-----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, NDyWj1VWvJ6g0db0o94kBVFoMDwmnF31+03QhvtQZtFS5nXya4ACdJPc2WvT8eq/ Gth72LTqvy46ICrxG7zPMw== 0000897101-00-001188.txt : 20001218 0000897101-00-001188.hdr.sgml : 20001218 ACCESSION NUMBER: 0000897101-00-001188 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20001215 GROUP MEMBERS: FINANCIAL EDGE FUND LP GROUP MEMBERS: FINANCIAL EDGE-STRATEGIC FUND LP GROUP MEMBERS: JOHN M MORRISON GROUP MEMBERS: KURT R WEISE GROUP MEMBERS: MORRISON JOHN M GROUP MEMBERS: PL CAPITAL LLC 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: 789609 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: MORRISON JOHN M CENTRAL INDEX KEY: 0001055502 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4400 BAKER RD CITY: MINNETONKA STATE: MN ZIP: 55343 MAIL ADDRESS: STREET 1: 4400 BAKER RD CITY: MINNETONKA STATE: MN ZIP: 55343 SC 13D/A 1 0001.txt CUSIP No. 949759104 Page 1 of 22 Pages UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Amendment No. 1) Under the Securities Exchange Act of 1934 WELLS FINANCIAL CORP. (Name of Issuer) Common Stock (Title of Class of Securities) 949759104 (CUSIP Number) Mr. Thomas J. Puff, Esq. Winthrop & Weinstine, P.A. 3000 Dain Rauscher Plaza Minneapolis, MN 55402 (612) 347-0634 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 11, 2000 (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 [ ]. CUSIP No. 949759104 Page 2 of 22 Pages 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) John M. Morrison 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC 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 United States 7 Sole Voting Power 51,810 shares Number of Shares 8 Shared Voting Power Beneficially 0 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 51,810 shares 10 Shared Dispositive Power 0 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 51,810 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) 4.1% 14 Type of Reporting Person IN CUSIP No. 949759104 Page 3 of 22 Pages 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) Kurt R. Weise 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC 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 United States 7 Sole Voting Power 500 shares Number of Shares 8 Shared Voting Power Beneficially 0 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 500 shares 10 Shared Dispositive Power 0 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 500 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) .1% 14 Type of Reporting Person IN CUSIP No. 949759104 Page 4 of 22 Pages 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) PL Capital, LLC 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC 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 7 Sole Voting Power 29,090 shares Number of Shares 8 Shared Voting Power Beneficially 23,720 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 29,090 shares 10 Shared Dispositive Power 23,720 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 52,810 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) 4.2% 14 Type of Reporting Person PN CUSIP No. 949759104 Page 5 of 22 Pages 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) Financial Edge Fund, LP 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC 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 7 Sole Voting Power 0 shares Number of Shares 8 Shared Voting Power Beneficially 15,720 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 0 shares 10 Shared Dispositive Power 15,720 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 15,720 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) 1.3% 14 Type of Reporting Person PN CUSIP No. 949759104 Page 6 of 22 Pages 1 Name of Reporting Person S.S. or I.R.S. Identification Number of Above Person (optional) Financial Edge-Strategic Fund, LP 2 Check The Appropriate Box If a Member of a Group (a)[X] (b)[ ] 3 SEC 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 7 Sole Voting Power 0 shares Number of Shares 8 Shared Voting Power Beneficially 8,000 shares Owned By Each Reporting 9 Sole Dispositive Power Person With 0 shares 10 Shared Dispositive Power 8,000 shares 11 Aggregate Amount Beneficially Owned by Each Reporting Person 8,000 shares 12 Check Box If The Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13 Percent of Class Represented By Amount in Row (11) .6% 14 Type of Reporting Person PN CUSIP No. 949759104 Page 7 of 22 Pages ITEM 1. SECURITY AND ISSUER This Schedule 13D, Amendment #1, is being filed jointly by John M. Morrison; Kurt R. Weise; Financial Edge Fund, L.P., a Delaware limited partnership ("Financial Edge Fund"); Financial Edge-Strategic Fund, LP, a Delaware limited partnership ("Financial Edge Strategic"); and PL Capital, LLC, a Delaware limited liability company and General Partner of Financial Edge Fund and Financial Edge Strategic ("PL Capital"); All of the filers of this Schedule 13D are collectively the "Group." This filing amends that certain 13D filed