BRIGHTON, Mass., Nov. 6, 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 fourth quarter ended September 30, 2014. For the quarter ended September 30, 2014, the Company reported a net loss of ($148,000), or ($0.03) per share, basic and diluted, as compared to net income of $461,000, or $0.07 per share, basic and diluted, for the comparable 2013 period, and net income of $539,000, or $0.09 per share, basic and diluted, for the quarter ended June 30, 2014.
On August 5, 2014, the Company, parent of Peoples Federal Savings Bank, and Independent Bank Corp. (Nasdaq:INDB), parent of Rockland Trust Company, signed a definitive agreement for Independent Bank Corp. to acquire Peoples Federal Bancshares, Inc. and Rockland Trust Company to acquire Peoples Federal Savings Bank. Under the terms of the merger agreement, the Company will merge with and into Independent Bank Corp. with Independent Bank Corp. surviving the merger. As a result, the Company incurred non-tax deductible merger expenses of $778,000 during the quarter ended September 30, 2014.
Total interest and dividend income was $5.1 million for the quarter ended September 30, 2014 compared to $4.8 million for the quarter ended September 30, 2013. Net interest and dividend income was $4.4 million for the quarter ended September 30, 2014 compared to $4.2 million for the quarter ended September 30, 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 $391,000 for the quarter ended September 30, 2014 compared to $402,000 for the quarter ended September 30, 2013. The decrease was due to the decrease in customer service fees of $11,000, or 5.3%, a decrease in other income of $5,000 or 21.7%, a decrease in loan servicing fees of $4,000 or 30.8% and a decrease in income on life insurance policies of $4,000 or 2.5%, offset by an increase in gain on sales of mortgage loans of $13,000. There were no sales of loans during the quarter ended September 30, 2013. Total non-interest expense was $4.5 million for the quarter ended September 30, 2014 compared to $3.8 million for the quarter ended September 30, 2013. The increase is primarily due to non-tax deductible merger expenses of $778,000, noted above. The increase was offset by a decrease in salaries and employee benefits that decreased to $2.5 million for the quarter ended September 30, 2014 compared to $2.6 million for the quarter ended September 30, 2013. The decrease was primarily due to a decrease in pension expense offset by 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 $5.1 million for both of the quarters ended September 30, 2014 and June 30, 2014. Net interest and dividend income was $4.4 million for the quarter ended September 30, 2014 compared to $4.5 million for the quarter ended June 30, 2014. Total non-interest income for the quarter ended September 30, 2014 increased to $391,000 from $376,000 for the quarter ended June 30, 2014. Total non-interest expense increased to $4.5 million for the quarter ended September 30, 2014 compared to $3.9 million for the quarter ended June 30, 2014.
Total assets increased $16.1 million, or 2.8%, to $601.3 million at September 30, 2014 from $585.2 million at September 30, 2013. Loans, net increased $20.9 million, or 4.5% during the fiscal year ended September 30, 2014, as residential loans (one-to four-family and multi-family), construction loans and commercial loans increased, while commercial real estate and consumer loans decreased. Cash and cash equivalents decreased $5.0 million to $32.1 million at September 30, 2014 from $37.1 million at September 30, 2013. Securities available-for-sale and held-to-maturity decreased $450,000, or 1.0%, to $45.8 million at September 30, 2014, from $46.3 million at September 30, 2013. Borrowings increased to $53.0 million at September 30, 2014 from $44.0 million at September 30, 2013.
Deposits increased $9.4 million to $434.5 million at September 30, 2014 from $425.1 million at September 30, 2013. Demand deposit accounts increased $3.0 million, money markets increased $3.2 million, NOW accounts increased $2.8 million and term certificates increased $1.2 million during fiscal 2014. Savings accounts decreased $786,000 during the same period.
At September 30, 2014, total stockholders' equity was $103.9 million, a decrease of $2.5 million from $106.4 million at September 30, 2013, resulting primarily from dividends paid of $2.6 million and the repurchase and retirement of 226,498 shares, or $4.1 million, of the Company's common stock. The decrease in total stockholder's equity was offset, in part, by net income of $1.5 million, stock-based compensation of $2.1 million and common stock released and committed to be released by the ESOP of $523,000.
