PRESS RELEASE

Wells Financial Corp.                         Contact:   Lonnie R. Trasamar
Wells Federal Bank                                       President and
53 First Street, S.W.                                    Chief Executive Officer
Wells, Minnesota 56097                                   (507) 553-3151

                                                         For Immediate Release
                                                         September 28, 2004

                              WELLS FINANCIAL CORP.
                        ANNOUNCES MODIFIED DUTCH AUCTION
              TO PURCHASE UP TO 150,000 SHARES OF OUTSTANDING STOCK

WELLS,  MINNESOTA,  September 28, 2004 - Wells Financial Corp. ("Wells") (Nasdaq
National  Market  "WEFC")  President  and  Chief  Executive  Officer,  Lonnie R.
Trasamar,  today announced that Wells will  repurchase up to 150,000 shares,  or
approximately 13%, of its 1,162,651 shares of common stock currently outstanding
through a modified Dutch auction issuer tender offer.

The Board of  Directors of Wells has selected a modified  Dutch  auction  tender
offer with the goals of  deregistering  Wells'  common stock from the  reporting
obligations  imposed on Wells  under the  Securities  Exchange  Act of 1934,  as
amended,  and delisting such stock from the Nasdaq National  Market.  Under this
format,  shareholders  will  have the  opportunity  to sell part or all of their
shares to Wells at the cash purchase  price  selected by the  shareholder of not
less than $29.50 per share nor greater than $31.50 per share. Upon expiration of
the offer,  Wells will select the lowest  purchase  price that will permit it to
buy the desired number of shares.  All shares purchased will be purchased at the
same  Wells-selected  price, even if tendered at a lower price. If more than the
maximum  number of  shares  sought is  tendered  at or below the  Wells-selected
price,  tendering  shareholders  owning  fewer than 100  shares  will have their
shares purchased without pro-ration and other shares will be purchased pro rata.
Shareholders of record will, in general,  be able to tender their shares free of
all brokerage  commissions  and stock transfer taxes, if any, which will be paid
by Wells.  If, after the offer  expires,  the number of record  holders of Wells
common stock  exceeds 300,  then Wells intends to initiate a reverse stock split
in a manner  that will  ensure  that the number of record  holders is reduced to
below 300, making the Company eligible for  deregistration  under the Securities
Exchange Act of 1934, as amended.  If stockholders are cashed out as a result of
a reverse  stock split,  they will  receive the same price per share  determined
pursuant to the offer.  Immediately  following  any  reverse  stock  split,  the
Company may  initiate a forward  stock split in order to increase  the number of
issued and  outstanding  shares of our common stock to  pre-reverse  stock split
levels,  less any  fractional  shares that are  cashed-out  in the reverse stock
split.

The offer is not conditioned on a minimum number of shares being tendered. Wells
will pay for the shares  purchased  and for all related fees and expenses out of
available  funds  and cash on hand.  The offer to  purchase  shares  will  begin
September  28,  2004 and expire on October 29,  2004,  unless  extended.  Shares
tendered into the offer may be withdrawn at any time before the expiration  date
of the offer. On September 27, 2004, the closing sale price for the common stock
as reported on the Nasdaq National Market was $28.75.




NEITHER  WELLS   FINANCIAL   CORP.   NOR  ITS  BOARD  OF  DIRECTORS   MAKES  ANY
RECOMMENDATION  TO ANY  SHAREHOLDER  AS TO  WHETHER  TO TENDER OR  REFRAIN  FROM
TENDERING  ANY OR ALL OF SUCH  SHAREHOLDER'S  SHARES  IN THE  OFFER  AND HAS NOT
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.

This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares of Wells common  stock.  The offer is made solely by the Offer to
Purchase, dated September 28, 2004, and the related Letter of Transmittal.  Each
shareholder  is urged to  consult  their tax  advisor as to the  particular  tax
consequences  of the tender offer to such  shareholder.  The full details of the
offer,  including  complete  instructions on the tender process  procedure along
with the  transmittal  forms and  other  data is being  mailed  to  shareholders
commencing on or about September 28, 2004. You should read the Offer to Purchase
and  the  Letter  of  Transmittal   carefully  because  they  contain  important
information.  The documents  will be available  free of charge at the website of
the United  States  Securities  and  Exchange  Commission  at  www.sec.gov.  The
documents may also be obtained free of charge from Wells Financial  Corp.  (507)
553-3151  or from  the  information  agent  for the  offer,  D.F.  King at (800)
368-5948.

Wells  Financial Corp. is the holding company of Wells Federal Bank, a federally
chartered savings bank  headquartered in Wells,  Minnesota.  The Bank's deposits
are federally insured by the Federal Deposit Insurance  Corporation ("FDIC"). At
June 30, 2004, Wells Financial Corp. had total assets and  stockholders'  equity
of $223.4 million and $28.3 million, respectively.

The foregoing material may contain forward-looking  statements.  We caution that
such statements may be 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. Wells Financial Corp. 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  after the
date of such statements.

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