by the Group on July 10, 2000, and incorporates by reference all information from that filing except as otherwise modified or amended herein. This Schedule 13D, Amendment #1, 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 (1) Mr. John M. Morrison, an individual, with respect to the shares of Common Stock beneficially owned by Mr. Morrison; (2) Mr. Kurt R. Weise, an individual, with respect to the shares of Common Stock beneficially owned by Mr. Weise, (3) PL Capital, with respect to shares held in its name as well as shares of Common Stock held in the name of Financial Edge Fund and Financial Edge Strategic, in PL Capital's capacity as General Partner of those entities; the managing members and owners of PL Capital are John Palmer and Richard Lashley; (4) Financial Edge Fund, with respect to shares of Common Stock held by Financial Edge Fund; and (5) Financial Edge Strategic, with respect to shares of Common Stock held by Financial Edge Strategic. The business address of Mr. Morrison and Mr. Weise is The Colonnade, 5500 Wayzata Blvd., Suite 145, Golden Valley, MN 55416.. Mr. Morrison, a Florida resident, resides at 3093 Fort Charles Drive, Naples, Florida. Mr. Morrison is principally engaged in the ownership and management of various investments and entities, the majority of which are concentrated in the banking and financial services sector. Mr. Weise is principally engaged in the administration and management of Mr. Morrison's holdings. The business address of PL Capital, Financial Edge Fund, Financial Edge Strategic, Mr. Palmer and Mr. Lashley is 2015 Spring Road, Suite 290, Oak Brook, Illinois 60523. PL Capital, Mr. Palmer and Mr. Lashley are principally engaged in providing investment banking and investment management services in the banking and financial services sector. (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 (a) 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, CUSIP No. 949759104 Page 8 of 22 Pages or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. (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 105,120 shares, acquired at an aggregate cost of $1,262,794. The amount of funds expended to date by Mr. Morrison to acquire the 51,810 shares of Common Stock he holds in his name is $622,513. Such funds were provided from Mr. Morrison's personal funds and, from time to time, in part by margin account loans from subsidiaries of U.S. Bancorp Piper Jaffray Inc., extended in the ordinary course of business. The amount of funds expended to date by Mr. Weise to acquire the 500 shares of Common Stock he holds in his name is $5,653. Such funds were provided from Mr. Weise's personal funds. 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, extended in the ordinary course of business. The amount of funds expended to date by Financial Edge Fund to acquire the 15,720 shares of Common Stock it holds in its name is $179,691. 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. All purchases of Common Stock made by members of the Group using funds borrowed from Bear Stearns, DLJ, and US Bancorp Piper Jaffray Inc., 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. CUSIP No. 949759104 Page 9 of 22 Pages ITEM 4. PURPOSE OF TRANSACTION On July 12, 2000, Members of the Group met with the management of Wells Financial to discuss enhancing shareholder value including but not limited to mutually beneficial merger and acquisition opportunities. On July 21, 2000, a Member of the Group sent a letter to Mr. Kruse, Chairman, President and CEO of Wells Financial, which outlined a variety of potential opportunities for Wells Financial to participate in a transaction valued in a range of $15.00 to $17.00 per Wells share (see Exhibit 2). That range represented a 30-45% premium to Wells's average stock price for the period preceding the filing of the Group's initial Form 13D on July 10, 2000. In a letter dated August 16, 2000, Mr. Kruse replied that Wells had engaged an outside firm to assist the Board of Wells in exploring its options (see Exhibit 3). On various occasions in September and early October, various Members of the Group contacted Wells's outside advisory firm and members of Wells's management to inquire about the status of Wells's examination of its strategic options and how it intended to enhance shareholder value. Frustrated by the lack of progress, on October 5, 2000, Mr. Richard Lashley, a Member of the Group, sent a letter to Mr. Kruse, with a copy to each member of Wells's Board of Directors (see Exhibit 4). On October 26, 2000, Mr. Kruse and Mr. Bichler, an outside Board member of Wells, met with Members of the Group. At that meeting, Members of the Group reiterated their interest in Wells and requested an opportunity to execute a confidentiality agreement and begin due diligence on Wells. That request was denied. In a letter dated November 14, 2000 to Mr. Kruse, the Group reiterated its interest in pursuing a transaction with Wells's that would provide