-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JJlx4H2nLxipeR/2Rn32Osjj4+2Ocno3vtWxfDbqhZhO3YI/lRK5c72Edb7jRBfk IgimtarnUbMcCNMjPDunhA== 0000897069-01-000311.txt : 20010410 0000897069-01-000311.hdr.sgml : 20010410 ACCESSION NUMBER: 0000897069-01-000311 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20010409 GROUP MEMBERS: FINANCIAL EDGE FUND L P GROUP MEMBERS: FINANCIAL EDGE-STRATEGIC FUND, L.P. GROUP MEMBERS: GARY D. PIHLSTROM GROUP MEMBERS: JOHN WM. PALMER GROUP MEMBERS: PL CAPITAL, LLC GROUP MEMBERS: RICHARD J. LASHLEY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WELLS FINANCIAL CORP CENTRAL INDEX KEY: 0000934739 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 411799504 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-45455 FILM NUMBER: 1598349 BUSINESS ADDRESS: STREET 1: 53 FIRST ST SW STREET 2: P.O. BOX 310 CITY: WELLS STATE: MN ZIP: 56097 BUSINESS PHONE: 5075533151 MAIL ADDRESS: STREET 1: 53 1ST ST SW STREET 2: PO BOX 310 CITY: WELLS STATE: MN ZIP: 56097 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL EDGE FUND L P CENTRAL INDEX KEY: 0001008845 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2015 SPRING ROAD STREET 2: SUITE 290 CITY: OAK BROOK STATE: IL ZIP: 60523 BUSINESS PHONE: 3126633458 MAIL ADDRESS: STREET 1: 440 S LASALLE ST STREET 2: ONE FINANCIAL PL SUITE 1021 CITY: CHICAGO STATE: IL ZIP: 60605 SC 13D/A 1 0001.txt SCHEDULE 13D AMENDMENT NO 4 CUSIP No. 949759104 Page 1 of 43 Pages UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Amendment No. 4) Under the Securities Exchange Act of 1934 WELLS FINANCIAL CORP. (Name of Issuer) Common Stock (Title of Class of Securities) 949759104 (CUSIP Number) Mr. Phillip Goldberg Foley & Lardner One IBM Plaza Suite 3300 330 North Wabash Avenue Chicago, IL 60611-3608 (312) 755-2579 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 9, 2001 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. -1- CUSIP No. 949759104 Page 2 of 43 Pages ================================================================================ 1 NAME OF REPORTING PERSON Financial Edge Fund, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)[ ] - -------------------------------------------------------------------------------- 3 OTS USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC, OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER 66,720 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING ------------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER 66,720 WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 66,720 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 5.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN ================================================================================ -2- CUSIP No. 949759104 Page 3 of 43 Pages ================================================================================ 1 NAME OF REPORTING PERSON Financial Edge-Strategic Fund, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)[ ] - -------------------------------------------------------------------------------- 3 OTS USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC, OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER 8,000 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING ------------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER 8,000 WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 0.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN ================================================================================ -3- CUSIP No. 949759104 Page 4 of 43 Pages ================================================================================ 1 NAME OF REPORTING PERSON PL Capital, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)[ ] - -------------------------------------------------------------------------------- 3 OTS USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER 103,810 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING ------------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER 103,810 WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 103,810 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 8.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN ================================================================================ -4- CUSIP No. 949759104 Page 5 of 43 Pages ================================================================================ 1 NAME OF REPORTING PERSON John Wm. Palmer - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)[ ] - -------------------------------------------------------------------------------- 3 OTS USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER 103,810 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING ------------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER 103,810 WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 103,810 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 8.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ -5- CUSIP No. 949759104 Page 6 of 43 Pages ================================================================================ 1 NAME OF REPORTING PERSON Richard J. Lashley - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)[ ] - -------------------------------------------------------------------------------- 3 OTS USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER 103,810 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING ------------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER 103,810 WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 103,810 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 8.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ -6- CUSIP No. 949759104 Page 7 of 43 Pages ================================================================================ 1 NAME OF REPORTING PERSON Gary D. Pihlstrom - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)[ ] - -------------------------------------------------------------------------------- 3 OTS USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 100 ------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER 100 REPORTING ------------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER 0 WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 100 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 0.1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ -7- CUSIP No. 949759104 Page 8 of 43 Pages Item 1. Security and Issuer This Schedule 13D is being filed jointly by: Financial Edge Fund, L.P., a Delaware limited partnership ("Financial Edge Fund"); Financial Edge-Strategic Fund, LP, a Delaware limited partnership ("Financial Edge Strategic"); PL Capital, LLC, a Delaware limited liability company and General Partner of Financial Edge Fund and Financial Edge Strategic ("PL Capital"); John Wm. Palmer; Richard J. Lashley; and Gary D. Pihlstrom. All of the filers of this Schedule 13D are collectively the "Group." This filing amends that certain 13D earlier filed by the Group, as previously amended (the "Original 13D"). This Schedule 13D relates to the common stock ("Common Stock") of Wells Financial Corp. (the "Company" or "Wells Financial"). The address of the principal executive offices of the Company is 53 First Street SW, Wells, Minnesota 56097. The joint filing agreement of the members of the Group is attached as Exhibit 1. Item 2. Identity and Background (a)-(c) This statement is filed by Mr. John Palmer and Mr. Richard J. Lashley, with respect to the shares of Common Stock beneficially owned by Mr. Palmer and Mr. Lashley, which include shares of Common Stock held in the name of Financial Edge Fund, Financial Edge Strategic, and PL Capital, in Mr. Palmer's and Mr. Lashley's capacities as Managing Members of PL Capital, the General Partner of Financial Edge Fund and Financial Edge Strategic. This statement is filed by Financial Edge Fund, Financial Edge Strategic and PL Capital, each of which is a Delaware corporation, with respect to the shares of Common Stock held by each of them. The business address of Financial Edge Fund, Financial Edge Strategic, PL Capital, Mr. Palmer and Mr. Lashley is 2015 Spring Road, Suite 290, Oak Brook, Illinois 60523. The principal employment of Mr. Palmer and Mr. Lashley is providing investment banking and investment management services in the banking and financial services sector. Financial Edge Fund, Financial Edge Strategic and PL Capital are engaged in the same business, through Mr. Lashley and Mr. Palmer. This statement is filed by Mr. Pihlstrom, an individual, with respect to the shares of Common Stock beneficially owned by him. The business address of Mr. Pihlstrom is The Colonnade, 5500 Wayzata Blvd., Suite 145, Golden Valley, MN 55416. Mr. Pihlstrom is principally self-employed as an attorney. (d) During the past five years, no member of the Group has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the past five years, no member of the Group has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. -8- CUSIP No. 949759104 Page 9 of 43 Pages (f) All of the individuals who are members of the Group are citizens of the United States. Item 3. Source and Amount of Funds or Other Consideration The aggregate of Common Stock held by the Group is 103,910 shares, acquired at an aggregate cost of $1,375,853. The amount of funds expended to date by Financial Edge Fund to acquire the 66,720 shares of Common Stock it holds in its name is $919,191. Such funds were provided in part from Financial Edge Fund's available capital and, from time to time, in part by margin account loans from subsidiaries of The Bear Stearns Companies, Inc. ("Bear Stearns"), extended in the ordinary course of business. The amount of funds expended to date by Financial Edge Strategic to acquire the 8,000 shares of Common Stock it holds in its name is $90,240. Such funds were provided in part from Financial Edge Strategic's available capital and, from time to time, in part by margin account loans from subsidiaries of Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), extended in the ordinary course of business. The amount of funds expended to date by PL