EAST TEXAS FINANCIAL SERVICES, INC.
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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: August 22, 2000
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EAST TEXAS FINANCIAL SERVICES, INC.
REPORTS EARNINGS
Tyler, Texas, August 22, 2000, - - - 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
nine months ended June 30, 2000, was $234,022 or $0.21 per common share,
compared to $256,260 or $0.19 per common share reported for the same period in
1999.
For the three months ended June 30, 2000, the Company reported net income of
$87,460 or $.08 per share, compared to $48,850 or $.04 per share for the three
months ended June 30, 1999.
Total assets were reported as $200.4 million at June 30, 2000, compared to
$153.7 million at September 30, 1999. Loans receivable were reported as $96.8
million at June 30, 2000, compared to $67.3 million at September 30, 2000.
"The increase in earnings per share is both a result of our continued efforts to
redirect earning assets into higher yielding consumer and commercial banking
products and our continued program of repurchasing stock when market conditions
warrant" stated President and CEO, Gerald W. Free.
The Statements of Financial Condition reflects the additional assets and
liabilities acquired in the Company's acquisition of Gilmer Financial Services,
Inc. at June 30, 2000. Earnings for the three month and nine month periods ended
June 30, 2000 do not reflect income from the acquisition.
Over the past three months, shares of the Company's stock have traded between
$7.25 and $8.52 per share. At June 30, 2000, the Company had 1,162,320 shares of
stock outstanding and a book value per share of approximately $13.68.
Capital levels for the Company's wholly owned subsidiary, First Federal Savings
and Loan Association of Tyler, were reported, at June 30, 2000, as approximately
6.77% for core capital. The minimum regulatory requirements for the core capital
ratio is 4.00%. The Association's risk-based capital ratio was 11.41% at June
30, 2000, compared to the minimum 8.0% regulatory requirement.
At June 30, 2000, non-performing assets totaled $1.1 million or 0.55% of total
assets, compared to $768,000 or 0.50% of total assets at September 30, 1999.
Non-performing loans equaled $1.0 million or 1.06% of loans receivable at June
30, 2000, compared to $768,000 or 1.14% at September 30, 1999. Classified assets
were reported as $2.5 million or 1.23% of total assets at June 30, 2000,
compared to $1.1 million or 0.71% of total assets at September 30, 1999.
"The increase in non-performing and classified assets were a direct result of
the Company's acquisition of Gilmer Savings Bank, F.S.B. at June 30, 2000,"
stated President Free. "We were aware of the additional problem assets acquired
in the Gilmer transaction and established appropriate allowances for loan losses
in negotiating the purchase price."
At June 30, 2000, the Company's allowance for loan losses totaled $1.1 million
or 1.14% of loans receivable, compared to $270,039 or 0.40% of loans receivable
at September 30, 1999.
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 Tyler, Texas, a full service office in
Whitehouse, Texas, a full service office in Gilmer, Texas, and a loan agency in
Lindale, Texas.
The Company's stock is traded under the symbol "ETFS" on the OTC Electronic
Bulletin Board.
