×

Peoples Federal Bancshares, Inc. Announces Fourth Quarter and Fiscal 2013 Financial Results

BRIGHTON, Mass., Nov. 1, 2013 (GLOBE NEWSWIRE) -- Peoples Federal Bancshares, Inc. (the "Company") (Nasdaq:PEOP), the holding company for Peoples Federal Savings Bank (the "Bank"), announced fourth quarter and annual earnings for the fiscal year ended September 30, 2013. For the quarter ended September 30, 2013, the Company reported net income of $461,000 or $0.07 per share, basic and diluted, as compared to a net loss of $323,000 or $(0.05) per share, basic and diluted, for the same period last year, and net income of $598,000, or $0.10 per share, basic and diluted, for the quarter ended June 30, 2013. The net loss for the September 30, 2012 quarter was attributable to the establishment of a $1.0 million valuation allowance against the Company's deferred tax asset. For the fiscal year ended September 30, 2013, the Company reported net income of $2.3 million, or $0.37 per share, basic and diluted, as compared to net income of $1.7 million, or $0.26 per share, basic and diluted, for fiscal 2012.

For the quarter ended September 30, 2013, net interest and dividend income totaled $4.2 million as compared to $4.3 million for the quarter ended September 30, 2012. Low market interest rates have continued to pressure net interest and dividend income as recently originated loans reflect the low interest rate environment. Non-interest income totaled $402,000 for the quarter ended September 30, 2013, as compared to $562,000 for the quarter ended September 30, 2012, as mortgage banking income decreased during the current quarter. Non-interest expense totaled $3.8 million for the quarter ended September 30, 2013 as compared to $3.7 million for the quarter ended September 30, 2012.

For the fiscal year ended September 30, 2013 and 2012, net interest and dividend income totaled $16.6 million and $17.0 million, respectively. Low market interest rates have continued to pressure net interest and dividend income as recently originated loans reflect current market conditions. Non-interest income totaled $1.9 million for the fiscal year ended September 30, 2013, as compared to $1.8 million for the fiscal year ended September 30, 2012. Non-interest expense totaled $14.3 million for the fiscal year ended September 30, 2013, as compared to $14.1 million for the fiscal year ended September 30, 2012, reflecting higher salaries and employee benefits offset mainly by a decrease in advertising expense, equipment expense and other expense.

On a linked quarter basis, net interest and dividend income remained stable at $4.2 million for the Company's 2013 fourth fiscal quarter ended September 30, 2013 and for the third fiscal quarter ended June 30, 2013. Non-interest income for the fourth quarter of fiscal 2013 decreased to $402,000 from $472,000 for the third fiscal quarter ended June 30, 2013. Non-interest expense increased to $3.8 million for the fourth fiscal quarter ended September 30, 2013 as compared to $3.6 million for the third fiscal quarter ended June 30, 2013.

Total assets increased $14.4 million, or 2.5%, to $585.2 million at September 30, 2013 from $570.8 million at September 30, 2012. Loans, net increased $15.0 million, or 3.3%, as residential real estate, construction and commercial loans all increased while commercial real estate and consumer loans declined. Cash and cash equivalents increased $893,000 to $37.1 million at September 30, 2013 from $36.2 million at September 30, 2012. Securities available-for-sale and held-to-maturity in total decreased $1.3 million, or 2.7%, to $46.3 million at September 30, 2013 from $47.6 million at September 30, 2012. Borrowings increased to $44.0 million at September 30, 2013 from $33.0 million at September 30, 2012.

Deposits increased $8.4 million to $425.1 million at September 30, 2013 from $416.7 million at September 30, 2012. Savings accounts increased $7.2 million, demand deposits increased $8.7 million, and NOW accounts increased $1.5 million, while term certificates decreased $6.9 million and money market accounts decreased $2.1 million. At September 30, 2013, total stockholders' equity was $106.3 million, a decrease of $4.2 million from $110.5 million at September 30, 2012 resulting primarily from dividends paid of $2.3 million and the repurchase and retirement of 336,345 shares, or $6.0 million, of the Company's common stock pursuant to our stock repurchase plan. The decline in stockholder's equity was offset, in part, by net income of $2.3 million, stock based compensation expense of $1.5 million and common stock released and committed to be released by the ESOP of $510,000.

