other comprehensive income |
162 |
131 |
|||
Treasury stock, at cost, 1,404,699 shares at June |
|||||
30, 2010; 1,411,060 shares at December 31, 2009 |
(27,937) |
(28,068) |
|||
TOTAL EQUITY |
22,610 |
22,063 |
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TOTAL LIABILITIES AND EQUITY |
$ 249,726 |
$ 265,221 |
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Wells Financial Corp. and Subsidiary |
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Consolidated Statement of Income |
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(Dollars in Thousands, except per share data) |
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(Unaudited) |
||||||||||
Three Months Ended |
Six Months Ended |
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June 30, |
June 30, |
|||||||||
2010 |
2009 |
2010 |
2009 |
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Interest and dividend income |
||||||||||
Loans receivable: |
||||||||||
Residential loans |
$ 598 |
$ 704 |
$1,199 |
$1,421 |
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Commercial Loans |
583 |
578 |
1,174 |
1,208 |
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Ag Real Estate Loans |
741 |
882 |
1,490 |
1,780 |
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Consumer and other loans |
1,121 |
1,183 |
2,238 |
2,424 |
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Investment securities and other interest- |
||||||||||
bearings deposits |
155 |
107 |
296 |
212 |
||||||
Total interest income |
3,198 |
3,454 |
6,397 |
7,045 |
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Interest expense |
||||||||||
Deposits |
786 |
1,005 |
1,658 |
2,059 |
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Borrowed funds |
226 |
478 |
488 |
902 |
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Total interest expense |
1,012 |
1,483 |
2,146 |
2,961 |
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Net interest income |
2,186 |
1,971 |
4,251 |
4,084 |
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Provision for loan losses |
255 |
375 |
380 |
760 |
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Net interest income after |
||||||||||
provision for loan losses |
1,931 |
1,596 |
3,871 |
3,324 |
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Noninterest income |
||||||||||
Gain on sale of loans |
332 |
932 |
466 |
1,726 |
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Loan servicing fees |
238 |
231 |
477 |
456 |
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Insurance commissions |
153 |
147 |
357 |
333 |
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Fees and service charges |
141 |
143 |
273 |
292 |
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Other |
180 |
68 |
258 |
136 |
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Total noninterest income |
1,044 |
1,521 |
1,831 |
2,943 |
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Noninterest expense |
||||||||||
Compensation and benefits |
1,074 |
1,028 |
2,112 |
2,102 |
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Occupancy and equipment |
256 |
265 |
506 |
526 |
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Federal insurance premiums |
116 |
38 |
226 |
56 |
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Data processing |
190 |
184 |
377 |
384 |
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Advertising |
59 |
49 |
115 |
103 |
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Amortization & Valuation adjustments for MSR's |
80 |
115 |
166 |
261 |
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Other |
425 |
453 |
855 |
828 |
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Total noninterest expense |
2,200 |
2,132 |
4,357 |
4,260 |
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Income before income taxes |
775 |
985 |
1,345 |
2,007 |
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Income tax expense |
300 |
388 |
519 |
765 |
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Net Income |
$ 475 |
$ 597 |
$ 826 |
$1,242 |
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Earnings per share |
||||||||||
Basic earnings per share |
$ 0.61 |
$ 0.77 |
$ 1.06 |
$ 1.60 |
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Diluted earnings per share |
$ 0.61 |
$ 0.77 |
$ 1.05 |
$ 1.60 |
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SOURCE Wells Financial Corp.
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