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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 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   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; 6,465,934 and 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)
and  2012, 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
assets to 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
assets to 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
assets to 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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