Capital to acquire the 29,090 shares of Common Stock held in its name is $364,697. Such funds were provided from PL Capital's working capital and, from time to time, in part by margin account loans from subsidiaries of McDonald Investments ("McDonald Investments"), extended in the ordinary course of business. The amount of funds expended to date by Mr. Pihlstrom to acquire the 100 shares of Common Stock he holds in his name is $1,725. Such funds were provided from Mr. Pihlstrom's personal funds. All purchases of Common Stock made by members of the Group using funds borrowed from Bear Stearns, DLJ and McDonald Investments, if any, were made in margin transactions on those firms' usual terms and conditions. All or part of the shares of Common Stock owned by members of the Group may from time to time be pledged with one or more banking institutions or brokerage firms as collateral for loans made by such entities to members of the Group. Such loans generally bear interest at a rate based upon the broker's call rate from time to time in effect. Such indebtedness, if any, may be refinanced with other banks or broker-dealers. Item 4. Purpose of Transaction The purpose of the acquisition of the shares of Common Stock by members of the Group is to profit from appreciation in the market price of the Common Stock through the assertion of stockholder rights and influencing the policies of Wells Financial. The Group expects to actively assert stockholder rights, in the manner described below, with the intent to influence the policies of the Company. -9- CUSIP No. 949759104 Page 10 of 43 Pages The Original 13D contains detail regarding certain activities previously undertaken by the Group as previously constituted. These activities include indications of interest (by former and current members of the Group) to acquire Wells Financial and how those indications of interest were rejected by Wells Financial on several occasions during mid- and late 2000. The Group is also aware that during late 2000 the Board of Directors of Wells Financial rejected a separate indication of interest from an out-of-state financial institution. The Group believes that the Board of Wells Financial should not have rejected these indications of interest and that Wells Financial's stockholders should have been given an opportunity to decide for themselves whether to accept any offers to acquire Wells. On December 18, 2000, Mr. Palmer sent a letter to Wells Financial demanding, among other things, the stockholder list of the Company. A copy of that letter is attached as Exhibit 2. On January 4, 2001, the Company provided PL Capital with the stockholder list and certain other requested items, including the minutes of the Board of Directors of the Company for the past three years. A copy of that letter is attached as Exhibit 3. By letter dated February 8, 2001, PL Capital's counsel requested certain additional stockholder list information. A copy of that letter is attached as Exhibit 4. PL Capital and Mr. Pihlstrom are currently evaluating such information with respect to pursuing a possible solicitation of proxies at the Company's upcoming 2001 Annual Meeting. In a letter dated February 14, 2001, PL Capital submitted to the Company a notice of intent to nominate Mr. Gary Pihlstrom for election to the Company's Board of Directors at the 2001 Annual Meeting of Stockholders of the Company. Additionally, the letter announced the notice of intent to submit a stockholder proposal to the vote of the Company's stockholders. A copy of that letter is attached as Exhibit 5. While the stockholder proposal, if approved by the stockholders, would not bind the Board of Directors to any course of action, it would express the wishes of the stockholders that the Board of Directors undertake a particular course of action in order to maximize stockholder value. The stockholder proposal is to be (or to be substantially similar to): RESOLVED, that stockholders of Wells Financial hereby inform the Board of Directors of Wells Financial that: (1) the management and Board of Wells Financial should solicit offers to acquire, or merge with, Wells Financial, from all potentially interested parties, in a fair and open process; (2) the Company should publicly disclose to stockholders the results of that process, and (3) the stockholders of Wells Financial should be presented with an opportunity to vote on the definitive offer with the highest value, regardless of whether Wells Board or management feels such offer is sufficient. On March 7, 2001, the Group filed with the United States Securities and Exchange Commission (the "SEC") a letter sent to stockholders noting that stockholders would shortly receive a proxy statement and request for proxies from the Group. A copy of that letter is attached as Exhibit 6. -10- CUSIP No. 949759104 Page 11 of 43 Pages On March 13, 2001, the Group filed a definitive proxy statement with the SEC and thereafter mailed the proxy statement to stockholders of the Company. The proxy statement requests that stockholders vote for the election of Mr. Pihlstrom to the Board of Directors of the Company and that stockholders vote for the stockholder proposal made by the Group. The proxy statement is available for free at the SEC's web site, www.sec.gov. On March 26, 2001, the Group filed with the SEC a letter sent to stockholders. A copy of that letter is attached as Exhibit 7. On April 4, the Group filed with the SEC an additional letter sent to stockholders. A copy of that letter is attached as Exhibit 8. On April 4, an independent proxy analysis firm, Institutional Shareholder Services ("ISS"), issued a report regarding the proxy contest being conducted by the Group and recommended that stockholders vote their shares in a designated manner. A copy of that report is attached as Exhibit 9. On April 6, the Group filed with the SEC a letter sent to stockholders and a press release issued by the Group, stating certain recommendations made by ISS to the stockholders of Wells that supported the position of the Group. Those documents are attached as Exhibit 10 and Exhibit 11. On April 9, 2001, the Group sent a letter to management of the Company, noting certain statements that the Group believes are misleading made by the Company in a press release in response to the ISS proxy analysis. A copy of that letter is attached as Exhibit 12. Also on April 9, 2001, the Group issued a press release in response to a press release of the Company that the Group believes is misleading. A copy of that press release is attached as Exhibit 13. Members of the Group also plan to contact certain of the Company's stockholders to discuss their views regarding the Company and its performance and corporate governance. Members of the Group may make further purchases of shares of Common Stock. Members of the Group may dispose of any or all the shares of Common Stock held by them, although they have no current intention to do so. Except as noted in this Schedule 13D, no member of the Group has any plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (b) through (j), inclusive, of Item (4) of Schedule 13D. Members of the Group reserve the right, at any time and from time to time, to review or reconsider their positions and formulate plans or proposals with respect thereto. Item 5. Interest in Securities of the Company The percentages used in this Schedule 13D are calculated based upon the number of outstanding shares of Common Stock, 1,254,332, reported as the number of outstanding shares as of November 6, 2000, on a Form 10-Q dated November 6, 2000 and as of December 31, 2000 in a press release dated January 16, 2001. Except as noted below, all -11- CUSIP No. 949759104 Page 12 of 43 Pages purchases and sales of Common Stock reported herein were made in open market transactions on the Nasdaq National Market System. (A) Financial Edge Fund (a)-(b) See cover page. (c) Financial Edge Fund has not made any transactions in the Common Stock since the last 13D filing. (d) Because they are the Managing Members of PL Capital, which is the general partner of Financial Edge Fund, Mr. Palmer and Mr. Lashley have the power to direct the affairs of Financial Edge Fund, including the voting and disposition of shares of Common Stock held in the name of Financial Edge Fund. Therefore, Mr. Palmer and Mr. Lashley are deemed to share voting and disposition power with Financial Edge Fund with regard to those shares of Common Stock. (B) Financial Edge Strategic (a)-(b) See cover page. (c) Financial Edge Strategic has made no transactions in the Common Stock in the last 60 days. (d) Because they are the Managing Members of PL Capital, which is the general partner of Financial Edge Strategic, Mr. Palmer and Mr. Lashley have the power to direct the affairs of Financial Edge Strategic, including the voting and disposition of shares of Common Stock held in the name of Financial Edge Strategic. Therefore, Mr. Palmer and Mr. Lashley are deemed to share voting and disposition power with Financial Edge Strategic with regard to those shares of Common Stock. (C) PL Capital (a)-(b) See cover page. (c) PL Capital has made no transactions in the Common Stock in the last 60 days. (d) Because they are the Managing Members of PL Capital, which is the general partner of Financial Edge Fund, Mr. Palmer and Mr. Lashley have the power to direct the affairs of PL Capital, including the voting and disposition of shares of Common Stock held in the name of PL Capital. (D) Mr. John Palmer -12- CUSIP No. 949759104 Page 13 of 43 Pages (a)-(b) See cover page. (c) Mr. Palmer has made no transactions in the Common Stock directly. (E) Mr. Richard Lashley (a)-(b) See cover page. (c) Mr. Lashley has made no purchases of Common Stock directly. (F) Mr. Gary D. Pihlstrom (a)-(b) See cover page. (c) Mr. Pihlstrom has made no transactions in the Common Stock in the last 60 days Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Company. Other than the Joint Filing Agreement filed as Exhibit 1 to this filing, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finders' fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or losses, or the giving or withholding of proxies, except for sharing of profits, as described below. With respect to shares of Common stock held by the Financial Edge Fund and Financial Edge Strategic, PL Capital is entitled to (1) an allocation of a portion of profits, if any, and (2) a management fee based upon a percentage of total capital. Item 7. Material to be Filed as Exhibits No. Description 1 Joint Filing Agreement 2 Letter dated December 18, 2000 from PL Capital to Wells Financial.