<PAGE>
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 report)
August 1, 1996
EAST TEXAS FINANCIAL SERVICES, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 0-24848 75-2559089
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1200 SOUTH BECKHAM AVENUE, TYLER, TEXAS 75701-3319
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(903) 593-1767
N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events
- ---------------------
On August 1, 1996, the Registrant issued for publication the press release
attached as Exhibit 99 announcing its quarterly earnings, declaration of cash
dividends and stock repurchase program.
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and 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: August 1, 1996 By:/s/ GERALD W. FREE
--------------- --------------------------
Gerald W. Free
President and Chief
Executive Officer
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EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------- ---------
99 Press release, published on 6
August 1, 1996
<PAGE>
EXHIBIT 99
[EAST TEXAS FINANCIAL SERVICES, INC. LETTERHEAD APPEARS HERE]
NEWS RELEASE
For verification, contact: Gerald W. Free, President and CEO
Derrell W. Chapman, Vice President/COO/CFO
Telephone: (903) 593-1767
Fax: (903) 593-1094
For immediate release, August 1, 1996
______________________________________________________________________________
EAST TEXAS FINANCIAL SERVICES, INC.
REPORTS EARNINGS, DECLARES CASH DIVIDEND AND
ANNOUNCES STOCK REPURCHASE PROGRAM
Tyler, Texas, August 1, 1996 - - - East Texas Financial Services, Inc.,
(NASDAQ:ETFS), the holding company for First Federal Savings and Loan
Association of Tyler, today reported that consolidated net income for the three
months ended June 30, 1996, was $212,360 or $0.20 per share, compared to $0.28
per share for the three months ended June 30, 1995. For the nine month period
ended June 30, 1996, net income was reported as $668,149 or $0.60 per share
compared to $0.71 per share for the same period in 1995.
Gerald W. Free, President and CEO of the Company, stated that "the decrease
in net income was expected and was attributable to additional compensation and
benefit expenses associated with the Company's 1995 Recognition and Retention
Plan and Employee Stock Ownership Plan, additional expenses as a result of the
need to comply with the full year end reporting requirements as a result of
being a public company for the first time and a decrease in net interest
income." Free also stated, "despite the decrease in earnings from the prior
year, he was pleased to report an increase in earnings per share from the $0.19
per share reported for the quarter ended March 31, 1996, primarily a result of
the Company's continuing stock repurchase programs."
- Continued -
<PAGE>
In conjunction with the release of earnings, Free also announced that the
Company had declared a cash dividend, for the quarter ended June 30, 1996, of
$0.05 per share to be paid on August 28, 1996, to stockholders of record as of
August 14, 1996.
In addition, President Free stated that he was pleased to announce that the
Company had received, pursuant to Office of Thrift Supervision approval,
authority to repurchase an additional 56,695 shares of stock, or approximately
5% of the Company's outstanding shares. The shares will be purchased in the
open market over the next twelve months at prevailing market prices from time to
time depending upon market conditions.
President Free 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, and that the Board believes the
repurchase represents an attractive investment opportunity which will benefit
the Company and its stockholders." The repurchased shares will become treasury
shares and will be used for issuance of shares in connection with the exercise
of stock options as well as general corporate purposes.
Over the past three months, shares have traded between $14.50 and $15.75
per share. At June 30, 1996, the Company had $115.3 million in assets and
stockholders' equity of $21.8 million. On June 30, 1996, the Company had
1,133,890 shares of stock outstanding, resulting in a book value per share of
$19.24.
Capital levels for the Company's wholly owned subsidiary, First Federal
Savings and Loan Association of Tyler, were reported, at June 30, 1996, as 15.3%
for both tangible and core ratios. The minimum regulatory requirement for
tangible and core capital ratios were 1.50% and 3.00% respectively. The
Association's risk based capital ratio was 44.6% at quarter end as compared to
the minimum 8.0% regulatory requirement.
At June 30, 1996, non-performing assets totaled $271,000 or .23% of total
assets as compared to $396,000 or .34% of total assets at September 30, 1995.
Non-performing loans equaled .58% of loans receivable at June 30, 1996, compared
to .95% at September 30, 1995. Classified assets were reported as $748,000 or
.65% of total assets at June 30, 1996, compared to $781,000 or .67% of total
assets at September 30, 1995.
East Texas Financial Services, Inc., is the holding company for First
Federal Savings and Loan Association of Tyler, Texas, which presently operates
two full service offices and one loan agency in the Tyler area.
The Company's stock is traded under the symbol "ETFS" on the NASDAQ
National Market System and is listed in most daily newspapers as "EastTxFnl".