Wells's shareholders with a value of approximately $17.00 per share (see Exhibit 5). In a letter dated November 30, 2000, Mr. Kruse, on behalf of Wells's Board of Directors, rejected that proposal as unacceptable and inadequate (see Exhibit 6). The Group believes that Wells's shareholders would benefit from the type of transaction contemplated and that Wells's Board and management should not have rejected such interest without permitting Members of the Group and our legal and financial advisors to perform due diligence. The Group also believes that it should not have taken 4 months for Wells's management to analyze and respond to the proposal outlined in July. Based upon the Group's analysis of Wells's financial performance, the historical public market for its stock, the limited opportunities for growth in its market area and comparable thrift merger and acquisition transactions, the Group believes the proposals contemplated are fair and attractive to Wells's shareholders if carefully considered. The Group notes that a transaction valued at $17.00 per share equals 13.5x Wells's earnings for the past 12 months, a value within the range of recent thrift transactions nationally. In addition, $17.00 per share would reflect a significant premium to the recent average market price for Wells's stock. The Group believes the shareholders of Wells should be given a chance to decide for themselves whether a transaction valued at approximately $17.00 per share would be acceptable. Accordingly, the Group plans to encourage Wells's management and its board to reconsider their rejection of our proposals. Members of the Group plan to contact certain of Wells's shareholders to discuss their views on this matter. Members of the Group also intend to consult with their legal and financial advisors to discuss other strategic options including, but not limited to (1) obtaining a shareholder list (2) calling a special meeting of the shareholders (3) seeking Board representation (4) and discussing the feasibility of pursuing a tender offer or other business combination. Members of the Group may make further CUSIP No. 949759104 Page 10 of 22 Pages purchases of shares of Common Stock. Members of the Group may also dispose of any or all the shares of Common Stock held by them, at any time, although there is no current intention to do so. Except as noted in this Schedule 13D, Amendment #1, 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. The Group and its members 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, Amendment #1, 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. Except as noted below, all purchases and sales of Common Stock reported herein were made in open market transactions on the Nasdaq National Market System. (A) Mr. John M. Morrison (a) Aggregate number of shares beneficially owned: 51,810 Percentage: 4.1% (b) 1. Sole power to vote or to direct vote: 51,810 2. Shared power to vote or to direct vote: 0 3. Sole power to dispose or to direct the disposition: 51,810 4. Shared power to dispose or to direct disposition: 0 (c) Mr. Morrison made no purchases of Common Stock in the last 60 days: (B) Mr. Kurt R. Weise (a) Aggregate number of shares beneficially owned: 500 Percentage: 0.1% (b) 1. Sole power to vote or to direct vote: 500 2. Shared power to vote or to direct vote: 0 3. Sole power to dispose or to direct the disposition: 500 4. Shared power to dispose or to direct disposition: 0 (c) Mr. Weise made no purchases of Common Stock in the last 60 days: (C) PL Capital (a) Aggregate number of shares beneficially owned: 52,810 Percentage: 4.2% CUSIP No. 949759104 Page 11 of 22 Pages (b) 1. Sole power to vote or to direct vote: 29,090 2. Shared power to vote or to direct vote: 23,720 3. Sole power to dispose or to direct the disposition: 29,090 4. Shared power to dispose or to direct disposition: 23,720 (c) PL Capital made no purchases of Common Stock in the last 60 days: (D) Financial Edge Fund (a) Aggregate number of shares beneficially owned: 15,220 Percentage: 1.3% (b) 1. Sole power to vote or to direct vote: 0 2. Shared power to vote or to direct vote: 15,220 3. Sole power to dispose or to direct the disposition: 0 4. Shared power to dispose or to direct disposition: 15,220 (c) Financial Edge Fund made no purchases of Common Stock in the last 60 days: (E) Financial Edge Strategic (a) Aggregate number of shares beneficially owned: 8,000 Percentage: 0.6% (b) 1. Sole power to vote or to direct vote: 0 2. Shared power to vote or to direct vote: 8,000 3. Sole power to dispose or to direct the disposition: 0 4. Shared power to dispose or to direct disposition: 8,000 (c) Financial Edge Strategic made no purchases of 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 CUSIP No. 949759104 Page 12 of 22 Pages 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 July 21, 2000 to Mr. Lawrence Kruse 3 Letter dated August 16, 2000 from Mr. Lawrence Kruse 4 Letter dated October 5, 2000 from Mr. Richard