UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - October 27, 1999
Commission file number 0-24040
PENNFED FINANCIAL SERVICES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 22-3297339
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(State or other jurisdiction (I.R.S. Employer
incorporation of organization) Identification Number)
622 Eagle Rock Avenue, West Orange, New Jersey 07052-2989
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 669-7366
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<PAGE>
Item 5. Other Events
On October 27, 1999, PennFed Financial Services, Inc. (the Company)
issued the press release attached hereto as Exhibit 99.1 announcing its first
quarter results and a stock repurchase program.
The foregoing information does not purport to be complete and is
qualified in its entirety by reference to the Exhibits to this Report.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Regulation
S-K Exhibit
Number Document
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99.1 Press Release dated
October 27, 1999
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PENNFED FINANCIAL SERVICES, INC.
Date: November 10, 1999 By: /s/ Joseph L. LaMonica
--------------------------------
Joseph L. LaMonica
President and Chief
Executive Officer
Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Jeffrey J. Carfora, EVP, CFO
973-669-7366, ext. 202
PENNFED FINANCIAL SERVICES, INC. ANNOUNCES
STRONG FIRST QUARTER EARNINGS AND
A STOCK REPURCHASE PROGRAM
WEST ORANGE, NJ, OCTOBER 27, 1999 -- At an annual stockholders meeting
today, William C. Anderson, Chairman of PennFed Financial Services, Inc.
(NASDQ:PFSB), the $1.6 billion holding company for the New Jersey-based Penn
Federal Savings Bank, reported first quarter Fiscal Year 2000 (FY2000) results
of $0.35 per diluted share, reflecting an increase of 13% from $0.31 for the
quarter ended September 30, 1998.
Anderson also announced a 5% stock repurchase program to be in effect
over the next 18 months.
Net income of $3.1 million for the three months ended September 30,
1999 resulted in a return on average common equity of 11.33%. Cash return on
average common equity was 14.90% and cash earnings per diluted share were $0.46
per share.
Net interest margin displayed significant improvement, climbing to
2.43% for the September 1999 quarter from 2.21% for the September 1998 quarter.
As of September 30, PennFed's non-performing assets were just 0.26% of
total assets - compared to 0.30% at June 30, 1999.
"Growth in PennFed's consumer and commercial loan portfolios continued,
increasing $27 million, or 21% from September 30, 1998," said Joseph L.
LaMonica, President and Chief Executive Officer. "Originations for these
portfolios for the quarter ended September 30, 1999 increased 35% compared to
the September 1998 quarter."
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<PAGE>
PennFed Q12000
Page 2 of 3
According to LaMonica, gains on sales of one- to four-family loans in
the first quarter of FY2000 were significantly reduced from the prior year
quarter due to reduced loan sale activity. "Due to the current higher interest
rate and steeper yield curve environment, it has proven more profitable during
the first quarter of the current fiscal year to retain most of our new
production," said LaMonica. "An on-going evaluation process is in place to
determine whether sales or retention best serves our long-term profitability and
risk management goals."
PennFed's total loan production for the first quarter was down from the
prior year quarter due to rising rates and reduced refinancing activity, but
still was strong at $88 million.
Near the end of the first quarter of FY2000, PennFed introduced
enhanced business services and products. In addition to other new and existing
products, an overdraft account, a money market account, and ATM services are now
available for small and mid-sized business and commercial customers.
Also during the first quarter, PennFed relocated its Sayreville office
to a larger, full-service facility. By the end of FY2000, PennFed will open its
21st Penn Federal Savings Bank branch in Roseland.
PennFed's plans for the second quarter include initiating an Accounts
Receivable Financing Program for small and mid-sized businesses in its market
area and expanding its market for home equity loans. Closings for home equity
loans will be arranged at customers' New Jersey homes or offices when they live
in areas not easily accessible to PennFed branches.
PennFed stockholders of record as of November 12, 1999 will be paid a
cash dividend of $0.04 per share on November 26, 1999.
Penn Federal Savings Bank, headquartered in New Jersey, maintains 20
branch offices in Bayville, Brick, Caldwell, East Newark, Fairfield,
Farmingdale, Harrison, Livingston, Marlboro, Montclair (2), Newark (3), Old
Bridge, Sayreville, Toms River, Upper Montclair, Verona, and West Orange. The
Bank's deposits are insured by the Federal Deposit Insurance Corporation.
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PennFed Q12000
Page 3 of 3
This release contains forward-looking statements that are subject to
risk and uncertainties, including, but not limited to, changes in economic
conditions in the Company's market areas, changes in policies by regulatory
agencies, the impact of competitive loan products, loan demand risks,
fluctuations in interest rates and operating results and other risks detailed
from time to time in the Company's filings with the Securities and Exchange
Commission. The Company cautions readers not to place undue reliance on any
forward-looking statements. The Company does not undertake and specifically
disclaims any obligation to revise any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after the
date of such statements. These risks could cause the Company's future to differ
materially from those expressed in any forward-looking statements by, or on
behalf of, the Company.