* 3 Letter dated January 4, 2001 from Wells Financial to PL Capital.* 4 Letter dated February 8, 2001 from Phillip M. Goldberg to Wells Financial.* 5 Letter dated February 14, 2001 from PL Capital to Wells Financial.* 6 Letter dated March 7, 2001 to stockholders of the Company from the PL Capital Group. 7 Letter dated March 27, 2001 to stockholders of the Company from the PL Capital Group. 8 Letter dated April 3, 2001 to stockholders of the Company from the PL Capital Group. 9 Proxy Analysis of Institutional Shareholder Services, dated April 4, 2001. -13- CUSIP No. 949759104 Page 14 of 43 Pages 10 Letter dated April 4, 2001 to stockholders of the Company from the PL Capital Group. 11 Press release of the PL Capital Group, dated April 4, 2001. 12 Letter dated April 9, 2001 from PL Capital to Wells Financial. 13 Press release of the PL Capital Group, dated April 9, 2001. *Filed as part of the Original 13D. -14- CUSIP No. 949759104 Page 15 of 43 Pages SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: April 9, 2001 FINANCIAL EDGE FUND, L.P. By: PL CAPITAL, LLC General Partner By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member FINANCIAL EDGE-STRATEGIC FUND, L.P. By: PL CAPITAL, LLC General Partner By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member PL CAPITAL, LLC By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member By: /s/ John Palmer John Palmer By: /s/ Richard Lashley Richard Lashley By: /s/ Gary D. Pihlstrom Gary D. Pihlstrom -15- EX-99.1 2 0002.txt JOINT FILING AGREEMENT CUSIP No. 949759104 Page 16 of 43 Pages EXHIBIT 1 JOINT FILING AGREEMENT Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree that the Schedule 13D to which this Joint Filing Agreement is being filed as an exhibit shall be a joint statement filed on behalf of each of the undersigned. Date: April 9, 2001 FINANCIAL EDGE FUND, L.P. By: PL CAPITAL, LLC General Partner By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member FINANCIAL EDGE-STRATEGIC FUND, L.P. By: PL CAPITAL, LLC General Partner By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member PL CAPITAL, LLC By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member By: /s/ John Palmer John Palmer By: /s/ Richard Lashley Richard Lashley By: /s/ Gary D. Pihlstrom Gary D. Pihlstrom -16- EX-99.6 3 0003.txt LETTER CUSIP No. 949759104 Page 17 of 43 Pages EXHIBIT 6 PL CAPITAL, LLC 2015 Spring Road Suite 290 Oak Brook, Illinois 60523 Tel: (630) 928-0231 Fax: (630) 928-0232 AN IMPORTANT MESSAGE TO FELLOW STOCKHOLDERS OF WELLS FINANCIAL CORP. FROM THE PL CAPITAL GROUP March 7, 2001 Dear Fellow Wells Financial Stockholder: We need your assistance. Within the next month, you will receive a proxy from the management of Wells Financial, and a proxy from us, The PL Capital Group. Who are we? We are one of Wells Financial's largest stockholders (we own 8.8% of Wells Financial's outstanding common stock). We are seeking your support to: (1) Elect our candidate, Mr. Gary Pihlstrom, to the Board of Wells Financial at the upcoming Wells Financial Annual Meeting scheduled for April 18, 2001. Mr. Pihlstrom is a Minnesota resident and an attorney with significant experience in the banking industry; and (2) Adopt a non-binding stockholder resolution contained only in our proxy that will call on the Board and management of Wells Financial to seek a potential acquirer through a fair and open sales process, the results of which would be disclosed to, and voted upon, by stockholders. What a vote for PL Capital will mean for you: A commitment to maximize the value of Wells Financial's stock. If the stockholders elect PL Capital's representative to serve on the board of directors, our nominee will be committed to working with the existing board members to urge the board and management, if appropriate, to pursue a sale or merger of Wells to the highest bidder. Wells Financial has been public for more than five years and we believe it is time for the stockholders of Wells to realize the full value of their investment. Does this mean we advocate a "fire sale," as will be suggested to you by Wells Financial's management? Absolutely not. We want Wells to pursue a sale in a fair and orderly process, open to all potential bidders. We then want you and the other stockholders to be informed of the results of that process so you, -17- CUSIP No. 949759104 Page 18 of 43 Pages and the other stockholders, can decide for yourselves whether any offers received are acceptable. We will need your support. You will receive a proxy statement from Wells Financial's management and Board, and you will be asked to return their proxy card. We encourage you NOT to vote your shares until you receive and review PL Capital's proxy materials. If you have any questions or need further assistance please contact our proxy solicitor MalCon Proxy Advisors, Inc., 130 William Street, New York, NY 10038; (800) 475-9320; or PL Capital (Richard Lashley (973) 360-1666, or John Palmer (630) 928-0231). Thank you for your consideration. On behalf of The PL Capital Group, John Palmer Richard Lashley Principal Principal This letter is not a solicitation of your proxy; the PL Capital Group intends to solicit proxies from you through delivery to you of a proxy statement with accompanying proxy card. We encourage you to read our proxy statement when it becomes available because it contains important information. You can get our proxy statement, and any other relevant documents, for free at the web site of the Securities and Exchange Commission (www.sec.gov). A copy of our proxy statement will also be sent directly to you. In addition, copies of our recent Schedule 13D filings are available on the SEC's website. Our most recent Schedule 13D filing contains a list of the participants in The PL Capital Group's proxy solicitation and a detailed description of our security holdings of Wells. You may also contact us directly to obtain free copies of our proxy statement. -18- EX-99.7 4 0004.txt LETTER CUSIP No. 949759104 Page 19 of 43 Pages EXHIBIT 7 PL CAPITAL, LLC 2015 Spring Road Suite 290 Oak Brook, Illinois 60523 Tel: (630) 928-0231 Fax: (630) 928-0232 AN IMPORTANT MESSAGE TO FELLOW STOCKHOLDERS OF WELLS FINANCIAL CORP. FROM THE PL CAPITAL GROUP March 27, 2001 Dear Fellow Wells Financial Stockholder: We need your vote!! By now you should have received a proxy from the management of Wells Financial, and a proxy from us, The PL Capital Group. Who are we? We are one of Wells Financial's largest stockholders (we own 8.8% of Wells Financial outstanding common stock). Why are we running this proxy contest? We are taking our case directly to you and the stockholders because we are very frustrated by the actions of Wells Financial's Board and management. Specifically, as detailed in our proxy statement, we are aware of at least two instances in 2000 in which Wells Financial's Board and management rebuffed takeover overtures (including one by current and former members of The PL Capital Group), without public disclosure to you and other Wells' stockholders, even though both opportunities, if consummated, would likely have provided stockholders with a takeover premium. Now that we have called stockholders' attention to management's actions, via this proxy contest, the management of Wells is publicly stating that the takeover overtures were rejected because they were "inadequate," based upon a valuation from an outside financial advisory firm which showed that Wells was worth more than the amounts offered by the two potential acquirers. What Wells has not disclosed to stockholders is that neither potential suitor, to our knowledge, was provided with the valuation or any other additional information that may have supported increasing the initial takeover pricing offered. We are also not aware of any instance in 2000 or 2001 in which Wells sought or encouraged offers from other potential acquirers. Wells Financial's Chairman recently stated that "we have always been sensitive to the desire of stockholders to maximize stockholder value. We do not believe, however, that this goal will -19- CUSIP No. 949759104 Page 20 of 43 Pages best be served by selling your Company for an inadequate price, even if the price offered represents a premium to the current trading price of our stock." Guess what? We could not agree more! As one of Wells Financial's largest stockholders, we don't want the Company sold for an inadequate price either. However, we would like to see Wells obtain the highest price possible, through an actual transaction with a real bidder that produces a realizable value for stockholders now, in 2001. We do not believe stockholders should have to wait for a theoretically higher, but possibly unattainable, value in the future, particularly in light of the recent changes in the economy and the stock market. If Wells Financial's management is truly sensitive to stockholders' desires to maximize stockholder value, we hope that after five years as a public company they will agree it is time for Wells to pursue an open and fair sales process whereby all potential acquirers are provided with information and access to the Company's records. We would also like the Company to publicly disclose to you and other stockholders the results of that process so that you and other stockholders can decide whether an offer is "inadequate" or not. Although the Board and management of Wells are not legally bound to follow our stockholder proposal, even if it is voted for by the majority of the stockholders, we believe that passage of the stockholder