During the quarters ended September 30, 2013 and 2012, the Company paid quarterly cash dividends of $0.04 and $0.03 per common share, respectively, totaling $239,000 and $181,000, during the quarters ended September 30, 2013 and 2012. The dividends paid totaled $2.3 million and $181,000, respectively, during the years ended September 30, 2013 and 2012.

Non-performing assets totaled $2.2 million, or 0.4% of total assets, at September 30, 2013, compared to $3.4 million, or 0.6% of total assets, at September 30, 2012 and $1.9 million, or 0.3% of total assets, at June 30, 2013. Classified assets decreased to $4.1 million at September 30, 2013, as compared to $9.6 million at September 30, 2012 but have increased as compared to $3.5 million at June 30, 2013. The Company did not provide to the allowance for loan losses during the quarter ended September 30, 2013 reflecting little change in net loans and improvements in loan delinquencies, non-performing assets and classified assets.

Certain statements herein constitute "forward-looking statements" and actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the businesses in which Peoples Federal Bancshares, Inc. is engaged and changes in the securities market. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise.

PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30,
2013 2012
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks $ 4,047 $ 6,713
Interest-bearing demand deposits with other banks 30,906 27,378
Federal funds sold 79 48
Federal Home Loan Bank - overnight deposit 2,102 2,102
Total cash and cash equivalents 37,134 36,241
Securities available-for-sale 14,225 21,653
Securities held-to-maturity (fair values of $32,105 and $26,746) 32,054 25,921
Federal Home Loan Bank stock (at cost) 3,775 4,014
Loans 470,086 454,925
Allowance for loan losses (4,037) (3,891)
Loans, net 466,049 451,034
Premises and equipment, net 3,465 3,577
Cash surrender value of life insurance policies 20,007 19,364
Accrued interest receivable 1,448 1,589
Deferred income tax asset, net 5,432 5,116
Other assets 1,657 2,318
Total assets $ 585,246 $ 570,827
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 57,891 $ 49,165
Interest-bearing 367,202 367,583
Total deposits 425,093 416,748
Short-term borrowings 6,000 8,000
Long-term debt 38,000 25,000
Accrued expenses and other liabilities 9,801 10,541
Total liabilities 478,894 460,289
Stockholders' equity:
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued -- --
Common stock, $0.01 par value; 100,000,000 shares authorized; 6,465,934 and 6,726,904 shares issued and outstanding at September 30, 2013 and 2012, respectively 65 67
Additional paid-in capital 60,039 63,909
Retained earnings 55,103 55,153
Accumulated other comprehensive (loss) income (30) 113
Unearned restricted shares; 256,894 and 244,140 shares at September 30, 2013 and 2012, respectively (4,183) (3,777)
Unearned compensation - ESOP (4,642) (4,927)
Total stockholders' equity 106,352 110,538
Total liabilities and stockholders' equity $ 585,246 $ 570,827
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Years Ended
September 30, September 30,
2013 2012 2013 2012