Lashley to Mr. Kruse and the Board of Directors of Wells Financial 5 Letter dated November 14, 2000 to Mr. Kruse 6 Letter dated November 30, 2000 from Mr. Kruse CUSIP No. 949759104 Page 13 of 22 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: December 11, 2000 By: /s/ John Morrison John Morrison By: /s/ Kurt Weise Kurt Weise 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 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 PL CAPITAL, LLC By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member EX-99.1 2 0002.txt JOINT FILING AGREEMENT CUSIP No. 949759104 Page 14 of 22 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: July 7, 2000 By: /s/ John Morrison John Morrison By: /s/ Kurt Weise Kurt Weise 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 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 PL CAPITAL, LLC By: /s/ John Palmer /s/ Richard Lashley John Palmer Richard Lashley Managing Member Managing Member EX-99.2 3 0003.txt LETTER OF JULY 21, 2000 CUSIP No. 949759104 Page 15 of 22 Pages EXHIBIT 2: LETTER OF JULY 21, 2000 (stationary of John M. Morrison) July 21, 2000 Mr. Lawrence Kruse, Chairman, President & CEO Wells Financial Corp. 53 First Street, S.W. Wells, MN 56097 Dear Larry: It was a pleasure to meet with you and Jim Moll. Our initial discussions confirmed the opportunity we have to join together to form a stronger, more profitable banking franchise than either of us now have operating separately. Having spent a lifetime as a manager and owner of small banks in Minnesota and numerous other states, I understand the challenges facing Wells Financial Corp. (Wells) in a rapidly changing financial environment. Together, I firmly believe we can better meet those challenges while creating significant value for your shareholders today. I also believe Well's existing employees would have greater career and financial opportunities as part of a larger banking franchise. Together, we could offer a greater range of products and services to the communities that Wells serves. As we discussed on Wednesday, there are numerous ways for us to join forces. We are prepared to discuss a range of potential transaction structures we believe would meet Wells needs. Given the diversity of my holdings and resources, these structures are significantly more flexible than other banking entities can normally offer. Such potential structures could include: 1. A merger of Wells Financial and United Financial in an exchange of stock, or a combination of stock and cash, structured as a tax-free reorganization; Wells Federal could be retained as a separate enity under the holding company or could be merged into one of the banks currently in United Financial. 2. An all-cash acquisition of all of the outstanding shares of Wells Financial by me (and perhaps other investors). 3. An all-cash acquisition of all of the outstanding shares of Wells Financial by Central Bank, our bank in Stillwater, Minnesota, which is 100% owned by me. Any of these options would provide an opportunity to create a transaction with a current value to Wells shareholders in the range of $15.00 to $17.00, based on outstanding shares of approximately 1,261,000. This represents a significant 30% to 45% premium to Wells recent average stock price. This range of transaction value could be in the form of cash, stock or some combination thereof. We believe Wells shareholders would find this range of current value to be extremely attractive, CUSIP No. 949759104 Page 16 of 22 Pages particularly given the depressed merger market for small thrifts combine with, as you indicated, Wells lack of growth in its current markets. We also believe the stock of United Financial Corporation (symbol UBMT), a bank holding company in Montana in which I am a 30% shareholder and Chairman, is undervalued and would be attractive to Wells shareholders. UBMT trades below book value and has a dividend yield of approximately 7%. This letter is intended as a preliminary, non-binding indication of interest and this opportunity is subject, of course, to negotiation of specific business terms and execution of a definitive purchase agreement, due diligence, regulatory approvals and other customary terms and conditions for such transactions. Kurt Weise and I and our associates at our various banks have significant experience in bank acquisitions and merger integration and we have an excellent relationship with both federal and state banking regulators. We would also utilize the services of John Palmer and Richard Lashley of PL Capital. John and Richard have significant bank merger and acquisition experience and expertise. We are prepared to enter into a confidentiality agreement and begin negotiations and due diligence as soon as practical. If you prefer, our counsel at Dorsey & Whitney would be pleased to prepare a Confidentiality Agreement for your review. Larry, I am excited about the opportunity to return to my hometown roots to create a meaningful