proposal, and election of our Board candidate, Mr. Pihlstrom, sends a clear message to the Board and management of Wells Financial that stockholders want their stockholder value maximized in 2001, through a fair, open and competitive sales process, consistent with the fiduciary duties of Mr. Pihlstrom. Therefore, if you would like to have us encourage Wells to pursue a sale in a fair, open and competitive sales process, we request that you vote the enclosed WHITE proxy card FOR our candidate for the Board, Mr. Gary Pihlstrom, and FOR our stockholder proposal. If you have any questions or need further assistance please contact our proxy solicitor MalCon Advisors, Inc., 130 William Street, New York, NY 10038; (800) 475-9320; or PL Capital (Richard Lashley (973) 360-1666, or John Palmer (630) 928-0231). Thank you for your consideration. On behalf of The PL Capital Group, John Palmer Richard Lashley Principal Principal We encourage you to read our proxy statement because it contains important information. If you do not already have a proxy statement from us, you can get our proxy statement, -20- CUSIP No. 949759104 Page 21 of 43 Pages and any other relevant documents, for free at the web site of the Securities and Exchange Commission (www.sec.gov). In addition, copies of our recent Schedule 13D filings are available on the SEC's website. Our most recent Schedule 13D filing contains a list of the participants in The PL Capital Group's proxy solicitation and a detailed description of our security holdings of Wells. You may also contact us directly to obtain free copies of our proxy statement. -21- EX-99.8 5 0005.txt LETTER CUSIP No. 949759104 Page 22 of 43 Pages EXHIBIT 8 PL CAPITAL, LLC 2015 Spring Road Suite 290 Oak Brook, Illinois 60523 Tel: (630) 928-0231 Fax: (630) 928-0232 AN IMPORTANT MESSAGE TO FELLOW STOCKHOLDERS OF WELLS FINANCIAL CORP. FROM THE PL CAPITAL GROUP April 3, 2001 Dear Fellow Wells Financial Stockholder: The management of Wells Financial sent you and other shareholders a letter on April 2 which we believe contained a number of potentially misleading statements and conclusions about the PL Capital Group and our efforts to increase the value of Wells Financial stock. Wells Financial's Version Management's April 2 letter acknowledges that in 2000 Wells received, and rejected, two separate offers to acquire Wells. Management claims that at least one of the offers was a "contingent offer, without proof of financial ability" and that the Wells Financial Board of Directors "acted responsibly" in rejecting both offers based upon "an independent valuation" which "confirmed" that the offers "were not in the best interest of shareholders." PL Capital's Response; What Wells Management Didn't Tell You To PL Capital's knowledge: o Wells' management refused repeated requests to provide either potential acquirer with a confidentiality agreement, a standard procedure in such circumstances and a precursor to allowing additional due diligence by a potential acquirer; o Wells refused to supply either party with the purported "valuation" or any other information that supported Wells' assertion that the offers were "inadequate"; o Wells refused to supply either party with any other information which might have induced one or both of the potential acquirers to increase their offers; o Wells took months to fully respond to the acquisition inquiries; o Wells never informed their shareholders of the existence of the potential acquisition inquiries, until we commenced our proxy contest; and o Wells did not engage an investment banker or advisor to negotiate with either party, or seek better offers from others, they simply engaged a firm to prepare a valuation. -22- CUSIP No. 949759104 Page 23 of 43 Pages In our view, if this purported valuation is so reliable that Wells Board used it as a basis to reject two potential acquirers, without allowing either party to negotiate or perform any due diligence, we suggest that Wells: (1) Disclose the value contained in the valuation, and (2) Engage the firm that prepared the valuation to validate their opinion by finding an actual acquirer willing to pay this purportedly higher value in an actual transaction. As one of Wells' largest shareholder groups, we hope, for the sake of ourselves and all shareholders, that the value Wells apparently places upon itself is obtainable. However, unless Wells is willing and able to do a self-tender, or sell the company, at the per-share values apparently suggested by the "valuation," the "valuation" is merely an academic exercise and does nothing for Wells shareholders, in our opinion. We are also concerned that in September 2000, the Board of Directors of Wells, subsequent to an expression of interest to acquire Wells, granted to three of its fellow Directors options to acquire 32,805 shares, in the aggregate, at a price of $12.88 per share, a substantial discount to the value contained in the expression of interest. Wells Financial's Version - ------------------------- Management's April 2 letter also portrays the PL Capital Group as seeking a "quick profit" and that our actions would result in a "fire sale." PL Capital Group's Response - --------------------------- If we were so interested in a "quick profit," why haven't we sold our stock in the marketplace at a profit and moved on? Why didn't we sell our stock back to the Company in their recent 100,000 share buyback? We were approached numerous times in 2000 and 2001 to sell our stock, at a significant profit to our cost basis. Why are we expending significant amounts of money, time and effort to pursue this proxy contest if all we want is a "quick profit"? We are pursuing this proxy contest because we believe that Wells Financial's Board does not understand Wells Financial's long term prospects as an independent company or what the majority of their shareholders want. We also want all of the shareholders of Wells to have an opportunity to maximize their shareholder value. We also believed that no other shareholders, other than us, were going to spend the time and money to pursue a proxy contest. Wells also stated in their letter that our shareholder proposal would effectively lead them into a "fire sale." We do not want, nor are we suggesting, that there be a "fire sale." It is up to Wells to handle the marketing process, not PL Capital. Wells' management should be capable of controlling whether it becomes a fire sale. Their "fire sale" argument is a red herring to avoid a sale of the Company, in our opinion. -23- CUSIP No. 949759104 Page 24 of 43 Pages We need your vote on the WHITE proxy card. If you would like to support us we request that you vote the enclosed WHITE proxy card FOR our candidate for the Board, Mr. Gary Pihlstrom, and FOR our stockholder proposal. Time is short - please vote FOR today! - If you have already voted on management's card or have not voted yet please follow these instructions: Registered holders - If you hold your shares in registered name, you can mail back a later dated proxy card or you can attend the meeting and vote in person. Street name holders - If you hold your shares at a bank or broker, return the proxy card mailed to you in the envelope provided or contact your representative and instruct them to vote on your behalf. If you plan to attend the meeting and vote in person, you must notify your broker and request a "legal proxy." If you have any questions or need further assistance please contact our proxy solicitor MalCon Advisors, Inc., 130 William Street, New York, NY 10038; (800) 475-9320; or PL Capital (Richard Lashley (973) 360-1666, or John Palmer (630) 928-0231). Thank you for your consideration. On behalf of The PL Capital Group, John Palmer Richard Lashley Principal Principal We encourage you to read our proxy statement because it contains important information. If you do not already have a proxy statement from us, you can get our proxy statement, and any other relevant documents, for free at the web site of the Securities and Exchange Commission (www.sec.gov). In addition, copies of our recent Schedule 13D filings are available on the SEC's website. Our most recent Schedule 13D filing contains a list of the participants in The PL Capital Group's proxy solicitation and a detailed description of our security holdings of Wells. You may also contact us directly to obtain free copies of our proxy statement. -24- EX-99.9 6 0006.txt PROXY ANALYSIS CUSIP No. 949759104 Page 25 of 43 Pages EXHIBIT 9 Institutional Shareholders Services Thompson Financial - -------------------------------------------------------------------------------- Proxy Analysis: WELLS FINANCIAL CORP. Ticker: WEFC Proxy Contest Meeting: April 18, 2001 Record Date: March 2, 2001 Security ID: 949759104 (CUSIP), US9497591043 (ISIN) - -------------------------------------------------------------------------------- MEETING AGENDA - -------------------------------------------------------------------------------- Item Code Management Proxy (TAN CARD) Mgt. Rec. ISS REC. - -------------------------------------------------------------------------------- []1 M0201 Elect Directors For WITHHOLD - -------------------------------------------------------------------------------- Shareholder Proposal - -------------------------------------------------------------------------------- []2 S0618 Seek Sale of Company/Assets Against AGAINST - -------------------------------------------------------------------------------- Dissident Proxy (WHITE CARD) - -------------------------------------------------------------------------------- []1 M0225 Elect Directors (Opposition Slate) For FOR - -------------------------------------------------------------------------------- []2 S0618 Seek Sale of Company/Assets For AGAINST - -------------------------------------------------------------------------------- To follow ISS's recommendation, execute your votes on the dissident's WHITE proxy card and discard management's TAN proxy card. -25- CUSIP No. 949759104 Page 26 of 43 Pages - ------------------------------------------------------------------------------- FINANCIAL