Peoples Federal Bancshares, Inc. Announces Fiscal Second Quarter 2014 Results

BRIGHTON, Mass., April 29, 2014 (GLOBE NEWSWIRE) -- Peoples Federal Bancshares, Inc. (the "Company") (Nasdaq:PEOP), the holding company for Peoples Federal Savings Bank (the "Bank"), reported financial results for the fiscal second quarter ended March 31, 2014. For the quarter ended March 31, 2014, the Company reported net income of $514,000, or $0.09 per share, basic and diluted, as compared to net income of $545,000, or $0.09 per share, basic and diluted, for the comparable 2013 period, and net income of $554,000, or $0.09 per share, basic and diluted, for the quarter ended December 31, 2013.

Total interest and dividend income was $5.0 million for the Company's quarter ended March 31, 2014 compared to $4.8 million for the quarter ended March 31, 2013. Net interest and dividend income was $4.4 million for the Company's quarter ended March 31, 2014 compared to $4.0 million for the quarter ended March 31, 2013. The low interest rate environment has continued to impact the Company's net interest and dividend income as recently originated loans reflect the current low interest rate environment. Total non-interest income was $444,000 for the quarter ended March 31, 2014 compared to $488,000 for the quarter ended March 31, 2013. The decrease was primarily due to the decrease in net gain on sales of mortgage loans of $35,000, or 76.1%. Total non-interest expense was $4.0 million for the quarter ended March 31, 2014 compared to $3.6 million for the quarter ended March 31, 2013. Salaries and employee benefits increased to $2.7 million for the quarter ended March 31, 2014 compared to $2.4 million for the quarter ended March 31, 2013. The increase was primarily due to normal salary increases and additional staffing for the Westwood branch that opened during the Company's second fiscal quarter 2014.

On a linked quarter basis, total interest and dividend income was $5.0 million for the Company's quarter ended March 31, 2014 compared to $4.9 million for the previous quarter ended December 31, 2013. Net interest and dividend income was $4.4 million for the Company's quarter ended March 31, 2014 compared to $4.3 million for the previous quarter ended December 31, 2013. Total non-interest income for the fiscal second quarter of 2014 increased to $444,000 from $399,000 for the first fiscal quarter ended December 31, 2013. Total non-interest expense increased to $4.0 million for the quarter ended March 31, 2014 compared to $3.8 million for the quarter ended December 31, 2013.

Total assets increased $16.1 million, or 2.8%, to $601.3 million at March 31, 2014 from $585.2 million at September 30, 2013. Loans, net increased $23.5 million, or 5.0% during the six months ended March 31, 2014, as residential loans and construction loans increased, while commercial real estate, commercial loans and consumer loans decreased. Cash and cash equivalents decreased $8.9 million to $28.2 million at March 31, 2014 from $37.1 million at September 30, 2013. Securities available-for-sale and held-to-maturity in total increased $1.0 million, or 2.2%, to $47.3 million at March 31, 2014 from $46.3 million at September 30, 2013. Borrowings increased to $56.0 million at March 31, 2014 from $44.0 million at September 30, 2013.

Deposits increased $6.6 million to $431.7 million at March 31, 2014 from $425.1 million at September 30, 2013. NOW accounts increased $3.2 million, money market accounts increased $2.3 million, demand deposits increased $2.1 million and savings accounts increased $313,000 during the period. Term certificates decreased $1.3 million during the same period. At March 31, 2014, total stockholders' equity was $104.2 million, a decrease of $2.2 million from $106.4 million at September 30, 2013, resulting primarily from dividends paid of $2.0 million and the repurchase and retirement of 147,198 shares or $2.6 million, of the Company's common stock. The decrease in total stockholder's equity was offset, in part, by net income of $1.1 million, the increase in additional paid-in capital related to stock-based compensation of $1.1 million and common stock released and committed to be released by the ESOP of $253,000.

During the quarters ended March 31, 2014 and 2013, the Company paid quarterly cash dividends of $0.04 and $0.03 per common share, respectively. Dividends paid totaled $238,000 and $178,000, respectively, for the quarters ended March 31, 2014 and 2013.

