SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 4, 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)
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Item 5. Other Events
On August 4, 1999, the Registrant issued for publication the press
release attached as Exhibit "99" announcing earnings for the quarter ended June
30, 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.
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Exhibit
Number Description
- ------ -----------
99 Press release, published on August 4, 1999.
<PAGE>
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.
Date: August 10, 1999 By: /s/ GERALD W. FREE
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Gerald W. Free
Vice Chairman, President
And Chief Executive Officer
EXHIBIT "99"
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EAST TEXAS FINANCIAL SERVICES, INC.
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1200 South Beckham -- P. O. Box 6910 -- Tyler, TX 75711-6910 -- 903-593-1767
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: August 4, 1999
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EAST TEXAS FINANCIAL SERVICES, INC.
REPORTS EARNINGS AND DECLARES CASH DIVIDEND
Tyler, Texas, August 4, 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 nine months ended June 30,
1999, was $282,000 or $0.21 per common share, compared to $425,148 or $0.29 per
common share reported for the same period in 1998.
For the three month period ended June 30, 1999, the Company reported net income
of $48,850 or $.04 per common share, compared to $123,049 or $.09 per common
share for the three month period ended June 30, 1998. Earnings for the current
quarter were down primarily as a result of costs associated with the opening of
an additional full-service office and the introduction of additional lines of
business in 1999. 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 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.
"The ongoing costs associated with these changes are approximately $35,000 per
month. Based on our projections for net interest income and other non-interest
income, we believe that our new office location needs to be approximately
$15,000,000 in assets to begin adding to net income. As of June 30th, we had
approximately $3,000,000 in assets at our new location, with outstanding
commitments to loan an additional $4,000,000. At that rate of growth, we would
expect our new location and services to be profitable by early to mid 2000,
which is consistent with our original estimate."
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
August 25, 1999 to stockholders of record as of August 11, 1999. The annualized
dividend yield is approximately 1.40% based on the most recent market price of
$14.25.
Over the past three months, shares of the Company's stock have traded between
$10.125 and $14.125 per share. At June 30, 1999, the Company had 1,392,853
shares of stock outstanding and a book value per share of approximately $14.26.
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Capital levels for the Company's wholly owned subsidiary, First Federal Savings
and Loan Association of Tyler, were reported, at June 30, 1999, as 11.77% 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 30.92% at quarter end as compared to the minimum
8.0% regulatory requirement.
At June 30, 1999, non-performing assets totaled $387,000 or 0.26% of total
assets as compared to $228,000 or 0.18% of total assets at September 30, 1998.
Non-performing loans equaled $387,000 or 0.61% of loans receivable at June 30,
1999, compared to $228,000 or 0.37% at September 30, 1998. Classified assets
were reported as $596,000 or 0.39% of total assets at June 30, 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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<TABLE>
<CAPTION>
EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS June 30, 1999 September 30, 1998
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(Unaudited)
<S> <C> <C>
Cash and due from banks $ 700,340 $ 592,363
Interest-bearing deposits with banks 2,995,408 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 3,509,689 0
Mortgage-backed securities available-for-sale 32,839,921 12,810,165
Investment securities held-to-maturity (estimated market
value of $31,856,963 at June 30, 1999, and
$30,115,954 at September 30, 1998) 31,996,016 29,766,844
Mortgage-backed securities held-to-maturity (estimated
market value of $6,499,597 at June 30, 1999
and $11,088,555 at September 30, 1998) 6,380,517 10,940,500
Loans receivable, net of allowance for credit losses
of $231,971 at June 30, 1999 and $233,180 at
September 30, 1998 63,309,037 61,119,047
Accrued interest receivable 1,156,568 978,378
