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Peoples Federal Bancshares, Inc. Announces Fourth Quarter and Fiscal 2013 Financial Results

Peoples Federal Bancshares, Inc. Announces Fourth Quarter and Fiscal 2013
Financial Results

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 resultingprimarily 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  30,906         27,378
banks
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  32,054         25,921
$32,105 and $26,746)
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       20,007         19,364
policies
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;6,465,934and 6,726,904   65             67
shares issued and outstanding at September
30, 2013 and 2012, respectively
Additional paid-in capital                   60,039         63,909
Retained earnings                            55,103         55,153
Accumulated other comprehensive (loss)       (30)           113
income
Unearned restricted shares; 256,894 and
244,140 shares at September 30, 2013         (4,183)        (3,777)
and2012, respectively
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 156       155       608       564
advances
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,  4,153     4,120     16,448    16,470
after provision for loan losses
                                                                
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      --        120       189       169
loans
Increase in cash surrender value   157       161       643       651
of life insurance
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         156                152
advances
Total interest expense                     625                653
Net interest and dividend income           4,153              4,167
Provision for loan losses                  --                 --
Net interest and dividend income, after    4,153              4,167
provision for loan losses
                                                             
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   157                143
insurance
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    Balance      Paid     Rate
                                            (1)                            (1)
                    (Unaudited)
                    (Dollars in thousands)
Interest-earning                                                    
assets:
Loans (2)            $460,109   $4,574 3.98%   $441,232   $4,857 4.40%
Taxable securities   43,861      183     1.67   51,701      191     1.48
(3)
Other
interest-earning     33,521      17      0.20   29,321      14      0.19
assets
FHLB stock           3,775       4       0.42   4,014       5       0.50
Total
interest-earning     541,266     4,778   3.53   526,268     5,067   3.85
assets
Non-interest-earning 35,540                     36,992              
assets
Total assets         $576,806                  $563,260           
                                                                   
Interest-bearing                                                    
liabilities:
Deposits:                                                           
Savings             $55,991    14      0.10   $49,616    18      0.15
Money market         151,019     158     0.42   153,091     236     0.62
accounts
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     404,539     625     0.62   397,319     782     0.79
liabilities
Demand deposits      55,890                     45,791              
Other
non-interest-bearing 9,782                      9,017               
liabilities
Total
non-interest-bearing 65,672                     54,808              
liabilities
Total liabilities    470,211                    452,127             
Stockholders' equity 106,595                    111,133             
Total liabilities
and stockholders'    $576,806                  $563,260           
equity
                                                                   
Net interest income              $4,153                    $4,285 
Net interest rate                        2.91%                       3.06%
spread (4)
Net interest-earning $136,727                  $128,949           
assets (5)
Net interest margin                      3.07%                       3.26%
(6)
Ratio of
interest-earning
assetsto total      1.34       x                1.32       x         
interest-bearing
liabilities
                                                                   
(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   40,283      600      1.49   56,856      914      1.61
(2)
Other
interest-earning     41,484      87       0.21   28,864      73       0.25
assets
FHLB stock           3,880       16       0.41   4,155       19       0.46
Total
interest-earning     538,849     19,393   3.60   512,073     20,329   3.97
assets
Non-interest-earning 35,834                      44,030               
assets
Total assets         $574,683                   $556,103            
                                                                     
Interest-bearing                                                      
liabilities:
Deposits:                                                             
Savings             $53,727    72       0.13   $48,675    90       0.18
Money market         152,967     767      0.50   153,789     1,066    0.69
accounts
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     404,687     2,745    0.68   392,230     3,319    0.85
liabilities
Demand deposits      52,293                      41,816               
Other
non-interest-bearing 9,380                       8,762                
liabilities
Total
non-interest-bearing 61,673                      50,578               
liabilities
Total liabilities    466,360                     442,808              
Stockholders' equity 108,323                     113,295              
Total liabilities
and stockholders'    $574,683                   $556,103            
equity
                                                                     
Net interest income              $16,648                    $17,010 
Net interest rate                         2.92%                        3.12%
spread (3)
Net interest-earning $134,162                   $119,843            
assets (4)
Net interest margin                       3.09%                        3.32%
(5)
Ratio of
interest-earning
assetsto total      1.33       x                 1.31       x          
interest-bearing
liabilities
                                                                     
(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    Balance      Paid     Rate
                                            (1)                            (1)
                    (Unaudited)
                    (Dollars in thousands)
Interest-earning                                                    
assets:
Loans (2)            $460,109   $4,574 3.98%   $450,486   $4,644 4.12%
Taxable securities   43,861      183     1.67   39,533      147     1.49
(3)
Other
interest-earning     33,521      17      0.20   44,511      26      0.23
assets
FHLB stock           3,775       4       0.42   3,775       3       0.32
Total
interest-earning     541,266     4,778   3.53   538,305     4,820   3.58
assets
Non-interest-earning 35,540                     35,920              
assets
Total assets         $576,806                  $574,225           
                                                                   
Interest-bearing                                                    
liabilities:
Deposits:                                                           
Savings             $55,991    14      0.10   $54,572    17      0.12
Money market         151,019     158     0.42   152,231     173     0.45
accounts
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     404,539     625     0.62   404,272     653     0.65
liabilities
Demand deposits      55,890                     52,647              
Other
non-interest-bearing 9,782                      9,089               
liabilities
Total
non-interest-bearing 65,672                     61,736              
liabilities
Total liabilities    470,211                    466,008             
Stockholders' equity 106,595                    108,217             
Total liabilities
and stockholders'    $576,806                  $574,225           
equity
                                                                   
Net interest income              $4,153                    $4,167 
Net interest rate                        2.91%                       2.93%
spread (4)
Net interest-earning $136,727                  $134,033           
assets (5)
Net interest margin                      3.07%                       3.10%
(6)
Ratio of
interest-earning
assetsto total      1.34       x                1.33       x         
interest-bearing
liabilities
                                                                   
(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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