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 16, 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 December 16, 1999, the Registrant issued for publication the press
release attached as Exhibit "99" announcing earnings for the fiscal year ended
September 30, 1999.
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
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99 Press release, published on December 16, 1999.
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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 16, 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 o P. O. Box 6910 o Tyler, TX 75711-6910
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 16, 1999
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EAST TEXAS FINANCIAL SERVICES, INC.
ANNOUNCES YEAR END EARNINGS
Tyler, Texas, December 16, 1999, - - - East Texas Financial Services, Inc., (OTC
Bulletin Board: ETFS.OB), 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, 1999, was $297,990 or $.23 per share compared to
net income of $560,946 or $.39 per share for the year ended September 30, 1998.
"We were expecting a decrease in earnings for the current year," stated Gerald
W. Free, Vice Chairman, President and CEO. "The expenses associated with our new
office location in South Tyler and the introduction of new commercial and
consumer banking products and services during the year accounted for a
substantial portion of the decline in earnings. We anticipated that it would
take approximately 18 months to begin seeing positive earnings from the new
location. We are well ahead of that pace." In April of 1999, the Company opened
a new full service branch office at 7205 S. Broadway in Tyler. The office is
staffed with eight full time and two part time employees. The primary focus of
the new location is on commercial and consumer banking relationships. In
addition, the company now offers a full line of consumer and commercial banking
products at its two other full service locations in Tyler and Whitehouse, Texas.
The Company also has loan production offices located in Tyler and Lindale,
Texas.
Total assets of the Company were reported as $153.7 million at September 30,
1999, compared to $124.0 million at September 30, 1998. Loans receivable totaled
$67.3 million at year end, an increase of $6.2 million or approximately 10.0%
from the $61.1 million reported at September 30, 1998.
Stockholders' equity totaled $18.4 million at September 30, 1999, a decrease of
$2.0 million from the $20.4 million at September 30, 1998. During the fiscal
year ended September 30, 1999, the Company repurchased 171,203 shares of
treasury stock at an average price of $12.90 per share and ended the year with
1,294,420 shares outstanding. At year end, the Company owned 590,072 shares of
treasury stock at an average price of $11.84 per share. Shares of the Company's
stock closed at $14.00 per share at September 30, 1999, compared to a close of
$13.25 at September 30, 1998.
"In addition to the new consumer and commercial banking products and services
introduced this year, we spent a substantial amount of time and expense in
analyzing potential merger candidates," noted President Free. "We have believed
for some time that an acquisition was one of the best methods to increase the
size of our balance sheet, increase earnings and ultimately increase the value
of our stockholders' investment. We are extremely pleased to have completed a
plan to add Gilmer Savings Bank, F.S.B. to our operations. We believe that we
can bring an enhanced array of products to the Gilmer market that will
complement their current operations and that the merger allows us to expand our
markets and continue our growth strategy. We view this as an opportunity to
enhance the value of our stock. We expect the merger to be completed in early
2000 and we expect to see positive results from it next year."
Capital levels for the Company's wholly owned subsidiary, First Federal Savings
and Loan Association of Tyler, were reported at year end as 11.2% for both
tangible and core capital ratios, in excess of the minimum required levels of
1.5% and 4.0% respectively. The Association's risk-based capital ratio was 27.9%
of risk-weighted assets at September 30, 1999, as compared to the minimum, 8.0%
regulatory requirement. At year end, the Association was considered a
"well-capitalized" institution.
At September 30, 1999, non-performing assets totaled $768,000 or .50% of total
assets, compared to $228,000 or .18% of assets at September 30, 1998.
Non-performing loans to total loans receivable equaled 1.14% at September 30,
1999 compared to .37% at September 30, 1998. Classified assets were reported as
$1.1 million at year end, compared to $570,000 at September 30, 1998.
- selected financial data follows -
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<TABLE>
<CAPTION>
Selected Financial Data
(Dollars in Thousands, except share data) 1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
At September 30,
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Total assets ............................... $ 153,725 $ 124,017 $ 115,949 $ 114,373 $ 117,077
Loans receivable, net ...................... 67,250 61,119 57,110 47,925 41,760
Investment Securities - Available-for-sale . 5,919 0 0 0 0
Investment securities - held-to-maturity ... 30,481 29,767 23,058 30,139 30,263
Mortgage-backed securities - available
for sale ................................. 32,894 12,810 4,356 0 0
Mortgage-backed securities -
held-to-maturity ......................... 5,807 10,941 18,152 24,949 33,741
Deposits ................................... 87,540 86,644 88,551 90,768 92,474
FHLB advances .............................. 45,058 14,946 4,195 0 0
Stockholders' equity ....................... 18,419 20,384 20,879 20,931 23,146
Common shares outstanding .................. 1,294,420 1,464,056 1,026,366 1,079,285 1,256,387
Book value per share ....................... 14.23 13.92 20.34 19.39 18.42
For The Year Ended September 30,
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Net interest income ........................ $ 3,231 $ 3,298 $ 3,419 $ 3,552 $ 3,658
Provision for loan losses .................. 0 0 5 0 0
Other operating income ..................... 358 361 302 371 299
Operating expenses ......................... 3,141 2,768 2,523 3,200 2,335
Net income ................................. 298 561 767 458 1,071
Selected Financial Ratios
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Return on average assets ................... 0.21% 0.46% 0.67% 0.40% 0.92%
Return on average equity ................... 1.51 2.72 3.67 2.08 5.47
Interest rate spread (average) ............. 1.81 2.00 2.21 2.27 2.49
Net interest margin ........................ 2.41 2.83 3.12 3.16 3.21
Ratio of interest-earning assets to
interest-
bearing liabilities ...................... 113.80 119.58 122.29 122.23 119.13
Operating expenses to average assets ....... 2.26 2.31 2.19 2.77 2.01
Efficiency ratio ........................... 91.21 78.96 69.24 84.10 59.70
Net interest income to operating expenses .. 1.03 x 1.20 x 1.35 x 1.11 x 1.57 x
Asset Quality Ratios
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Non-performing assets to total assets ...... 0.50% 0.18% 0.27% 0.39% 0.34%
Non-performing loans to total loans ........ 1.14 0.37 0.54 0.94 0.95
receivable
Allowance for loan losses to non-performing 35.16 102.19 88.06 64.22 74.75
loans
Allowance for loan losses to total loans ... 0.40 0.38 0.48 0.60 0.71
Allowance for loan losses to total assets .. 0.18 0.18 0.24 0.25 0.25
Regulatory Capital Ratios (Association only)
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Total capital to total assets .............. 11.22% 14.91% 15.21% 15.39% 14.40%
Tangible capital ratio ..................... 11.30 14.95 15.20 15.30 14.40
Core capital ratio ......................... 11.30 14.95 15.20 15.30 14.40
Risk-based capital ratio ................... 27.94 38.29 40.22 44.23 43.44
</TABLE>
Serving the Financial Needs of East Texas
