Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Jeffrey J. Carfora, EVP, CFO
973-669-7366, ext. 202
PENNFED FINANCIAL SERVICES, INC. REPORTS
FIRST QUARTER EARNINGS AND
A STOCK REPURCHASE PROGRAM
WEST ORANGE, NJ, October 25, 2000 - At an annual stockholders meeting
today, Joseph L. LaMonica, President and Chief Executive Officer of PennFed
Financial Services, Inc. (NASDQ:PFSB), the $1.7 billion holding company for the
New Jersey-based Penn Federal Savings Bank, reported Fiscal Year 2001 first
quarter earnings. Net income of $3.2 million resulted in $0.39 per diluted
share, reflecting an increase of 11% from $0.35 for the quarter ended September
30, 1999. Cash earnings per share for the current quarter were $0.49.
"For the quarter just ended, PennFed's commercial and consumer loan
originations totaled $25 million - a 25% increase from the prior year quarter,"
said LaMonica. At September 30, 2000 these loan portfolios totaled $196 million,
reflecting a 30% increase from September 30, 1999.
PennFed's one- to four-family mortgage loan production of $65 million
for the current quarter was relatively flat to the September 30, 1999 quarter,
but down from the $86 million of production in the quarter ended June 30, 2000.
Approximately 63% of the one- to four-family mortgage loan production for the
quarter ended September 30, 2000 was adjustable rate product.
Total assets at September 30, 2000 decreased $19 million from the June
30, 2000 level due primarily to the sale of one- to four-family mortgage loans.
One of the
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Company's strategies includes the sale of conforming, fixed-rate one- to
four-family loan production. Loans sold under this strategy totaled nearly $8
million, with gains totaling $107,000.
In addition, during the quarter, the Company sold $46 million of longer
duration, one- to four-family mortgage loans in an effort to improve funding,
liquidity, interest rate risk and net interest margin. These sales resulted in
an after tax gain of $134,000.
Deposit growth for the quarter totaled $38 million, of which
approximately $11 million was attributable to the new branch in Roseland, New
Jersey that opened on July 22, 2000. Core deposits at this branch totaled 38% at
September 30, 2000. The net costs associated with the Roseland branch for this
quarter amounted to $0.01 per share. LaMonica noted that, "Given PennFed's early
success with deposit gathering at Roseland, we anticipate that this branch will
hit its breakeven point by the end of its first year of operation."
The Company continued to focus on growth in checking, with those
balances increasing $3.8 million, or 13%, on an annualized basis.
Superior asset quality continued. As of September 30, 2000, PennFed's
non-performing assets were just 0.18% of total assets - compared to 0.26% at
September 30, 1999.
Net interest margin of 2.19% for the quarter ended September 30, 2000
reflects a decline from 2.26% for the June 2000 quarter. This margin compression
was due to a continued flattened yield curve, a rising cost of funds and a
continued shift in one- to four-family mortgage loan production to adjustable
rate loans. LaMonica noted that, "In reaction to the continued pressure on net
interest margin, the Company has intensified its efforts to transition its
balance sheet composition, through sale of conforming one- to four-family loan
production and increased focus on business relationships and core deposits.
PennFed's non-interest expense and efficiency ratios remained favorable
at 1.15% and 44.53%, respectively, for the quarter ended September 30, 2000.
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The Company announced that it has repurchased a total of 367,500 shares
at an average price of $13.36 under its 5% Stock Repurchase Program, previously
announced in April 2000. The shares were repurchased in the open market at
prices ranging from $12.94 to $14.25. Under this program, PennFed plans to
complete the repurchase of the remaining 52,500 shares in the open market,
subject to market conditions. At the annual stockholders meeting, William C.
Anderson, Chairman, indicated that aggressive capital management will continue
and he announced another 5% stock repurchase program to be in effect over the
next 18 months.
PennFed stockholders of record as of November 10, 2000 will be paid a
cash dividend of $0.04 per share on November 24, 2000.
Penn Federal Savings Bank, headquartered in New Jersey, maintains 21
branch offices in Bayville, Brick, Caldwell, East Newark, Fairfield,
Farmingdale, Harrison, Livingston, Marlboro, Montclair (2), Newark (3), Old
Bridge, Roseland, Sayreville, Toms River, Upper Montclair, Verona, and West
Orange. The Bank's deposits are insured by the Federal Deposit Insurance
Corporation.
