Wells Financial Corp. (WEFP: OTCQB) | Wells Financial Corp. Announces Second Quarter Results of Operations

OTC

WELLS, Minn., July 24, 2015 /PRNewswire/ —

 

 

Quarter Ended June 30, 2015

James D. Moll, President of Wells Financial Corp. (OTCQB: WEFP) (the Company), the holding company of Wells Federal Bank (the Bank), announced net income for the second quarter of 2015 of $550,000, up $454,000 or 472.9%, when compared to the second quarter of 2014.  Basic and diluted earnings per share for the second quarter of 2015 were $0.75, up $0.62 or 477.0%, when compared to the second quarter of 2014.  The improvement in net income for the quarter is due, primarily, to increases of $129,000 and $222,000, or 6.5% and 25.6%, in net interest income and noninterest income, respectively.  Also contributing to the improved earnings were decreases of $150,000 and $224,000, or 100.0% and 8.8%, in the provision for loan loss and noninterest expense, respectively. 

The increase in net interest income was due to an increase in the net interest rate spread and the increase in noninterest income resulted, primarily, from an increase in gain on sale of loans as a larger volume of residential mortgage loans was originated and sold to the secondary market.  A decrease in expenses associated with other real estate owned was the primary reason for the decrease in noninterest expense. The decrease in the provision for loan losses resulted from management’s analysis of credit quality. 

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 losses through the provision for loan losses.  As of June 30, 2015 and 2014, the balance in the allowance for loan losses and the allowance for loan losses as a percentage of total loans were $2,184,000 and $1,934,000 and 1.2% and 1.2%, respectively.

Six Months Ended June 30, 2015

Net income for the six months ended June 30, 2015 was $1,043,000, up $696,000, or 200.6% when compared to the same period in 2014.  Basic and diluted earnings per share for the period were $1.41, up $0.96 or 213.3%.  Increases of $401,000 and $226,000, or 10.2% and 13.0%, in net interest income and noninterest income, respectively, were the primary reasons for the increase in net income.  Also contributing to the improved earnings were decreases of $250,000 and $235,000, or 78.1% and 4.9%, in the provision for loan loss and noninterest expense, respectively. 

The increase in net interest income was due to an increase in the net interest rate spread and the increase in noninterest income resulted, primarily, from an increase in gain on sale of loans as a larger volume of residential mortgage loans was originated and sold to the secondary market.  Decreases in compensation and expenses associated with other real estate owned were the primary reason for the decrease in noninterest expense. The decrease in the provision for loan losses resulted from management’s analysis of credit quality. 

Recent Developments

On July 16, 2015 the Company announced that it had completed the acquisition of St. James Federal Savings and Loan Association (“St. James“) in a conversion merger transaction and the related stock offering of the Company, effective July 16, 2015.  As a result of the conversion merger, St. James converted from a federally-chartered mutual savings association to a federally-chartered stock savings association and immediately merged with and into Wells Federal Bank, the surviving entity in the merger conversion.  The Company sold 78,736 shares of common stock at a price of $27.36 per share to depositor and borrower members of St. James, to the Employee Stock Ownership Plan and stockholders of Wells, and to members of the general public in a concurrent subscription offering and community offering.  Gross offering proceeds totaled approximately $2.15 million.  As a result of the stock offering, the Company had 814,758 shares of common stock issued and outstanding as of the close of business on July 16, 2015.  St. James’ sole office, located in St. James, Minnesota, has become a branch office of Wells Federal Bank.

Forward-looking Statements

Statements in this press release that are not strictly historical may be “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1996, 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**

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wells-financial-corp-announces-second-quarter-results-of-operations-300118448.html

SOURCE Wells Financial Corp.

Leave a Reply