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Steele Financial Corporation and East Texas Financial Services, Inc. Terminate Acquisition Agreement

  //business-finance.news-articles.net/content/201 .. ervices-inc-terminate-acquisition-agreement.html
  Published in Business and Finance on Wednesday, August 25th 2010 at 9:05 GMT by Market Wire
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TYLER, Texas--([ BUSINESS WIRE ])--Steele Financial Corporation (aSFCa) and East Texas Financial Services, Inc. (aETFSa) (OTCBB:ETFS) jointly announced that they have terminated their definitive agreement under which SFC was to have acquired ETFS, the parent of First Federal Bank Texas (the aBanka). The parties decided it was in their mutual best interests to terminate the agreement after SFC informed ETFS that SFC believed ETFS had undergone a material adverse change due to a significant increase in the non-performing assets of the Bank.

Brandon T. Steele, Chairman of Steele Financial Corporation, commented: aWe are obviously disappointed that this transaction will not be completed. Economic conditions have made the Banka�s operating environment extraordinarily difficult. Although our definitive agreement has been terminated, I plan to remain a director of ETFS and the Bank, and look forward to continuing to work with the Banka�s management to improve asset quality and operating performance.a

Derrell W. Chapman, President and Chief Executive Officer of ETFS and the Bank, said: aWe too are disappointed that this transaction will not occur. While, like many institutions, our performance has suffered due to the current operating environment, our capital position remains strong. The Bank continues to be 'well-capitalized' under regulatory capital guidelines, with ratios of total capital to risk-weighted assets, Tier 1 capital to risk-weighted assets and Tier 1 capital to adjusted total assets of 14.14%, 13.16% and 8.69%, respectively. We are fortunate to have Mr. Steele on our Board, as we believe he shares our vision and commitment to community banking and to the enhancement of the value of our franchise.a

First Federal Bank, Texas, a federal savings bank based in Tyler, Texas, was founded in 1923. First Federal Bank Texas operates from four office locations in Tyler and Gilmer, Texas. At June 30, 2010, ETFS had total consolidated assets of $236.4 million.