During the quarters ended September 30, 2014 and 2013, the Company paid quarterly cash dividends of $0.05 and $0.04 per common share, respectively, totaling $289,000 and $239,000, respectively.
Non-performing assets totaled $2.1 million, or 0.4% of total assets, at September 30, 2014, unchanged from $2.1 million, or 0.4% of total assets, at September 30, 2013. Classified assets decreased to $3.4 million at September 30, 2014, as compared to $4.1 million at September 30, 2013. The Company did not provide to the allowance for loan losses during the fiscal year ended September 30, 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 | ||
| September 30, | ||
| 2014 | 2013 | |
| (Unaudited) | ||
| (In thousands, except share data) | ||
| ASSETS | ||
| Cash and due from banks | $ 4,301 | $ 4,047 |
| Interest-bearing demand deposits with other banks | 25,945 | 30,906 |
| Federal funds sold | 364 | 79 |
| Federal Home Loan Bank - overnight deposit | 1,502 | 2,102 |
| Total cash and cash equivalents | 32,112 | 37,134 |
| Securities available-for-sale | 8,819 | 14,225 |
| Securities held-to-maturity (fair values of $36,965 and $32,105) | 37,010 | 32,054 |
| Federal Home Loan Bank stock (at cost) | 4,252 | 3,775 |
| Loans | 490,899 | 470,086 |
| Allowance for loan losses | (4,026) | (4,037) |
| Loans, net | 486,873 | 466,049 |
| Premises and equipment, net | 3,614 | 3,465 |
| Cash surrender value of life insurance policies | 20,639 | 20,007 |
| Accrued interest receivable | 1,486 | 1,448 |
| Deferred income tax asset, net | 5,238 | 5,432 |
| Other assets | 1,241 | 1,657 |
| Total assets | $ 601,284 | $ 585,246 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits: | ||
| Non-interest bearing | $ 60,862 | $ 57,891 |
| Interest-bearing | 373,675 | 367,202 |
| Total deposits | 434,537 | 425,093 |
| Short-term borrowings | -- | 6,000 |
| Long-term debt | 53,000 | 38,000 |
| Accrued expenses and other liabilities | 9,857 | 9,801 |
| Total liabilities | 497,394 | 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; 6,239,436 | ||
| and 6,465,934 shares issued and outstanding at September 30, 2014 and | ||
| 2013, respectively | 62 | 65 |
| Additional paid-in capital | 56,814 | 60,039 |
| Retained earnings | 54,010 | 55,103 |
| Accumulated other comprehensive loss | (26) | (30) |
| Unearned restricted shares; 162,866 and 256,894 shares at September 30, 2014 and | ||
| 2013, respectively | (2,614) | (4,183) |
| Unearned compensation - ESOP | (4,356) | (4,642) |
| Total stockholders' equity | 103,890 | 106,352 |
| Total liabilities and stockholders' equity | $ 601,284 | $ 585,246 |
| PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| Three Months Ended | Years Ended | |||
| September 30, | September 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (Unaudited) | ||||
| (Dollars in thousands, except share data) | ||||
| Interest and dividend income: | ||||
| Interest and fees on loans | $ 4,798 | $ 4,574 | $ 19,061 | $ 18,690 |
| Interest on debt securities: | ||||
| Taxable | 235 | 183 | 958 | 600 |
| Other interest | 14 | 17 | 54 | 87 |
| Dividends on equity securities | 15 | 4 | 47 | 16 |
| Total interest and dividend income | 5,062 | 4,778 | 20,120 | 19,393 |