Non-performing assets totaled $2.1 million, or 0.3% of total assets, at March 31, 2014, compared to $2.1 million, or 0.4% of total assets, at September 30, 2013. Classified assets decreased to $3.7 million at March 31, 2014, as compared to $4.1 million at September 30, 2013. The Company did not provide to the allowance for loan losses during the six-month period ended March 31, 2014 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
March 31,
2014
September 30,
2013
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks $ 4,321 $ 4,047
Interest-bearing demand deposits with other banks 21,716 30,906
Federal funds sold 102 79
Federal Home Loan Bank - overnight deposit 2,102 2,102
Total cash and cash equivalents 28,241 37,134
Securities available-for-sale 9,555 14,225
Securities held-to-maturity (fair values of $37,646 and $32,105) 37,790 32,054
Federal Home Loan Bank stock (at cost) 3,918 3,775
Loans 493,502 470,086
Allowance for loan losses (4,030) (4,037)
Loans, net 489,472 466,049
Premises and equipment, net 3,821 3,465
Cash surrender value of life insurance policies 20,336 20,007
Accrued interest receivable 1,451 1,448
Deferred income tax asset, net 5,111 5,432
Other assets 1,569 1,657
Total assets $ 601,264 $ 585,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 59,943 $ 57,891
Interest-bearing 371,758 367,202
Total deposits 431,701 425,093
Short-term borrowings 6,000 6,000
Long-term debt 50,000 38,000
Accrued expenses and other liabilities 9,392 9,801
Total liabilities 497,093 478,894
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; 6,318,736 and 6,465,934 shares issued and outstanding at March 31, 2014 and September 30, 2013, respectively 63 65
Additional paid-in capital 57,843 60,039
Retained earnings 54,199 55,103
Accumulated other comprehensive loss (36) (30)
Unearned restricted shares; 209,880 and 256,894 shares at March 31, 2014 and September 30, 2013, respectively (3,399) (4,183)
Unearned compensation - ESOP (4,499) (4,642)
Total stockholders' equity 104,171 106,352
Total liabilities and stockholders' equity $ 601,264 $ 585,246
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
Six Months Ended
March 31,
2014 2013 2014 2013
(Unaudited)
(Dollars in thousands, except share data)
Interest and dividend income:
Interest and fees on loans $ 4,759 $ 4,619 $ 9,432 $ 9,472
Interest on debt securities:
Taxable 241 120 474 270
Other interest 12 26 27 44
Dividends on equity securities 14 4 18 9
Total interest and dividend income 5,026 4,769 9,951 9,795
Interest expense:
Interest on deposits 438 555 892 1,167
Interest on Federal Home Loan Bank advances 176 150 344 300
Total interest expense 614 705 1,236 1,467
Net interest and dividend income 4,412 4,064 8,715 8,328
Provision for loan losses -- 80 -- 200
Net interest and dividend income, after provision for loan losses 4,412 3,984 8,715 8,128
Non-interest income:
Customer service fees 188 193 384 403
Loan servicing fees, net 8 6 21 14
Net gain on sales of mortgage loans 11 46 11 147
Net gain on sales of securities available-for-sale 3 -- 3 --
Increase in cash surrender value of life insurance 161 181 329 343
Other income 73 62 95 73
Total non-interest income 444 488 843 980
Non-interest expense:
Salaries and employee benefits 2,655 2,403 5,265 4,729
Occupancy expense 310 249 538 478
Equipment expense 103 101 202 207
Professional fees 174 177 331 294
Advertising expense 200 108 333 237
Data processing expense 224 211 443 419
Deposit insurance expense 70 61 131 130
Other expense 260 257 513 514
Total non-interest expense 3,996 3,567 7,756 7,008
Income before income taxes 860 905 1,802 2,100
Provision for income taxes 346 360 734 874
Net income $ 514 $ 545 $ 1,068 $ 1,226
Weighted-average shares outstanding:
Basic 5,712,699 5,894,114 5,729,763 5,935,215
Diluted 5,748,215 5,914,177 5,779,439 5,973,180
Earnings per common share:
Basic $ 0.09 $ 0.09 $ 0.18 $ 0.20
Diluted $ 0.09 $ 0.09 $ 0.18 $ 0.20
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
2014
December 31,
2013
(Unaudited)
(Dollars in thousands, except
share data)
Interest and dividend income:
Interest and fees on loans $ 4,759 $ 4,673
Interest on debt securities:
Taxable 241 233
Other interest 12 15
Dividends on equity securities 14 4
Total interest and dividend income 5,026 4,925
Interest expense:
Interest on deposits 438 454
Interest on Federal Home Loan Bank advances 176 168
Total interest expense 614 622
Net interest and dividend income 4,412 4,303
Provision for loan losses -- --
Net interest and dividend income, after provision for loan losses 4,412 4,303
Non-interest income:
Customer service fees 188 196
Loan servicing fees, net 8 13
Net gain on sales of mortgage loans 11 --
Net gain on sales of securities available-for-sale 3 --
Increase in cash surrender value of life insurance 161 168
Other income 73 22
Total non-interest income 444 399
Non-interest expense:
Salaries and employee benefits 2,655 2,610
Occupancy expense 310 228
Equipment expense 103 99
Professional fees 174 157
Advertising expense 200 133
Data processing expense 224 219
Deposit insurance expense 70 61
Other expense 260 253
Total non-interest expense 3,996 3,760
Income before income taxes 860 942
Provision for income taxes 346 388
Net income $ 514 $ 554
Weighted-average shares outstanding:
Basic 5,712,699 5,746,458
Diluted 5,748,215 5,810,294
Earnings per common share:
Basic $ 0.09 $ 0.09
Diluted $ 0.09 $ 0.09