franchise in Southern Minnesota that we can both be proud of. I look forward to having an opportunity to work with you, your management team and Board. I will call you in few days to discuss this further. In the meantime, please feel free to call me or Kurt at 612-542-3001, John Palmer (630) 928-0231 or Rich Lashley (973) 360-1666, at any time. Sincerely, /s/ John John M. Morrison EX-99.3 4 0004.txt LETTER OF AUGUST 16, 2000 CUSIP No. 949759104 Page 17 of 22 Pages EXHIBIT 3: LETTER OF AUGUST 16, 2000 (stationary of Wells Financial Corp.) August 16, 2000 Mr. John M. Morrison 3093 Fort Charles Drive Naples, Florida 34102 Dear Mr. Morrison We appreciate the interest you and your associates have shown in Wells Financial as evidenced by your purchase of a substantial number of shares of stock. Your comments on the current undervaluation of the majority of financial stocks is a concern shared by virtually everyone in the industry. There is less consensus on why financials have fallen out of favor by the market investor. Is this a short-term lack of interest or is it more long term? This is another question on which opinions vary greatly. Recent actions taken by the Federal Reserve Board to increase interest rates have had a negative impact on our profitability. While this is an area of our immediate focus, we continue to look at all options to enhance stockholder value, not only for the immediate future but also on a long-term basis. The Board of Directors has engaged the use of an outside firm to assist in exploring all options and to provide an independent analysis of those options. We anticipate this will be completed in 60 to 90 days. Best regards, /s/ Lawrence H. Kruse Lawrence H. Kruse President and Chairman of the Board EX-99.4 5 0005.txt LETTER OF OCTOBER 5, 2000 CUSIP No. 949759104 Page 18 of 22 Pages EXHIBIT 4: LETTER OF OCTOBER 5, 2000 (stationary of PL Capital LLC) October 5, 2000 Mr. Lawrence Kruse Wells Financial Corp. 53 First Street, SW Wells, MN 56097 Dear Larry: As you know, in early July, John Morrison, Kurt Weise, John Palmer and I visited you for the purpose of introducing ourselves, disclosing our ownership interest in Wells and opening a dialogue with you regarding potential opportunities for Wells Financial to merge with or be acquired by Mr. Morrison and/or various entities affiliated with Mr. Morrison. At that time, we had discussions about the potential benefits to Wells' shareholders, customers and employees of an affiliation with a larger banking organization. Subsequently, we sent you a letter dated July 21, 2000, which outlined a variety of ways Wells could benefit from such an affiliation and suggested potential forms such an affiliation could take. In that letter, we stated that we looked forward to having the opportunity to create a transaction that would have a current value to Wells shareholders in the range of $15.00 to $17.00, a 30-45% premium to Wells trading price at that time. Three weeks later, in a letter dated August 16th, you notified Mr. Morrison that the Board of Wells had engaged an outside firm to assist the Board in exploring all options and to provide an independent analysis of those options, a process you expected to complete in 60-90 days. We are surprised, and as shareholders of Wells concerned, that it has taken so long to begin the process of exploring strategic alternatives. Consequently, on numerous occasions over the past three months we contacted Well's outside advisory firm, Capital Resources, to inquire as to the status of the advisory and valuation process. Our goal was to initiate serious discussions about our interest in Wells and to begin the due diligence process, hopefully leading to a definitive and formal offer. We were repeatedly informed that the management and Board of Wells were not prepared to respond to our initial overture until Capital Resources had completed a valuation of Wells and discussed it fully with Wells's Board. This morning, we called you to directly express our concerns over the lack of progress since we first contacted Wells three months ago. Quite frankly, we were distressed by your response. In summary, you stated that the Company had many other things to do and our interest in acquiring Wells was not of sufficient importance to justify calling a special meeting of the Board. Additionally, you indicated that our interest in acquiring Wells was probably a higher priority to us than it was to Wells. As one of Wells largest outside shareholders, we view the evaluation of potential offers for the Company as one of the Board of Directors' highest priorities. This as an important opportunity that Well's Board and management would be negligent not to pursue. Consequently, we strongly suggest that you seek the advice of external legal counsel as to the Board of Directors' duties and responsibilities in these circumstances. CUSIP No. 949759104 Page 19 of 22 Pages Notwithstanding our frustrations, we remain interested