| Interest expense: | ||||
| Interest on deposits | 452 | 469 | 1,792 | 2,137 |
| Interest on Federal Home Loan Bank advances | 183 | 156 | 716 | 608 |
| Total interest expense | 635 | 625 | 2,508 | 2,745 |
| Net interest and dividend income | 4,427 | 4,153 | 17,612 | 16,648 |
| Provision for loan losses | -- | -- | -- | 200 |
| Net interest and dividend income, after provision for loan losses | 4,427 | 4,153 | 17,612 | 16,448 |
| Non-interest income: | ||||
| Customer service fees | 198 | 209 | 776 | 825 |
| Loan servicing fees, net | 9 | 13 | 39 | 43 |
| Net gain on sales of mortgage loans | 13 | -- | 24 | 189 |
| Net gain on sales of securities available-for-sale | -- | -- | 3 | -- |
| Increase in cash surrender value of life insurance | 153 | 157 | 632 | 643 |
| Other income | 18 | 23 | 136 | 154 |
| Total non-interest income | 391 | 402 | 1,610 | 1,854 |
| Non-interest expense: | ||||
| Salaries and employee benefits | 2,474 | 2,626 | 10,341 | 9,799 |
| Occupancy expense | 274 | 246 | 1,084 | 965 |
| Equipment expense | 122 | 96 | 446 | 390 |
| Professional fees | 90 | 172 | 613 | 570 |
| Advertising expense | 144 | 118 | 651 | 497 |
| Data processing expense | 226 | 216 | 896 | 853 |
| Deposit insurance expense | 79 | 57 | 280 | 268 |
| Merger expense | 778 | -- | 778 | -- |
| Other expense | 347 | 236 | 1,129 | 1,004 |
| Total non-interest expense | 4,534 | 3,767 | 16,218 | 14,346 |
| Income before income taxes | 284 | 788 | 3,004 | 3,956 |
| Provision for income taxes | 432 | 327 | 1,545 | 1,671 |
| Net (loss) income | $ (148) | $ 461 | $ 1,459 | $ 2,285 |
| Weighted-average shares outstanding: | ||||
| Basic | 5,639,461 | 5,763,952 | 5,672,374 | 5,875,741 |
| Diluted | 5,639,461 | 5,811,421 | 5,714,026 | 5,915,400 |
| (Loss) earnings per common share: | ||||
| Basic | $ (0.03) | $ 0.07 | $ 0.25 | $ 0.37 |
| Diluted | $ (0.03) | $ 0.07 | $ 0.25 | $ 0.37 |
| PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| Three Months Ended | ||
| September 30, | June 30, | |
| 2014 | 2014 | |
| (Unaudited) | ||
| (Dollars in thousands, except share data) | ||
| Interest and dividend income: | ||
| Interest and fees on loans | $ 4,798 | $ 4,831 |
| Interest on debt securities: | ||
| Taxable | 235 | 249 |
| Other interest | 14 | 13 |
| Dividends on equity securities | 15 | 14 |
| Total interest and dividend income | 5,062 | 5,107 |
| Interest expense: | ||
| Interest on deposits | 452 | 448 |
| Interest on Federal Home Loan Bank advances | 183 | 189 |
| Total interest expense | 635 | 637 |
| Net interest and dividend income | 4,427 | 4,470 |
| Provision for loan losses | -- | -- |
| Net interest and dividend income, after provision for loan losses | 4,427 | 4,470 |
| Non-interest income: | ||
| Customer service fees | 198 | 194 |
| Loan servicing fees, net | 9 | 9 |
| Net gain on sales of mortgage loans | 13 | -- |
| Increase in cash surrender value of life insurance | 153 | 150 |
| Other income | 18 | 23 |
| Total non-interest income | 391 | 376 |
| Non-interest expense: | ||
| Salaries and employee benefits | 2,474 | 2,602 |
| Occupancy expense | 274 | 272 |
| Equipment expense | 122 | 122 |
| Professional fees | 90 | 192 |
| Advertising expense | 144 | 174 |