Federal Home Loan Bank stock, at cost 2,138,800 789,100
Premises and equipment 2,643,508 2,273,067
Foreclosed real estate, net of allowance of $-0- 0 34,500
Mortgage servicing rights 268,071 216,879
Other assets 638,086 1,303,120
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Total Assets $ 151,135,578 $ 124,017,462
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<CAPTION>
EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
LIABILITIES AND STOCKHOLDERS' EQUITY June 30, 1999 September 30, 1998
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(Unaudited)
<S> <C> <C>
Liabilities:
Demand deposits $ 1,887,603 $ 1,528,374
Savings and NOW deposits 13,714,731 10,504,973
Time deposits 72,098,938 74,610,310
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Total deposits 87,701,272 86,643,657
FHLB advances 42,282,763 14,945,852
Advances from borrowers for taxes and insurance 582,951 844,188
Federal income taxes
Current (37,562) -0-
Deferred 99,305 31,618
Accrued expenses and other liabilities 646,622 1,168,453
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Total liabilities 131,275,351 103,633,768
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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 (126,080) (213,366)
Unearned employee stock ownership plan shares (543,564) (543,564)
Unrealized gain/(loss) available-for-sale
securities (net) (15,406) (64,974)
Retained earnings (substantially restricted) 13,730,902 13,661,392
Treasury stock, 491,639 shares at cost (5,524,094) (4,794,263)
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Total stockholder's equity 19,860,227 20,383,694
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Total liabilities and stockholders' equity $ 151,135,578 $ 124,017,462
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</TABLE>
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<TABLE>
<CAPTION>
EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Nine Months
Ended June 30, Ended June 30,
(Unaudited) (Unaudited)
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable:
First Mortgage $1,099,806 $1,137,446 $3,327,777 $3,424,340
Consumer and other loans 101,023 60,995 260,141 131,083
Securities available for sale:
Investment securities 4,030 11,546 56,220 41,859
Mortgage-backed securities 416,196 145,433 992,788 314,507
Securities held to maturity:
Investment securities 564,969 422,663 1,450,009 1,223,087
Mortgage-backed securities 115,175 243,422 432,185 839,190
Deposits with banks 31,185 58,664 115,181 190,550
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Total interest income 2,332,384 2,080,169 6,634,301 6,164,616
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INTEREST EXPENSE
Deposits 1,051,220 1,096,740 3,180,472 3,325,875
FHLB advances 475,237 167,030 1,032,074 350,878
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Total interest expense 1,526,457 1,263,770 4,212,546 3,676,753
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Net interest income before
provision for loan losses 805,927 816,399 2,421,755 2,487,863
Provision for loan losses 0 0 0 0
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Net interest income after
provision for loan losses 805,927 816,399 2,421,755 2,487,863
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<CAPTION>
EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Nine Months
Ended June 30, Ended June 30,
(Unaudited) (Unaudited)
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
NONINTEREST INCOME
Gain(loss) on sale of
interest-earning assets 22,437 37,230 127,502 100,675
Loan origination and commitment fees 17,930 14,245 64,988 56,015
Loan servicing fees 23,667 19,874 53,400 68,798
Gain on foreclosed real estate (352) (6,911) (50) (6,351)
Other 16,543 13,692 76,792 35,330
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Total noninterest income 80,225 78,130 322,632 254,467
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NONINTEREST EXPENSE
Compensation and benefits 543,784 463,006 1,572,468 1,415,800
Occupancy and equipment 195,827 47,084 310,718 140,843
SAIF deposit insurance premium (27,533) 14,417 (1,069) 42,862
Loss on foreclosed real estate 0 0 2,069 0
Other 88,250 173,060 402,571 470,015
---------- ---------- ---------- ----------
Total noninterest expense 800,328 697,567 2,286,757 2,069,520
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Income (loss) before provision for
income taxes 85,824 196,962 457,630 672,810
Income tax expense (benefit) 36,974 73,913 175,630 247,662
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NET INCOME (LOSS) $ 48,850 $ 123,049 $ 282,000 $ 425,148
========== ========== ========== ==========
Earnings per common share $ .04 $ .09 $ .21 $ .29
Earnings per common share -
assuming dilution .04 .08 .21 .28
</TABLE>
