Wells Financial Corp. Announces Third Quarter Earnings WELLS,
Minn., Nov. 9 /PRNewswire-FirstCall/ -- Selected Financial Data
Three months ended Nine months ended September September September
September 30, 2004 30, 2003 30, 2004 30, 2003 Net Income $471,000
$1,135,000 $1,513,000 $3,027,000 Basic earnings per share $0.40
$1.00 $1.30 $2.68 Diluted earnings per share $0.40 $0.98 $1.28
$2.62 Return on average equity (1) 6.6% 16.8% 7.1% 15.3% Return on
average assets (1) 0.8% 2.0% 0.9% 1.8% Net interest rate spread
3.8% 2.9% 3.7% 2.8% Net interest rate margin 4.0% 3.2% 3.9% 3.0%
Book value per share at September 30 $24.88 $24.18 $24.88 $24.18
(1) annualized Lonnie R. Trasamar, President of Wells Financial
Corp. (the "Company") (NASDAQ:WEFC), the holding company of Wells
Federal Bank (the "Bank"), announced earnings of $471,000 for the
quarter ended September 30, 2004, down 58.5% when compared to the
same period in 2003. Basic and diluted earnings per share for the
quarter were $0.40 and $0.40. This compares to basic and diluted
earnings per share of $1.00 and $0.98, respectively, for the
quarter ended September 30, 2003. Net income for the nine-months
ended September 30, 2004 was $1,513,000, down 50.0% when compared
to the same period in 2003. Basic and diluted earnings per share
were $1.30 and $1.28, respectively. Basic and diluted earnings per
share for the nine-months ended September 30, 2003 were $2.68 and
$2.62, respectively. The decrease in net income for the three and
nine months ended September 30, 2004 when compared to the same
periods in 2003 was primarily the result of decreases of $1,371,000
and $3,540,000, respectively, in the gain on sale of loans
originated for sale. During the first nine months of 2004 fewer
mortgage loans were originated for sale when compared to the first
nine months of 2003 resulting in a decrease in gain on sale of
loans originated for sale. Partially offsetting the decrease in
gain on sale of loans originated for sale were increases of
$542,000 and $1,200,000 in net interest income for the three and
nine months ended September 30, 2004, respectively, when compared
to the same periods in 2003. Total assets increased by $8,671,000
during the first nine months of 2004 due primarily to an increase
of $32,500,000 in loans receivable. The increase in loans
receivable resulted, primarily, from increases in commercial and
agricultural real estate loans. Cash and securities available for
sale decreased by $13,753,000 and $11,254,000, respectively.
Liabilities increased by $7,618,000 during the first nine months of
2004 primarily due to a $10,640,000 increase in borrowed funds
being partially offset by a $4,580,000 decrease in deposits. Wells
Financial Corp. and Wells Federal Bank are headquartered in Wells,
Minnesota. The Bank operates eight full service offices located in
Wells, Blue Earth, Mankato, Fairmont, North Mankato, Albert Lea,
St. Peter and Owatonna Minnesota and loan origination offices
located in Farmington, Minnesota and Mason City, Iowa. The Bank is
a community oriented, full service savings bank offering
traditional mortgage, consumer, commercial and agricultural loan
products. The Bank offers insurance, mutual funds and variable rate
annuity products through its subsidiary, Wells Insurance Agency.
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. WELLS FINANCIAL CORP. and SUBSIDIARY Consolidated
Statements of Financial Condition September 30, 2004 and December
31, 2003 (Dollars in Thousands) (Unaudited) ASSETS 2004 2003 Cash,
including interest-bearing accounts September 30, 2004 $5,844;
December 31, 2003 $17,655 $11,565 $25,318 Certificates of deposit
200 200 Securities available for sale, at fair value 16,156 27,410
Federal Home Loan Bank Stock, at cost 1,777 1,303 Loans held for
sale 1,549 1,997 Loans receivable, net 192,549 160,049 Prepaid
income taxes 92 - Accrued interest receivable 1,613 1,209 Premises
and equipment, net 4,140 3,585 Mortgage servicing rights, net 2,573
2,681 Other assets 262 53 TOTAL ASSETS $232,476 $223,805
LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $165,082
$169,662 Borrowed funds 33,640 23,000 Advances from borrowers for
taxes and insurance 2,555 1,585 Deferred income taxes 1,506 1,456
Accrued interest payable 291 34 Accrued expenses and other
liabilities 481 200 TOTAL LIABILITIES 203,555 195,937 STOCKHOLDERS'
EQUITY: Preferred stock, no par value; 500,000 shares authorized;
none outstanding - - Common stock, $.10 par value; authorized
7,000,000 shares; issued 2,187,500 shares 219 219 Additional
paid-in capital 17,142 17,154 Retained earnings, substantially
restricted 27,669 26,922 Accumulated other comprehensive income 554
525 Unearned compensation restricted stock awards (396) (561)
Treasury stock, at cost, shares at September 30, 2004, 1,024,849
and 1,033,673 shares at December 31, 2003 (16,267) (16,391) TOTAL
STOCKHOLDERS' EQUITY 28,921 27,868 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $232,476 $223,805 WELLS FINANCIAL CORP. and
SUBSIDIARY Consolidated Statements of Income (Dollars in thousands,
except per share data) (Unaudited) Three Months Ended Nine Months
Ended September 30, September 30, 2004 2003 2004 2003 Interest and
dividend income Loans receivable: First mortgage loans $1,754
$1,674 $5,187 $5,489 Consumer and other loans 1,163 698 3,260 2,117
Investment securities and other interest bearing deposits 189 275
634 928 Total interest income 3,106 2,647 9,081 8,534 Interest
Expense Deposits 637 763 1,933 2,643 Borrowed funds 357 314 988 931
Total interest expense 994 1,077 2,921 3,574 Net interest income
2,112 1,570 6,160 4,960 Provision for loan losses - - - - Net
interest income after provision for loan losses 2,112 1,570 6,160
4,960 Noninterest income Gain on sale of loans originated for sale
273 1,644 1,102 4,642 Loan servicing fees 241 242 722 691 Insurance
commissions 165 135 505 346 Fees and service charges 161 404 464
820 Other 33 66 93 135 Total noninterest income 873 2,491 2,886
6,634 Noninterest expense Compensation and benefits 1,091 1,068
3,388 3,034 Occupancy and equipment 260 298 794 830 Data processing
102 106 369 358 Advertising 84 73 236 206 Amortization and
valuation adjustments for mortgage servicing rights 209 250 473 854
Other 509 439 1,389 1,359 Total noninterest expense 2,255 2,234
6,649 6,641 Income before taxes 730 1,827 2,397 4,953 Income tax
expense 259 692 884 1,926 Net income $471 $1,135 $1,513 $3,027 Cash
dividends declared per share $0.22 $0.20 $0.66 $0.60 Earnings per
share Basic $0.40 $1.00 $1.30 $2.68 Diluted $0.40 $0.98 $1.28 $2.62
Weighted average number of common shares outstanding: Basic
1,161,706 1,132,939 1,160,848 1,129,989 Diluted 1,186,586 1,157,877
1,185,728 1,154,927 DATASOURCE: Wells Financial Corp. CONTACT:
Lonnie R. Trasamar of Wells Financial Corp., +1-507-553-3151
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