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Wells Financial Corp. Restates Fourth Quarter and Annual Earnings

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    Year Ended December
                              31,                     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.