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 March 31,
2014 2013
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Yield/
Rate (1)
(Unaudited)
(Dollars in thousands)
Interest-earning assets:
Loans (2) $ 482,360 $ 4,759 3.95% $ 449,549 $ 4,619 4.11%
Taxable securities (3) 46,492 241 2.07 35,566 120 1.35
Other interest-earning assets 24,096 12 0.20 50,678 26 0.21
FHLB stock 3,904 14 1.43 3,958 4 0.40
Total interest-earning assets 556,852 5,026 3.61 539,751 4,769 3.53
Non-interest-earning assets 36,592 36,427
Total assets $ 593,444 $ 576,178
Interest-bearing liabilities:
Deposits:
Savings $ 56,470 14 0.10 $ 53,538 20 0.15
Money market accounts 152,485 154 0.40 155,630 200 0.51
NOW accounts 40,565 6 0.06 37,683 6 0.06
Term certificates 119,639 264 0.88 129,105 329 1.02
Total deposits 369,159 438 0.47 375,956 555 0.59
FHLB advances 54,556 176 1.29 32,911 150 1.82
Total interest-bearing liabilities 423,715 614 0.58 408,867 705 0.69
Demand deposits 55,844 49,945
Other non-interest-bearing liabilities 8,846 9,088
Total non-interest-bearing liabilities 64,690 59,033
Total liabilities 488,405 467,900
Stockholders' equity 105,039 108,278
Total liabilities and stockholders' equity $ 593,444 $ 576,178
Net interest income $ 4,412 $ 4,064
Net interest rate spread (4) 3.03% 2.84%
Net interest-earning assets (5) $ 133,137 $ 130,884
Net interest margin (6) 3.17% 3.01%
Ratio of interest-earning assets to total interest-bearing liabilities 1.31x 1.32x
(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.
Six Months Ended March 31,
2014 2013
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Yield/
Rate (1)
(Unaudited)
(Dollars in thousands)
Interest-earning assets:
Loans (2) $ 474,751 $ 9,432 3.97% $ 451,068 $ 9,472 4.20%
Taxable securities (3) 47,823 474 1.98 38,850 270 1.39
Other interest-earning assets 25,774 27 0.21 42,874 44 0.21
FHLB stock 3,838 18 0.94 3,986 9 0.45
Total interest-earning assets 552,186 9,951 3.60 536,778 9,795 3.65
Non-interest-earning assets 36,195 37,108
Total assets $ 588,381 $ 573,886
Interest-bearing liabilities:
Deposits:
Savings $ 56,416 28 0.10 $ 52,161 39 0.15
Money market accounts 151,479 309 0.41 154,320 435 0.56
NOW accounts 40,812 13 0.06 37,381 12 0.06
Term certificates 119,143 542 0.91 128,426 681 1.06
Total deposits 367,850 892 0.48 372,288 1,167 0.63
FHLB advances 49,385 344 1.39 32,681 300 1.84
Total interest-bearing liabilities 417,235 1,236 0.59 404,969 1,467 0.72
Demand deposits 55,930 50,299
Other non-interest-bearing liabilities 9,714 9,367
Total non-interest-bearing liabilities 65,644 59,666
Total liabilities 482,879 464,635
Stockholders' equity 105,502 109,251
Total liabilities and stockholders' equity $ 588,381 $ 573,886
Net interest income $ 8,715 $ 8,328
Net interest rate spread (4) 3.01% 2.93%
Net interest-earning assets (5) $ 134,951 $ 131,809
Net interest margin (6) 3.16% 3.10%
Ratio of interest-earning assets to total interest-bearing liabilities 1.32x 1.33x
(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.
Three Months Ended
March 31, 2014 December 31, 2013
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Outstanding
Balance
Interest
Earned/
Paid
Average
Yield/
Rate (1)
(Unaudited)
(Dollars in thousands)
Interest-earning assets:
Loans (2) $ 482,360 $ 4,759 3.95% $ 467,306 $ 4,673 4.00%
Taxable securities (3) 46,492 241 2.07 49,126 233 1.90
Other interest-earning assets 24,096 12 0.20 27,414 15 0.22
FHLB stock 3,904 14 1.43 3,775 4 0.42
Total interest-earning assets 556,852 5,026 3.61 547,621 4,925 3.60
Non-interest-earning assets 36,592 35,806
Total assets $ 593,444 $ 583,427
Interest-bearing liabilities:
Deposits:
Savings $ 56,470 14 0.10 $ 56,362 14 0.10
Money market accounts 152,485 154 0.40 150,495 155 0.41
NOW accounts 40,565 6 0.06 41,054 7 0.07
Term certificates 119,639 264 0.88 118,657 278 0.94
Total deposits 369,159 438 0.47 366,568 454 0.50
FHLB advances 54,556 176 1.29 44,326 168 1.52
Total interest-bearing liabilities 423,715 614 0.58 410,894 622 0.61
Demand deposits 55,844 56,014
Other non-interest-bearing liabilities 8,846 10,564
Total non-interest-bearing liabilities 64,690 66,578
Total liabilities 488,405 477,472
Stockholders' equity 105,039 105,955
Total liabilities and stockholders' equity $ 593,444 $ 583,427
Net interest income $ 4,412 $ 4,303
Net interest rate spread (4) 3.03% 2.99%
Net interest-earning assets (5) $ 133,137 $ 136,727
Net interest margin (6) 3.17% 3.14%
Ratio of interest-earning assets
to total interest-bearing liabilities 1.31x 1.33x
(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.