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

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| Source: Peoples Federal Bancshares, Inc.

BRIGHTON, Mass., Jan. 30, 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 first quarter ended December 31, 2013. For the quarter ended December 31, 2013, the Company reported net income of $554,000 or $0.09 per share, basic and diluted, as compared to net income of $681,000 or $0.11 per share, basic and diluted, for the same period last year, and net income of $461,000, or $0.07 per share, basic and diluted, for the quarter ended September 30, 2013.

For both the quarters ended December 31, 2013 and 2012, net interest and dividend income totaled $4.3 million. 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. Non-interest income totaled $399,000 for the quarter ended December 31, 2013, as compared to $492,000 for the quarter ended December 31, 2012, as gain on sales of loans decreased $101,000, or 100.0%, during the current quarter. Non-interest expense totaled $3.8 million for the quarter ended December 31, 2013 as compared to $3.4 million for the quarter ended December 31, 2012.

On a linked quarter basis, total interest and dividend income was $4.9 million for the Company's fiscal quarter ended December 31, 2013 and as compared to $4.8 million for the previous quarter ended September 30, 2013. Non-interest income for the fiscal first quarter of 2014 decreased to $399,000 from $402,000 for the quarter ended September 30, 2013. Non-interest expense remained at $3.8 million for both the quarters ended December 31, 2013 and September 30, 2013.

Total assets increased $3.2 million, or 0.5%, to $588.4 million at December 31, 2013 from $585.2 million at September 30, 2013. Loans, net increased $4.4 million, or 0.9% during the quarter, as residential loans and construction loans increased, while commercial real estate, commercial loans and consumer loans decreased. Cash and cash equivalents decreased $6.0 million to $31.1 million at December 31, 2013 from $37.1 million at September 30, 2013. Securities available-for-sale and held-to-maturity in total increased $4.8 million, or 10.4%, to $51.1 million at December 31, 2013 from $46.3 million at September 30, 2013. Borrowings increased to $52.0 million at December 31, 2013 from $44.0 million at September 30, 2013.

Deposits decreased $2.6 million to $422.5 million at December 31, 2013 from $425.1 million at September 30, 2013. NOW accounts increased $4.2 million and money market accounts increased $1.1 million during the December 31, 2013 quarter. Demand deposits decreased $3.2 million, savings accounts decreased $218,000, and term certificates decreased $4.5 million during the same quarter. At December 31, 2013, total stockholders' equity was $105.2 million, a decrease of $1.2 million from $106.4 million at September 30, 2013, resulting primarily from dividends paid of $1.7 million and the repurchase and retirement of 34,607 shares or $607,000, of the Company's common stock pursuant to the Company's stock repurchase plan. The decline in stockholder's equity was offset, in part, by net income of $554,000, stock based compensation expense of $525,000 and common stock released by the ESOP of $124,000.

During the quarters ended December 31, 2013 and 2012, the Company paid quarterly cash dividends of $0.04 and $0.03 per common share, respectively. In addition, during both the December 31, 2013 and 2012 quarters, the Company paid special cash dividends of $0.25 per common share. Dividends paid totaled $1.7 million for each of the quarters ended December 31, 2013 and 2012.   

Non-performing assets totaled $2.8 million, or 0.5% of total assets, at December 31, 2013, compared to $2.1 million, or 0.4% of total assets, at September 30, 2013. Classified assets decreased to $3.6 million at December 31, 2013, as compared to $4.1 million at September 30, 2013. The Company did not provide to the allowance for loan losses during the quarter ended December 31, 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
     
  December 31, September 30,
  2013 2013
  (Unaudited)  
  (In thousands, except share data)
ASSETS
Cash and due from banks  $ 4,438  $ 4,047
Interest-bearing demand deposits with other banks  24,363  30,906
Federal funds sold  239  79
Federal Home Loan Bank - overnight deposit  2,102  2,102
Total cash and cash equivalents  31,142  37,134
Securities available-for-sale  13,246  14,225
Securities held-to-maturity (fair values of $37,524 and $32,105)  37,871  32,054
Federal Home Loan Bank stock (at cost)   3,775  3,775
Loans   474,438  470,086
Allowance for loan losses   (4,019)  (4,037)
Loans, net   470,419  466,049
Premises and equipment, net  3,431  3,465
Cash surrender value of life insurance policies  20,175  20,007
Accrued interest receivable   1,327  1,448
Deferred income tax asset, net  5,329  5,432
Other assets   1,636  1,657
Total assets  $ 588,351  $ 585,246
     
