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Peoples Federal Bancshares, Inc. Announces Fiscal First Quarter 2013 Results

BRIGHTON, Mass., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Peoples Federal Bancshares, Inc. (the "Company") (Nasdaq:PEOP), the holding company for Peoples Federal Savings Bank (the "Bank"), announced earnings for the quarter ending December 31, 2012, the fiscal first quarter for its year. For the three months ended December 31, 2012, the Company reported net income of $681,000 or $0.11 per share, basic and diluted, as compared to net income of $825,000 or $0.13 per share, basic and diluted, for the same period last year.

Net interest and dividend income totaled $4.3 million for both three-month periods ended December 31, 2012 and 2011. Non-interest income totaled $492,000 for the three months ended December 31, 2012 as compared to $453,000 for the three months ended December 31, 2011. Non-interest expense totaled $3.4 million for the three months ended December 31, 2012 as compared to $3.3 million for the three months ended December 31, 2011, reflecting higher salaries and employee benefits offset by a decrease in other expense.

Total assets increased $6.6 million, or 1.2%, to $577.4 million at December 31, 2012 from $570.8 million at September 30, 2012. Loans, net increased $1.5 million, or 0.3%, as we experienced increases in construction loans, residential real estate and commercial loans, offset by decreases in commercial real estate loans and multi-family loans. Cash and cash equivalents increased $16.2 million to $52.4 million at December 31, 2012 from $36.2 million at September 30, 2012. This increase was the result of an increase in deposits and maturing securities, which management determined not to reinvest into loans or securities in the low interest rate environment. Borrowings remained at $33.0 million at December 31, 2012 and September 30, 2012. Deposits increased $9.9 million to $426.6 million at December 31, 2012 from $416.7 million at September 30, 2012. The increases were in all deposit types. Demand deposits increased $2.9 million, term certificates increased $2.4 million, savings increased $1.7 million, money markets increased $1.6 million and NOWs increased $1.3 million. At December 31, 2012, total stockholders' equity was $108.8 million, a decrease of $1.7 million from $110.5 million at September 30, 2012. The decrease in stockholders' equity during the quarter was primarily due to dividends of $1.7 million and the repurchase and retirement of 67,300 shares or $1.1 million of the Company's common stock pursuant to our stock repurchase plan, offset by net income of $681,000, stock options and restricted stock awards earned of $333,000 and common stock released by the ESOP plan of $121,000.

During the quarter ended December 31, 2012, the Company paid a quarterly cash dividend of $0.03 per common share. In addition, the Company paid a special cash dividend of $0.25 per common share during the December 31, 2012 quarter. The dividends paid totaled $1.7 million during the quarter. The Company did not pay any dividends during the quarter ended December 31, 2011.

Non-performing assets totaled $3.3 million, or 0.57% of total assets, at December 31, 2012, as compared to $3.4 million, or 0.60% of total assets, at September 30, 2012. Classified assets decreased to $7.0 million at December 31, 2012 compared to $9.6 million at September 30, 2012. The Company provided $120,000 to the provision for loan losses during the quarter ended December 31, 2012, reflecting an increase in net loans and changes in the loan segments.

