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:  June 9, 1999

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                       EAST TEXAS FINANCIAL SERVICES, INC.
                       ANNOUNCES STOCK REPURCHASE PROGRAM

Tyler,  Texas,  June 9, 1999,  - - - East Texas  Financial  Services,  Inc,  the
holding company for First Federal Savings and Loan Association of Tyler,  Texas,
today announced its intention to rescind the stock repurchase  program announced
January 29, 1999.  The Company was able to  repurchase  71,203 shares out of the
73,203 shares authorized by the program.

The Company also announced a new stock repurchase program. The program calls for
the Company to repurchase approximately 100,000 shares of its outstanding shares
of common stock in the open market over the next twelve months.  The shares will
be purchased at prevailing market prices from time to time depending upon market
conditions.

Gerald W. Free, President of the Company,  indicated that the Board of Directors
approved the  repurchase  program in view of the current  level of the Company's
common stock and the strong capital position of the Company's subsidiary,  First
Federal Savings and Loan  Association of Tyler. Mr. Free stated that "we believe
that  the  repurchase  of  our  shares   represents  an  attractive   investment
opportunity which will benefit the Company and our stockholders. The repurchased
shares  will  become  treasury  shares  and will be used for  general  corporate
purposes,  including the issuance of shares in  connection  with the exercise of
stock options."

Over the past few months, shares of Company stock have traded between $10.31 and
$11.00 per share. At May 31, 1999, the Company had approximately  $150.3 million
in assets,  stockholders'  equity of approximately $19.7 million,  and 1,392,853
shares outstanding.


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