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:    
Non-interest bearing  $ 54,703  $ 57,891
Interest-bearing  367,764  367,202
Total deposits  422,467  425,093
Short-term borrowings  8,000  6,000
Long-term debt  44,000  38,000
Accrued expenses and other liabilities  8,701  9,801
Total liabilities  483,168  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; 
6,431,327 and 6,465,934 shares issued and outstanding at December 31, 2013 and  September 30, 2013, respectively 
 64  65
Additional paid-in capital  59,619  60,039
Retained earnings  53,923  55,103
Accumulated other comprehensive loss  (61)  (30)
Unearned restricted shares; 233,387 and 256,894 shares at December 31, 2013 and  September 30, 2013, respectively  (3,791)  (4,183)
Unearned compensation - ESOP  (4,571)  (4,642)
Total stockholders' equity  105,183  106,352
Total liabilities and stockholders' equity  $ 588,351  $ 585,246
 
 
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
     
CONSOLIDATED STATEMENTS OF INCOME
     
  Three Months Ended
  December 31,
  2013 2012
  (Unaudited)
  (Dollars in thousands, except share data)
Interest and dividend income:    
Interest and fees on loans  $ 4,673  $ 4,853
Interest on debt securities:    
Taxable  233  150
Other interest  15  18
Dividends on equity securities  4  5
Total interest and dividend income  4,925  5,026
     
Interest expense:    
Interest on deposits  454  612
Interest on Federal Home Loan Bank advances  168  150
Total interest expense  622  762
Net interest and dividend income  4,303  4,264
Provision for loan losses  --  120
Net interest and dividend income, after provision for loan losses  4,303  4,144
     
Non-interest income:    
Customer service fees  196  210
Loan servicing fees, net  13  8
Net gain on sales of mortgage loans  --  101
Increase in cash surrender value of life insurance  168  162
Other income  22  11
Total non-interest income  399  492
     
Non-interest expense:    
Salaries and employee benefits   2,610  2,326
Occupancy expense  228  229
Equipment expense  99  106
Professional fees  157  117
Advertising expense  133  129
Data processing expense  219  208
Deposit insurance expense  61  69
Other expense  253  257
Total non-interest expense  3,760  3,441
Income before income taxes  942  1,195
Provision for income taxes   388  514
Net income  $ 554  $ 681
     
Weighted-average shares outstanding:    
Basic  5,746,458  5,975,422
Diluted  5,810,294  6,031,289
     
Earnings per common share:    
Basic  $ 0.09  $ 0.11
Diluted  $ 0.09  $ 0.11
 
 
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARIES
     
CONSOLIDATED STATEMENTS OF INCOME
     
  Three Months Ended
  December 31, September 30,
  2013 2013
  (Unaudited)
  (Dollars in thousands, except share data)
Interest and dividend income:    
Interest and fees on loans  $ 4,673  $ 4,574
Interest on debt securities:    
Taxable  233  183
Other interest  15  17
Dividends on equity securities  4  4
Total interest and dividend income  4,925  4,778
     
Interest expense:    
Interest on deposits  454  469
Interest on Federal Home Loan Bank advances  168  156
Total interest expense  622  625
Net interest and dividend income  4,303  4,153
Provision for loan losses  --  --
Net interest and dividend income, after provision for loan losses  4,303  4,153
     
Non-interest income:    
Customer service fees  196  209
Loan servicing fees, net  13  13
Increase in cash surrender value of life insurance  168  157
Other income  22  23
Total non-interest income  399  402
     
