Peoples Federal Bancshares, Inc. (PEOP-NASDAQ)

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April 6, 2012 Issue

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Operating a community based financial institution in the greater Boston area for over 100 years - Peoples Federal Bancshares, Inc. now has 7 full-service branch locations with consistent earnings, solid assets and minimal non-performing loans

Company Profile:
www.pfsb.com

Peoples Federal Bancshares, Inc. is the parent company of Peoples Federal Savings Bank, a community-oriented financial institution operating seven full-service branch locations in the greater Boston area. Peoples Federal Savings Bank offers a broad array of retail and commercial lending and deposit services.

Maurice H. Sullivan, Jr.
Chairman and Chief Executive Officer

Maurice H. Sullivan, Jr. is our Chairman and Chief Executive Officer. Mr. Sullivan has served as a board member of Peoples Federal Savings Bank since 1971, has served as Chairman of the Board since 1987 and has served as the Chairman and Chief Executive Officer of Peoples Federal MHC and Peoples Federal Bancorp, Inc. since their formation in 2005. Mr. Sullivan previously was a practicing attorney. He is the father of Board member Maurice H. Sullivan, III. Mr. Sullivan has served on the Boards of several community organizations, including Caritas St. Elizabeth's Medical Center, WGBH Community Advisory Board and the West End House/Allston-Brighton Boys and Girls Club. Mr. Sullivan is a graduate of the University of Notre Dame and Boston College Law School.

Interview conducted by: Lynn Fosse, Senior Editor
CEOCFO Magazine, Published - April 6, 2012
 

Financial
Regional - Northeast Banks
(PEOP-NASDAQ)

Peoples Federal Bancshares, Inc.
435 Market Street
Brighton, MA 02135
Phone: 617-254-0707
www.pfsb.com
 

CEOCFO: Mr. Sullivan, every bank has a philosophy or way of looking at things, what about Peoples Federal Bancshares?

Mr. Sullivan: I would describe the bank as a very community based organization. We have been here well over a hundred years. We have made it our business of providing services to the community. Everybody is involved in all aspects of our business, in providing services and opportunities to people in the areas where we exist.

CEOCFO: What about the geography, how has it faired compared to the rest of the country these days?

Mr. Sullivan: We are in Brighton Massachusetts, which is part of the city of Boston. We have seven branches, all of which are contiguous and most of which are in the City. The City of Boston has faired very well through the last few years and through the economic downturn. We have been very fortunate in the sense that there has been very little diminution of property values and employment opportunities. We were affected obviously, but not as much as other areas of the country. Compared to other parts of the country we have done very well.

CEOCFO: How does Peoples Federal break down between consumer and commercial, and would you like to see the mix changing?

Mr. Sullivan: We do both. We have people that come into the bank wanting to borrow for homes, personal loans and car loans, so we provide those services. We also do a fair amount of commercial loans. We are not your traditional thrift. We have lent over the years to not only the one to four family owner-occupied residences, but on store blocks, small office buildings, apartment buildings, and similar kinds of loans. We find there has been a great demand over the years, for that product mix.

CEOCFO: What has changed for Peoples Federal over the last few years in how you either approach your customers or approach your credit, in general?

Mr. Sullivan: I do not think a lot has changed. Obviously, we are concerned with maintaining good asset quality. We focus on that, and always have. When you have times like this, you have to be concerned about what you have on the books and good asset quality. I do not think our outlook towards people or towards our business has changed dramatically; a little more defensive, maybe a little bit more cautious of where we are going.

CEOCFO: Looking at the People Federal website, I see “Get a Better Deal,” on many of the pages. How do you give a better deal, and in general what are people finding at your bank that they may not find at other banks?

Mr. Sullivan: Service is our trademark. When people come in the door, we know who they are. I can go out into the lobby of our offices and greet our customers on a name basis, which goes a long way. They can sit down and discuss their business needs with us, without feeling as though they are talking to somebody on the phone. If somebody calls us, he or she gets a return call; they do not just get a voicemail when calling Peoples. The personal aspect of things is a very important part of that.

CEOCFO: Are there many other community banks in your area, and how does Peoples Federal compare with the competition?

Mr. Sullivan: If you step out the door of our location here in Brighton and look in any direction, you will see every major bank located in Boston as well as another local community bank. We compare very well to all of those. If you do not compete, you are not going to get very far in this world and we do very well in that regard. Our mortgage and deposit rates have to be competitive. We also have to be competitive in technology and all aspects of the banking business today.

CEOCFO: Will Peoples Federal be adding additional branches and additional services?

Mr. Sullivan: We are looking at that. Nothing is off the table as far as growth and expansion is concerned. We just opened a branch in Newton Massachusetts, which has been in operation now for about six months. It is contiguous to our location here, and it has done very well. It is a nice neighborhood and it compliments our operation. If we do open another branch, the focus will be the same. It will be something contiguous to our existing branch operation and something that compliments our existing branch operations. We are very mindful of that. We do not want to go too far just for the sake of establishing a branch.

CEOCFO: Do you do much advertising?

Mr. Sullivan: We have a fair amount. We started an advertising campaign in connection with the new branch, and it is working out pretty well.

CEOCFO: What are the intangibles you look for in your people?

Mr. Sullivan: We look for people who are knowledgeable, personable and that we know are of good character. We also look for people who can blend with their co-workers, get along and work well with customers. We look for a well-rounded individual who fits into the culture.

CEOCFO: How do you work with your customers and reassure them over the last few years that things will get better and their money is safe, because everybody is still skittish?

Mr. Sullivan: Yes, they are very skittish and we have seen that here. We try to reassure people that we are interested in them. If a homeowner has difficulty, we are more than happy to work with them. We have modified loans to make sure that people can stay in their houses. It is important to us that we work that way. In my 40 years here, homeowner mortgage foreclosures have been insignificant.   We work with people and that is why we are here.

CEOCFO: How important is the history, do people care anymore?

Mr. Sullivan: We sit around and talk about that quite a bit, but history is a great teacher. I remember the last go-round in the 1980’s and early 1990’s. We saw many banks that went public. We only went public about a year and a half ago, but we saw how people used their capital and how many of those banks went out of business, because they were not very careful with it. We learned a lot during that period. We saw how people operated, we saw the negative effects of it and we learned something from it, which was very helpful to us through this last economic downturn.

CEOCFO: Why was that the right time Peoples Federal to go public?

Mr. Sullivan: We thought about it some years ago. We initially established a mutual holding company, non-stock mutual holding company and we thought at that point in time that we might have an offering out of the mutual holding company. However, the economy turned down and our own concept of things also changed, so we put it on the shelf for a little while. Then we decided, after reevaluating things that the best thing to do was to have a full conversion and go public in that capacity. We have been here for fifteen months and everything seems to be moving along ok.

CEOCFO: What is the financial picture like for Peoples Federal Bancshares?

Mr. Sullivan: The financial picture for us is good. Our earnings are consistent, we have good solid assets and our non-performing loans are minimal, so it is looking good. We are very happy to be where we are at this point in time.

CEOCFO: Why should investors pay attention to Peoples Federal Bancshares today?

Mr. Sullivan: We have a great balance sheet, good asset quality, a nice deposit base, a terrific branch network and great employees. We have everything that everybody would like to be.

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We have everything that everybody would like to be. - Maurice H. Sullivan Jr.