News Column

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

April 29, 2014

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,
 2014201320142013
 (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,
 20142013
 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,
 20142013
 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, 2014December 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) 254-0707

Source: Peoples Federal Bancshares, Inc.


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