Non-interest expense:    
Salaries and employee benefits   2,610  2,626
Occupancy expense  228  246
Equipment expense  99  96
Professional fees  157  172
Advertising expense  133  118
Data processing expense  219  216
Deposit insurance expense  61  57
Other expense  253  236
Total non-interest expense  3,760  3,767
Income before income taxes  942  788
Provision for income taxes   388  327
Net income   $ 554  $ 461
     
Weighted-average shares outstanding:    
Basic  5,746,458  5,763,952
Diluted  5,810,294  5,811,421
     
Earnings per common share:    
Basic  $ 0.09  $ 0.07
Diluted  $ 0.09  $ 0.07

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,
  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)  $ 467,306  $ 4,673 4.00%  $ 452,554  $ 4,853 4.29%
Taxable securities (3)  49,126  233  1.90  42,062  150  1.43
Other interest-earning assets  27,414  15  0.22  35,656  18  0.20
FHLB stock  3,775  4  0.42  4,014  5  0.50
Total interest-earning assets  547,621  4,925  3.60  534,286  5,026  3.76
Non-interest-earning assets  35,806      37,373    
Total assets  $ 583,427      $ 571,659    
             
Interest-bearing liabilities:            
Deposits:            
Savings   $ 56,362  14  0.10  $ 50,814  20  0.16
Money market accounts  150,495  155  0.41  153,038  235  0.61
NOW accounts  41,054  7  0.07  37,085  6  0.06
Term certificates  118,657  278  0.94  127,764  351  1.10
Total deposits  366,568  454  0.50  368,701  612  0.66
FHLB advances  44,326  168  1.52  32,457  150  1.85
Total interest-bearing liabilities  410,894  622  0.61  401,158  762  0.76
Demand deposits  56,014      50,643    
Other non-interest-bearing liabilities  10,564      9,654    
Total non-interest-bearing liabilities  66,578      60,297    
Total liabilities  477,472      461,455    
Stockholders' equity  105,955      110,204    
Total liabilities and stockholders' equity  $ 583,427      $ 571,659    
             
Net interest income    $ 4,303      $ 4,264  
Net interest rate spread (4)     2.99%     3.00%
Net interest-earning assets (5)  $ 136,727      $ 133,128    
Net interest margin (6)     3.14%     3.19%
Ratio of interest-earning assets to total interest-bearing liabilities  1.33 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.
 
  Three Months Ended 
  December 31, 2013 September 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)  $ 467,306  $ 4,673 4.00%  $ 460,109  $ 4,574 3.98%
Taxable securities (3)  49,126  233  1.90  43,861  183  1.67
Other interest-earning assets  27,414  15  0.22  33,521  17  0.20
FHLB stock  3,775  4  0.42  3,775  4  0.42
Total interest-earning assets  547,621  4,925  3.60  541,266  4,778  3.53
Non-interest-earning assets  35,806      35,540    
Total assets  $ 583,427      $ 576,806    
             
Interest-bearing liabilities:            
Deposits:            
Savings   $ 56,362  14  0.10  $ 55,991  14  0.10
Money market accounts  150,495  155  0.41  151,019  158  0.42
NOW accounts  41,054  7  0.07  39,075  6  0.06
Term certificates  118,657  278  0.94  122,769  291  0.95
Total deposits  366,568  454  0.50  368,854  469  0.51
FHLB advances  44,326  168  1.52  35,685  156  1.75
Total interest-bearing liabilities  410,894  622  0.61  404,539  625  0.62
Demand deposits  56,014      55,890    
Other non-interest-bearing liabilities  10,564      9,782    
Total non-interest-bearing liabilities  66,578      65,672    
Total liabilities  477,472      470,211    
Stockholders' equity  105,955      106,595    
Total liabilities and stockholders' equity  $ 583,427      $ 576,806    
             
Net interest income    $ 4,303      $ 4,153  
Net interest rate spread (4)     2.99%     2.91%
Net interest-earning assets (5)  $ 136,727      $ 136,727    
Net interest margin (6)     3.14%     3.07%
Ratio of interest-earning assets to total interest-bearing liabilities  1.33 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.
Maurice H. Sullivan, Jr.
(617) 254-0707