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
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PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
September 30, June 30, September 30,
2000 2000 1999
---------------- ----------------- -----------------
Selected Financial Condition Data:
<S> <C> <C> <C>
Cash and Federal funds sold $14,960 $13,866 $9,497
Investments, net and FHLB stock 325,496 325,321 330,276
Mortgage-backed securities, net 77,714 87,561 114,193
Loans held for sale 18,350 0 0
Loans receivable:
One- to four-family mortgage loans 1,029,354 1,070,048 939,600
Commercial and multi-family real estate loans 93,652 86,257 74,320
Consumer loans 102,626 97,587 77,160
Allowance for loan losses (4,076) (3,983) (3,363)
Other, net 9,234 9,339 7,742
---------------- ----------------- -----------------
Loans receivable, net 1,230,790 1,259,248 1,095,459
Goodwill and other intangible assets 8,486 8,996 10,555
Other assets 34,671 34,227 33,563
---------------- ----------------- -----------------
Total assets $1,710,467 $1,729,219 $1,593,543
================ ================= =================
Deposits $1,117,807 $1,080,350 $1,063,684
FHLB advances 374,465 364,465 304,465
Other borrowings 47,465 112,175 62,275
Other liabilities 24,514 25,443 19,558
Preferred securities of Trust, net 32,821 32,805 32,759
Stockholders' equity 113,395 (a) 113,981 (a) 110,802 (a)
---------------- ----------------- -----------------
Total liabilities and stockholders' equity $1,710,467 $1,729,219 $1,593,543
================ ================= =================
Book value per share (b) $14.77 $14.37 $13.34
Tangible book value per share (b) $13.66 $13.24 $12.07
Equity to assets 6.63% 6.59% 6.95%
Tangible equity to tangible assets 6.16% 6.10% 6.33%
Asset Quality Data:
Non-performing loans $2,374 $2,715 $3,454
Real estate owned, net 633 334 647
---------------- ----------------- -----------------
Total non-performing assets $3,007 $3,049 $4,101
================ ================= =================
Non-performing loans to total loans 0.19% 0.21% 0.31%
Non-performing assets to total assets 0.18% 0.18% 0.26%
Allowance for loan losses to non-performing loans 171.69% 146.70% 97.37%
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 8.00% 7.76% 7.87%
Core capital ratio (requirement - 4.00%) 8.00% 7.76% 7.87%
Risk-based capital ratio (requirement - 8.00%) 15.80% 15.50% 16.24%
</TABLE>
(a) Common shares outstanding as of September 30, 2000 totaled 8,117,313
shares.
(b) 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. Based upon the inclusion of all shares
issued to the ESOP, at September 30, 2000 book value per share and tangible
book value per share would be $13.97 and $12.92, respectively.
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PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the three months ended September 30,
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2000 1999
------------------ ------------------
Selected Operating Data:
<S> <C> <C>
Interest and dividend income $30,436 $26,635
Interest expense 21,364 17,477
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Net interest and dividend income 9,072 9,158
Provision for loan losses 200 210
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Net interest and dividend income after provision for loan losses 8,872 8,948
Non-interest income:
Service charges 577 556
Net gain (loss) from real estate operations 0 30
Net gain on sales of loans 314 33
Other 168 189
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Total non-interest income 1,059 808
Non-interest expenses:
Compensation & employee benefits 2,666 2,511
Net occupancy expense 395 383
Equipment 448 440
Advertising 118 82
Amortization of intangibles 510 562
Federal deposit insurance premium 55 159
Other 829 832
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Total non-interest expenses 5,021 4,969
------------------ ------------------
Income before income taxes 4,910 4,787
Income tax expense 1,734 1,705
------------------ ------------------
Net income $3,176 $3,082
================== ==================
Earnings per common share (c):
Basic $0.41 $0.37
Diluted $0.39 $0.35
Cash earnings per common share (c) (d):
Basic $0.51 $0.49
Diluted $0.49 $0.46
Return on average common equity 11.18% 11.33%
Cash return on average common equity 14.15% 14.90%
Return on average assets 0.73% 0.78%
Yield on average interest-earning assets 7.18% 7.00%
Cost of average interest-bearing liabilities 5.26% 4.82%
------------------ ------------------
Net interest rate spread 1.92% 2.18%
================== ==================
Net interest margin 2.19% 2.43%
Non-interest exp. as a % of avg. assets 1.15% 1.26%
Efficiency ratio 44.53%(e) 44.35%(e)
</TABLE>
(c) 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.
(d) Cash earnings are reported earnings excluding the non-cash expenses
associated with the amortization of intangibles and employee stock plans.
(e) The efficiency ratio includes the benefit from the net gain on sales of
loans. Excluding the net gain on sales of loans, the efficiency ratio would
have been 45.95% and 44.50%, respectively.