SUMMARY - -------------------------------------------------------------------------------- INCOME STATEMENT SUMMARY (amounts in millions except per share data) - -------------------------------------------------------------------------------- 1998 1999 2000 ACG* ---- ---- ---- ---- Net Interest Income $6.71 $6.80 $6.52 -1.42% Net Income 2.48 2.22 1.20 -30.44% EPS (Basic) 1.42 1.26 1.41 -0.35% Dividend 0.57 0.00 0.00 NMF - ------------------------ * Annual Compound Growth Fiscal Year Ended: December 31 Source: Annual Report - -------------------------------------------------------------------------------- PERFORMANCE SUMMARY - -------------------------------------------------------------------------------- 1-Year 3-Year 5-Year Total shareholder returns, company 13.8% 0.3% 53.6% Total shareholder returns, index 11.1% 0.4% -59.8% Total shareholder returns, peer group 14.8% -3.1% 26.2% - ------------------------ Source: Bloomberg Business News - ------------------------------------------------------------------------------- BUSINESS: Unitary bank holding company STATE OF INCORPORATION: Minnesota ACCOUNTANTS: McGladrey & Pullen -26- CUSIP No. 949759104 Page 27 of 43 Pages - -------------------------------------------------------------------------------- BOARD SUMMARY - -------------------------------------------------------------------------------- Affiliated Independent Insiders Outsiders Outsiders Full Board 2 1 3 Audit Committee 0 1 2 Compensation Committee 0 0 0 Nominating Committee 0 0 0 - -------------------------------------------------------------------------------- Classified board: Yes CEO as chairman: Yes Current nominees: 2 Retired CEO on board: No Note: As of March 2, 2001, all officers and directors as a group beneficially owned 12.5 percent of the common stock. As of the same date, PL Capital owned 8.7 percent. [] Item 1: Elect Directors Wells Financial Corp. classifies its six directors into three director classes. This proposal seeks election of two directors for two-year terms expiring in 2003. The full board comprises two insiders, one affiliated outsider, and three independent outsiders. The Audit Committee comprises one affiliated outsider and two independent outsiders. There are no standing compensation or nominating committees. Richard Mueller, an affiliated outside director, has served on the board for a period of ten years or more. Note: Wells Financial is facing a proxy contest launched by PL Capital, LLC, which holds a stake in 8.8 percent of the company. At the company's 2001 annual meeting, PL Capital is seeking the election of one of its own nominees to the company's six-member board. Wells Financial's board is staggered into three classes, with two director seats open at this year's meeting. PL Capital has also submitted a shareholder proposal calling for the company to promptly explore all possible sale transactions, disclose the results of such explorations, and allow shareholders to vote on any firm offers. Concerned that the company has little potential for future growth and that the company's stock has been persistently undervalued by the -27- CUSIP No. 949759104 Page 28 of 43 Pages market, PL Capital is advocating the sale of Wells Financial in order to allow shareholders to realize full value for their shares. Since the board has thus far rejected the overtures the company has received, the dissidents are taking the two-pronged approach of seeking the election of their nominee and submission of the nonbinding shareholder proposal. Shareholders should note that PL Capital has mounted value enhancement campaigns at several bank and thrift institutions in the past. Since 1996, PL Capital has accumulated five-percent or larger ownership positions in four other savings institutions that were subsequently sold at premiums ranging from 67 percent to 106 percent over the target's closing price on the day prior to PL Capital's initial 13D filing. PL Capital has more recently filed 13Ds on three other public banks and thrifts, one of which added Richard Lashley and another PL Capital principal to its board to settle a proxy contest last year. PL Capital estimates that it will spend as much as $20,000 in connection with the proxy contest. The dissidents will seek reimbursement for their expenses. Background Wells Financial converted from mutual to stock form in 1995, going public at an initial price of $8.00 per share. A traditional thrift with eight branches in southwest Minnesota, the company is headquartered in Wells, Minnesota, a small rural town. The company has branches in six counties. Although Wells Financial's stock price grew steadily from 1995 through 1998, over the three years since the company has experienced lackluster growth and tepid shareholder returns. Since achieving a high of $22.00 per share in May 1998, the company's stock steadily declined in value--on the last day of trading before PL Capital's initial 13D filing relating to the dissidents' acquisition of a five-percent stake in the company, Wells Financial's stock closed at $12.38 per share. In the months since the dissidents' July 2000 filing, the stock price has climbed back to the $17.00 to $18.00 range where it is currently trading, apparently on speculation that the company will be sold. In this context, a group of outside investors, including PL Capital, began acquiring shares of Well Financial common stock in June 2000. PL Capital believed that the company's stock was undervalued and represented an attractive investment opportunity. At that time, PL Capital was working in conjunction with John Morrison, a Minnesota bank operator with considerable experience buying, selling, and running banks, who had identified Wells Financial as a potentially attractive acquisition. In July 2000, therefore, the PL Capital filed a 13D indicating its desire to meet with management to discuss the possibility of consummating a merger or related transaction. Over the next several months, PL Capital and Wells Financial had periodic correspondence and two meetings relating to a possible acquisition by a Morrison-affiliated entity of Wells Financial for between $15.00 and $17.00 a share, payable in cash and/or stock of United Financial, a publicly owned bank in which Morrison holds a 30-percent stake. During the -28- CUSIP No. 949759104 Page 29 of 43 Pages same time frame, an out-of-state institution also approached Wells, expressing its desire to acquire the company for a price range that management states fell between $17.00 and $19.00 per share. After retaining a financial advisor to perform a valuation of the company, however, Wells Financial's management concluded that both bids' price range was too low and communicated this fact to Mr. Morrison. The valuation period was approximately 60 days in length, during which time management refused to hold any further substantive discussions with Mr. Morrison. Wells Financial subsequently declined to execute a confidentiality agreement or engage in further substantive discussions with PL Capital, citing PL Capital's meager price range. In early 2001, Mr. Morrison divested his Wells Financial stake, selling his shares to PL Capital and ending his participation in the PL Capital. PL Capital remains committed to achieving a sale of the company, however, whether to Mr. Morrison or an alternative bidder. Frustrated by the board's refusal to negotiate with Mr. Morrison and the company's apparent rejection of an overture made by an out-of-state bank in the last several months, the dissidents have mounted this campaign, seeking to gain an independent voice on the board and asking shareholders to approve a nonbinding proposal calling on the board to pursue a sale. In evaluating the issues raised by this contest, ISS spoke to Mr. Lashley and John Palmer, principals of PL Capital and to Messrs. Kruse and Moll, Wells Financial's CEO and CFO, respectively, on behalf of management. Dissident Position PL Capital steadfastly maintains that Wells Financial should be sold. In the wake of Mr. Morrison's departure, Messrs. Lashley and Palmer cast themselves as significant shareholders whose interest is simply to maximize the value of their investment. Based on what they regard as the board's inability or unwillingness to pursue the company's best value enhancement opportunities, the dissidents are seeking the election of one director to provide an independent voice in favor of exploring strategic transactions. To support its contention that the company should be sold, PL Capital points to what it views as Wells Financial's faltering financial results and dubious prospects for future growth as a stand-alone entity in its current market area. The dissidents begin by pointing to the company's slow asset growth--when the company converted to stock form in 1995 it had approximately $195 million in total assets, versus $220 million today, reflecting an aggregate increase of 12.8 percent over five years, or 2.4 percent annual compound growth. Deposits grew at a compounded annual rate of approximately two percent over the same period, and actually declined when retained interest on deposits is excluded. The dissidents characterize the company's return on equity as flat to only slightly up (ROE was 7.9 percent in 2000, up from 5.5 percent in 1995) and return on assets as down, at 0.85 percent versus a high of 1.26 percent in 1998. -29- CUSIP No. 949759104 Page 30 of 43 Pages Wells Financial's stock price has faltered, too, the dissidents point out, coming in at $15.94 per share on Dec. 31, 2000, or 28 percent of the company's high reached in 1998. Since 1998, the company's stock has trended generally downward, falling as low as $11.00 per share in June 2000, before the filing of the dissidents' first 13D. And the dissidents do not believe that the company's future promises much in the way of improvement. Messrs. Lashley and Palmer believe that Wells Financial's core business is actually contracting, and that the company's status as a traditional thrift (70 percent of deposits are CDs) does not provide a platform for future