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) 254-0707

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