(Unaudited)
(Dollars in thousands, except share data)
Interest and dividend income:
Interest and fees on loans $ 4,574 $ 4,857 $ 18,690 $ 19,323
Interest on debt securities:
Taxable 183 191 600 914
Other interest 17 14 87 73
Dividends on equity securities 4 5 16 19
Total interest and dividend income 4,778 5,067 19,393 20,329
Interest expense:
Interest on deposits 469 627 2,137 2,755
Interest on Federal Home Loan Bank advances 156 155 608 564
Total interest expense 625 782 2,745 3,319
Net interest and dividend income 4,153 4,285 16,648 17,010
Provision for loan losses -- 165 200 540
Net interest and dividend income, after provision for loan losses 4,153 4,120 16,448 16,470
Non-interest income:
Customer service fees 209 210 825 838
Loan servicing fees (costs), net 13 (5) 43 2
Net gain on sales of mortgage loans -- 120 189 169
Increase in cash surrender value of life insurance 157 161 643 651
Other income 23 76 154 173
Total non-interest income 402 562 1,854 1,833
Non-interest expense:
Salaries and employee benefits 2,626 2,540 9,799 9,587
Occupancy expense 246 238 965 920
Equipment expense 96 104 390 437
Professional fees 172 133 570 488
Advertising expense 118 110 497 558
Data processing expense 216 211 853 811
Deposit insurance expense 57 75 268 251
Other expense 236 264 1,004 1,074
Total non-interest expense 3,767 3,675 14,346 14,126
Income before income taxes 788 1,007 3,956 4,177
Provision for income taxes 327 1,330 1,671 2,520
Net income (loss) $ 461 $ (323) $ 2,285 $ 1,657
Weighted-average shares outstanding:
Basic 5,763,952 5,982,123 5,875,741 6,175,042
Diluted 5,811,421 5,982,123 5,915,400 6,183,718
Earnings (loss) per common share:
Basic $ 0.07 $ (0.05) $ 0.37 $ 0.26
Diluted $ 0.07 $ (0.05) $ 0.37 $ 0.26
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30, June 30,
2013 2013
(Unaudited)
(Dollars in thousands, except share data)
Interest and dividend income:
Interest and fees on loans $ 4,574 $ 4,644
Interest on debt securities:
Taxable 183 147
Other interest 17 26
Dividends on equity securities 4 3
Total interest and dividend income 4,778 4,820
Interest expense:
Interest on deposits 469 501
Interest on Federal Home Loan Bank advances 156 152
Total interest expense 625 653
Net interest and dividend income 4,153 4,167
Provision for loan losses -- --
Net interest and dividend income, after provision for loan losses 4,153 4,167
Non-interest income:
Customer service fees 209 213
Loan servicing fees, net 13 16
Net gain on sales of mortgage loans -- 42
Increase in cash surrender value of life insurance 157 143
Other income 23 58
Total non-interest income 402 472
Non-interest expense:
Salaries and employee benefits 2,626 2,444
Occupancy expense 246 241
Equipment expense 96 87
Professional fees 172 104
Advertising expense 118 142
Data processing expense 216 218
Deposit insurance expense 57 81
Other expense 236 254
Total non-interest expense 3,767 3,571
Income before income taxes 788 1,068
Provision for income taxes 327 470
Net income $ 461 $ 598
Weighted-average shares outstanding:
Basic 5,763,952 5,869,813
Diluted 5,811,421 5,905,052
Earnings per common share:
Basic $ 0.07 $ 0.10
Diluted $ 0.07 $ 0.10