in pursuing a transaction with Wells that would benefit Well's shareholders, customers and employees. We look forward to hearing from you or your advisors no later than October 19th. Sincerely, /s/ Richard Lashley Richard Lashley Principal cc: Board of Directors: ------------------- Mr. Gerald Bastian 50 Valley Ridge Court Mankato, MN 56001 Mr. Richard Mueller 602 8th Street SW Wells, MN 56097 Mr. David Buesing 393 2nd Avenue SW Wells, MN 56097 Mr. Randel Bichler 760 7th Avenue SW Wells, MN 56097 Mr. Dale Stallkamp 411 S. Grove Street Suite 4 Blue Earth, MN 56013 EX-99.5 6 0006.txt LETTER OF NOVEMBER 14, 2000 CUSIP No. 949759104 Page 20 of 22 Pages EXHIBIT 5: LETTER OF NOVEMBER 14, 2000 (stationary of John Morrison) November 14, 2000 Mr. Lawrence Kruse, Chairman, President & CEO Wells Financial Corp. 53 First Street, S.W. Wells, MN 56097 Dear Larry: I appreciated your visit several weeks ago where we discussed our mutual interest in Wells Financial Corp. ("Wells"), and your apparent willingness to explore a potential transaction with us. My letter of July 21, 2000 outlined several potential structures that would have interest to us. In your letter of August 16, 2000 you indicated that Wells had engaged the use of an outside firm to assist in exploring options available to Wells. However, there has been no follow up information on this engagement provided. I had hoped, based upon our previous meetings, that we could begin meaningful discussions on possible transactions. Quite frankly, I am surprised at the lack of any response and surprised that this matter has received such apparent limited attention from management and the Board of Directors of Wells. However, we have continued to analyze potential deal structures. We have engaged legal counsel and US Bancorp Piper Jaffray as investment banking advisors, to assist us in analyzing potential transactions and other alternatives available to the shareholders. There are several potential logical transaction structures. Undoubtedly, certain shareholders of Wells would welcome cash liquidity, while others may desire continuing stock ownership in a publicly-traded entity with liquidity, potential for price appreciation and on-going dividend income. For example, a transaction could be structured as 50% cash and 50% stock. This structure would allow for a tax-free exchange of the stock portion of the consideration. Under this structure, Well's stock would be valued at approximately $17.00 per share. This would represent a 24% premium over Well's current stock price ($13.75) and a 40% premium over the stock price ($12.00) prior to our filing of the 13D in July 2000. In order to further our discussions, we would need to begin due diligence. We are prepared to sign a confidentiality agreement to begin that process. If you prefer our legal counsel could prepare a confidentiality agreement for your review. We continue to believe a transaction would be beneficial to the shareholders of Wells and would meet with their approval. Further, the customers and employees of Wells would also benefit from a larger company that could operate more efficiently and deliver more diverse financial products to its CUSIP No. 949759104 Page 21 of 22 Pages customers. We are prepared to have US Bancorp Piper Jaffray explain our position to the Board of Wells in more detail. Please contact me at your earliest convenience, but in any event by November 27, 2000. We look forward to a meaningful dialogue regarding a potential transaction with Wells. I will call you in few days to discuss this further. Please feel free to call me or Kurt Weise at 612-512-5299, or you can reach John Palmer at (630) 928-0231 or Rich Lashley at (973) 360-1666. Any mail should be directed to 5500 Wayzata Blvd., Suite 145, Golden Valley MN. Thank you. Sincerely, /s/ John M. Morrison John M. Morrison EX-99.6 7 0007.txt LETTER OF NOVEMBER 30, 2000 CUSIP No. 949759104 Page 22 of 22 Pages EXHIBIT 6: LETTER OF NOVEMBER 30, 2000 (stationary of Wells Financial Corp.) November 30, 2000 Mr. John M. Morrison 5500 Wayzata Blvd. Suite 145 Golden Valley, MN 55416 Dear Mr. Morrison Mr. Bichler and I met with you personally on October 26th to respond to your indication of interest. As we discussed at our meeting in October, the Board of Wells Financial Corp. carefully and fully reviewed your preliminary, non-binding indication of interest in consultation with the company's financial advisors and counsel. As we conveyed very clearly at our meeting, the Board concluded that the range of proposal in your initial letter was unacceptable and at a level that did not justify further consideration. At our board meeting in November, your letter of November 14th was reviewed. As the terms you outlined in this letter were basically unchanged from the previous correspondence our position remains as previously stated. Best regards, /s/ Lawrence H. Kruse Lawrence H. Kruse President and Chairman -----END PRIVACY-ENHANCED MESSAGE-----