growth in a market characterized by increasing competition from commercial institutions. While management has recently expanded its agricultural lending, the dissidents view this effort as risky, exposing the company to a potentially deflationary commodity cycle environment. PL Capital believes that the company's best hope has always been to either become a commercial institution itself or to merge with a larger, commercial bank. In this context, PL Capital believes that Mr. Morrison's premium bid should have been given closer consideration by the company, as should the $17 to $19 expression of interest tendered by the out-of-state bank. The dissidents now believe that management is unduly opposed to a sale of the company, or at the least is wedded to an unreasonable and unsupportable valuation of the company that precludes the likelihood of management receiving an "acceptable" offer. The dissidents fear that the protracted valuation process engaged in by the company's financial advisor may have been nothing more than a stalling tactic designed to help management avoid discussing a sale of the company. In addition, they question management's unwillingness to execute a confidentiality agreement with the bidders and permit due diligence, which may have allowed Mr. Morrison and the out-of-state bank to sweeten their offers. The dissidents conclude that shareholders should elect Mr. Philstrom to Wells Financial's board. Although Mr. Philstrom is an attorney who has worked with Mr. Morrison before, Messrs. Lashley and Palmer point out that Mr. Morrison is no longer a member of their group and that it is not clear whether Mr. Morrison retains any interest in Wells Financial. Therefore, they believe that Mr. Philstrom would constitute a valuable independent voice on the board, who could apply his banking experience to help the incumbents determine the best available transaction for the company. As described previously, the dissidents are also submitting a shareholder proposal calling for the sale of the company. Management position Management reiterates that it has been and remains interested in fairly priced, bona fide offers to acquire the company. In the eyes of Messrs. Kruse and Moll, however, the offers management has received to date have simply been too low. Management maintains that notwithstanding the dissidents' claims, the company has value and the ability to sustain itself going forward--Wells Financial is the fourth-largest thrift in Minnesota and has traditionally performed well in low-interest rate environments like the one on the horizon. Management also states that the company has performed well over the past year, growing its assets at a rate exceeding its peer group median for each of the five quarters ended Sept. -30- CUSIP No. 949759104 Page 31 of 43 Pages 30, 2000, and exceeding its peers' return on equity over the same period. While willing to explore bona fide, reasonable bids for the company, therefore, management concludes that there is no pressing need to rush into a transaction, and that the board has an obligation not to indulge lowball offers that is just as compelling as its duty to explore fair bids. In any event, management points out that it never adopted a "just say no" stance versus the offers it received to acquire Wells Financial. Instead, management took constructive action to evaluate the bids, hiring an investment banker to value the company and retaining outside counsel to guide the board and management in its consideration of the offers. Mr. Kruse and an independent member of the board met with Mr. Morrison to discuss Mr. Morrison's offer on Oct. 26, at which time management communicated its belief that Mr. Morrison's price range was unacceptable. Management also responded positively to the out-of-state institution's offer, although it was surprised that the other bank was prepared to make a bid so quickly and on the basis of so little previous contact between the parties. At all times, management emphasizes, the company treated the expressions of interest as bona fide. Nonetheless, management maintains that the offers received to date are too low to justify further discussions with the offerers. In support of this contention, management cites the conclusions of its investment banker and also points to Sandler O'Neill data on 2000 Midwest thrift transactions. For transactions with a deal value of more than $15 million, the average price to book value was 125 percent and price to earnings per share was 17.7x. Management points out that these ratios suggest an implied value for Wells Financial of more than $22.00 per share, well above the ranges suggested by Mr. Morrison and the competing bidder. When asked whether the company considered executing a confidentiality agreement and allowing Mr. Morrison to conduct due diligence that could have justified management's valuation of the company, Messrs. Kruse and Moll responded that they believe due diligence results are generally used to justify a decrease rather than an increase to an original offer. As such, they regarded Mr. Morrison's initial bid as representing the high end of his potential interest--in management's opinion, there was little likelihood that Mr. Morrison would increase his bid to a reasonable level after completion of due diligence. Management also states that executing a confidentiality agreement would deprive the company of all negotiating leverage, since the company would presumably be obligated to deal exclusively with Mr. Morrison for the duration of the agreement. Management concludes by reemphasizing that it remains open to fairly priced bids, but believes that the expressions of interest it has thus far received are simply too low. Furthermore, Messrs. Kruse and Moll do not believe that the company's prospects are so bleak as to warrant a "fire sale," and they do not feel an obligation to actively solicit bids for the company at this time. In fact, management believes that the company can continue to perform strongly going forward. The replacement of one of the incumbent directors with the dissident nominee would not be in shareholders' best interests, in management's view. Messrs. Kruse and Moll point out that Mr. Philstrom can be reached by calling a -31- CUSIP No. 949759104 Page 32 of 43 Pages Morrison-owned business; therefore, they question the true independence of the dissident nominee. Analysis As an initial matter, we acknowledge that Wells Financial does not fit the profile of an entrenched management team committed to remaining in office notwithstanding the cost to shareholders. The company's governance profile, on the whole, is fairly benign--the company does not have a poison pill, although the board is classified. Management took the important step of engaging the bidders in a dialogue, and appeared to have had at least some cordial, meaningful contacts with Mr. Morrison and PL Capital. Mr. Kruse's willingness to meet with Mr. Morrison, and to have one of his independent directors in attendance, reflects a commitment to fair consideration of the issues that is commendable and generally reflective of management that is attuned to shareholder interests. Management also engaged a valuation firm whose credibility the dissidents do not question, which is an encouraging sign. Nonetheless, when a company receives premium-priced bids from two separate parties, management would be well served to take further steps beyond merely cordial discussions. First, if the offerers come in with price ranges that are too low, management might communicate to those bidders, in general terms, what a good starting price for discussions might be. In addition, management might have benefited from allowing Mr. Morrison to conduct due diligence on the company. Messrs. Moll and Kruse have conceded that they viewed, and continue to view, Mr. Morrison as a legitimate potential buyer of the company. If they believe that the company's value is greater than Mr. Morrison's bid, therefore, they would be well-served to provide Mr. Morrison data to substantiate that valuation. Due diligence offers a convenient forum for the provision of such information. The course management chose to pursue instead--aborting discussions unless and until Morrison returned with a new offer, without providing any guidance as to what an acceptable price range would be--seemed destined to yield the adverse result that did, in fact, occur--Mr. Morrison's retreat and the apparent end, for the moment, of his campaign to buy Wells. While we are sympathetic to management's argument that it cannot and should not let just anyone have access to the company's books, it is reasonable to ask a board to give legitimate interested parties like Mr. Morrison the opportunity to learn more about Wells Financial's hidden value. If Mr. Morrison were to maintain his original offer after conducting due diligence, management would still be able to reject his bid, and could do so knowing that they had explored every opportunity to obtain a fairer price. Furthermore, we are not convinced that the range of Mr. Morrison's interest (not to mention that of the out of state institution) is low enough to justify management's decision to cease discussions. Even the low end of Mr. Morrison's expression of interest--$15.00 per share--reflects a premium of 21.2 percent over Wells' stock price on the last day of trading prior to PL Capital's initial 13D filing, and the $17.00 upper end reflects a 37.4-percent premium. Prior to the dissidents' 13D, the company's stock had not closed at or above $14.00 per share since October 1999. And the last time the company's stock had -32- CUSIP No. 949759104 Page 33 of 43 Pages closed at $17.00 per share was November 1998. While we are sensitive to management's concerns that PL Capital is merely a short-term speculator seeking to make a quick profit, it appears that the Morrison bid offers enough of a premium to benefit even long-term shareholders of the company. The $19.00-per-share proposal made by the out-of-state institution, of course, is even more attractive to