The following tables set forth average assets, liability and equity account balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

Three Months Ended September 30,
2013 2012
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate (1) Balance Paid Rate (1)
(Unaudited)
(Dollars in thousands)
Interest-earning assets:
Loans (2) $ 460,109 $ 4,574 3.98% $ 441,232 $ 4,857 4.40%
Taxable securities (3) 43,861 183 1.67 51,701 191 1.48
Other interest-earning assets 33,521 17 0.20 29,321 14 0.19
FHLB stock 3,775 4 0.42 4,014 5 0.50
Total interest-earning assets 541,266 4,778 3.53 526,268 5,067 3.85
Non-interest-earning assets 35,540 36,992
Total assets $ 576,806 $ 563,260
Interest-bearing liabilities:
Deposits:
Savings $ 55,991 14 0.10 $ 49,616 18 0.15
Money market accounts 151,019 158 0.42 153,091 236 0.62
NOW accounts 39,075 6 0.06 37,447 7 0.07
Term certificates 122,769 291 0.95 128,186 366 1.14
Total deposits 368,854 469 0.51 368,340 627 0.68
FHLB advances 35,685 156 1.75 28,979 155 2.14
Total interest-bearing liabilities 404,539 625 0.62 397,319 782 0.79
Demand deposits 55,890 45,791
Other non-interest-bearing liabilities 9,782 9,017
Total non-interest-bearing liabilities 65,672 54,808
Total liabilities 470,211 452,127
Stockholders' equity 106,595 111,133
Total liabilities and stockholders' equity $ 576,806 $ 563,260
Net interest income $ 4,153 $ 4,285
Net interest rate spread (4) 2.91% 3.06%
Net interest-earning assets (5) $ 136,727 $ 128,949
Net interest margin (6) 3.07% 3.26%
Ratio of interest-earning assets to total interest-bearing liabilities 1.34 x 1.32 x
(1) Yields are annualized.
(2) Average loans include non-accrual loans and are net of average deferred loan fees/costs.
(3) Average balances are presented at average amortized cost.
(4) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.
Years Ended September 30,
2013 2012
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
(Unaudited)
(Dollars in thousands) (Dollars in thousands)
Interest-earning assets:
Loans (1) $ 453,202 $ 18,690 4.12% $ 422,198 $ 19,323 4.58%
Taxable securities (2) 40,283 600 1.49 56,856 914 1.61
Other interest-earning assets 41,484 87 0.21 28,864 73 0.25
FHLB stock 3,880 16 0.41 4,155 19 0.46
Total interest-earning assets 538,849 19,393 3.60 512,073 20,329 3.97
Non-interest-earning assets 35,834 44,030
Total assets $ 574,683 $ 556,103
Interest-bearing liabilities:
Deposits:
Savings $ 53,727 72 0.13 $ 48,675 90 0.18
Money market accounts 152,967 767 0.50 153,789 1,066 0.69
NOW accounts 38,220 24 0.06 36,724 40 0.11
Term certificates 126,255 1,274 1.01 130,326 1,559 1.20
Total deposits 371,169 2,137 0.58 369,514 2,755 0.75
FHLB advances 33,518 608 1.81 22,716 564 2.48
Total interest-bearing liabilities 404,687 2,745 0.68 392,230 3,319 0.85
Demand deposits 52,293 41,816
Other non-interest-bearing liabilities 9,380 8,762
Total non-interest-bearing liabilities 61,673 50,578
Total liabilities 466,360 442,808
Stockholders' equity 108,323 113,295
Total liabilities and stockholders' equity $ 574,683 $ 556,103
Net interest income $ 16,648 $ 17,010
Net interest rate spread (3) 2.92% 3.12%
Net interest-earning assets (4) $ 134,162 $ 119,843
Net interest margin (5) 3.09% 3.32%
Ratio of interest-earning assets to total interest-bearing liabilities 1.33 x 1.31 x
(1) Average loans include non-accrual loans and are net of average deferred loan fees/costs.
(2) Average balances are presented at average amortized cost.
(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.
Three Months Ended
September 30, 2013 June 30, 2013
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate (1) Balance Paid Rate (1)
(Unaudited)
(Dollars in thousands)
Interest-earning assets:
Loans (2) $ 460,109 $ 4,574 3.98% $ 450,486 $ 4,644 4.12%
Taxable securities (3) 43,861 183 1.67 39,533 147 1.49
Other interest-earning assets 33,521 17 0.20 44,511 26 0.23
FHLB stock 3,775 4 0.42 3,775 3 0.32
Total interest-earning assets 541,266 4,778 3.53 538,305 4,820 3.58
Non-interest-earning assets 35,540 35,920
Total assets $ 576,806 $ 574,225
Interest-bearing liabilities:
Deposits:
Savings $ 55,991 14 0.10 $ 54,572 17 0.12
Money market accounts 151,019 158 0.42 152,231 173 0.45
NOW accounts 39,075 6 0.06 39,035 6 0.06
Term certificates 122,769 291 0.95 125,434 305 0.97
Total deposits 368,854 469 0.51 371,272 501 0.54
FHLB advances 35,685 156 1.75 33,000 152 1.84
Total interest-bearing liabilities 404,539 625 0.62 404,272 653 0.65
Demand deposits 55,890 52,647
Other non-interest-bearing liabilities 9,782 9,089
Total non-interest-bearing liabilities 65,672 61,736
Total liabilities 470,211 466,008
Stockholders' equity 106,595 108,217
Total liabilities and stockholders' equity $ 576,806 $ 574,225
Net interest income $ 4,153 $ 4,167
Net interest rate spread (4) 2.91% 2.93%
Net interest-earning assets (5) $ 136,727 $ 134,033
Net interest margin (6) 3.07% 3.10%
Ratio of interest-earning assets to total interest-bearing liabilities 1.34 x 1.33 x
(1) Yields are annualized.
(2) Average loans include non-accrual loans and are net of average deferred loan fees/costs.
(3) Average balances are presented at average amortized cost.
(4) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.

CONTACT: Maurice H. Sullivan, Jr. (617) 254-0707Source:Peoples Federal Bancshares, Inc.