Wells Financial Corp. Restates Fourth Quarter and Annual Earnings

Mar 11, 2011, 12:52 ET from Wells Financial Corp.

WELLS, Minn., March 11, 2011 /PRNewswire/ -- Lonnie R. Trasamar, President and CEO of Wells Financial Corp. (OTC Bulletin Board: WEFP) and its subsidiary, Wells Federal Bank, announced today revised earnings for the quarter and year ended December 31, 2010.  After careful review of expected future cash flows on selected loans and repossessed properties the Company felt it was prudent to record additional provisions on those assets.  Revised earnings for the fourth quarter of 2010 and the year ended December 31, 2010 are $402,000 and $1,815,000, respectively, down $209,000 when compared to net income previously reported.  Please see the Consolidated Statement of Condition and Consolidated Statement of Income attached to this press release.

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 Statements of Financial Condition

December 31, 2010 and 2009

(dollars in thousands, except per share data)

Assets

2010

2009

Cash and cash equivalents, including interest-bearing accounts

2010 $2,468; 2009 $5,772

$              8,244

$      12,008

Certificates of deposit, at cost

-

175

Federal funds sold

12,542

29,005

Securities available for sale

14,624

10,698

Federal Home Loan Bank Stock, at cost

1,859

2,728

Loans held for sale

2,217

1,931

Loans receivable, net of allowance for loan losses of $2,136

in 2010; $1,525 in 2009

185,418

195,423

Accrued interest receivable

1,366

1,564

Premises and equipment

3,439

3,693

Mortgage servicing rights, net

1,687

1,373

Foreclosed real estate

5,628

5,062

Other assets

1,383

1,561

Total assets

$          238,407

$   265,221

Liabilities and Stockholders' Equity

Liabilities

Deposits

$          210,819

$   208,870

Borrowed funds

1,785

31,435

Advances from borrowers for taxes and insurance

2,300

2,233

Deferred income taxes

-

157

Accrued interest payable

53

61

Accrued expenses and other liabilities

223

402

Total liabilities

215,180

243,158

Stockholders' Equity

Preferred stock, no par value; 500,000 shares authorized;

none outstanding

-

-

Common stock, $.10 par value; 7,000,000 shares

authorized; 2,187,500 shares issued

219

219

Additional paid-in capital

17,104

17,166

Retained earnings, substantially restricted

33,615

32,615

Accumulated other comprehensive income

147

131

Less cost of treasury stock, 2010 1,400,705 shares;

2009 1,411,260 shares

(27,858)

(28,068)

Total stockholders' equity

23,227

22,063

Total liabilities and stockholders' equity

$          238,407

$   265,221

Wells Financial Corp. and Subsidiary

Consolidated Statements of Income

(dollars in thousands, except per share data)

Quarter Ended December 31,

Year Ended December 31,

2010

2009

2010

2009

Interest Income

Loans receivable

$        2,960

$        3,151

$ 12,036

$       13,319

Investment securities and interest-bearing deposits

127

109

561

437

Total interest income

3,087

3,260

12,597

13,756

Interest Expense

Deposits

647

949

3,030

4,000

Borrowed funds

32

302

679

1,591

Total interest expense

679

1,251

3,709

5,591

Net interest income

2,408

2,009

8,888

8,165

Provision for loan losses

473

145

978

980

Net interest income after provision for loan losses

1,935

1,864

7,910

7,185

Noninterest Income

Gain on sale of loans originated for sale

783

282

1,849

2,365

Loan servicing fees

240

240

954

933

Insurance commissions

162

154

679

636

Fees and service charges

141

158

550

605

Other

106

249

464

282

Total noninterest income

1,432

1,083

4,496

4,821

Noninterest Expenses

Compensation and benefits

1,147

1,135

4,305

4,269

Occupancy

267

246

1,006

1,010

Data processing

187

174

738

738

Advertising

68

58

245

238

Amortization of mortgage servicing rights

71

89

309

461

Impairment of securities available for sale

-

-

-

-

Other

1,035

387

2,919

1,935

Total noninterest expenses

2,775

2,285

9,522

8,651

Income before income taxes

592

222

2,884

3,355

Income tax expense

190

222

1,069

1,245

Net income

$        402

$        440

$    1,815

$         2,110

Earnings per share

Basic

$       0.51

$       0.57

$      2.32

$           2.72

Diluted

$       0.51

$       0.57

$      2.31

$           2.71

SOURCE Wells Financial Corp.