shareholders, notwithstanding the fact that it falls short of the value management deems sufficient. And while multiples paid in other transactions certainly offer valuable guidance on where Wells Financial should sell, we recognize that the market is the final arbiter of a company's worth. Given Wells Financial's trading range over the past two years, the Morrison bid and the competing offer appear to warrant greater consideration than management has given them thus far. Finally, PL Capital is a significant Wells Financial shareholder (albeit a relatively new one) which has a clear interest in increasing shareholder value. PL Capital has an impressive history of bank investments, many of which have yielded subsequent transactions that generated significant premiums to shareholders. And the dissidents are asking for only a single seat on the company's six-member board--an addition that poses only a nominal risk of disruption in return for significant potential benefits. Particularly given the slow reaction of the board to offers made for the company thus far (one of the dissidents' prime complaints about management is that Mr. Kruse and his board may be too "slow moving" in an increasingly fast-paced financial services industry), the addition of Mr. Philstrom could provide a valuable injection of energy to the board while also prompting a revisitation of what a reasonable offer for the company would be. While the incumbent board is majority independent, three of the directors meeting ISS definitions of "independent outsiders" have served on the board for ten years or more and may therefore be less prone to aggressively question management than a newcomer. Conclusion On the basis of the factors enumerated above, we believe shareholders would be best served by electing the dissident nominee to Wells Financial's board. PL Capital's significant financial stake in the company and its past success at enhancing shareholder value at other banks are points in its favor, and the election of a single new director does not appear to pose a great risk of disrupting the board's deliberations or giving PL Capital undue influence over management. While we believe that management has, in the main, acted responsibly and with an eye to its fiduciary obligation to shareholders in fielding offers for the company, we conclude that the addition of Mr. Philstrom would provide valuable incentive for the company to continue to assess the environment for selling the company. The dissident nominee could also help refine management's thinking on what a fair price for the company would be. While we do not propose to determine a fair price for the company in this analysis, the bids made so far reflect a substantial premium to the company's historical market price that appear to merit, at the least, the continuation of meaningful discussions with the offerors and the execution of agreements that would allow legitimate bidders access to information justifying a higher price. - ISS prefers that companies establish separate compensation or nominating committees. -33- CUSIP No. 949759104 Page 34 of 43 Pages - ISS prefers that all key board committees include only independent outsiders. We recommend WITHHOLDING a vote for Item 1. Shareholder Proposal [] Item 2: Seek Sale of Company/Assets PL Capital has submitted this shareholder proposal calling for the prompt sale of the company to the highest bidder. Specifically, the proposal requests that: "(1) the management and board of Wells Financial should solicit offers to acquire, or merge with, Wells Financial, from all potentially interested parties, in a fair and open process; (2) the company should publicly disclose to stockholders the results of that process, and (3) the stockholders of Wells Financial should be presented with an opportunity to vote on the definitive offer with the highest value, regardless of whether Wells Board of management feels such offer is sufficient." As described above, PL Capital has submitted this proposal in conjunction with its campaign to elect one director to the company's board and as part of its overall campaign to push for the sale of the company. Although we recommend that shareholders vote for the dissident director nominee, however, we do not believe this proposal warrants shareholder support. We are recommending in favor of the dissident director chiefly on procedural grounds--the fact that the board failed to explore aggressively enough two premium-priced offers to acquire the company--and not on the basis of any determination that the company definitively should be sold. We agree with management, in fact, that the board has an obligation to sell only at a fair price, and we further agree that the board must play a crucial role in determining what constitutes fair value and what offers, if any, should be forwarded to shareholders for a vote. While we support the election of a new, independent director to aid the board in its deliberations, we cannot support this proposal, which by its terms would exclude the board from playing any meaningful role in a sale process. Our final vote recommendation, therefore, is for shareholders to vote for the dissident nominee to the board and against this nonbinding proposal calling for the sale of the company. We believe that the election of Mr. Philstrom will provided sufficient momentum to the dissident's efforts to ensure that management fully explores sale opportunities, without creating the "fire sale" atmosphere that a shareholder vote in favor of this proposal could potentially create. We recommend a vote AGAINST Item 2. Dissident Proxy (WHITE CARD) -34- CUSIP No. 949759104 Page 35 of 43 Pages [] Item 1: Elect Directors (Opposition Slate) See discussion above. We recommend a vote FOR Item 1. [] Item 2: Seek Sale of Company/Assets See discussion above. We recommend a vote AGAINST Item 2. -35- CUSIP No. 949759104 Page 36 of 43 Pages ------------------------- Wells Financial Corp. 53 First Street, S.W. P.O. Box 310 Wells, Minnesota 56097 (507) 553-3151 Company Solicitor: D.F. King & Co. (212) 269-5550 Shareholder Proposal Deadline: November 15, 2001 This proxy analysis has not been submitted to, or received approval from, the Securities and Exchange Commission. While ISS exercised due care in compiling this analysis, we make no warranty, express or implied, regarding the accuracy, completeness, or usefulness of this information and assume no liability with respect to the consequences of relying on this information for investment or other purposes. -36- CUSIP No. 949759104 Page 37 of 43 Pages Vote Record Form: WELLS FINANCIAL CORP. Ticker: WEFC Proxy Contest Meeting: April 18, 2001 Record Date: March 2, 2001 Account ID Code: Shares Held on Record Date: Shares Voted: Date Voted: - -------------------------------------------------------------------------------- MEETING AGENDA - -------------------------------------------------------------------------------- Item Code Proposals Mgt. Rec. ISS REC. Vote Cast - -------------------------------------------------------------------------------- []1 M0201 Elect Directors For WITHHOLD - -------------------------------------------------------------------------------- Shareholder Proposal - -------------------------------------------------------------------------------- []2 S0618 Seek Sale of Company/Assets Against AGAINST - -------------------------------------------------------------------------------- Dissident Proxy (WHITE CARD) - -------------------------------------------------------------------------------- []1 M0225 Elect Directors (Opposition Slate) For FOR - -------------------------------------------------------------------------------- []2 S0618 Seek Sale of Company/Assets For AGAINST - -------------------------------------------------------------------------------- -37- EX-99.10 7 0007.txt LETTER CUSIP No. 949759104 Page 38 of 43 Pages EXHIBIT 10 PL CAPITAL, LLC 2015 Spring Road Suite 290 Oak Brook, Illinois 60523 Tel: (630) 928-0231 Fax: (630) 928-0232 AN IMPORTANT MESSAGE TO FELLOW STOCKHOLDERS OF WELLS FINANCIAL CORP. FROM THE PL CAPITAL GROUP Dear Fellow Wells Financial Stockholder: During the past several weeks you should have received a proxy statement, and several letters, from us, the PL Capital Group, with respect to your holdings in Wells Financial Corp. (symbol:WEFC). We apologize for the volume of mailings, however, we feel it is important to inform you of an important recent development. We are pleased to announce that an independent proxy analysis firm, Institutional Shareholder Services (ISS), issued a 12 page report on April 4th, which recommended that shareholders should vote FOR Mr. Gary Pihlstrom, the PL Capital Group's candidate for Wells Financial's Board of Directors. ISS's recommendation was based upon interviews of both the management of Wells, and the PL Capital Group, as well a review of public filings and other relevant information. ISS's report concluded that "shareholders would be best served by electing the dissident nominee [Mr. Gary Pihlstrom] to Wells Financial board." ISS is widely recognized as one of the leading independent proxy analysis firms in the country. Their work is relied upon by hundreds of leading institutional investment firms throughout the country. The Annual Meeting is scheduled for April 18th. As you know, the PL Capital Group is seeking your support to vote FOR the following items on the WHITE proxy card: 1. FOR our candidate, Mr. Gary Pihlstrom, for election to Wells Financial's Board of Directors, and 2. FOR the shareholder proposal noted in PL Capital Group's proxy statement and card. Even if you have already voted for the candidates proposed by the management of Wells Financial, we request that you reconsider your vote in light of the recommendation by ISS. -38- CUSIP No. 949759104 Page 39 of 43 Pages Time is short - please vote FOR today! - If you have already voted on management's card or have not voted yet please follow these instructions: Registered holders - If you hold your shares in registered name, you can mail back a later dated proxy card, fax