SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 30, 1999
EAST TEXAS FINANCIAL SERVICES, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-24848 75-2559089
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1200 South Beckham Avenue, Tyler, Texas 75701-3319
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (903) 593-1767
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
On April 30, 1999, the Registrant issued for publication the press
release attached as Exhibit "99" announcing earnings for the quarter ended March
31, 1999 and the declaration of cash dividend.
Item 7. Financial Statements and Exhibits
The Exhibit referred to in Item 5 of this Report and listed on the
accompanying Exhibit Index is filed as part of this Report and is incorporated
herein by reference.
2
Exhibit Sequential
Number Description Page No.
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99 Press release, published on April 30, 1999. 6
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAST TEXAS FINANCIAL SERVICES, INC.
Date: April 30, 1999 By: /s/ GERALD W. FREE
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Gerald W. Free
Vice Chairman, President and
Chief Executive Officer
EXHIBIT "99"
EAST TEXAS FINANCIAL SERVICES, INC.
1200 South Beckham o P. O. Box 6910 o Tyler, TX 75711-6910 o 903-593-1767
o Fax 903-593-1094
NEWS RELEASE
For verification, contact: Gerald W. Free, Vice Chairman/President/CEO
Derrell W. Chapman, Vice President/COO/CFO
Telephone: (903) 593-1767
Fax: (903) 593-1094
For immediate release: April 30, 1999
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EAST TEXAS FINANCIAL SERVICES, INC.
REPORTS EARNINGS AND DECLARES CASH DIVIDEND
Tyler, Texas, April 30, 1999, - - - East Texas Financial Services, Inc., the
holding Company for First Federal Savings and Loan Association of Tyler, Texas,
today reported that consolidated net income for the six months ended March 31,
1999, was $233,150 or $0.17 per share, compared to $302,099 or $0.21 per share
reported for the same period in 1998.
For the three month period ended March 31, 1999, the Company reported net income
of $57,379 or $.04 per share, compared to $157,795 or $.11 per share for the
three month period ended March 31, 1998. Earnings for the current quarter were
down primarily as a result of extensive start-up costs associated with the
opening of an additional full-service office and the introduction of additional
lines of business. The new office opened for business in late March. The
expanded product lines, including commercial and consumer loans as well as a
variety of deposit products, are now being offered at all of the Company's
full-service locations.
"We were fully aware of the start-up costs associated with the expansion into
additional lines of business and the addition of a new full-service office
location in Tyler," stated Vice Chairman of the Board, President and CEO, Gerald
W. Free. "However, we are confident that the decision to introduce consumer and
commercial lending and additional consumer products such as credit cards, ATM
machines and cards, and other consumer products is the direction the Company
should be moving."
"Also, our ongoing wholesale securities arbitrage program started in 1997 and a
new loan arbitrage program begun in 1999 are helping to offset some of the
expenses associated with the start-up and have allowed us to increase our total
assets and utilize a portion of our excess capital," said Free. "The two
programs combined constitute approximately $24.5 million in Federal Home Loan
Bank of Dallas advances. Our objective is to achieve a positive spread between
the interest earned on the loans and investments and the interest paid on
advances."
In conjunction with the release of earnings, Mr. Free announced that the Company
would continue its quarterly cash dividend of $0.05 per share to be paid on May
26, 1999 to stockholders of record as of May 12, 1999. The annualized dividend
yield is approximately 1.94% based on the most recent market price of $10.31.
Over the past three months, shares of the Company's stock have traded between
$8.25 and $12.13 per share. At March 31, 1999, the Company had 1,392,853 shares
of stock outstanding and a book value per share of approximately $14.18.
Capital levels for the Company's wholly owned subsidiary, First Federal Savings
and Loan Association of Tyler, were reported, at March 31, 1999, as 13.97% for
both tangible and core ratios. The minimum regulatory requirements for tangible
and core capital ratios were 1.50% and 4.00% respectively. The Association's
risk-based capital ratio was 36.98% at quarter end as compared to the minimum
8.0% regulatory requirement.
At March 31, 1999, non-performing assets totaled $329,000 or 0.25% of total
assets as compared to $228,000 or 0.18% of total assets at September 30, 1998.
Non-performing loans equaled $329,000 or 0.53% of loans receivable at March 31,
1999, compared to $228,000 or 0.37% at September 30, 1998. Classified assets
were reported as $598,000 or 0.44% of total assets at March 31, 1999, compared
to $570,000 or 0.46% of total assets at September 30, 1998.
East Texas Financial Services, Inc., is the holding company for First Federal
Savings and Loan Association of Tyler, Texas, which presently operates three
full service offices and two loan agencies in the Tyler area.
The Company's stock is traded under the symbol "ETFS" on the OTC Electronic
Bulletin Board.
