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)
December 10, 1998
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 Number)
incorporation
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)
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Item 5. Other Events
On December 10, 1998, the Registrant issued for publication the press
release attached as Exhibit "99" announcing earnings for the fiscal year ended
September 30, 1998.
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.
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Exhibit Sequential
Number Description Page
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99 Press release, published on December 10, 1998. 6
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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: December 10, 1998 By: /s/ GERALD W. FREE
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Gerald W. Free
Vice Chairman, President
And Chief Executive Officer
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EXHIBIT "99"
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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: December 10, 1998
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EAST TEXAS FINANCIAL SERVICES, INC.
ANNOUNCES YEAR END EARNINGS
Tyler, Texas, December 10, 1998, - - - 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 fiscal year ended September
30, 1998, was $560,946 or $.39 per share, based on 1,431,623 weighted average
shares outstanding for the year, compared to net income of $766,775 or $.52 per
share for the year ended September 30, 1997.
Total assets of the Company were reported as $124.0 million at September 30,
1998, compared to $115.9 million at September 30, 1997. Investment and
mortgage-backed securities totaled $29.8 million and $23.8 million,
respectively, at September 30, 1998. Loans receivable totaled $61.1 million at
year end, an increase of $4.0 million or approximately 7.0% from the $57.1
million reported at September 30, 1997.
Stockholders' equity totaled $20.4 million at September 30, 1998, or 16.4% of
total assets, down slightly from the $20.9 million at September 30, 1997. During
the fiscal year ended September 30, 1998, the Company repurchased 76,973 shares
of treasury stock at an average price of $14.04 per share and ended the year
with 1,464,056 shares outstanding. At year end, the Company owned 420,436 shares
of treasury stock at an average price of $11.40 per share. Shares of the
Company's stock closed at $13.25 per share at September 30, 1998, compared to a
close of $13.67 at September 30, 1997.
Capital levels for the Company's wholly owned subsidiary, First Federal Savings
and Loan Association of Tyler, were reported at year end as 14.9% for both
tangible and core capital ratios, well in excess of the minimum required levels
of 1.5% and 4.0% respectively. The Association's risk-based capital ratio was
38.3% of risk-weighted assets at September 30, 1998, as compared to the minimum,
8.0% regulatory requirement. At year end, the Association was considered a
"well-capitalized" institution.
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For the year ended September 30, 1998, total interest income was reported as
$8.3 million, compared to $7.9 million for the year ended September 30, 1997.
Interest expense totaled $5.0 million for the year ended September 30, 1998, a
$493,000 increase from the $4.5 million for 1997. Net interest income after
provisions for loan losses was reported as $3.3 million, compared to $3.4
million for the prior year. The Company reported a net interest margin on
interest earning assets of 2.83% for the year ended September 30, 1998, compared
to 3.12% for 1997.
Total non-interest expenses were reported as $2.8 million for the year ended
September 30, 1998, compared to $2.5 million for the year ended September 30,
1997.
At September 30, 1998, non-performing assets totaled $228,000 or .18% of total
assets, compared to $310,000 or .27% of assets at September 30, 1997.
Non-performing loans to total loans receivable equaled .37% at September 30,
1998 compared to .54% at September 30, 1997. Classified assets were reported as
$570,000 at year end, compared to $904,000 at September 30, 1997.
East Texas Financial Services, Inc., is the holding company for 75 year old
First Federal Savings and Loan Association of Tyler, Texas. First Federal
operates two full service offices and two loan agencies in the Tyler area.
On November 27, 1998, the Company stock was moved from the Nasdaq SmallCap
Market to the Over-The-Counter Bulletin Board. The move occurred when the number
of round lot shareholders dropped below 300. The Company stock continues to be
traded under the symbol ETFS.
- selected financial data follows -
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<TABLE>
<CAPTION>
Selected Financial Data
(Dollars in Thousands, except share data) 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C>
At September 30,
Total assets ............................... $ 124,017 $ 115,949 $ 114,373 $ 117,077 $ 114,935
Loans receivable, net
Held for sale ........................... 0 0 0 0 0
Held in portfolio ....................... 61,119 57,110 47,925 41,760 35,337
Investment securities - held-to-maturity ... 29,767 23,058 30,139 30,263 0
Mortgage-backed securities - available ..... 12,810 4,356 0 0 0
for sale ................................... 10,941 18,152 24,949 33,741 0
Mortgage-backed securities -
held-to-maturity
Deposits ................................... 86,644 88,551 90,768 92,474 102,200
Stockholders' equity ....................... 20,383 20,879 20,931 23,146 11,458
Common shares outstanding .................. 1,464,056 1,026,366 1,079,285 1,256,387 N.A.
Book value per share ....................... 13.92 20.34 19.39 18.42 N.A.
For The Year Ended September 30,
Net interest income ........................ $ 3,298 $ 3,419 $ 3,552 $ 3,658 $ 3,040
Provision for loan losses .................. 0 5 0 0 121
Other operating income ..................... 361 302 371 299 (2,118)
Operating expenses ......................... 2,768 2,523 3,200 2,335 1,981
Net income ................................. 561 767 458 1,071 (759)
Selected Financial Ratios
Return on average assets ................... .46 % 0.67 % 0.40 % 0.92 % (0.66) %
Return on average equity ................... 2.72 3.67 2.08 5.47 (6.41)
Interest rate spread (average) ............. 2.00 2.21 2.27 2.49 2.33
Net interest margin ........................ 2.83 3.12 3.16 3.21 2.67
Ratio of interest-earning assets to
interest-
bearing liabilities ...................... 119.58 122.29 122.23 119.13 110.08
Operating expenses to average assets ....... 2.31 2.19 2.77 2.01 1.72
Efficiency ratio ........................... 78.96 69.24 84.10 59.70 61.70
Net interest income to operating expenses .. 1.20 x 1.35 x 1.11 x 1.57 x 1.47 x
Asset Quality Ratios
Non-performing assets to total assets ...... .18 % 0.27 % 0.39 % 0.34 % 0.27 %
Non-performing loans to total loans ........ .37 0.54 0.94 0.95 0.87
receivable
Allowance for loan losses to non-performing 102.19 88.06 64.22 74.75 97.72
loans
Allowance for loan losses to total loans ... .38 0.48 0.60 0.71 0.85
Allowance for loan losses to total assets .. .18 0.24 0.25 0.25 0.26
Regulatory Capital Ratios (Association only)
Total capital to total assets .............. 14.91% 15.21 % 15.39 % 14.40 % 9.97 %
Tangible capital ratio ..................... 14.95 15.20 15.30 14.40 9.97
Core capital ratio ......................... 14.95 15.20 15.30 14.40 9.97
Risk-based capital ratio ................... 38.29 40.22 44.23 43.44 31.06
</TABLE>
Serving the Financial Needs of East Texas
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