Wells Financial Corp. Announces Annual Results

Wells Financial Corp. Announces Annual Results 


WELLS, Minn., March 10  /PRNewswire-FirstCall/ -- 

                         Selected Financial Data

                                                 Year ended     Year ended
                                                  12/31/04       12/31/03

   Net Income                                    $2,164,000     $3,540,000
   Basic earnings per share                           $1.87          $3.12
   Diluted earnings per share                         $1.83          $3.05
   Return on average equity                           7.64%         13.30%
   Return on average assets                           0.95%          1.58%
   Book value per share                              $24.58         $24.15
   Net interest rate spread                           3.75%          3.16%
   Net interest rate margin                           3.92%          3.33%
   Allowance for loan loss to total loans             0.44%          0.56%




Lonnie R. Trasamar, President of Wells Financial Corp. (the Company), the
holding company of Wells Federal Bank (the Bank), announced earnings for 2004
of $2,164,000, down $1,376,000 or 38.9% when compared to 2003.  Basic and
diluted earnings per share for 2004 were $1.87 and $1.83, respectively.  This
compares to basic and diluted earnings per share of $3.12 and $3.05,
respectively, for 2003.

The decrease in net income for 2004 when compared to 2003 was primarily the
result of a decrease of $4,192,000 in the gain on sale of loans originated for
sale.  During 2004 fewer mortgage loans were originated for sale when compared
to 2003 resulting in a decrease in the gain on sale of loans originated for
sale.  Partially offsetting the decrease in gain on sale of loans originated
for sale was an increase of $1,468,000 in net interest income.

Total assets increased by $15,590,000 during 2004 due primarily to an increase
of $45,613,000 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 $19,713,000 and
$13,465,000, respectively.

Liabilities increased by $16,868,000 during 2004 due to a $18,640,000 increase
in borrowed funds being partially offset by a $2,167,000 decrease in deposits.

Wells Financial Corp. and Wells Federal Bank are headquartered in Wells,
Minnesota.  The Bank operates nine full service offices located in Wells, Blue
Earth, Mankato, Fairmont, North Mankato, Albert Lea, St. Peter and Owatonna
Minnesota and Mason City, Iowa and a loan origination office located in
Farmington, Minnesota.  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.

  Consolidated Statements of Financial Condition
  December 31, 2004 and 2003
  (dollars in thousands)

  Assets                                             2004           2003
  Cash, including interest-bearing accounts
   2004 $1,383; 2003 $17,655                        $5,605        $25,318
  Certificates of deposit                              100            200
  Securities available for sale                     13,945         27,410
  Federal Home Loan Bank Stock, at cost              2,133          1,303
  Loans held for sale                                3,454          1,997
  Loans receivable, net of allowance for loan
   losses of $924 in 2004 and $904 in 2003         205,662        160,049
  Accrued interest receivable                        1,533          1,209
  Premises and equipment                             4,212          3,585
  Mortgage servicing rights, net                     2,515          2,681
  Other assets                                         236             53
    Total assets                                  $239,395       $223,805

  Liabilities and Stockholders' Equity
  Liabilities
    Deposits                                      $167,495       $169,662
    Borrowed funds                                  41,640         23,000
    Advances from borrowers for taxes and
     insurance                                       1,877          1,585
    Deferred income taxes                            1,494          1,456
    Accrued interest payable                            38             34
    Accrued expenses and other liabilities             261            200
      Total liabilities                            212,805        195,937

  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                      17,177         17,154
    Retained earnings, substantially restricted     28,063         26,922
    Accumulated other comprehensive income             600            525
    Unearned Employee Stock Ownership Plan shares        -              -
    Unearned compensation-restricted stock awards     (329)          (561)
    Less cost of treasury stock, 2004 1,105,852
     shares; 2003 1,033,673 shares                 (19,140)       (16,391)
      Total stockholders' equity                    26,590         27,868
      Total liabilities and stockholders' equity  $239,395       $223,805




  Consolidated Statements of Income
  Years Ended December 31, 2004 and 2003
  (dollars in thousands, except per share data)

                                                     2004           2003
  Interest and Dividend Income
    Loans receivable:
      First mortgage loans                          $7,036         $7,447
      Consumer and other loans                       4,569          2,848
    Investment securities and interest-bearing
     deposits                                          797          1,219
      Total interest income                         12,402         11,514
  Interest Expense
    Deposits                                         2,609          3,350
    Borrowed funds                                   1,406          1,245
      Total interest expense                         4,015          4,595
      Net interest income                            8,387          6,919
  Provision for loan losses                            120              -
      Net interest income after provision for
       loan losses                                   8,267          6,919
  Noninterest Income
    Gain on sale of loans originated for sale        1,421          5,090
    Loan servicing fees                                962            947
    Insurance commissions                              643            459
    Fees and service charges                           621          1,058
    Other                                               98            196
      Total noninterest income                       3,745          7,750
  Noninterest Expenses
    Compensation and benefits                        4,393          4,159
    Occupancy                                        1,070          1,153
    Data processing                                    652            471
    Advertising                                        331            293
    Amortization and valuation adjustments for
     mortgage servicing rights                         656          1,071
    Other                                            1,525          1,752
      Total noninterest expenses                     8,627          8,899
      Income before income taxes                     3,385          5,770
  Income tax expense                                 1,221          2,230
      Net income                                    $2,164         $3,540
  Cash dividends declared per share                  $0.88          $0.80
  Earnings per share
    Basic                                            $1.87          $3.12
    Diluted                                          $1.83          $3.05


DATASOURCE: Wells Financial Corp.



CONTACT:  Lonnie R. Trasamar of Wells Financial Corp., [phone]

Copyright