- END -
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EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
ASSETS JUNE 30, 1996 SEPTEMBER 30,1995
------------- -----------------
(Unaudited)
<S> <C> <C>
Cash and due from banks $ 538,628 $ 537,326
Interest-bearing deposits with banks 5,847,754 5,702,510
Interest earning time deposits with financial institutions 1,662,573 882,000
Federal funds sold 331,739 626,596
Investment securities held-to-maturity (estimated market value
of $30,255,177 at June 30, 1996, and $30,505,193
at September 30, 1995) 30,293,994 30,263,495
Mortgage-backed securities held-to-maturity (estimated market
value of $27,177,799 at June 30, 1996, and
$34,314,627 at September 30, 1995) 26,758,378 33,741,155
Loans receivable, net of allowance for credit losses
of $289,120 at June 30, 1996, and $295,800
at September 30, 1995 46,343,965 41,760,272
Accrued interest receivable 1,115,143 1,056,326
Federal Home Loan Bank stock, at cost 934,700 893,400
Premises and equipment 987,902 1,020,965
Foreclosed real estate, net of allowances of $-0- 0 90,000
Other assets 523,692 502,545
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Total Assets $ 115,338,468 $ 117,076,590
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits $ 2,479,208 $ 2,692,259
Savings and NOW deposits 11,143,337 10,512,930
Other time deposits 78,834,413 79,268,616
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Total deposits 92,456,958 92,473,805
Advances from borrowers for taxes and insurance 643,058 978,583
Federal income taxes
Current (14,891) 38,682
Deferred 110,447 62,474
Accrued expenses and other liabilities 328,140 376,651
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Total Liabilities 93,523,712 93,930,195
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Stockholders' equity:
Preferred stock, $0.01 par value, 500,000
shares authorized, none outstanding
Common stock, $.01 par value, 5,500,000 shares authorized,
1,256,387 shares issued 12,564 12,564
Additional paid-in capital 12,048,775 12,048,775
Deferred compensation - RRP shares (475,225) (562,511)
Unearned employee stock ownership plan shares (881,477) (881,477)
Retained earnings (substantially restricted) 13,080,821 12,529,044
Treasury stock, 122,497 shares at cost (1,970,702) 0
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Total stockholders' equity 21,814,756 23,146,395
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Total liabilities and stockholders' equity $ 115,338,468 $ 117,076,590
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Nine Months
Ended June 30, Ended June 30,
(Unaudited) (Unaudited)
1996 1995 1996 1995
------------ ---------- ------------ -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable:
First mortgage loans $ 905,480 $ 850,812 $ 2,631,571 $ 2,409,521
Consumer and other loans 19,588 20,750 57,698 67,089
Investment securities 603,635 692,051 1,835,456 2,210,860
Mortgage-backed securities 470,306 520,375 1,555,358 1,181,899
------------ ----------- ----------- ------------
Total interest income 1,999,009 2,083,988 6,080,083 5,869,369
------------ ----------- ----------- ------------
INTEREST EXPENSE
Deposits 1,117,339 1,108,716 3,391,531 3,150,659
------------ ----------- ----------- ------------
Total interest expense 1,117,339 1,108,716 3,391,531 3,150,659
------------ ----------- ----------- ------------
Net interest income before provision
for loan losses 881,670 975,272 2,688,552 2,718,710
Provision for loan losses 0 0 0 0
------------ ----------- ----------- ------------
Net interest income after provision
for loan losses 881,670 975,272 2,688,552 2,718,710
------------ ----------- ----------- ------------
NONINTEREST INCOME
Gain (loss) on sales of interest-earning assets 16,588 4,170 74,548 (4,231)
Loan origination and commitment fees 22,474 21,004 60,016 45,104
Loan servicing fees 32,007 31,826 91,995 101,142
Other 18,118 10,504 48,668 42,589
------------ ----------- ----------- ------------
Total noninterest income 89,187 67,504 275,227 184,604
------------ ----------- ----------- ------------
NONINTEREST EXPENSE
Compensation and benefits 405,463 351,706 1,193,286 1,044,166
Occupancy and equipment 40,133 40,821 115,051 128,205
SAIF deposit insurance premium 55,139 60,476 167,522 180,794
(Gain) loss on foreclosed real estate (26) (233) 4,826 472
Other 135,526 117,039 431,882 361,642
------------ ----------- ----------- ------------
Total noninterest expense 636,235 569,809 1,912,567 1,715,279
------------ ----------- ----------- ------------
Income (loss) before provision for income taxes 334,622 472,967 1,051,212 1,188,035
Income tax expense (benefit) 122,262 163,950 383,063 392,208
------------ ----------- ----------- ------------
NET INCOME (LOSS) $ 212,360 $ 309,017 $ 668,149 $ 795,827
============ ============ =========== ============
Earnings per common share $0.20 $0.28 $0.60 $0.71
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