both sides of your proxy card to 212-843-4392 or you can attend the meeting and vote in person. Street name holders - If you hold your shares at a bank or broker, return the proxy card mailed to you in the envelope provided or contact your representative and instruct them to vote on your behalf. If you plan to attend the meeting and vote in person, you must notify your broker and request a "legal proxy." If you have any questions or need further assistance please contact our proxy solicitor MalCon Advisors, Inc., 130 William Street, New York, NY 10038; (800) 475-9320; or PL Capital (Richard Lashley 973-360-1666 or John Palmer 630-928-0231. Thank you for your consideration. Sincerely On behalf of The PL Capital Group, John Palmer Richard Lashley Principal Principal We encourage you to read our proxy statement because it contains important information. If you do not already have a proxy statement from us, you can get our proxy statement, and any other relevant documents, for free at the web site of the Securities and Exchange Commission (www.sec.gov). In addition, copies of our recent Schedule 13D filings are available on the SEC's website. Our most recent Schedule 13D filing contains a list of the participants in The PL Capital Group's proxy solicitation and a detailed description of our security holdings of Wells. You may also contact us directly to obtain free copies of our proxy statement. -39- EX-99.11 8 0008.txt PRESS RELEASE CUSIP No. 949759104 Page 40 of 43 Pages EXHIBIT 11 Contact: Rick Grubaugh MalCon Proxy Advisors, Inc. 130 William Street New York, NY 10038 212-619-4565 rgrubaugh@malconproxy.com LEADING INDEPENDENT PROXY ANALYSIS FIRM RECOMMENDS THAT SHAREHOLDERS OF WELLS FINANCIAL CORP. (WEFC) VOTE FOR THE PL CAPITAL GROUP BOARD CANDIDATE The PL Capital Group is pleased to announce that the leading independent proxy analysis firm, Institutional Shareholder Services (ISS), issued a 12 page report on April 4th, which recommended that shareholders of Wells Financial Corp. (symbol:WEFC) should vote for Mr. Gary Pihlstrom, the PL Capital Group's candidate for Wells Financial's Board of Directors, and against the Board candidates nominated by the management of Wells Financial. ISS's recommendation was based upon interviews with the management of Wells, and the PL Capital Group, as well a review of public filings and other relevant information. ISS's report concluded, "Shareholders would be best served by electing the dissident nominee [Mr. Gary Pihlstrom] to Wells Financial board." ISS is widely recognized as one of the leading independent proxy analysis firms in the country. Their work is relied upon by hundreds of major institutional investment firms throughout the country. Wells Financial's Annual Meeting is scheduled for April 18th. -40- EX-99.12 9 0009.txt LETTER CUSIP No. 949759104 Page 41 of 43 Pages EXHIBIT 12 April 9, 2001 VIA OVERNIGHT MAIL - ------------------ Mr. Lawrence Kruse Chairman and CEO Wells Financial Corp. 53 First Street S.W. Wells, MN 56097 Re: Press Release dated April 6, 2001 Dear Mr. Kruse: We were very disturbed to read the press release issued by Wells Financial Corp. ("Wells Financial") last Friday, April 6. We believe that press release contained material false and misleading statements, in violation of federal securities laws. We will point out to you a few of the several portions of the press release that we believe are false and misleading. One particularly egregious example is the statement that The PL Capital Group's stockholder proposal "calls for [Wells Financial] to solicit offers for the immediate sale of [Wells Financial]." As you are well aware, our proposal to stockholders calls only for a solicitation of offers to purchase, followed by a rational and open evaluation, not an immediate sale. A second egregious example is your deliberate implication that our stockholder proposal only calls for the solicitation of offers to purchase Wells Financial without commenting on the other aspects of the proposal that Institutional Shareholder Services ("ISS") included in its analysis. A third example is your misleading implication that ISS endorses your repeated false characterizations of our stockholder proposal as a "fire-sale" proposal. A fourth example is the attempt to use quotations by ISS to falsely imply that ISS opposes the nominee of The PL Capital Group for election to the Board of Directors when, in fact, ISS endorsed Mr. Pihlstrom for election to the Board of Directors and recommended that stockholders vote for Mr. Pihlstrom. To this point, ISS specifically called for the voting of our white card and the discarding of Wells Financial's tan card. We are currently reviewing our options in response to Wells Financial's false and misleading statements, which may include injunctive relief for violations of SEC Rule 14a-9 and other applicable laws. Very truly yours, John W. Palmer, for The PL Capital Group -41- EX-99.13 10 0010.txt PRESS RELEASE CUSIP No. 949759104 Page 42 of 43 Pages EXHIBIT 13 Contact: Rick Grubaugh MalCon Proxy Advisors, Inc. 130 William Street New York, NY 10038 212-619-4565 rgrubaugh@malconproxy.com Independent proxy analysis firm does not back candidate of current management of Wells Financial Corp (WEFC). On April 6, 2001, Wells Financial (NASDAQ: WEFC) issued a press release which The PL Capital Group believes is grossly misleading. In its press release, Wells Financial stated that The PL Capital Group's stockholder proposal "calls for [Wells Financial] to solicit offers for the immediate sale of [Wells Financial]." Wells Financial then stated that Institutional Shareholder Services ("ISS"), a leading independent proxy analysis firm, had recommended a vote against the stockholder proposal. However, the PL Capital Group's proposal does not call for the "immediate sale" or a "fire sale" of Wells Financial, but rather a fair and open process that management and the Board of Directors of Wells have not undertaken, as concluded by ISS. Moreover, Wells Financial ignores that The PL Capital Group's proposal had other components that were addressed by ISS. Wells Financial's press release also appears to imply that ISS endorsed all of management's positions with respect to the proxy contest being conducted by The PL Capital Group. In fact, ISS backed The PL Capital Group's nominee for election at this year's annual meeting, Mr. Gary Pihlstrom. Furthermore, ISS stated the following: o "we believe shareholders would be best served by electing the dissident nominee to Wells Financial's board" o "To follow ISS's recommendation, execute your votes on the dissident's WHITE proxy card and discard management's TAN proxy card." o "Particularly given the slow reaction of the board to offers made for the company thus far (one of the dissidents' prime complaints about management is that Mr. Kruse and his board may be too "slow moving" in an increasingly fast-paced financial services industry), the addition of Mr. Philstrom could provide a valuable injection of energy to the board while also prompting a revisitation of what a reasonable offer for the company would be." -42- CUSIP No. 949759104 Page 43 of 43 Pages o "While we do not propose to determine a fair price for the company in this analysis, the bids made so far reflect a substantial premium to the company's historical market price that appear to merit, at the least, the continuation of meaningful discussions with the offerors and the execution of agreements that would allow legitimate bidders access to information justifying a higher price." o "when a company receives premium-priced bids from two separate parties, management would be well served to take further steps beyond merely cordial discussions." o "Furthermore, we are not convinced that the range of Mr. Morrison's interest (not to mention that of the out of state institution) is low enough to justify management's decision to cease discussions. Even the low end of Mr. Morrison's expression of interest--$15.00 per share--reflects a premium of 21.2 percent over Wells' stock price on the last day of trading prior to PL Capital's initial 13D filing, and the $17.00 upper end reflects a 37.4-percent premium. Prior to the dissidents' 13D, the company's stock had not closed at or above $14.00 per share since October 1999. And the last time the company's stock had closed at $17.00 per share was November 1998. While we are sensitive to management's concerns that PL Capital is merely a short-term speculator seeking to make a quick profit, it appears that the Morrison bid offers enough of a premium to benefit even long-term shareholders of the company. The $19.00-per-share proposal made by the out-of-state institution, of course, is even more attractive to shareholders, notwithstanding the fact that it falls short of the value management deems sufficient. And while multiples paid in other transactions certainly offer valuable guidance on where Wells Financial should sell, we recognize that the market is the final arbiter of a company's worth." o "PL Capital has an impressive history of bank investments, many of which have yielded subsequent transactions that generated significant premiums to shareholders." We encourage shareholders to independently review ISS's report. We courage you to vote the White proxy card and support our candidate Gray Philstrom and our proposal. Wells Financial's Annual Meeting is scheduled for April 18th. We encourage you to read our proxy statement because it contains important information. If you do not already have a proxy statement from us, you can get our proxy statement, and any other relevant documents, for free at the web site of the Securities and Exchange Commission (www.sec.gov). In addition, copies of our recent Schedule 13D filings are available on the SEC's website. Our most recent Schedule 13D filing contains a list of the participants in The PL Capital Group's proxy solicitation and a detailed description of our security holdings of Wells. You may also contact us directly to obtain free copies of our proxy statement. -----END PRIVACY-ENHANCED MESSAGE-----