updated 5/2/2011 4:17:08 PM ET 2011-05-02T20:17:08

BRIGHTON, Mass., May 2, 2011 (GLOBE NEWSWIRE) -- Peoples Federal Bancshares, Inc. (the "Company") (Nasdaq:PEOP), the holding company for Peoples Federal Savings Bank (the "Bank"), announced second quarter and year to date earnings for the fiscal year ending September 30, 2011. For the quarter ended March 31, 2011, the Company reported net income of $824,000 or $0.12 per share, basic and diluted, as compared to net income of $861,000 for the quarter ended March 31, 2010. For the six months ended March 31, 2011, the Company reported net income of $1.8 million or $0.27 per share, basic and diluted, as compared to net income of $1.7 million 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 and dividend income for the quarter ended March 31, 2011 totaled $4.1 million as compared to $4.0 million for the quarter ended March 31, 2010. Noninterest income totaled $437,000 for the quarter ended March 31, 2011 as compared to $371,000 for the same period last year. Noninterest expense totaled $3.2 million for the quarter ended March 31, 2011 as compared to $2.6 million for the quarter ended March 31, 2010, reflecting higher salaries and employee benefits, increased professional fees associated with the operation as a public company and increases in other operating expenses in the 2011 period.

Net interest and dividend income for the six months ended March 31, 2011 totaled $8.2 million as compared to $7.4 million for the six months ended March 31, 2010. Noninterest income totaled $976,000 for the six months ended March 31, 2011 as compared to $1.0 million for the six months ended March 31, 2010, which included a $210,000 gain on the sales of available-for-sale securities. Noninterest expense totaled $6.3 million for the six months ended March 31, 2011 as compared to $5.3 million for the six months ended March 31, 2010, reflecting higher salaries and employee benefits, increased professional fees associated with the operation as a public company and increases in other operating expenses in the 2011 period.  

Since September 30, 2010, the Company's balance sheet has decreased by $17.4 million or 3.2%, to $528.6 million although net loans increased 4.2%. The increase in loans was primarily due to lending in the residential and commercial real estate loan categories. Cash and cash equivalents decreased by $47.6 million to $66.2 million at March 31, 2011 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 as well as the increase in net loans. FHLB borrowings decreased by $10.0 million, or 30.3%, from September 30, 2010.  Deposits decreased by $8.7 million to $382.2 million at March 31, 2011 from $390.8 million at September 30, 2010.

Non performing assets totaled $2.0 million or 0.38% of total assets at March 31, 2011, as compared to $3.0 million or 0.55% of total assets at September 30, 2010. Classified assets increased during the six months ended March 31, 2011 to $11.6 million as compared to $6.2 million as of September 30, 2010. The increase in classified assets is primarily due to one lending relationship, totaling $4.9 million, collateralized by a construction loan and further collateralized by other residential properties being classified substandard during the quarter. The Company did provide an additional $220,000 to the provision for loan losses during the six months ended March 31, 2011, reflecting a $16.0 million increase in net loans.    

Maurice H. Sullivan, Jr., Chairman and Chief Executive Officer of the Company, commented that, "Peoples Federal Bancshares, Inc. has continued to focus on building a strong banking franchise that competes for both deposit and lending relationships in the greater Boston market that we serve. To that end, we expect to open a full service branch location in West Newton, Massachusetts in the upcoming months. This new branch will be our first location in Middlesex County, Massachusetts and we look forward to expanding our franchise and serving customers in that portion of the greater Boston area." 

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
     
     
  March 31, 2011 September 30, 2010
  (unaudited)   
   (In Thousands, except share data)
ASSETS    
Cash and due from banks $9,359 $9,154
Interest-bearing demand deposits with other banks and money market mutual funds 40,285 66,888
Federal funds sold 8,154 12,505
Federal Home Loan Bank - overnight deposit 8,422 25,316
Total cash and cash equivalents 66,220 113,863
Investments in available-for-sale securities (at fair value) 31,407 23,596
Federal Home Loan Bank stock, at cost 4,339 4,339
Loans, net of allowance for loan losses of $3,318 as of March 31, 2011 (unaudited) and $3,203 as of September 30, 2010 393,682 377,664
Loans held-for-sale 0 260
Other real estate owned 551 795
Premises and equipment 3,192 3,257
Accrued interest receivable 1,506 1,589
Cash surrender value of life insurance policies 18,409 11,670
Deferred income tax asset, net 5,488 5,647
Other assets 3,761 3,257
Total assets $528,555 $545,937
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Deposits:    
Noninterest-bearing $34,100 $35,359
Interest-bearing 348,059 355,480
Total deposits 382,159 390,839
Federal Home Loan Bank advances 23,000 33,000
Other liabilities 6,911 7,738
Total liabilities 412,070 431,577
     
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  69,370 69,331
Retained earnings 52,407 50,606
Accumulated other comprehensive (loss) income  (17) 65
Unearned ESOP shares  (5,346) (5,713)
Total stockholders' equity 116,485 114,360
Total liabilities and stockholders' equity $528,555 $545,937
 
PEOPLES FEDERAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
         
  Three Months Ended

March 31
Six Months Ended

March 31, 
   2011    2010   2011    2010  
  (In Thousands)
  (unaudited)
         
Interest and dividend income:        
Interest and fees on loans $5,059 $5,486 $10,135 $10,617
Interest on debt securities:        
Taxable 69 11 143 70
Other interest 29 18 74 35
Dividends on Federal Home Loan Bank stock 3  — 3  ---
Total interest and dividend income 5,160 5,515 10,355 10,722
Interest expense:        
Interest on deposits 835 1,149 1,726 2,469
Interest on Federal Home Loan Bank advances 184 419 428 892
Total interest expense 1,019 1,568 2,154 3,361
Net interest and dividend income 4,141 3,947 8,201 7,361
Provision for loan losses 160 300 220 300
Net interest and dividend income after provision for loan losses 3,981 3,647 7,981 7,061
Noninterest income:        
Customer service fees 192 197 401 406
Loan servicing fees 26 25 52 51
Net gain on sales of mortgage loans 24 7 123 80
Net gain on sales of available-for-sale securities -- -- -- 210      
Income on cash surrender value of life insurance 123 116 240 216
Other income 72 26        160  59 
Total noninterest income 437 371 976 1,022
Noninterest expense:        
Salaries and employee benefits 1,965 1,652 3,968 3,397
Occupancy expense 230 212 439 404
Equipment expense 104 100 213 206
Professional fees 217 59 330 184
Advertising expense 30 32 63 74
Data processing expense 190 185 376 303
Deposit insurance expense 119 123 242 238
Other expense 306 256 629 464
Total noninterest expense 3,161 2,619 6,260 5,270
Income before income taxes 1,257 1,399 2,697 2,813
Income tax expense 433 538 896 1,094
 Net income $824 $861 $1,801 $1,719
Earnings per common share:         
Basic  $0.12 N/A  $0.27 N/A
Diluted  $0.12 N/A  $0.27 N/A
CONTACT: Maurice H. Sullivan, Jr.
         (617) 254-0707

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