The parent of Peoples Federal Savings Bank has declared a special cash dividend of $5 a share. It will be paid Oct. 28 to shareholders of record Oct. 18.

The holding company's stock closed at $23.75 Monday, a record, with the stock's second highest volume ever. The price was up 10.5 percent from $21.50 Thursday - the day that the PFS board said it would distribute such a dividend for the first time since it went public three years ago.

PFS Bancorp's special dividend means that it will distribute about $7.4 million to its roughly 750 shareholders, about half of them from Southeastern Indiana, Northern Kentucky and Southwest Ohio.

Stuart Suggs, PFS Bancorp's chief operating officer, chief financial officer and treasurer, said Monday that the thrift expects that most of the special dividend will be treated as a tax-free return of capital to investors, but the exact amount can't be determined until after its current tax year ends Dec. 31.

PFS Bancorp was able to issue the special dividend because of excess capital it raised in October 2001 when the thrift went public.

In that offering, PFS Bancorp raised about $15 million when it sold shares to the public for $10 a share.

It's now distributing the $7.4 million to investors to reduce its excess capital position.

The special dividend is in lieu of the thrift's normal quarterly cash dividend of 71/2 cents, which PFS plans to resume in January 2005.

PFS Bancorp has assets of about $125 million and deposits of almost $86 million. It has branches in Aurora, Rising Sun and Vevay and serves roughly 11,000 customers in Southeastern Indiana.

E-mail jmckinney@enquirer.com