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Wells Financial Corp. Announces Fourth Quarter, Annual Results and Cash Dividend

WELLS, Minn., Feb. 21, 2014 /PRNewswire/ --

 

Selected Financial Data
(Dollars in Thousands, except per share data)
(unaudited)





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
Consolidated Statement of Financial Condition
(Dollars in thousands)
(Unaudited)






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
Consolidated Statement of Income
(Dollars in thousands, except per share data)
(Unaudited)









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

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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