- selected financial data follows -
<PAGE>
EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
ASSETS June 30, 2000 September 30, 1999
------------- ------------------
(Unaudited)
<S> <C> <C>
Cash and due from banks $ 1,007,891 $ 1,019,937
Interest-bearing deposits with banks 2,805,202 974,627
Interest-earning time deposits with financial institutions 1,289,000 2,461,617
Federal funds sold 0 0
Investment securities available-for-sale 7,691,011 5,918,750
Mortgage-backed securities available-for-sale 45,286,010 32,893,809
Investment securities held-to-maturity (estimated market
value of $26,986,744 at June 30, 2000, and
$29,948,866 at September 30, 1999) 27,967,369 30,481,413
Mortgage-backed securities held-to-maturity (estimated
market value of $4,801,441 at June 30, 2000
and $5,949,914 at September 30, 1999) 4,688,000 5,806,975
Loans receivable, net of allowance for credit losses of $1,099,200
at June 30, 2000 and $270,039 at September 30, 1999 96,841,766 67,250,334
Accrued interest receivable 1,582,211 1,167,245
Federal Home Loan Bank stock, at cost 4,048,700 2,283,000
Premises and equipment 2,786,262 2,607,213
Foreclosed real estate and repossessed property, net 77,160 0
Goodwill 2,435,579 0
Mortgage servicing rights 272,620 266,010
Other assets 1,604,817 593,991
------------- -------------
Total Assets $ 200,383,598 $ 153,724,921
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest deposits $ 3,600,439 $ 2,021,914
Interest-bearing deposits 101,980,220 85,517,925
------------- -------------
Total deposits 105,580,659 87,539,839
FHLB advances 76,315,782 45,057,877
Advances from borrowers for taxes and insurance 1,131,268 823,755
Federal income taxes
Current (73,703) 0
Deferred 0 108,184
Accrued expenses and other liabilities 1,523,691 1,775,938
------------- -------------
Total liabilities 184,477,697 135,305,593
------------- -------------
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 1,162,320 outstanding 18,845 18,845
Additional paid-in-capital 12,397,167 12,397,167
Deferred compensation - RRP shares (9,698) (96,985)
Unearned employee stock ownership plan shares (442,059) (442,059)
Accumulated Other Comprehensive Income (loss) (919,532) (148,174)
Retained earnings (substantially restricted) 13,728,460 13,675,391
Treasury stock, 722,172 shares at cost (8,867,282) (6,984,857)
------------- -------------
Total stockholder's equity 15,905,901 18,419,328
------------- -------------
Total liabilities and stockholders' equity $ 200,383,598 $ 153,724,921
============= =============
</TABLE>
EAST TEXAS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Nine Months
Ended June 30, Ended June 30,
(Unaudited) (Unaudited)
2000 1999 2000 1999
--------------------------- ------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable:
First Mortgage $1,241,608 $ 1,099,806 $ 3,556,737 $ 3,327,777
Consumer and other loans 173,537 101,023 507,028 260,141
Securities available for sale:
Investment securities 206,167 4,030 489,014 56,220
Mortgage-backed securities 639,798 416,196 1,857,124 992,788
Securities held to maturity:
Investment securities 447,488 564,969 1,384,029 1,450,009
Mortgage-backed securities 89,142 115,175 270,040 432,185
Deposits with banks 13,671 31,185 48,486 115,181
---------- ----------- ----------- -----------
Total interest income 2,811,411 2,332,384 8,112,458 6,634,301
---------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 1,032,272 1,051,220 3,070,096 3,180,472
FHLB advances 941,269 475,237 2,504,825 1,032,074
Interest Expense to other banks 0 0 21,979 0
---------- ----------- ----------- -----------
Total interest expense 1,973,541 1,526,457 5,596,900 4,212,546
---------- ----------- ----------- -----------
Net interest income before
provision for loan losses 837,870 805,927 2,515,558 2,421,755
Provision for loan losses 4,043 0 4,445 0
---------- ----------- ----------- -----------
Net interest income after
provision for loan losses 833,827 805,927 2,511,113 2,421,755
---------- ----------- ----------- -----------
NONINTEREST INCOME
Gain(loss) on sale of interest-earning assets 7,985 22,437 31,167 127,502
Loan origination and commitment fees 13,476 17,930 33,259 64,988
Loan servicing fees 16,485 23,667 47,817 53,400
Gain on foreclosed real estate 0 (352) (855) (50)
Other 39,211 16,543 83,339 37,792
---------- ----------- ----------- -----------
Total noninterest income 77,157 80,225 194,727 283,632
---------- ----------- ----------- -----------
NONINTEREST EXPENSE
Compensation and benefits 533,270 543,784 1,601,780 1,572,468
Occupancy and equipment 126,006 195,827 386,202 310,718
SAIF deposit insurance premium 4,433 (27,533) 22,135 (1,069)
Loss on foreclosed real estate 0 0 0 2,069
Other 109,197 88,250 320,378 402,571
---------- ----------- ----------- -----------
Total noninterest expense 772,906 800,328 2,330,495 2,286,757
---------- ----------- ----------- -----------
Income (loss) before provision for income taxes 138,078 85,824 375,345 418,630
Income tax expense (benefit) 50,618 36,974 141,323 162,370
---------- ----------- ----------- -----------
NET INCOME (LOSS) $ 87,460 $ 48,850 $ 234,022 $ 256,260
========== =========== =========== ===========
Earnings per common share $ .08 $ .04 $ .21 $ .19
Earnings per common share - assuming dilution .08 .04 .20 .19
</TABLE>