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NOTE: SEE FINANCIAL TABLES ATTACHED
<PAGE>
<TABLE>
<CAPTION>
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
September 30, June 30, September 30,
1999 1999 1998
---------------- ----------------- -----------------
<S> <C> <C> <C>
Selected Financial Condition Data:
Cash and Federal funds sold $9,497 $9,900 $12,237
Investments, net and FHLB stock 330,276 309,905 210,223
Mortgage-backed securities, net 114,193 127,983 181,795
Loans held for sale 0 5,180 13,881
Loans receivable:
One- to four-family mortgage loans 939,600 910,064 971,716
Commercial and multi-family real estate loans 74,320 74,613 65,918
Consumer loans 77,160 (a) 72,572 (a) 58,847 (a)
Allowance for loan losses (3,363) (3,209) (2,869)
Other, net 7,742 7,391 7,466
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Loans receivable, net 1,095,459 1,061,431 1,101,078
Goodwill and other intangible assets 10,555 11,118 12,883
Other assets 33,563 33,246 34,321
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Total assets $1,593,543 $1,558,763 $1,566,418
================ ================= =================
Deposits $1,063,684 $1,063,600 $1,083,284
FHLB advances 304,465 244,465 279,465
Other borrowings 62,275 88,738 47,625
Other liabilities 19,558 21,717 19,006
Preferred securities of Trust, net 32,759 32,743 32,697
Stockholders' equity 110,802 (b) 107,500 (b) 104,341 (b)
---------------- ----------------- -----------------
Total liabilities and stockholders' equity $1,593,543 $1,558,763 $1,566,418
================ ================= =================
Book value per share (c) $13.34 $13.03 $12.12
Tangible book value per share (c) $12.07 $11.68 $10.63
Equity to assets 6.95 % 6.90 % 6.66 %
Tangible equity to tangible assets 6.33 % 6.23 % 5.89 %
Asset Quality Data:
Non-performing loans $3,454 $3,670 $4,532
Real estate owned, net 647 936 1,307
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Total non-performing assets $4,101 $4,606 $5,839
================ ================= =================
Non-performing loans to total loans 0.31 % 0.34 % 0.41 %
Non-performing assets to total assets 0.26 % 0.30 % 0.37 %
Allowance for loan losses to non-performing loans 97.37 % 87.44 % 63.31 %
<PAGE>
<CAPTION>
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
September 30, June 30, September 30,
1999 1999 1998
---------------- ----------------- -----------------
<S> <C> <C> <C>
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 7.87 % 7.88 % 7.28 %
Core capital ratio (requirement - 4.00%) 7.87 % 7.88 % 7.29 %
Risk-based capital ratio (requirement - 8.00%) 16.24 % 16.29 % 15.43 %
</TABLE>
(a) Consumer loans primarily include second mortgages and home equity lines of
credit.
(b) Common shares outstanding as of September 30, 1999 totaled 8,845,268
shares.
(c) In accordance with SOP 93-6, the calculation of book value per share only
includes ESOP shares to the extent that they are released or committed to
be released during the fiscal year.
<PAGE>
<TABLE>
<CAPTION>
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
For the three months
ended September 30,
---------------------
1999 1998
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<S> <C> <C>
Selected Operating Data:
Interest and dividend income $ 26,635 $ 27,238
Interest expense 17,477 18,944
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Net interest and dividend income 9,158 8,294
Provision for loan losses 210 175
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Net interest and dividend income after provision for loan losses 8,948 8,119
Non-interest income:
Service charges 556 541
Net gain (loss) from real estate operations 30 (37)
Net gain on sales of loans 33 417
Other 189 94
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Total non-interest income 808 1,015
Non-interest expenses:
Compensation & employee benefits 2,511 2,235
Net occupancy expense 383 327
Equipment 440 425
Advertising 82 76
Amortization of intangibles 562 598
Federal deposit insurance premium 159 159
Other 832 852
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Total non-interest expenses 4,969 4,672
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Income before income taxes 4,787 4,462
Income tax expense 1,705 1,611
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Net income $ 3,082 $ 2,851
======== ========
Earnings per common share (d):
Basic $ 0.37 $ 0.33
Diluted $ 0.35 $ 0.31
Cash earnings per common share (d) (e):
Basic $ 0.49 $ 0.45
Diluted $ 0.46 $ 0.42
Return on average common equity 11.33 % 11.01 %
Cash return on average common equity 14.90 % 15.01 %
Return on average assets 0.78 % 0.72 %
<PAGE>
<CAPTION>
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
For the three months
ended September 30,
---------------------
1999 1998
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<S> <C> <C>
Yield on average interest-earning assets 7.00 % 7.16 %
Cost of average interest-bearing liabilities 4.82 % 5.18 %
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Net interest rate spread 2.18 % 1.98 %
======== ========
Net interest margin 2.43 % 2.21 %
Non-interest exp. as a % of avg. assets 1.26 % 1.18 %
Efficiency ratio 44.35 %(f) 43.59 %(f)
</TABLE>
(d) In accordance with SOP 93-6, the calculation of EPS only includes ESOP
shares to the extent that they are released or committed to be released
during the fiscal year.
(e) Cash earnings are reported earnings excluding the non-cash expenses
associated with the amortization of intangibles and employee stock plans.
(f) The efficiency ratio includes the benefit from the net gains on sales of
loans. Excluding the net gains on sales of loans, the efficiency ratio would
have been 44.50% and 45.63%, respectively.