| Data processing expense | 226 | 227 |
| Deposit insurance expense | 79 | 70 |
| Merger expense | 778 | -- |
| Other expense | 347 | 269 |
| Total non-interest expense | 4,534 | 3,928 |
| Income before income taxes | 284 | 918 |
| Provision for income taxes | 432 | 379 |
| Net (loss) income | $ (148) | $ 539 |
| Weighted-average shares outstanding: | ||
| Basic | 5,639,461 | 5,611,087 |
| Diluted | 5,639,461 | 5,678,343 |
| (Loss) earnings per common share: | ||
| Basic | $ (0.03) | $ 0.09 |
| Diluted | $ (0.03) | $ 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 September 30, | ||||||||
| 2014 | 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) | $ 491,507 | $ 4,798 | 3.90% | $ 460,109 | $ 4,574 | 3.98% | ||
| Taxable securities (3) | 47,000 | 235 | 2.00 | 43,861 | 183 | 1.67 | ||
| Other interest-earning assets | 28,938 | 14 | 0.19 | 33,521 | 17 | 0.20 | ||
| FHLB stock | 4,252 | 15 | 1.41 | 3,775 | 4 | 0.42 | ||
| Total interest-earning assets | 571,697 | 5,062 | 3.54 | 541,266 | 4,778 | 3.53 | ||
| Non-interest-earning assets | 36,258 | 35,540 | ||||||
| Total assets | $ 607,955 | $ 576,806 | ||||||
| Interest-bearing liabilities: | ||||||||
| Deposits: | ||||||||
| Savings | $ 55,764 | 15 | 0.11 | $ 55,991 | 14 | 0.10 | ||
| Money market accounts | 153,084 | 162 | 0.42 | 151,019 | 158 | 0.42 | ||
| NOW accounts | 43,165 | 6 | 0.06 | 39,075 | 6 | 0.06 | ||
| Term certificates | 124,355 | 269 | 0.87 | 122,769 | 291 | 0.95 | ||
| Total deposits | 376,368 | 452 | 0.48 | 368,854 | 469 | 0.51 | ||
| FHLB advances | 57,565 | 183 | 1.27 | 35,685 | 156 | 1.75 | ||
| Total interest-bearing liabilities | 433,933 | 635 | 0.59 | 404,539 | 625 | 0.62 | ||
| Demand deposits | 60,239 | 55,890 | ||||||
| Other non-interest-bearing liabilities | 9,689 | 9,782 | ||||||
| Total non-interest-bearing liabilities | 69,928 | 65,672 | ||||||
| Total liabilities | 503,861 | 470,211 | ||||||
| Stockholders' equity | 104,094 | 106,595 | ||||||
| Total liabilities and stockholders' equity | $ 607,955 | $ 576,806 | ||||||
| Net interest income | $ 4,427 | $ 4,153 | ||||||
| Net interest rate spread (4) | 2.95% | 2.91% | ||||||
| Net interest-earning assets (5) | $ 137,764 | $ 136,727 | ||||||
| Net interest margin (6) | 3.10% | 3.07% | ||||||
| Ratio of interest-earning assets | ||||||||
| to total interest-bearing liabilities | 1.32 | x | 1.34 | 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, | ||||||||
| 2014 | 2013 | |||||||
| Average | Interest | Average | Average | Interest | Average | |||
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | |||
| Balance | Paid | Rate | Balance | Paid | Rate | |||
| (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| Interest-earning assets: | ||||||||
| Loans (1) | $ 482,578 | $ 19,061 | 3.95% | $ 453,202 | $ 18,690 | 4.12% | ||
| Taxable securities (2) | 47,713 | 958 | 2.01 | 40,283 | 600 | 1.49 | ||
| Other interest-earning assets | 26,278 | 54 | 0.21 | 41,484 | 87 | 0.21 | ||
| FHLB stock | 4,019 | 47 | 1.17 | 3,880 | 16 | 0.41 | ||
| Total interest-earning assets | 560,588 | 20,120 | 3.59 | 538,849 | 19,393 | 3.60 | ||
| Non-interest-earning assets | 36,203 | 35,834 | ||||||
