updated 2/7/2011 5:17:39 PM ET 2011-02-07T22:17:39

BRIGHTON, Mass., Feb. 7, 2011 (GLOBE NEWSWIRE) -- Peoples Federal Bancshares, Inc. (the "Company") (Nasdaq:PEOP), the holding company for Peoples Federal Savings Bank (the "Bank"), announced first quarter earnings for the fiscal year ending September 30, 2011. For the three months ended December 31, 2010, the Company reported net income of $977,000 or $0.15 per share, basic and diluted, as compared to net income of $858,000 for the same period last year. The Company's mutual-to-stock conversion occurred on July 6, 2010, therefore, earnings per share are not presented for periods where the shares were not outstanding for the entire period.

Net interest income for the three months ended December 31, 2010 totaled $4.1 million as compared to $3.4 million for the three months ended December 31, 2009.    Noninterest income totaled $539,000, which included $0 gain on the sales of available for-sale-securities for the three months ended December 31, 2010 as compared to $651,000, which included $210,000 gain on the sales of available-for-sale securities for the three months ended December 31, 2009.   Noninterest expense totaled $3.1 million for the three months ended December 31, 2010 as compared to $2.7 million for the three months ended December 31, 2009, reflecting higher salaries and employee benefits and increases in other operating expenses.   

Since September 30, 2010, the Company's balance sheet has decreased by $15.7 million or 2.9%, to $530.2 million. Net loans increased 4.5%. The increase in loans was primarily due to lending in the residential and commercial real estate loan categories. Cash and cash equivalents decreased by $33.8 million to $80.1 million at December 31, 2010 from $113.9 million at September 30, 2010. This decrease was the result of investing a portion of the stock offering proceeds in available-for-sale securities. FHLB borrowings decreased by $9.0 million, or 27.3%, from September 30, 2010.  Deposits decreased by $7.5 million to $383.3 million at December 31, 2010 from $390.8 million at September 30, 2010.

Asset quality has remained stable as non performing assets totaled $2.5 million or 0.47 % of total assets at December 31, 2010, as compared to $3.0 million or 0.54 % of total assets at September 30, 2010.   The Company did provide an additional $60,000 to the provision for loan losses during the quarter ended December 31, 2010 reflecting a $16.8 million increase in net loans.  

Maurice H. Sullivan, Jr., Chairman and Chief Executive Officer of the Company, commented that "Peoples Federal Bancshares, Inc. has begun our first fiscal year after the successful completion of our initial public offering in July 2010. As we implement our plans for the deployment of the capital raised, we will remember the discipline that was used to responsibly grow the Company in the past. We are committed to building profitable lending and deposit relationships, continuing to provide the products and services demanded by our customers and working to strategically lend and invest in the greater Boston market that we serve."

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 SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
     
  December 31, September 30,
  2010 2010
  (In Thousands, except share data)
ASSETS   (unaudited)  
Cash and due from banks  $9,135 $9,154
Interest-bearing demand deposits with other banks and money market mutual funds 38,527 66,888
Federal funds sold  8,999 12,505
Federal Home Loan Bank - overnight deposit  23,420 25,316
Total cash and cash equivalents  80,081 113,863
Investments in available-for-sale securities (at fair value)  25,492 23,596
Federal Home Loan Bank stock, at cost  4,339 4,339
Loans, net of allowance for loan losses of $3,203 as of September 30, 2010 and $3,204 as of September 30, 2009  394,497 377,664
Loans Held for Sale   --  260
Other real estate owned  353 795
Premises and equipment  3,234 3,257
Accrued interest receivable  1,415 1,589
Cash surrender value of life insurance policies  11,786 11,670
Deferred income tax asset, net  5,462 5,647
Other assets  3,538 3,257
 Total assets  $530,197 $545,937
     
LIABILITIES AND EQUITY     
Deposits:     
 Noninterest-bearing  $33,260 $35,359
 Interest-bearing  350,044 355,480
 Total deposits  383,304 390,839
Federal Home Loan Bank advances  24,000 33,000
Other liabilities  7,293 7,738
 Total liabilities  414,597 431,577
     
Stockholders' Equity:     
 Preferred stock, $.01 par value, 50,000,000 shares authorized, none issued   --   -- 
Common stock, $.01, par value, 100,000,000 shares authorized, 7,141,500 shares issued and outstanding  71 71
 Additional paid-in-capital  69,343 69,331
 Retained earnings  51,583 50,606
 Accumulated other comprehensive income  20 65
 Unearned ESOP shares  (5,417) (5,713)
 Total stockholders' equity  115,600 114,360
 Total liabilities and stockholders' equity  $530,197 $545,937
     
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31, 2010 and 2009
     
  2010 2009
  (In Thousands)
  (unaudited)
Interest and dividend income:     
 Interest and fees on loans  $5,076 $5,131
 Interest on debt securities:     
 Taxable  75 59
 Other interest  44 17
 Total interest and dividend income  5,195 5,207
Interest expense:     
 Interest on deposits  890 1,320
 Interest on Federal Home Loan Bank advances  245 473
 Total interest expense  1,135 1,793
 Net interest and dividend income  4,060 3,414
Provision for loan losses  60  --
Net interest and dividend income after provision for loan losses  4,000 3,414
Noninterest income:     
 Customer service fees  209 209
 Loan servicing fees  26 26
 Net gain on sales of mortgage loans  99 73
 Net gain on sales of available-for-sale securities   -- 210
 Income on cash surrender value of life insurance  117 100
 Other income  88 33
 Total noninterest income  539 651
Noninterest expense:     
 Salaries and employee benefits  2,004 1,746
 Occupancy expense  208 192
 Equipment expense  109 105
 Professional fees  113 125
 Advertising expense  33 42
 Data processing expense  186 118
 Deposit insurance expense  123 115
 Other expense  324 208
 Total noninterest expense  3,100 2,651
 Income before income taxes  1,439 1,414
Income tax expense  462 556
 Net income  $977 $858
     
Earnings per share:     
Basic  $.15  N/A
Diluted  $.15  N/A
CONTACT: Maurice H. Sullivan, Jr.
         (617) 254-0707

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