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
December 31, September 30,
2012 2012
(Unaudited)
(In thousands, except share data)
ASSETS
Cash and due from banks $ 6,442 $ 6,713
Interest-bearing demand deposits with other banks 43,858 27,378
Federal funds sold 41 48
Federal Home Loan Bank - overnight deposit 2,102 2,102
Total cash and cash equivalents 52,443 36,241
Securities available-for-sale 13,340 21,653
Securities held-to-maturity (fair values of $23,745 and 26,746) 23,178 25,921
Federal Home Loan Bank stock (at cost) 4,014 4,014
Loans 456,524 454,925
Allowance for loan losses (4,007) (3,891)
Loans, net 452,517 451,034
Premises and equipment, net 3,492 3,577
Cash surrender value of life insurance policies 19,526 19,364
Accrued interest receivable 1,367 1,589
Deferred income tax asset, net 5,131 5,116
Other assets 2,431 2,318
Total assets $ 577,439 $ 570,827
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 52,032 $ 49,165
Interest-bearing 374,596 367,583
Total deposits 426,628 416,748
Short-term borrowings 6,000 8,000
Long-term debt 27,000 25,000
Accrued expenses and other liabilities 8,977 10,541
Total liabilities 468,605 460,289
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; 6,659,604 and 6,726,904 shares issued and outstanding at December 31, 2012 and September 30, 2012, respectively 66 67
Additional paid-in capital 62,934 63,909
Retained earnings 54,159 55,153
Accumulated other comprehensive income 90 113
Unearned restricted shares; 230,055 and 244,140 shares at December 31, 2012 and September 30, 2012, respectively (3,559) (3,777)
Unearned compensation - ESOP (4,856) (4,927)
Total stockholders' equity 108,834 110,538
Total liabilities and stockholders' equity $ 577,439 $ 570,827
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
December 31,
2012 2011
(Unaudited)
(Dollars in thousands, except share data)
Interest and dividend income:
Interest and fees on loans $ 4,853 $ 4,867
Interest on debt securities:
Taxable 150 271
Other interest 18 24
Dividends on equity securities 5 3
Total interest and dividend income 5,026 5,165
Interest expense:
Interest on deposits 612 769
Interest on Federal Home Loan Bank advances 150 122
Total interest expense 762 891
Net interest and dividend income 4,264 4,274
Provision for loan losses 120 125
Net interest and dividend income, after provision for loan losses 4,144 4,149
Non-interest income:
Customer service fees 210 209
Loan servicing fees 8 13
Net gain on sales of mortgage loans 101 --
Increase in cash surrender value of life insurance 162 158
Other income 11 73
Total non-interest income 492 453
Non-interest expense:
Salaries and employee benefits 2,326 2,125
Occupancy expense 229 216
Equipment expense 106 112
Professional fees 117 103
Advertising expense 129 147
Data processing expense 208 196
Deposit insurance expense 69 60
Other expense 257 320
Total non-interest expense 3,441 3,279
Income before income taxes 1,195 1,323
Provision for income taxes 514 498
Net income $ 681 $ 825
Weighted-average shares outstanding:
Basic 5,975,422 6,372,181
Diluted 6,031,289 6,372,181
Earnings per common share:
Basic $ 0.11 $ 0.13
Diluted $ 0.11 $ 0.13

The following table sets 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 December 31,
2012 2011
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) $ 452,554 $ 4,853 4.29% $ 409,593 $ 4,867 4.75%
Taxable securities (3) 42,062 150 1.43 55,535 271 1.95
Other interest-earning assets 35,656 18 0.20 36,351 24 0.26
FHLB stock 4,014 5 0.50 4,339 3 0.28
Total interest-earning assets 534,286 5,026 3.76 505,818 5,165 4.08
Non-interest-earning assets 37,373 48,182
Total assets $ 571,659 $ 554,000
Interest-bearing liabilities:
Deposits:
Savings $ 50,814 20 0.16 $ 47,732 24 0.20
Money market accounts 153,038 235 0.61 151,557 277 0.73
NOW accounts 37,085 6 0.06 35,416 11 0.12
Term certificates 127,764 351 1.10 138,926 457 1.32
Total deposits 368,701 612 0.66 373,631 769 0.82
FHLB advances 32,457 150 1.85 17,391 122 2.81
Total interest-bearing liabilities 401,158 762 0.76 391,022 891 0.91
Demand deposits 50,643 38,974
Other non-interest-bearing liabilities 9,654 8,755
Total non-interest-bearing liabilities 60,297 47,729
Total liabilities 461,455 438,751
Stockholders' equity 110,204 115,249
Total liabilities and stockholders' equity $ 571,659 $ 554,000
Net interest income $ 4,264 $ 4,274
Net interest rate spread (4) 3.00% 3.17%
Net interest-earning assets (5) $ 133,128 $ 114,796
Net interest margin (6) 3.19% 3.38%
Ratio of total interest-earning assets to total interest-bearing liabilities 1.33 x 1.29 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.