| Total assets | $ 596,791 | $ 574,683 | ||||||
| Interest-bearing liabilities: | ||||||||
| Deposits: | ||||||||
| Savings | $ 56,101 | 58 | 0.10 | $ 53,727 | 72 | 0.13 | ||
| Money market accounts | 152,107 | 628 | 0.41 | 152,967 | 767 | 0.50 | ||
| NOW accounts | 41,823 | 26 | 0.06 | 38,220 | 24 | 0.06 | ||
| Term certificates | 121,342 | 1,080 | 0.89 | 126,255 | 1,274 | 1.01 | ||
| Total deposits | 371,373 | 1,792 | 0.48 | 371,169 | 2,137 | 0.58 | ||
| FHLB advances | 53,616 | 716 | 1.34 | 33,518 | 608 | 1.81 | ||
| Total interest-bearing liabilities | 424,989 | 2,508 | 0.59 | 404,687 | 2,745 | 0.68 | ||
| Demand deposits | 57,490 | 52,293 | ||||||
| Other non-interest-bearing liabilities | 9,628 | 9,380 | ||||||
| Total non-interest-bearing liabilities | 67,118 | 61,673 | ||||||
| Total liabilities | 492,107 | 466,360 | ||||||
| Stockholders' equity | 104,684 | 108,323 | ||||||
| Total liabilities and stockholders' equity | $ 596,791 | $ 574,683 | ||||||
| Net interest income | $ 17,612 | $ 16,648 | ||||||
| Net interest rate spread (3) | 3.00% | 2.92% | ||||||
| Net interest-earning assets (4) | $ 135,599 | $ 134,162 | ||||||
| Net interest margin (5) | 3.14% | 3.09% | ||||||
| Ratio of interest-earning assets | ||||||||
| to total interest-bearing liabilities | 1.32 | x | 1.33 | 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, 2014 | June 30, 2014 | |||||||
| 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) | $ 491,507 | $ 4,798 | 3.90% | $ 489,204 | $ 4,831 | 3.95% | ||
| Taxable securities (3) | 47,000 | 235 | 2.00 | 48,094 | 249 | 2.07 | ||
| Other interest-earning assets | 28,938 | 14 | 0.19 | 24,599 | 13 | 0.21 | ||
| FHLB stock | 4,252 | 15 | 1.41 | 4,144 | 14 | 1.35 | ||
| Total interest-earning assets | 571,697 | 5,062 | 3.54 | 566,041 | 5,107 | 3.61 | ||
| Non-interest-earning assets | 36,258 | 36,286 | ||||||
| Total assets | $ 607,955 | $ 602,327 | ||||||
| Interest-bearing liabilities: | ||||||||
| Deposits: | ||||||||
| Savings | $ 55,764 | 15 | 0.11 | $ 55,810 | 15 | 0.11 | ||
| Money market accounts | 153,084 | 162 | 0.42 | 152,376 | 157 | 0.41 | ||
| NOW accounts | 43,165 | 6 | 0.06 | 42,488 | 7 | 0.07 | ||
| Term certificates | 124,355 | 269 | 0.87 | 122,694 | 269 | 0.88 | ||
| Total deposits | 376,368 | 452 | 0.48 | 373,368 | 448 | 0.48 | ||
| FHLB advances | 57,565 | 183 | 1.27 | 58,088 | 189 | 1.30 | ||
| Total interest-bearing liabilities | 433,933 | 635 | 0.59 | 431,456 | 637 | 0.59 | ||
| Demand deposits | 60,239 | 57,831 | ||||||
| Other non-interest-bearing liabilities | 9,689 | 9,395 | ||||||
| Total non-interest-bearing liabilities | 69,928 | 67,226 | ||||||
| Total liabilities | 503,861 | 498,682 | ||||||
| Stockholders' equity | 104,094 | 103,645 | ||||||
| Total liabilities and stockholders' equity | $ 607,955 | $ 602,327 | ||||||
| Net interest income | $ 4,427 | $ 4,470 | ||||||
| Net interest rate spread (4) | 2.95% | 3.02% | ||||||
| Net interest-earning assets (5) | $ 137,764 | $ 134,585 | ||||||
| Net interest margin (6) | 3.10% | 3.16% | ||||||
| Ratio of interest-earning assets | ||||||||
| to total interest-bearing liabilities | 1.32 | x | 1.31 | 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. | ||||||||