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EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS March 31, 1999 September 30, 1998
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(Unaudited)
Cash and due from banks $ 960,755 $ 592,363
Interest-bearing deposits with banks 3,330,176 1,104,695
Interest-earning time deposits with financial institutions 2,559,617 1,959,617
Federal funds sold 0 129,187
Investment securities available-for-sale 3,036,307 0
Mortgage-backed securities available-for-sale 22,145,577 12,810,165
Investment securities held-to-maturity (estimated market
value of $27,045,150 at March 31, 1999, and
$30,115,954 at September 30, 1998) 27,015,739 29,766,844
Mortgage-backed securities held-to-maturity (estimated
market value of $7,782,809 at March 31, 1999
and $11,088,555 at September 30, 1998) 7,743,937 10,940,500
Loans receivable, net of allowance for credit losses of $231,933
at March 31, 1999 and $233,180 at September 30, 1998 61,760,054 61,119,047
Accrued interest receivable 965,070 978,378
Federal Home Loan Bank stock, at cost 1,386,600 789,100
Premises and equipment 2,700,269 2,273,067
Foreclosed real estate, net of allowance of $-0- 0 34,500
Mortgage servicing rights 264,362 216,879
Other assets 474,308 1,303,120
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Total Assets $ 134,342,771 $ 124,017,462
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(continued)
March 31, 1999 September 30, 1998
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(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits $ 1,455,359 $ 1,528,374
Savings and NOW deposits 11,764,053 10,504,973
Time deposits 73,857,107 74,610,310
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Total deposits 87,076,519 86,643,657
FHLB advances 26,907,438 14,945,852
Advances from borrowers for taxes and insurance 323,634 844,188
Federal income taxes
Current (53,725) -0-
Deferred 34,408 31,618
Accrued expenses and other liabilities 306,994 1,168,453
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Total liabilities 114,595,268 103,633,768
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Stockholders' equity:
Preferred stock, $0.01 par value, 500,000
shares authorized, none outstanding
Common stock, $0.01 par value, 5,500,000 shares authorized,
1,884,492 shares issued and 1,392,853 outstanding 18,845 18,845
Additional paid-in-capital 12,319,624 12,319,624
Deferred compensation - RRP shares (164,874) (213,366)
Unearned employee stock ownership plan shares (543,564) (543,564)
Unrealized gain/(loss) available-for-sale securities (net) (110,129) (64,974)
Retained earnings (substantially restricted) 13,751,695 13,661,392
Treasury stock, 491,639 shares at cost (5,524,094) (4,794,263)
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Total stockholder's equity 19,747,503 20,383,694
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Total liabilities and stockholders' equity $ 134,342,771 $ 124,017,462
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EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Six Months
Ended March 31, Ended March 31,
(Unaudited) (Unaudited)
1999 1998 1999 1998
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INTEREST INCOME Loans receivable:
First Mortgage $ 1,105,784 $ 1,152,062 $ 2,227,971 $ 2,286,895
Consumer and other loans 83,109 40,783 159,118 70,088
Securities available for sale:
Investment securities 37,655 15,104 52,190 30,313
Mortgage-backed securities 312,272 104,684 576,592 169,074
Securities held to maturity:
Investment securities 417,734 406,515 885,040 800,424
Mortgage-backed securities 138,310 281,066 317,010 595,768
Deposits with banks 50,913 54,923 83,996 131,885
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Total interest income 2,145,777 2,055,137 4,301,917 4,084,447
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INTEREST EXPENSE
Deposits 1,045,721 1,105,465 2,129,252 2,229,135
FHLB advances 305,619 121,675 556,837 183,848
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Total interest expense 1,351,340 1,227,140 2,686,089 2,412,983
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Net interest income before
provision for loan losses 794,437 827,998 1,615,828 1,671,464
Provision for loan losses 0 0 0 0
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Net interest income after
provision for loan losses 794,437 827,998 1,615,828 1,671,464
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Three Months Six Months
Ended March 31, Ended March 31,
(Unaudited) (Unaudited)
1999 1998 1999 1998
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NONINTEREST INCOME
Gain(loss) on sale of interest-earning assets 28,589 42,008 105,065 63,445
Loan origination and commitment fees 23,450 18,807 47,058 41,770
Loan servicing fees 18,950 26,621 29,733 48,924
Gain on foreclosed real estate (2,068) 560 302 560
Other 5,787 10,926 60,249 21,638
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Total noninterest income 74,708 98,922 242,407 176,337
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NONINTEREST EXPENSE
Compensation and benefits 518,609 460,684 1,028,684 952,794
Occupancy and equipment 68,687 45,513 114,891 93,759
SAIF deposit insurance premium 13,480 14,299 26,464 28,446
Loss on foreclosed real estate 0 0 2,069 0
Other 171,384 157,288 314,321 296,954
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Total noninterest expense 772,160 677,784 1,486,429 1,371,953
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Income (loss) before provision for income taxes 96,985 249,135 371,806 475,848
Income tax expense (benefit) 39,606 91,340 138,656 173,749
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NET INCOME (LOSS) $ 57,379 $ 157,795 $ 233,150 $ 302,099
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Earnings per common share $ .04 $ .11 $ .17 $ .21
Earnings per common share - assuming dilution .04 .11 .17 .20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAST TEXAS FINANCIAL SERVICES, INC.
Date: April 30, 1999 By: /s/ Gerald W. Free
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Gerald W. Free
Vice Chairman, President and
Chief Executive Officer